TO THE MEMBERS OF M/s. GANGOTRI TEXTILES LIMITED
Report on the IND AS Financial Statements
We have audited the accompanying IND AS financial statements of GANGOTRI TEXTILESLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2021the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information. (hereinafterreferred to IND AS financial statements).
Management's Responsibility for the IND AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese IND AS financial statements that give a true and fair view of the financialposition financial performance (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (INDAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the IND ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these IND AS financial statements basedon our audit. In conducting our audit we have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and the Rules made there under and theOrder issued under section 143 (11) of the Act. We conducted our audit of the IND ASfinancial statements in accordance with the Standards on Auditing specified under Section143 (10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the IND ASfinancial statements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and the disclosures in the IND ASfinancial statements. The procedures selected depend on the auditor's judgment includingthe assessment of the risks of material misstatement of the IND AS financial statements
whether due to fraud or error. In making those risk assessments the auditor considersinternal financial control relevant to the Company's preparation of the IND AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's directors as well as evaluating the overall presentation of the IND ASfinancial statements. We believe that the audit evidence obtained by us is sufficient andappropriate to provide a basis for our audit opinion on the IND AS financial statements
BASIS FOR QUALIFIED OPINION
1. In our opinion there prevails material uncertainty related to events / conditionswhich eventually / collectively cast significant doubts on going concern assumption. TheBoard of Directors in their meeting held on 06.08.2019 decided to voluntarily wind up theCompany. A special resolution to this effect was also brought before the shareholders fortheir approval in the 30th AGM of the Company held on 27.09.2019.
2. The interest provisions for all Loans from Banks has not been worked out since thedate of taking over of assets by the bank. We could not able to quantify the interestamount.
3. The balances shown under Secured loans and Balances with bank. Confirmation ofbalance is yet to be given by the Bankers. Hence the balances reflected under these twoheads are as per the books of account of the company.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid IND AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2021 and its profit total comprehensive income the cash flowsand the changes in equity for the year ended as on that date
KEY AUDIT MATTERS
Key Audit Matters are those matters that in our professional judgments were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the contexts of our audit of the financial statements as a whole and informing our opinion there on and we do not provide a separate opinion on these matters.We have nothing to report in this regard.
Information other than the Financial Statements and Auditor's Report thereon;
(i) The Company's Board of Directors is responsible for the other information. Theother information comprised the Management Discussion and Analysis Board's Reportincluding Annexures to Board's Report Business Responsibility Report CorporateGovernance and Shareholder's Information but does not include the financial statementsand our auditor's report thereon.
(ii) Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.
(iii) In connection with our audit of the financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
(iv) If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in sec 134 (5)of the act with respect to the preparation of these financial statements that give a trueand fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the company in accordance withthe IND AS and other Accounting Principles generally accepted in India. Thisresponsibility also includes Maintenance of adequate accounting records in accordance withthe provisions of the act for safeguarding the asset of the company and for preventing anddetecting frauds and other irregularities; Selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statement the management is responsible for assessing thecompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the company or to cease operations or as no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
AUDITOR'S RESPONSIBILITY FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.
As a part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
(i) Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
(ii) Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in circumstances. Under section 143(3) (i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
(iii) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.
(iv) Conclude on the appropriateness of the management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the company'sability to continue as a going concern. If we conclude that a material uncertainty existwe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
(v) Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materially is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes ir probable that the economic decisions of areasonably knowledge user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the order.
2. As required by Section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books;
(c) The balance sheet the statement of profit and loss and the cash flow statementdealt with by this Report are in agreement with the books of account;
(d) Except for the effects of the matters described in the basis for qualified opinionparagraph above the aforesaid IND AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act;
(e) The matters described on the Basis for Qualified Opinion paragraph above in ouropinion may have adverse effect on the functioning of the Company.
(f) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164 (2) of the Act;
(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated on the Basis for Qualified Opinion paragraph above
(h) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financialposition in its standalone IND AS financial statements Refer Note 24 to thefinancial statements;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
ANNEXURE-A TO THE AUDITORS' REPORT
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2021 we report that:
I) All the Assets except vehicles are taken over sold realized and adjusted againstloan dues by the bank.
II) The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013 during the year.
III) The Company has not accepted any deposit from public during the year.
IV) We have broadly reviewed the records maintained by the company till the date ofpossession taken over by the bank pursuant the Rules made by the Central Government forthe maintenance of the cost records under Section 148(1) of the Companies Act. We are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed Examination of the records with a viewof determining whether they are accurate or complete
V)(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amount deducted/accrued in the books of accountin respect of undisputed statutory dues including Provident Fund Investor Education andProtection fund income-tax Sales-tax Wealth tax service Tax Goods and Service Tax andother material statutory dues have been regularly deposited during the year by the Companywith the appropriate authorities As explained to us the Company did not have any dues onaccount of employees' State Insurance Customs duty and Excise duty except the following.
|Name of the Statute ||Year ||Nature of Dues ||Amount in Lakhs ||Status ||Provided in the books of accounts ||Amount in Lakhs |
|Tamilnadu Additional Sales Tax Act 1970 ||1996-97 ||Additional Sales Tax ||20.07 ||Supreme Court of India ||Yes ||20.07 |
|Income tax Act 1961 ||2004-05 ||Interest U/S 234B/234C ||5.85 ||ITAT Chennai ||No ||5.85 |
|Income tax Act 1961 ||2012-13 ||Penalty U/s 271(1)(c) ||730.00 ||High Court Chennai ||No ||730.00 |
(b) According to the records of the Company The Stock Exchanges ( NSE & BSE) havelevied fine on the company for the following issues.
|Name of the Exchange ||Fine levied for ||Amount ||Status |
| ||Submission of un-audited Financial results for the quarter ended 30-9-2015 ||3473073 ||Yet to pay penalty amount |
|M/s National Stock Exchange of India Ltd. ||Submission of Audited financial results for the year ended 31-3-2017 ||668073 ||Yet to pay penalty amount |
| ||F Non-compliance with the Corporate ||418900 ||Not paid |
| ||Governance Report for the quarter ended 31-12-2018 (No of Independent Directors in the Board strenqth.) || || |
| ||Arrears of Annual Listing Fee payable ||1181232 ||Not paid |
| ||Non-compliance with the Corporate Governance Report for the quarter ended 31-12-2018. (No of Independent ||418900 ||Not paid |
|M/s Bombay Stock Exchange Ltd ||Directors in the Board strength.) || || |
| ||Arrears of Annual Listing Fee Payable ||918210 ||Not Paid |
| ||Submission of un-audited financial results for the quarter ended 31-12-2018 in PDF mode. ||42000 ||Not Paid |
VI The Company has defaulted in repayment of interest and principal to bank andfinancial institutions.
VII. During the year the company has not given any guarantee for loan taken fromothers from banks or financial institution.
VIII. The company has not obtained any term loan during the year.
IX. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
X. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
XI. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid/provided formanagerial remuneration for the year 2019-20.
XII. According to the information and explanations given to us and based on ourexamination of the records of the Company no transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
XIII. The Company is not a Nidhi Co. And therefore clause 3(12) of the Order is notapplicable to the Company
XIV. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
XV. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934
ANNEXURE B" TO THE AUDITOR'S REPORT
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2021 we report that:
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the
design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemsover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that
(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company;
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In Our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 based oninternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.
For. K.N Swamy & Co
Firm Regn No : 004321S
Membership No : 018956