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GTN Textiles Ltd.

BSE: 532744 Sector: Industrials
NSE: GTNTEX ISIN Code: INE302H01017
BSE 00:00 | 10 Aug 12.95 0.40
(3.19%)
OPEN

13.12

HIGH

13.17

LOW

12.57

NSE 05:30 | 01 Jan GTN Textiles Ltd
OPEN 13.12
PREVIOUS CLOSE 12.55
VOLUME 925
52-Week high 22.15
52-Week low 6.78
P/E
Mkt Cap.(Rs cr) 15
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 13.12
CLOSE 12.55
VOLUME 925
52-Week high 22.15
52-Week low 6.78
P/E
Mkt Cap.(Rs cr) 15
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

GTN Textiles Ltd. (GTNTEX) - Auditors Report

Company auditors report

To the Members of GTN Textiles Ltd

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying financial statements of GTNTextiles Ltd (the "Company") which comprise the Balance Sheet as at 31stMarch 2021 the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and the Statement of cash flows for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information. (Hereinafter referred to as "Standalonefinancial statements").

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid Standalone financial statements for the yearended 31st March 2021 give the information required by the Act in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the company as at 31stMarch 2021 and loss changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of theStandalone financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Relating to Going Concern

4. The Company has incurred a net loss of Rs.3600.71 lakhs and cashloss of Rs 2052.80 lakhs during the year ended 31st March 2021 and net worth is erodedas on that date. Since Company has been unable to conclude re-negotiations or obtainreplacement financing the Company's future cash flows are uncertain. This situationindicates that a material uncertainty exists that may cast significant doubt on theCompany's ability to continue as a going concern. However as per the information andexplanation provided by the Company (note no 5) Company's account with Lenders wasclassified as sub-standard as of 31st March 2021 due to irregularity in working capitalaccount. Company is in discussion with Lenders and working on a proposal to regularise theaccount from sale proceeds of non-core assets. As the estimated sale value of non-coreassets is higher than the amount of irregularity with Lenders Management is hopeful ofresolving it at the earliest.

In view of this our report is not modified

Key Audit Matters

5. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined that there is no matter to becommunicated as a key audit matter in our report.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

6. The Company's Board of Directors is responsible for the preparationof the other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone financial statements and our auditor's report thereon. Ouropinion on the standalone financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon. In connection with our audit ofthe standalone financial statements our responsibility is to read the other informationand in doing so consider whether the other information is materially inconsistent withthe standalone financial statements or our knowledge obtained during the course of ouraudit or otherwise appears to be materially misstated .

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact.

The above information is not available to us as on the date of ourreport.

Management's Responsibility for the Standalone FinancialStatements:

7. The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Standalone) specified under section 133 of the

Act read with Companies (Indian Accounting Standards) Rules 2015 asamended. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of accounting records relevant to the preparation and presentation of thefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

8. In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

9. The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements:

10. Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.

11. As part of an audit in accordance with SAs we exerciseprofessional judgment and maintain professional scepticism throughout the audit. We also:

(i) Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

(ii) Obtain an understanding of internal control relevant to the auditin order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the Company has adequate internal financial controls system in placeand the operating effectiveness of such controls.

(iii) Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

(iv) Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

(v) Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

12. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

13. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

14. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matter

15. On account of the COVID 19 related lockdown restrictionsManagement was not able to perform the year end physical verification of inventories inaggregating to Rs. 921.37 lakhs at certain locations. Consequently we have performedalternative audit procedures to audit the existence of inventory as per the guidanceprovided in SA 501 "Audit Evidence - Specific consideration to selective items"which includes physical verification done by the management during the year and theirsupporting documents relating to purchases construction and sales and have obtainedsufficient audit evidence to issue our unmodified opinion on these standalone financialstatements.

Report on Other Legal and Regulatory Requirements:

16. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (Including OtherComprehensive Income) Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the books of account.

d) In our opinion the aforesaid Standalone financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.

e) On the basis of written representations received from the directorsas on 31st March 2021 taken on record by the board of directors none of thedirectors are disqualified as on 31st March 2021 from being appointed asdirectors in terms of section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure A". Our reportexpresses an unmodified opinion on the adequacy and operating effectiveness of theCompany's internal financials controls with reference to financial statements.

g) In our opinion according to the information and explanations givento us and based on our examination of the records of the company the Company haspaid/provided for managerial remuneration for the year ended on March 312021 haspaid/provided by the Company to its directors in accordance with the provisions of thesection 197 of the Act read with Schedule V to the Act.

h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company did not have any pending litigations on its financialposition in its Standalone financial statements.

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

i) In our opinion and to the best of our information and according tothe explanations given to us the remuneration paid by the Company to its directors duringthe year is in accordance with the provisions of section 197 of the Act.

17. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of subsection(11) of section 143 of the Companies Act 2013 we give in "Annexure - B"a statement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

Annexure - A to the Independent Auditors' Report

(Referred to in paragraph 16(f) under 'Report on Other Legal andRegulatory Requirements' section of our report) Report on the Internal Financial Controlsunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference tofinancial statements of GTN Textiles Ltd ("the Company") as at 31stMarch 2021 in conjunction with our audit of the financial statements of the Company forthe year ended and as at on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note on Audit of Internal Financial Controlsover Financial Reporting (the "Guidance Note") and the Standards on Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls and both issuedby the Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financialstatements.

A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to financial statements includes those policies andprocedures that

1) pertain to the maintenance of records that in reasonabledetail accurately and fairly reflect the transactions and dispositions of the assets ofthe company;

2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and

3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements.

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to financial statements and suchinternal financial controls with reference to financial statements were operatingeffectively as at 31st March 2021 based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance

Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India.

For L U Krishnan & Co.
Chartered Accountants
Firm's Registration No: 001527S
P K Manoj
Place: Chennai Partner
Date: 30-06-2021 Membership No.207550
UDIN: 21207550AAAAEX5245

Annexure - B to the Independent Auditors' Report

(Referred to in paragraph 17 under ‘Report on Other Legal andRegulatory Requirements' section of our report)

The Annexure referred to in Independent Auditors' Report to the membersof the Company on the Standalone financial statements for the year ended 31 March 2021 wereport that:

(i) Property Plant and Equipment.

(a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipment.

(b) The Property Plant & Equipment have been physicallyverified by the Management at reasonable intervals in accordance with regular programme ofverification. According to the information and explanations given to us no materialdiscrepancies were found on such verification.

(c) According to the information and explanations given to us andon the basis of our examination of the records of the Company the title deeds ofimmovable properties are held in the name of the Company.

(ii) During this year Inventories has been physically verified bythe management and there were no material discrepancies were noticed during suchverification.

(iii) According to the information and explanations given to usthe Company has not granted any loans secured or unsecured to any company firm LimitedLiability Partnership or other parties listed in the register maintained under section 189of the Companies Act 2013 (‘the Act'). Accordingly clauses from (iii) (a) to (iii)(c) of paragraph 3 of the Order is not applicable to the Company.

(iv) In our opinion and according to the information andexplanations given to us the Company has no loans investments guarantee and securitywhich meets the requirements of section 185 and 186 of the Act.

(v) According to the information and explanations given to us theCompany has not accepted deposits and does not have any unclaimed deposits within themeaning of Section 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules2014 (as amended). Accordingly the provisions of the clause 3 (v) of the Order are notapplicable.

(vi) We have broadly reviewed the books of account maintained bythe company pursuant to rules prescribed by the Government of India for maintenance ofcost records under sub section (1) of section 148 of the Act and are of the opinion thatprima facie the prescribed accounts and records have been maintained. However we havenot made a detailed examination of the records.

(vii) a) According to the information and explanations given to usand according to the records as produced and examined

by us in our opinion the Company is regular in depositing withappropriate authorities the undisputed statutory dues including income tax sales taxservice tax value added tax goods and service tax customs duty excise duty cess andother material statutory dues applicable to it and there are no arrears of outstandingstatutory dues as at 31st March 2021 for a period of more than six months fromdate they become payable.

b) According to the information and explanations given to us therewere no dues in respect of income tax sales tax service tax value added tax goods andservice tax customs duty excise duty cess and other material statutory dues which havenot been deposited on account of dispute and the same being contested by the company.

(viii) According to the information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto a financial institution bank and government. The Company has not issued any debenturesduring the year and does not have any outstanding dues in respect of debenture holders.

(ix) The Company has raised money by way of issuing 6.5%Non-Cumulative Non-Convertible Non-Participating Redeemable Preference Shares amounting toRs.510.00 Lakhs by way of private placement and Rs 653.94 lakhs by way of Term Loans fromCentral Bank India and State Bank of India and proceeds are applied the for the purposefor which funds are raised.

(x) According to the information and explanations given to us nofraud by the Company or on the Company by its officers or employees has been noticed orreported during our audit.

(xi) According to the information and explanations given to us andbased on our examination of the records of the company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of the section 197 of the Act read with Schedule V to the Act.

(xii) In our opinion and according to the information andexplanations given to us the Company is not a Nidhi company. Accordingly paragraph3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to usand based on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

(xiv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placementof shares of fully or partly convertibledebentures during the year.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For L U Krishnan & Co.
Chartered Accountants
Firm's Registration No: 001527S
P K Manoj
Place: Chennai Partner
Date: 30-06-2021 Membership No.207550
UDIN: 21207550AAAAEX5245

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