Lagnam Spintex Limited
We have audited the accompanying standalone financial statements of LAGNAM SPINTEXLIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2021 and the Statement of Profit and Loss and Statement of Cash Flows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31st March 2021 and the profit andits cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ("ICAI") together with theethical requirements that are relevant to our audit of the Standalone Financial Statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the standalone financial statements.
Responsibility of Management for Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone 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.
The Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial 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.
Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of 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 existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and 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.
Emphasis of Matters
The Company has provided depreciation on Plant and Machinery considering the same as'Continuous Process Plant' based on technical expert's advice. This being a technicalmatter no opinion is expressed thereon. Refer note no.11 to the accompanying financialstatements.
Our opinion is not qualified in respect of this matter.
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-I a statement on the matters specified in paragraphs 3and 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) In our opinion proper books of account as required by law have been kept by theCompany 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) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in termsof Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure- II on this matter.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197 (16) of the Act as amended:
According to the information and explanation given to us and based on our examinationof the records of the Company the Company has paid or provided for the managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the companies Act 2013.
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 financial statements - Refer Note 33 to the standalonefinancial statements;
(ii) The Company did not have any longterm contracts including derivative contracts forwhich there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
| ||For SSMS & Associates Chartered Accountants |
| ||Firm Reg. No.19351C |
|Place: Bhilwara ||(Satish Somani) |
|Date: 15th April 2021 ||Partner |
|UDIN : 21076241AAAABA2196 M.No. 076241 || |
ANNEXURE I TO AUDITORS REPORT
The Annexure referred to in our report of even date to the members of Lagnam SpintexLimited on the accounts of the company for the year ended 31st March 2021.We report that:
(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) These fixed assets have been physically verified by the management at reasonableintervals no any material discrepancies were noticed on such verification;
(c) The title deeds of immovable properties are held in the name of the company.
(ii) Physical verification of inventory has been conducted at reasonable intervals bythe management; no any material discrepancies were noticed on physical verification.
(iii) The company has not granted any loan secured or unsecured to companies firmsLimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.
(iv) The company has not entered any transaction in respect of loan investmentsguarantee and security covered under section 185 and 186 of the Companies act 2013.
(v) The company has not accepted deposits under provisions of sections 73 to 76 or anyother relevant provisions of the Companies Act and the rules framed there under.
(vi) We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the company pursuant to the Rules made by the CentralGovernment for the maintenance of cost records under sub section (1) of section 148 of theCompanies Act 2013 and we are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained.
(vii) (a) The company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax duty of customs GST cess and anyother statutory dues with the appropriate authorities.
(b) According to the records of company no dues of income-tax sales-tax service taxduty of customs duty of excise value added tax GSTcess and any other statutory dueswith the appropriate authorities which has not been deposited on account of disputeSubject to following tax due:-
|Sr. No. Name of Statue ||Nature of Due ||Amount (Rs. In Lac) ||Forum where dispute is pending |
|1. Income ||Tax ||37.31 ||Commi- |
|Tax 1961 ||Interest ||34.59 ||ssioner Appeals Ajmer |
(viii) In our opinion and according to the information and explanations given to usthe company has not defaulted in repayment of loan and borrowing to financialInstitutions banks Government or dues to debenture holders.
(ix) In our opinion and according to the information and explanation given to us thecompany has not raised money by way of initial public offer or further public offer (including Dept instruments ).
(x) In our opinion and according to the information and explanations given to us thereis no fraud by the company or any fraud on the Company by its officers or employees hasbeen noticed or reported during the year.
(xi) The managerial remuneration has been paid and provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V of theCompanies Act 2013.
(xii) The provision specified in Nidhi Rule 2014 is not applicable on Company.
(xiii) Company has complied the provision of sections 177 and 188 of Companies Act 2013on all transactions with the related parties where applicable and the details have beendisclosed in the Financial Statements etc. as required by the applicable accountingstandards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
(xv) The company has not entered into any non cash transactions with directors orpersons connected with him under the provisions of section 192 of Companies Act 2013.
(xvi) The Company has not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For SSMS & Associates Chartered Accountants Firm Reg. No.19351C |
|Place: Bhilwara ||(Satish Somani) |
|Date: 15th April 2021 Partner UDIN : 21076241AAAABA2196 M.No. 076241 || |
ANNEXURE II TO AUDITORS REPORT
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION143 OF THE COMPANIES ACT 2013 ("THE ACT")
We have audited the internal financial controls over financial reporting of LagnamSpintex Limited Bhilwara ("the Company") as of 31st March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
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 31st March 2021based on the criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on 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. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the 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 designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial 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 systemover 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 the receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised 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.
| ||For SSMS & Associates Chartered Accountants Firm Reg. No.19351C |
|Place: Bhilwara ||(Satish Somani) |
|Date: 15th April 2021 Partner UDIN: 21076241AAAABA2196 M.No. 076241 || |