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Sambandam Spinning Mills Ltd.

BSE: 521240 Sector: Industrials
NSE: SAMBANDAM ISIN Code: INE304D01012
BSE 00:00 | 01 Jul 189.95 0
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NSE 05:30 | 01 Jan Sambandam Spinning Mills Ltd
OPEN 190.95
PREVIOUS CLOSE 189.95
VOLUME 4
52-Week high 295.00
52-Week low 157.00
P/E 5.57
Mkt Cap.(Rs cr) 81
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 190.95
CLOSE 189.95
VOLUME 4
52-Week high 295.00
52-Week low 157.00
P/E 5.57
Mkt Cap.(Rs cr) 81
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sambandam Spinning Mills Ltd. (SAMBANDAM) - Auditors Report

Company auditors report

TO THE MEMBERS OF SAMBANDAM SPINNING MILLS LIMITED Report on the audit of theStandalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of SambandamSpinning Mills Limited ("the Company") which comprise the Balance Sheet asat March 31 2021 the Statement of Profit and Loss including Other Comprehensive Incomethe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand notes to the Standalone financial Statements including a summary of the 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 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2021 its profitincluding other comprehensive income its cash flow and the changes in equity for the yearended 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' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the financial yearended March 31 2021. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report. We have fulfilled theresponsibilities described in the Auditor's responsibilities for the audit of thestandalone financial statements section out of report including in relation to thesematters. Accordingly our audit included the performance of procedures designed to respondto our assessment of the risks of material misstatement of the standalone financialstatements. The results of our audit procedures including the procedures performed toaddress the matters below provide the basis of our opinion on the accompanying standalonefinancial statements.

A. Revenue Recognition

Key Audit Matter Description

Reference may be made to note2(c) of significant accounting policies and note 27 to thestandalone financial statements of the Company.

Revenue recognition is inherently an area of audit risk which we have substantiallyfocused on mainly covering the aspects of cut off and the impact of Ind AS 115 as keyaudit matters.

Response to Key Audit Matter

Principal Audit Procedures

Our audit procedures relating to revenue comprised of test of controls and substantiveprocedures including the following:

a. We assessed whether the policy of recognizing revenue was in line with Ind AS –115.

b. We performed procedures to assess the design and internal controls established bythe management and tested the operating effectiveness of relevant controls related to therecognition of revenue.

c. Selected a sample of continuing and new contracts and tested the operatingeffectiveness of the internal control relating to identification of the distinctperformance obligations and determination of transaction price. We carried out acombination of procedures involving enquiry and observation reperformance and inspectionof evidence in respect of operation of these controls.

d. We have tested on a sample basis whether specific revenue transactions around thereporting date has been recognised in the appropriate period by comparing the transactionsselected with relevant underlying documentation including goods delivery notes customeracknowledgement/proof of acceptance and the terms of sales.

e. We have also validated subsequent credit notes and sales returns up to the date ofthis Report to ensure the appropriateness and accuracy of the revenue recognition.

f. We tested journal entries on a sample basis to identify any unusual or irregularitems.

g. We also considered the adequacy of the disclosures in Company's standalone financialstatements in relation to Ind AS 115 and whether they meet the disclosure requirements.

Conclusion

Based on the procedures performed above we did not find any material exceptions withregards to adoption of Ind AS 115 and timing of revenue recognition.

Emphasis of Matter

We draw your attention to Note 51 of the standalone financial statements which explainsthe uncertainties and the management's assessment of the potential impact due tolock-downs and other restrictions and conditions related to the COVID-19 pandemicsituation and consequently the Company's results are highly dependent upon futuredevelopments which are highly uncertain.

Our opinion is not modified in respect of this matter.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact.

We have nothing to report in this regard.

Responsibilities of Management and those charged with governance for the StandaloneFinancial 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 includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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. Those Board of Directors are also responsible foroverseeing the Company's financial reporting 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 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 standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

l Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

l Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section143(3)(i) of theAct 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.

l Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

l Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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.

l Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in

(I) planning the scope of our audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsfor the year ended March 31 2021and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 the India in terms of sub-section (11) of section 143of the Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section143 (3) of the Act based on our audit 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 including OtherComprehensive Income the Statement of Cash Flows and the Statement of Changes in Equitydealt with by this report are in agreement with the relevant books of account.

(d) In our opinion the aforesaid Standalone Financial Statements comply with the IndAS specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2021taken on record by the Board of Directors none of the directors is disqualifiedas on March 312021 from being appointed as a director in terms of Section164(2) of theAct.

(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 2" to this report. Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

(g) The Company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

(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) Rule 2014 as amended in ouropinion and the to the best of our information and according to the explanations given tous:

.i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial Statements – Refer Note 42 to the Standalonefinancial statements.

ii. The company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at March 312021.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable tothe company for the year ended March 31 2021.

For R.Sundararajan & Associates
Chartered Accountants
Firm Registration No. 08282S
Date : June 26 2021 S.Krishnan - Partner
Place : Chennai Membership No. 26452
UDIN : 21026452AAAACA4794

"ANNEXURE1" to the Independent Auditor's Report referred to in paragraph 1under the heading 'Report on Other Legal and Regulatory Requirements' of our report ofeven date on the standalone financial statements of Sambandam Spinning Mills Limited

1. In respect of its fixed assets:

(a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies have been noticed on such verification.

( .c.) According to the information and explanations given to us

(.i.) based on the examination of registered sale deeds/ transfer deeds/ conveyancedeeds provided to us we report that the title deeds of all the immovable properties areheld in the name of the Company and

(ii) based on the records examined by us in respect of immovable property taken onlease and disclosed as Right of use of Asset in the financial statements the leaseagreement is in the name of the Company.

2. As explained to us the inventories other than goods in transit have been physicallyverified at the year-end by the management and no material discrepancies were noticed onsuch physical verification.

3. The Company has not granted during the year any loans secured or unsecured tofirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013.

4. According to the information and explanations given to us the Company has compliedwith the provisions of sections 185 and 186 of the Companies Act 2013 in respect of grantof loans making investments and providing guarantees and securities as applicable.

5. According to information and explanations given to us the Company has not acceptedany deposits from public. However in respect of the deposits accepted from shareholdersthe Company has complied with the directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013and the Companies (Acceptance of Deposits) Rules 2014.

6. The maintenance of cost records has been specified by the Central Government underSection 148 (1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended and prescribed by the Central Government under Sub section (1) of Section 148of the Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. However we have not made a detailed examination ofcost records with a view to determine whether they are accurate and complete.

7. According to the information and explanations given to us and the books of accountexamined by us in respect of statutory dues:

(a) Undisputed statutory dues including provident fund employees' state insuranceincome-tax goods and service tax Customs duty cess and any other statutory dues havegenerally been regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax goods andservice tax customs duty cess and other statutory dues were outstanding at year endfor a period of more than six months from the date they became payable.

( .c.) According to the records of the company the dues of employee state insuranceand other statutory dues on account of any dispute are as follows:

Nature of dues Disputed dues (Rs. lakhs) Period to which the amount relates Forum where the dispute is pending
Corporation tax 36.10 October 1998 - March 2021 Madras High Court
Infrastructure and development amenities charges 66.75 July 2012 Madras High Court
Employees State Insurance 25.63 2003 - 04 to 2004 - 05 Salem Labour Court

8. The Company has not defaulted in repayment of dues to any financial institution. TheCompany does not have any borrowings from Government or by way of debentures. In respectof the borrowings from State Bank of India and Karnataka Bank Limited the company hasopted for the moratorium under Covid-19 scheme for the amount of Rs.150 lakhs and Rs.48lakhs respectively due for repayment during the year. In view of the reschedulement thereis no default in repayment of dues to any bank.

9. The Company has not raised any money by way of initial public offer or furtherpublic offers (including debt instruments) during the year. Hence reporting on utilizationof such money does not arise.

10. To the best of our knowledge and belief and according to the information andexplanations given to us and considering the size and nature of the Company's operationsno fraud by the Company and no fraud of material significance on the Company by itsofficer's or employee's has been noticed or reported during the year nor have we have beeninformed of any such case by the Management.

11. According to the information and explanations given to us the company haspaid/provided managerial remuneration in accordance with the requisite approvals mandatedby the provisions of Section 197 read with Schedule V to the Companies Act 2013.

12. The Company is not a Nidhi Company and accordingly the provisions of Clause (xii)of the Order are not applicable to the Company.

13. In our opinion and according to the information and explanations given to us alltransactions with the related parties are in compliance with sections 177 and 188 of theCompanies Act 2013 where applicable. The details of the transactions during the yearhave been disclosed in the Standalone financial statements as required by the applicableAccounting Standards.

14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underClause (xiv) of the Order is not applicable.

15. In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions during the year with directors orpersons connected with them. Hence reporting on whether there is compliance withprovisions of section 192 of the Companies Act 2013 does not arise.

16. The Company is not required to be registered under section 45 - IA of the ReserveBank of India Act 1934.

For R.Sundararajan & Associates
Chartered Accountants
Firm Registration No. 08282S
Date : June 26 2021 S.Krishnan - Partner
Place : Chennai Membership No. 26452
UDIN : 21026452AAAACA4794

"ANNEXURE 2" to the Independent Auditor's Report of even date on theStandalone Financial Statements of Sambandam Spinning Mills Limited Report on the InternalFinancial Controls Over Financial Reporting 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 SambandamSpinning Mills Limited ("the Company") as of March 31 2021 in conjunction withour audit of the Standalone financial statements of the Company for the year ended on thatdate.

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 byte 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.

Auditor's Responsibility

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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing deemed to be prescribed under Section 143 (10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 judgement 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

(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and disposition of the assets of the company;

(ii) 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 authorisations of management and directors of the company; and

(iii) 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting 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.

For R.Sundararajan & Associates
Chartered Accountants
Firm Registration No. 08282S
Date : June 26 2021 S.Krishnan - Partner
Place : Chennai Membership No. 26452
UDIN : 21026452AAAACA4794

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