You are here » Home » Companies » Company Overview » Sri Nachammai Cotton Mills Ltd

Sri Nachammai Cotton Mills Ltd.

BSE: 521234 Sector: Industrials
NSE: N.A. ISIN Code: INE443E01016
BSE 00:00 | 16 Aug 48.90 -1.25
(-2.49%)
OPEN

48.00

HIGH

50.65

LOW

48.00

NSE 05:30 | 01 Jan Sri Nachammai Cotton Mills Ltd
OPEN 48.00
PREVIOUS CLOSE 50.15
VOLUME 1266
52-Week high 71.00
52-Week low 35.15
P/E 3.06
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 48.00
CLOSE 50.15
VOLUME 1266
52-Week high 71.00
52-Week low 35.15
P/E 3.06
Mkt Cap.(Rs cr) 21
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sri Nachammai Cotton Mills Ltd. (SRINACHACOTT) - Auditors Report

Company auditors report

To the Members of

Sri Nachammai Cotton Mills Limited

Report on the audit of standalone Financial Statements

Opinion

We have audited the standalone financial statements of Sri NachammaiCotton Mills Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2021 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Cash Flow Statement and for the year thenended and notes to the financial statements including a summary of the significantaccounting policies and other explanatory information. (hereinafter referred to standalonefinancial statements).

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ["the Act"] in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under Section 133 of the Companies Act 2013 read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India of the state of affairs of the Company as at March 31 2021theProfitand total comprehensive income changes in equity and its cash flows for the yearended on that date.

Basis for Opinion

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 thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese 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 on thestandalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report. We have fulfilled theresponsibilities described in the Auditor's responsibilities for the audit of theStandalone Ind AS financial statements section of our report including in relation tothese matters.

S. No. Key Audit Matter Auditor's Response
1 Recoverability of Income tax assets and Receivables from Government authorities Principal Audit Procedures
As at March 31 2021 current assets in respect of amounts receivable from government authorities to the extent of Rs. 174.62 lakhs are outstanding. We analysed and reviewed the nature of the amounts recoverable the sustainability and the likelihood of recoverability upon final resolution.. The amounts receivable from government authorities represent input tax credits eligible for set off and as such we considered and concluded that these recoverables are sustainable upon final resolution

We have determined that there are no other key audit matters tocommunicate in our report.

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

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportCorporate Governance and Shareholder's Information but does not include the standalonefinancial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially 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. Wehave nothing to report in this regard.

Responsibilities of Management and those charged with governance forthe standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134 (5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance (including other comprehensive income) cashflows and changes in equity of the Company in accordance with the Indian AccountingStandards (IND AS) prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments 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 the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

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.

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

Auditors' Responsibility

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or 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 professionaljudgment and maintain professional scepticism throughout the audit. We also:

> 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.

> 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.

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

> 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.

> 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.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 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.

We also provide those charged with governance with a statement that wehave 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.

From the matters communicated with those charged with governance wedetermine 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.

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 in terms of Section 143 (11) ofthe Act we give in Annexure "A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143 (3) of the Act based on our audit wereport 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 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 cash flow statement 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 prescribed under section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014;

e) On the basis of the written representations received from thedirectors of the Company as on March 31 2021 taken on record by the board of directorsnone of the directors are disqualified as on March 31 2021 from being appointed as adirector in terms of Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in Annexure "B" and

g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Companies Act 2013.

h) With respect to the other matters to be included in the auditors'report 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 does not have any pending litigations to be disclosed.

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

iii. Transferring of dividends to Investor Education and Protectionfund is not applicable as the Company has not declared any dividends in the earlier years.

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirements' section of our report to the members of Sri Nachammai Cotton MillsLimited of even date)

1 A The company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

B The Company has a regular programme of physical verification of itsfixed assets by which fixed assets are verified in a phased manner over a period of threeyears. In accordance with this programme certain fixed assets were verified during theperiod and no material discrepancies were noticed on such verification. In our opinionthis periodicity of physical verification is reasonable having regard to the size of tothe Company and the nature of its assets.

C According to the information and explanations given to us and therecords examined by us and based on the evidences received from Banks Immovableproperties whose title deeds have been pledged as security for Term Loans and cash creditfacilities availed from Banks are held in the name of the Company. In respect of freeholdproperties these have been confirmed by the management.

2 A As explained to us inventories have been physically verified bythe management at regular intervals during the year.

B In our opinion and according to the information and explanationsgiven to us the procedures of physical verification of inventories followed by themanagement are reasonable and adequate in relation to the size of the company and thenature of its business.

C In our opinion and according to the information and explanationsgiven to us the company has maintained proper records of its inventories and no materialdiscrepancies were noticed on physical verification as compared to the book records.

3 During the year the company has not granted any loan secured orunsecured to companies firms or other parties covered in the register maintained undersection 189 of the Companies Act 2013and hence Clause (b) and (c) is not applicable.

4 During the year Company has not made any loans and hence disclosureunder this clause related to compliance with the provisions of Section 185 and 186 of theAct does not arise.

In respect of investments made the Company has complied with theprovisions of Section 186 of the Companies Act.

5 The company has not accepted any deposits from the public and as suchclause 3(v) of the Order is not applicable.

6 We have broadly reviewed the cost records maintained by the companyspecified by the Central Government under sub-section (1) of Section 148 of the CompaniesAct 2013 as applicable to the company and are of the opinion that prima facie thespecified cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

7 a According to the information and explanations given to us thecompany is regular in depositing undisputed statutory dues including Provident FundEmployees' State insurance Income tax GST and any other statutory dues with theappropriate authorities during the year.

According to the information and explanations given to us noundisputed amounts payable in respect of the aforesaid dues were outstanding as at 31stMarch 2021 for a period of more than six months from the date they became payable

b According to the information and explanations given to us there areno dues of Income tax GST etc which have not been deposited with the appropriateauthorities on account of any dispute.

8 In our opinion and according to the information and explanation givento us the company has not defaulted in repayment of dues to any of the banks.

9 The Company did not raise any money by way of initial public offer orfurther public offer (including debt instruments) and term loans during the year.Accordingly clause 3 (ix) of the Order is not applicable.

10 To the best of our knowledge and belief and according to theinformation and explanations given to us no fraud on or by the company was noticed orreported during the year that causes the financial statements to be materially misstated.

11 According to the information and explanations give to us and basedon 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 section 197 read with Schedule V to the Act.

12 In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly clause 3(xii) of the Orderis not applicable.

13 According to the information and explanations given to us and basedon our examination of the records of the Company transactions with the related partiesare in compliance with sections 177 and 188 of the Act where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards.

14 According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.

15 According to the information and explanations given to us and basedon 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.

16 The Company is not required to be registered under section 45-1A ofthe Reserve Bank of India Act 1934.

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2 (f) under 'Report on Other Legal andRegulatory Requirements' section of our report to the Members of Sri Nachammai CottonMills Limited of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub- section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Sri Nachammai Cotton Mills Limited ("the Company") as of March 312021 in conjunction with our audit of the financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishingand maintaining internal financial controls based on the internal control over financialreporting 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. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and 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 internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement in 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 financialcontrol system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(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 authorisations of management and directors of thecompany; and

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

Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper management ofoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and according to the information and explanations givento us the Company has in all material respects an adequate internal financial controlsystem 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 VVSoundararajan& Co
Chartered Accountants
Firm Registration No. 003944S
(V S Ashok Kumar)
Partner
Membership No. 021435
UDIN: 21021435AAAAEZ2747
Place: Salem
Date:21-6-2021

.