You are here » Home » Companies » Company Overview » Surat Textile Mills Ltd

Surat Textile Mills Ltd.

BSE: 530185 Sector: Industrials
NSE: N.A. ISIN Code: INE936A01025
BSE 00:00 | 12 Aug 11.51 0.45
(4.07%)
OPEN

11.69

HIGH

11.94

LOW

11.21

NSE 05:30 | 01 Jan Surat Textile Mills Ltd
OPEN 11.69
PREVIOUS CLOSE 11.06
VOLUME 617168
52-Week high 34.15
52-Week low 7.69
P/E
Mkt Cap.(Rs cr) 256
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 11.69
CLOSE 11.06
VOLUME 617168
52-Week high 34.15
52-Week low 7.69
P/E
Mkt Cap.(Rs cr) 256
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Surat Textile Mills Ltd. (SURATTEXTILE) - Auditors Report

Company auditors report

TO THE MEMBERS OF

SURAT TEXTILE MILLS LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements ofSURAT TEXTILE MILLS LIMITED (hereinafter referred as "the Company") whichcomprise the balance sheet as at March 31 2021 the statement of profit and loss(including other comprehensive income) the cash flow statement and the statement ofchanges in equity for the year then ended and notes to the Standalone FinancialStatements including a summary of significant accounting policies and other explanatoryinformation.

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 (hereinafter referred as "theAct") in the manner so required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended (hereinafter referred as"Ind AS") and other accounting principles generally accepted in India of thestate of affairs (financial position) of the Company as at March 31 2021 and itsprofit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(hereinafter referred as "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 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 believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note No. 36 to the financial statements whichdescribes the economic and social consequences the entity is facing as a result ofCovid-19 which is impacting operations of the Company supply chains personnel availablefor work etc.

Our opinion is not modified in respect of this matter of emphasis.

Key Audit Matter

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 FinancialStatements taken as a whole in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the key audit matter as describedbelow:

Accounting treatment for customer contracts
Description of key audit matter
Revenue amounting to Rs.13057.30 Lakhs reported in the company's financial statements pertains to customer specific contracts and the same are required to satisfy the recognition and measurement criteria as prescribed in IND AS 115 'Revenue from Contracts with Customers'. Revenue recognition is considered as an inherent risk and also as a fraud risk.
In case of revenue recognition risk of material mis-statement significantly increases for its cut-offs accuracy completeness and presentation and disclosure. This can lead to revenue either being recognised in incorrect accounting periods or at incorrect value thereby impacting the results. Considering these factors in the context of our audit this matter was of significance and hence a key audit matter.
Description of Auditor's response
With a view to verify the reasonableness of the revenue accounting we carried out following procedures:
a) Understanding the internal control environment for revenue recognition and to test check with a view to verify its operating effectiveness;
b) Read terms of the contracts and verified accuracy of sales recognition;
c) Discussed with the management process of identification of variable consideration;
d) Verified cut-off documents to ensure that revenue is recognized in correct accounting period and carried out other substantive procedures;
e) Performed analytical procedures and obtained reasons for major variances;
f) Ensured that revenue is recognized in accordance with accounting policy of the Company and Ind AS 115 and necessary disclosures are made in the financial statements;

Information Other than the Standalone Financial Statements andAuditor's Report Thereon (hereinafter referred as "Other Information")

The Company's Management and Board of Directors are responsible for thepreparation of the other information. The other information comprises the Board's reportand management discussion and analysis 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 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 identified above and in doing soconsider whether the other information is materially inconsistent with the StandaloneFinancial Statements or our knowledge obtained during the course of our audit orotherwise appears to be materially misstated. If based on the work we have performed weconclude that there is a material misstatement of this other information we are requiredto report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with Governance forthe Standalone Financial Statements

The Company's Management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of theseStandalone Financial Statements that give a true and fair view of the financial positionfinancial performance cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Ind AS. 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 Company's Managementand Board of Directors are responsible for assessing the Company's ability to continue asa going concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

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:

A. Identify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

B. Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

D. 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 Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

E. Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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.

Other Matter

Due to the Covid-19 pandemic and the lockdown and other restrictionsimposed by the Government and local administration the audit processes carried outsubsequent to commencement of lockdown were based on the remote access and evidence shareddigitally.

Our opinion is not modified in respect of this other 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 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by section 143 (3) of the Act and 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 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 flowsdealt with by this report are in agreement with the books of account;

d) In our opinion the aforesaid Standalone Financial Statements complywith the Ind AS specified under section 133 of the Act read with rule 7 of the Companies(Accounts) Rules 2014;

e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 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 overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B"; our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting;

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 wereport that 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 Act; and

h) With respect to the other matters to be included in the auditor'sreport in accordance with rulell of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:

i. There is no pending litigation of Company as at March 31 2021-refer note 28 of the financials statement.

ii. The Company has made provision as required under the applicablelaw or Ind AS for material foreseeable loses if any on long term contracts includingderivative contracts

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

For Sharp & Tannan Associates
Chartered Accountants
Firm's Registration No.: 109983W
by the hand of
Tirtharaj Khot
Partner
Membership No.: (F) 037457
Pune June 03 2021 UDIN No.: 21037457AAAAAZ5141

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under the heading "Report on OtherLegal and Regulatory Requirements" of our report on even date)

(i) (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets (i.e. propertyplant and equipment investment property and other intangible assets of the Company).

(b) The fixed assets are being physically verified by the management atregular intervals based on the programme of verification which in our opinion isreasonable. No material discrepancies were identified during such physical verificationconducted by the Company during the year.

(c) According to the information and explanation provided to us alltitle deeds of immovable properties are held in the name of the Company.

(ii) Physical verification of inventory has been conducted atreasonable intervals by the management. Discrepancies noticed on physical verificationwere not material and the same have been properly dealt with in the books of account.

(iii) The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Act. Accordingly reporting on paragraphs 3 (iii) (a)(b) and (c) of the Order are not applicable to the Company.

(iv) According to information and explanation provided to us duringthe year the Company has not granted any loans made any investments and provided anyguarantees and securities to the parties covered under section 185 & 186 of the Actaccordingly reporting on paragraph 3(iv) of the Order is not applicable.

(v) According to information and explanation provided to us theCompany has not accepted deposits hence the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 of the Act and the rules framed there underare not applicable to it. According to information and explanation provided to us noorder has been passed by Company Law Board or National Company Law Tribunal or ReserveBank of India or any court or any other tribunal in the current year. Accordinglyreporting on paragraph 3(v) of the Order is not applicable.

(vi) The Central Government has specified maintenance of cost recordsunder section 148(1) of the Act. We have broadly reviewed these records relating tomaterials labour and other items of cost maintained by the Company and are of the opinionthat prima facie; the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of records with a view to determine whetherthey are accurate and complete.

(vii) (a) The Company is generally regular in depositing undisputedstatutory dues including provident fund employees' state insurance income-tax goods andservice tax sales-tax service tax duty of customs duty of excise value added taxcess and any other statutory dues as applicable with the appropriate authorities.According to the information and explanation provided to us no undisputed amounts payablein respect of statutory dues were in arrears as at March 31 2021 for a period of morethan six months from the date they became payable.

(b) According to the information and explanation provided to us nodues of income tax sales tax service tax duty of customs duty of excise value addedtax GST or cess which have not been deposited on account of dispute as at March 31 2021.

(viii) Based on our audit procedures and according to the informationand explanation provided to us the Company did not have any loan or borrowings duespayable to Bank financial institutions & government during the year and also theCompany did not have any debenture holders accordingly reporting on paragraph 3(viii) ofthe Order is not applicable.

(ix) According to information and explanation provided to us theCompany has not raised moneys by way of initial public offer or further public offer(including debt instruments) and has not obtained any term loans during the year.Accordingly paragraph 3 (ix) of the Order is not applicable to the Company.

(x) Based upon the audit procedures performed by us and according tothe information and explanations provided to us no material fraud by the Company or anymaterial fraud on the Company by its officers or employees has been noticed or reportedduring the year.

(xi) According to the information and explanation provided to us themanagerial remuneration has been paid and provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company. Accordingly reporting onpara 3(xii) is not applicable.

(xiii) According to the information and explanation provided to us alltransactions with the related parties are in compliance with Sections 177 and 188 of theAct wherever applicable and the details have been disclosed in the Standalone FinancialStatements as required by the applicable Ind AS.

(xiv) According to the information and explanation provided to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year under review. Accordingly reporting on para3(xiv) is not applicable.

(xv) According to the information and explanation provided to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith them. Accordingly reporting on para 3(xv) is not applicable.

(xvi) According to the information and explanation provided to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly reporting on para 3(xvi) is not applicable.

For Sharp & Tannan Associates
Chartered Accountants
Firm's Registration No.: 109983W
by the hand of
Tirtharaj Khot
Partner
Membership No.: (F) 037457
Pune June 03 2021 UDIN No.: 21037457AAAAAZ5141

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 (f) under the heading "Report onother legal and regulatory requirements" of our report on even date)

Report on the Internal Financial Controls [Under Clause (i) ofsub-section 3 of section 143 of the Companies Act 2013 ("the Act")]

Opinion

We have audited the internal financial controls over financialreporting of SURAT TEXTILE MILLS LIMITED (hereinafter referred as "the Company")as of March 31 2021 in conjunction with our audit of the Standalone Financial Statementsof the Company for the year ended on that date.

In our opinion and to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal financial control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting (hereinafter referred as"the guidance note") issued by the Institute of Chartered Accountants of India(hereinafter referred as "ICAI").

Management's responsibility for Internal Financial Controls

The Company's Management and Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the guidance note. 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 the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the guidance note and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgment including the assessment of therisks of material misstatement of the Standalone Financial Statements whether due tofraud 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 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 Standalone Financial Statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneFinancial Statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride 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.

For Sharp & Tannan Associates
Chartered Accountants
Firm's Registration No.: 109983W
by the hand of
Tirtharaj Khot
Partner
Membership No.: (F) 037457
Pune June 03 2021 UDIN No.: 21037457AAAAAZ5141

.