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Surat Textile Mills Ltd.

BSE: 530185 Sector: Industrials
NSE: N.A. ISIN Code: INE936A01025
BSE 00:00 | 22 Feb 2.66 -0.02
(-0.75%)
OPEN

2.65

HIGH

2.75

LOW

2.56

NSE 05:30 | 01 Jan Surat Textile Mills Ltd
OPEN 2.65
PREVIOUS CLOSE 2.68
VOLUME 43357
52-Week high 5.20
52-Week low 2.25
P/E 7.82
Mkt Cap.(Rs cr) 59
Buy Price 2.66
Buy Qty 35.00
Sell Price 2.72
Sell Qty 153.00
OPEN 2.65
CLOSE 2.68
VOLUME 43357
52-Week high 5.20
52-Week low 2.25
P/E 7.82
Mkt Cap.(Rs cr) 59
Buy Price 2.66
Buy Qty 35.00
Sell Price 2.72
Sell Qty 153.00

Surat Textile Mills Ltd. (SURATTEXTILE) - Auditors Report

Company auditors report

To the members of Surat Textile Mills Limited

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

We have audited the accompanying standalone Ind AS financial statements of SuratTextile Mills Limited ("the Company") which comprise the balance sheet asat 31st March 2018 the statement of profit and loss (including other comprehensiveincome) the cash flow statement and the statement of changes in equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance cash flows and changes in equity of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 and amendments thereof.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making 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 Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under and the Orderissued under section 143(11) of the Act. We conducted our audit of the standalone Ind ASfinancial statements in accordance with the Standards on Auditing specified under Section143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the standalone IndAS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at 31st March 2018 andits profit (financial performance including other comprehensive income) its cash flowsand the changes in equity for the year ended on that date.

Other matters

The financial statements of the Company for the year ended 31st March 2017 wereaudited by another auditor whose report dated 29th May 2017 expressed an unmodifiedopinion on those statements.

Our opinion is not modified 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 Companies Act 2013 we give in the "Annexure A'' a statement on the mattersspecified in paragraphs 3 and 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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this report are in agreement with the booksof account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 and amendments thereof.

(e) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164 (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 B".

(g) 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. TheCompany has disclosed pending litigations and the impact on its financial position - refernote 28 to the standalone Ind AS financial statements.

ii. The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses; and iii. There were no amounts whichwere required to be transferred to the Investor Education and Protection Fund by theCompany.

For Sharp & Tannan Associates

Chartered Accountants Firm's Registration No.: 109983W

Tirtharaj Khot

Partner Pune 8th May 2018 Membership No.: 037457

Referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report on even date:

(i) (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 at regularintervals based on the phased 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 and records examined byus all title deeds of immovable properties are held in the name of the Company.

(ii) Physical verification of inventory has been conducted by the management atreasonable intervals. In our opinion the interval of such verification is reasonable.Discrepancies noticed on physical verification were not material and the same have beenproperly dealt with in the books of account.

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013. Accordingly reporting on para 3(iii) is notapplicable.

(iv) According to information and explanation provided to us for the transactioncovered under the sections 185 and section 186 of the Companies Act 2013 the Company hascomplied with the provisions of the said sections to the extent applicable.

(v) According to information and explanation provided to us the

Company has not accepted deposits hence the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 of the Companies Act and the rules framedthere under are not applicable to it. According to information and explanation providedto us; No order has been passed by Company Law Board or National Company Law Tribunal orReserve Bank of India or any court or any other tribunal in the current year. Accordinglyreporting on para 3(v) is not applicable.

(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 subsection (I) of Section 148 of theCompanies Act 2013 and we are of the opinion that prima facie; the prescribed accountsand records have been made and maintained. We have not however made a detailed examinationof records with a view to determine whether they are accurate and complete.

(vii) (a) The Company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income-tax Goods and Service Taxsales-tax service tax duty of customs duty of excise value added tax cess and anyother statutory dues with the appropriate authorities. According to the information andexplanation provided to us no undisputed amounts payable in respect of statutory dueswere in arrears as at 31st March 2018 for a period of more than six months from the datethey became payable.

(b) Details of dues of income tax sales tax including value added tax service taxduty of customs duty of excise which have not been deposited as on 31st March2018 on account of dispute are as follows:

Name of Statute Nature of dues Forum where Dispute is Pending Period to which amount Relates Amount Involved (In Millions Rs.) Amount Unpaid (In Millions Rs.)
The Central Excise Excise Duty / Custom Excise and Service 2008 -09 & 4.02 3.52
Act 1944 Service Tax Tax Appellate Tribunal (Ahmedabad) 2010-11

(viii) Based on our audit procedures and according to the information and explanationprovided to us the Company has not defaulted in repayment of dues to a financialinstitution bank or government. The Company does not have any debenture holders.

(ix) According to information and explanation provided to us the Company has notraised moneys by way of initial public offer or further public offer (including debtinstruments). According to the information and explanations provided to us term loansavailed by the Company were prima facie; applied for the purpose for which the loans wereobtained.

(x) Based upon the audit procedures performed by us and according to the informationand explanations provided to us no fraud by the Company or any fraud on the Company byits officers or employees has been noticed or reported during the year.

(xi) According to the information and explanation provided to us the managerialremuneration has been paid and provided in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Companies Act.

(xii) The Company is not a Nidhi Company. Accordingly reporting on para 3(xii) is notapplicable.

(xiii) According to the information and explanation provided to us all transactionswith the related parties are in compliance with Sections 177 and 188 of Companies Act2013 wherever applicable and the details have been disclosed in the standalone Ind ASfinancial statements as required by the applicable Indian Accounting Standards.

(xiv) According to the information and explanation provided to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review.

(xv) According to the information and explanation provided to us the Company has notentered into any non-cash transactions with directors or persons connected with him.

(xvi) According to the information and explanation provided to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For Sharp & Tannan Associates

Chartered Accountants Firm's Registration No.: 109983W

Tirtharaj Khot

Partner Pune 8th May 2018 Membership No.: 037457

Annexure B to the Independent Auditor's Report

Referred to in paragraph 2 (f) under the heading "Report on Other legal andRegulatory Requirements of our report on even date:

Report on the Internal Financial Controls

[under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")]

We have audited the internal financial controls over financial reporting of SuratTextile Mills Limited ("the Company") as of 31st March 2018 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.

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 by the 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") and the Standards on Auditing to the extent applicable toan audit of internal financial controls both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 standalone financial statements whether due to fraud orerror.

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 standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions 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 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 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 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Sharp & Tannan Associates

Chartered Accountants Firm's Registration No.: 109983W

Tirtharaj Khot

Partner Pune 8th May 2018 Membership No.: 037457