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Suryaamba Spinning Mills Ltd.

BSE: 533101 Sector: Industrials
NSE: N.A. ISIN Code: INE360J01011
BSE 00:00 | 11 Aug 49.55 2.45
(5.20%)
OPEN

47.50

HIGH

50.90

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47.50

NSE 05:30 | 01 Jan Suryaamba Spinning Mills Ltd
OPEN 47.50
PREVIOUS CLOSE 47.10
VOLUME 1010
52-Week high 61.40
52-Week low 35.30
P/E 2.81
Mkt Cap.(Rs cr) 15
Buy Price 49.55
Buy Qty 400.00
Sell Price 49.60
Sell Qty 13.00
OPEN 47.50
CLOSE 47.10
VOLUME 1010
52-Week high 61.40
52-Week low 35.30
P/E 2.81
Mkt Cap.(Rs cr) 15
Buy Price 49.55
Buy Qty 400.00
Sell Price 49.60
Sell Qty 13.00

Suryaamba Spinning Mills Ltd. (SURYAAMBASPINNI) - Auditors Report

Company auditors report

TO THE MEMBERS OF SURYAAMBASPINNING MILLS LIMITED

Report on the Ind AS Financial Statements

Opinion

We have audited the accompanying Ind AS financial statements of SURYAAMBA SPINNING MILLS LIMITED (the Company) which comprises the Balance Sheet as at March 312019 the Statement of Profit and Loss (including the Other Comprehensive Income) the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and notes to the financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the Ind AS financial statements).

In our opinion and to the best of our information and according to the explanations given to us the aforesaid Ind AS financial statements give the information required by the Companies Act 2013 (the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended (Ind AS) and other accounting principles generally accepted in India of the state of affairs of the Company as at March 31 2019 and its profit total comprehensive income its cash flows and the changes in equity for the year ended on that date.

Basis of Opinion

We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Ind AS financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Ind AS financial statements under the provisions of the Act and the Rules made thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were most of significance in or audit of the Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the Ind AS financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated to our report.

The Key Audit MattersHow was the matter addressed in our Audit
Revenue Recognition Revenue is one of the key profit drivers and is therefore susceptible to misstatements. Cut-off is the key assertion in so far as revenue recognition is concerned since an inappropriate cut-off can results in material misstatement of results for the years.Our audit procedures with regards to revenue recognition included testing controls automated and manual around dispatches / deliveries inventory reconciliations and circularization of receivable balances substantive testing for cut-off and analytical review procedures.
Capital Work-in-Progress / Property Plants and Equipments
The Company had embarked on the project of setting up and construction of Staff Quarter Building in the existing plant location of Nayakund. Value of such Building capitalized during the period is Rs. 54.15 Lakhs. The projects and buildings need to be capitalized and depreciated once the assets are ready for use as intended by the management. Inappropriate timing of capitalization of the project and / or inappropriate classification of categories ofOur audit procedures included testing the design implementation and operating effectiveness of controls in respect of review of Capital Work-inProgress particularly in respect of timing of the capitalization and recording of additions to items of various categories of PPE with source documentation substantive testing of appro - priateness of the Cut -off date considered for project capitalization.
items of Property Plants and Equipments could results in material misstatement of Capital Work-inProgress / Property Plants and Equipments with a consequents impact on depreciation charge and results forthe period.We tested the source documentation to determine whether the expenditure is of capital nature and has been appropriately approved and segregated into appropriate categories. We reviewed operating expenses to determine appropriateness of accounting. Further through sites visits we physically verified existence of Capital Work-inProgress /Property Plants and Equipments.
Recoverability of Indirect Tax Receivables
As at March 31 2019 Balances with Revenue Authorities under the head of Other Current Assets in respect of VAT Refund Receivables and Goods and Service Tax Receivables amounting to Rs. 109.81 Lakhs and Rs. 135.21 Lakhs which are pending for assessments processes.We have involved our internal experts to review the nature of the amount recoverable the sustainability and the likelihood of recoverability upon the final resolution.

Information Other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the other information. The other information comprises the Board's Report Report on Corporate governance and the Business Responsibility Report but does not include the consolidated financial statements standalone financial statements and our auditor's report thereon.

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

In connection with our audit of the Ind AS financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the Ind AS financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If based on the work we have performed we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position financial performance including the other comprehensive income cash flows and changes in equity of the Company in accordance with the accounting principle generally accepted in India including the Indian Accounting Standards specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentations of the Ind AS financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the Ind AS financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company's financial reporting process.

Auditor's Responsibility for the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financial statements as a whole are free from material misstatement whether due 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 audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

 Identify and assess the risks of material misstatement of the Ind AS financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal controls.

 Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

 Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However future events or conditions may cause the Company to cease to continue as a going concern.

 Evaluate the overall presentation structure and content of the Ind AS financial statements including the disclosures and whether the Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Ind AS financial a statement that individually or in aggregate makes it probable that the economic decisions of a reasonably knowledgeable user of the Ind AS financial statements may be influenced. We consider 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 Ind AS financial statements.

We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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 the matters specified in paragraph 3 and paragraph 4 of the said Order.

2. As required by Section 143(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 best of our knowledge and belief were necessary for the purposes ofouraudit;

b. In our opinion proper books of account as required by law have been kept 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 the other comprehensive income the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. In our opinion the Balance Sheet the Statement of Profit and Loss including the Other Comprehensive Income the Statement of Cash Flows and the Statement of Changes in Equity comply with the Indian Accounting Standards specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended;

e. On the basis of the written representation received from the directors as on March 312019 taken on the record by the Board of Directors none of directors is disqualified as on March 31 2019 from being appointed as a director in term of Section 164(2) of the Act.

f. With respect to adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such control refer to our separate report in Annexure B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over the financial reporting.

g. With respect to the other matters to be included in the Auditor's Report 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 explanations given to us the remunerations paid by the Company to its directors during the reporting period is in accordance with the provision of Section 197 of theAct.

h. With respect to the other matters to be included in the Independent Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of our information and according to the explanations given to us;

(i) The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - 'Refer Note No. 33a'.

(ii) The provision has been made in Ind AS financial statements as required under the applicable law or Indian Accounting Standards for material foreseeable losses if any on long - term contracts including the derivative contracts.

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

ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT

With reference to the Annexure referred to in Paragraph 1 under the heading Report on the Other Legal and Regulatory Requirements of our report of even date to the members of SURYAAMBA SPINNING MILLS LIMITED on the INDAS Financial Statements for the year ended 31st March 2019 we report that:

i) (a) The Company has maintained proper records showing the full particulars including quantitative details and situation of fixed assets.

(b) As explained to us the fixed assets have been physically verified by the management during the year in a phased periodical manner which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company the title deeds of immovable properties are held in the name of the Company.

ii) The inventory has been physically verified during the year by the management at reasonable intervals. In our opinion the frequency of verification is reasonable and adequate and no material discrepancies are noticed during our audit.

iii) The Company has not granted any loans secured or unsecured to the companies firms or other parties are listed in the register maintained under section 189 of Companies Act 2013. Hence provision of clause (iii) (a) (b) and (c) of the order are not applicable to the Company and hence not reported upon.

iv) In our opinion and according to the information and explanations given to us Company has complied with the provisions of Section 185 and 186 of Companies Act 2013 in respect of grant of loans making investments and providing guarantees and securities as applicable.

v) The Company has not accepted deposits from the public covered by the provision of Section 73 to Section 76 of the Companies Act 2013.

vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act 2013 for the products of Company. We have broadly reviewed the cost records maintained by the Company pursuant to sub-section (1) of 148 of the Companies Act 2013 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii) (a) According to the information and explanations given to us and based on the records of the Company examined by us the Company is regular in depositing the undisputed statutory dues including Provident Fund Employees' State Insurance Income Tax Custom Duty Value Added Tax Service Tax Goods and Service Tax and other material statutory dues as applicable with the appropriate authorities in India. Excise Duty is not applicable to the Company for the current year.

(b) According to the information and explanations given to us and based on the records of the Company examined by us there are no dues of Income Tax Service Tax Goods and Service Tax Sales Tax Customs Duty and Excise Duty which have not been deposited on account of any disputes.

viii) The Company has not defaulted in repayment of dues to its Bank in respect of loans taken by it. There were no dues payable to any financial institution/s.

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

x) According to the information and explanation given to us no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of audit.

xi) According to the information and explanations given to us and based on our examination of the records of the Company the Company has paid/provided for Managerial Remuneration in accordance with the requisite approvals mandated by the provision of the Section 197 read along with the Schedule V of the Act.

xii) In our opinion and according to the explanations given to us the Company is not a Nidhi Company. Accordingly provisions of clause (xii) of the order are not applicable to the Company.

xiii) According to information and explanations given to us and based on our examination of the records of the Company transactions with the related parties are in compliance with Section 177 and Section 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Standards.

xiv) According to the information and explanations given to us the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv) According to the information and explanations given to us and based on our examination of the records of the Company the Company has not entered into any non - cash transactions with the Directors or the persons connected with him. Accordingly provisions of clause (xv) of the Order are not applicable.

xvi) The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.

For S. VENKATADRI & CO.
Chartered Accountants
FRN No. 004614S
K. SRINIVASA RAO
Place: Hyderabad Partner
Dated: May 30 2019Membership No. 201470

ANNEXURE 'B' to the Independent Auditor's Report of even date on the Financial Statements of SURYAAMBA SPINNING MILLS LIMITED

Report on the Internal Controls on Financial Controls under Clause (i) of Sub - Section 3 of Section 143 of the Companies Act 2013 (the Act)

We have audited the internal financial controls over financial reporting of SURYAAMBA SPINNING MILLS LIMITED (the Company) as of March 312019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to the Company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the Guidance Note) and the Standards on Auditing issued by ICAI and prescribed under Section 143(10) of the Companies Act 2013 to the extent applicable to an audit of internal financial controls both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors' judgment including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles including Ind AS. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles including Ind AS and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the Company's assets that could have a material effect on the financial Statements.

Inherent Limitations of Internal Financial Controls over the Financial Reporting

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

Opinion

In our opinion the Company has in all material respects an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 312019 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S. VENKATADRI & CO.
Chartered Accountants
FRN No. 004614S
K. SRINIVASA RAO
Place: HyderabadPartner
Dated : May 30 2019Membership No. 201470