The Members of
SURYAAMBA SPINNING MILLS LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of SURYAAMBA SPINNING MILLSLIMITED (the "Company") which comprises the Balance Sheet as at March 31 2021the Statement of Profit and Loss (including the Other Comprehensive Income) the Statementof Changes in Equity and the Statement of Cash Flows and for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "the financialstatements").
In our opinion and to the best of our information and according to the explanationsgiven to us read with our comment in the Emphasis on Matter paragraph below the aforesaidfinancial statements give the information required by the Companies Act 2013 ("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 ("Ind AS") and other accounting principles generallyaccepted in India of the state of affairs of the Company as at March 31 2021 and itsprofits including total comprehensive income the changes in equity and its cash flows andfor the year ended on that date.
Basis of Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards on
Auditing (SAs) are further described in the Auditor's Responsibilities for the Audit ofthe financial statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("ICAI") together with the ethical requirements that are relevant to ouraudit of the financial statements under the provisions of the Act and the Rules madethereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe financial statements.
Emphasis of Matter
We draw your attention to Note No. 42 to the financial statement which explains themanagement's assessment of the financial impact due to lock down and other restrictionsand conditions imposed in relation to COVID 19 pandemic situations for which a definitiveassessment impact in the subsequent period is highly dependent upon the circumstances asthey evolve. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were most ofsignificance in or audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedto our report.
|The Key Audit Matters ||How 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 enhancement in Property Plants and Equipments in "PARSEONI". The Value of such Property Plants and Equipments capitalized during the period is 25830084. The project needs to be capitalized and depreciated once the assets are ready to use as intended by the management. Inappropriate timing of capitalization of the project and / or inappropriate classification of categories of item of Property Plants and Equipments could results in material misstatement of Capital Work-in-Progress / Property Plants and Equipments with a consequent impact on depreciation charge and results for the period. ||Our audit procedures included testing the design implementation and operating effectiveness of controls in respect of review of Capital Work-in-Progress particularly in respect of timing of the capitalization and recording of additions to items of various categories of Property Plants and Equipments with source documentation substantive testing of appropriateness of the cut-off date considered for project capitalization. |
|Recoverability of Indirect Tax Receivables As at March 31 2021 Balances with Revenue Authorities under the head of "Other Current Assets" in respect of GST Refund Receivables and Duty Draw Back Receivables amounting to 3300881 and 4916735 respectively which are pending to be received. ||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 visit we physically verified existence of Capital Work-in-Progress / Property Plants and Equipments. |
| ||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. |
Appropriateness of Current and Non - Current Classifications
For the purpose of current / non - current classification of the assets andliabilities the Company has ascertained its normal operating cycle as twelve months. Thisis based on the nature of services and the time between the acquisition of assets orinventories for processing and their presentation in cash and cash equivalents.
The classification of assets and liabilities has been done on the basis of documentaryevidences. Where conclusive evidences are not available the classification has been doneon the basis of management's best estimates of the period in which the assets would berealized or the liabilities would be settled. We have evaluated the reasonability of themanagement's estimates.
Information Other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Board's Report Report on Corporate governance and the BusinessResponsibility
Report but does not include the consolidated financial statements standalone financialstatements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Financial Statements
The Company's Management and the Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance including the other comprehensive income cashflows and changes in equity of the Company in accordance with the accounting principlegenerally accepted in India including the Indian Accounting Standards specified underSection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance 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 presentations ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management and Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibility for the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
? Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal controls.
? Obtain an understanding of internal financial controls relevant to the audit in orderto 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.
? Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
? Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
? Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements. We communicate with those chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat we identify during our audit. We also provide those charged with governance with astatement that we have complied with relevant ethical requirements regarding independenceand to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 Actwe give in the Annexure "A" a statement on the matters specified in paragraph 3and 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 bestof our knowledge and belief were necessary for the purposes of our audit;
b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss including the othercomprehensive income the Statement of Changes in Equity and the Statement of Cash Flowsthe 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 theOther
Comprehensive Income the Statement of Changes in Equity and the Statement of CashFlows comply with the Indian Accounting Standards specified under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended;
e. On the basis of the written representation received from the directors as on March31 2021 taken on the record by the Board of Directors none of directors is disqualifiedas on March 31 2021 from being appointed as a director in term of Section 164(2) of theAct.
f. With respect to adequacy of the internal financial controls over financial reportingof the
Company and the operating effectiveness of such control refer to our separate reportin Annexure "B". Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over the financialreporting.
g. With respect to the other matters to be included in the Auditor's Report inaccordance 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 theremunerations paid by the Company to its directors during the reporting period is inaccordance with the provision of Section 197 of the Act.
h. With respect to the other matters to be included in the Independent Auditor's Reportin accordance with Rule 11 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) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - "Refer Note No. 36".
(ii) The provision has been made in the financial statements as required under theapplicable law or Indian Accounting Standards for material foreseeable losses if any onlong - term contracts including the derivative contracts.
(iii) There has been no delay in transferring amounts required to be transferred toInvestor Education and Protection Fund by the Company.
ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in Paragraph 1 under "Report on the Other Legal and RegulatoryRequirements"
Section of our report of Even Date)
Report on Companies (Auditor's Report) Order 2016 ("the Order") issued bythe Central Government of India in term of Section 143(11) of the Companies Act 2013(the Act') of SURYAAMBA SPINNING MILLS LIMITED ("the Company");
1. In respect of the Company's fixed assets;
(a) The Company has maintained proper records in the electronic mode showing the fullparticulars including the quantitative details and situation of fixed assets.
(b)The fixed assets have been physically verified by the management in accordance witha regular programme of such verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. According to the informationand explanation given to us no material discrepancies were noticed on such physicalverification. In our opinion this periodicity of physical verification is reasonablehaving regards to the size of the Company and the nature of its assets.
(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company produced and verified by us we report that thetitle deeds of immovable properties of land and buildings which are freehold are held inthe name of the Company as at the Balance Sheet date. In respect of the immovableproperties taken lease by the Company the lease agreements are in the name of theCompany.
2. In respect of Company's inventories;
As explained to us inventories except goods in transits and the stock lying with thirdparties were physically verified during the year by the management at reasonableintervals. Full verification could not be conducted due to COVID 19 outbreaks. Howeverthe alternate audit procedures were applied procedures were applied for verifying physicalpresence of the balance inventory. In our opinion in respect of stock lying with thethird parties at the end of the year written confirmations have been obtained. In ouropinion the frequency such verification is reasonable. As explained to us there was nomaterial discrepancies noticed on such physical verification of inventories as compared tothe book records. However the discrepancies if any noticed on such physical verificationhave been properly dealt with in the books of accounts.
3. In respect of the loan secured or unsecured granted by the Company to thecompanies firms limited liabilities partnerships or other parties covered in theregister maintained under section 189 of Companies Act 2013.
According to information and explanation given to us there are no such companiesfirms limited liabilities partnership and other parties covered in the registermaintained under section 189 of the Companies Act 2013 to whom the Company has grantedany kind of loan whether secured or unsecured.
4. In our opinion and according to information and explanations given to us theCompany has complied with the provisions of section 185 and section 186 of the Act inrespect to grant of loans making investments and providing guarantees and securities asapplicable.
5. According to information and explanations given to us the Company has not acceptedany deposits from public within the meaning of Reserve Bank of India provision of Section73 to Section 76 of the Act any other relevant provisions and Rules made thereunderduring the year and does not have any unclaimed deposits as at March 31 2021 andtherefore the reporting under clause 3(v) of the Order are not applicable to the Company.
6. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under section 148(1) of the Companies Act 2013 in respect of the
Company's products / services to which the said Rules are made applicable and are ofthe opinion that prima facie the prescribed cost record been made and maintained.However we have not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.
7. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company in respect of statutory dues we report that;
(a) The Company has generally been regular in depositing undisputed statutory duesincluding goods and service tax provident fund employees' state insurance income taxsales tax service tax duties of custom duties of excise value added tax cess andother material statutory dues applicable to it with the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of goods and service tax provident fund employees' state insuranceincome tax sales tax service tax duties of custom duties of excise value added taxcess and other material statutory dues were in arrears as at March 31 2021 for a periodof more than six months from the date they became payable.
(b) According to the information and explanation given to us there are no materialdues of goods and service tax duties of custom income tax sales tax duties of exciseservice tax and value added tax which have not been deposited on account with theAppropriate authority on account of any dispute.
8. In our opinion and according to the information and explanation given to us by theCompany the Company has not defaulted repayment of any loans or borrowings from anyfinancial institution banks and government. The Company has not issued any debentureduring the year.
9. In our opinion and according to the information and explanation given to us duringthe year the Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year. However the Company has takenterm loan from bank and financial institutions have been applied for the purpose for whichthe loans were obtained except the funds deployed temporarily elsewhere.
10. According to the information and explanation given to us and on the basis ofexaminations of records of Company we report that no fraud by the Company or any materialfraud on the Company by its officers or employees has been noticed or reported during theyear.
11. The Company has paid or provided the Managerial Remuneration during the year inaccordance with the requisite approvals mandated by the provision of section 197 of Actread with the Schedule - V of the Companies Act 2013.
12. The Company is not a Nidhi Company as prescribed under section 406 of the Act andhence reporting under clause 3(xii) of the Order is not applicable to the Company.
13. According to information and explanations given to us and based on our examinationof the records of the Company all transactions with related parties are in compliancewith Section 177 and Section 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements under "Note No. 44 thetransactions with Related Parties" as required under Indian Accounting Standards (IndAS) 24 "Related Party Disclosure" specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rule 2014.
14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3(xiv) of the said Order is not applicable to the Company.
15. In our opinion and according to the information and explanation given to us duringthe year the Company has not entered into any non - cash transactions with its directorsor the person connected with him and hence provisions of section 192 of the Act are notapplicable. Thus reporting under clause 3 (xv) of the Order is not applicable to theCompany.
16. The Company is not required to be registered under Section 45 - IA of the ReserveBank of
India Act 1934 therefore the reporting under clause 3(xvi) of the Order is notapplicable to the Company.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2(f) under "Report on the Other RegulatoryRequirements" section of our report of even date)
Report on the Internal Financial Controls over the Financial Reporting 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 the financial reporting of"SURYAAMBA
SPINNING MILLS LIMITED" ("the Company") as of March 31 2021 inconjunction with our audit of the 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 ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of internal financialcontrols and both issued by the Institute of Chartered Accountants of India. Thosestandards and the guidance note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide the basis for our audit opinion on the Company's internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany'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 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.
In our opinion to the best of our information and according to the explanation givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For MANISH N JAIN & CO.
FRN No. 138430W
Membership No. 175398
Dated: May 29 2021
UDIN No.: 21175398AAAACS3452