You are here » Home » Companies » Company Overview » Suryavanshi Spinning Mills Ltd

Suryavanshi Spinning Mills Ltd.

BSE: 514140 Sector: Industrials
NSE: SURYVANSPG ISIN Code: INE431C01023
BSE 00:00 | 22 Feb 5.16 0.24
(4.88%)
OPEN

5.16

HIGH

5.16

LOW

5.16

NSE 05:30 | 01 Jan Suryavanshi Spinning Mills Ltd
OPEN 5.16
PREVIOUS CLOSE 4.92
VOLUME 5
52-Week high 7.03
52-Week low 3.24
P/E
Mkt Cap.(Rs cr) 3
Buy Price 0.00
Buy Qty 0.00
Sell Price 5.16
Sell Qty 495.00
OPEN 5.16
CLOSE 4.92
VOLUME 5
52-Week high 7.03
52-Week low 3.24
P/E
Mkt Cap.(Rs cr) 3
Buy Price 0.00
Buy Qty 0.00
Sell Price 5.16
Sell Qty 495.00

Suryavanshi Spinning Mills Ltd. (SURYVANSPG) - Auditors Report

Company auditors report

TO THE MEMBERS OF

SURYAVANSHI SPINNING MILLS LIMITED

SECUNDERABAD

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

We have audited the accompanying Ind ASfinancialstatements of SURYAVANSHI SPINNINGMILLS LIMITED (“the Company”) which comprise the Balance Sheet as at March31 2018 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other financial statements”).

Management’s Responsibility for the 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 Ind AS financial statements that give a true and fair view of the financial othercomprehensive income)cash flows and changes in equityof position financial theCompany in accordance with the accounting principles generally accepted in Indiaincludingthe Indian Accounting

Accounting Standards) Rules specified 2015 (as amended) under Section 133oftheAct.

Thisresponsibilityalsoincludesmaintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the

Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.We have taken into account the provisions of the Act and the Rules madethereunder including the accounting and auditing standards and matters which are requiredto be included in the audit report under the provisions of the Act and the Rules madethereunder.

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act and other applicableauthoritative pronouncements issued by the Institute of Chartered Accountants of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the Ind ASfinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditors’ judgment including the assessment of the risks of material misstatement ofthe Ind AS financial statements whether due to fraud the auditor considers internalfinancial control relevant to the Company’s preparation of the Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company’s Directors as well as evaluating the overall presentationof the IndASfinancial statements.

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

Basis for Qualified Opinion

1. The Company has not provided the interest on Working capital loans and Term loanswith SBI and Andhra Bank for Rs.601.68lakhs for the financial year 2017-18

2. The company also reversed the unpaid interest of Working capital loans and Termloans with SBI and Andhra Bank Rs.262.71 lakhs which was provided in earlier financialyear 2016-17.

3. The company has not provided the interest on delay in payment of statutory duesamounting to Rs.17.74lakhsas at end of the financial year 2017-18.

Consequent to the above the loss for the year and liabilities as at 31.03.2018 isunderstated and share Holders funds are overstated.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph the aforesaid Ind ASfinancialstatements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 and its loss its cash flows and the changes in equity for the yearended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements

a. Note No. 46 of the financial statementswhich indicates that the company has recordedaccumulated 2214.77 lakhs as at 31st March 2018. Resulting in completeerosion of net worthand current liabilities exceed current assets by Rs.2299.76lakhs further there were lowercash inflows from existing business activities. The Company has defaulted payment of duesto banks/ Financial Institutions and could not comply with the terms of sanction and /orrepayment schedule of the lending institutions and banks.

These conditions indicate the existence of material uncertainty that may castsignificant ability to continue as a going concern.However the accompanying financialstatements have been prepared on a “Going Concern “ basis for the reasons statedin the said note. b. Note No 44 of the financial statements relating tonon-provision ofinterest for delay in payment to MSME suppliers. c. Note No 48 of thefinancialstatementsrelating to confirmation of balances in respect of trade receivables and trade payables

Our opinion is not qualified in respect of above these matters.

Other Matters:

The comparative financial information of the Company for the year ended March 31 2017and the transition date opening balance sheet as at April 1 2016 included in these Ind ASfinancial financial statements for the years ended March 31 2017 and March 31 2016prepared in accordance with the Companies (Accounting Standards) Rules 2006 (as amended)which were audited by the predecessor auditor who expressed an unmodified opinion videreports dated May 27 2017 and May 30 2016 respectively. The adjustments to thosefinancial statements for the differences in accounting principles adopted by the Companyon transition to the Ind AS have been audited by us.

Our opinion is not qualified in respect of above matter. Report on Other Legal andRegulatory Requirements:

1. As required by the Companies (Auditor’s Report) Order 2016 (“theOrder”) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure A a statement on the matters specified inparagraphs 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 (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

(d) Except for the effects of the matters described in the basis for qualified opinionparagraph. In our opinion the aforesaid Ind AS financial statements comply with theapplicable Indian Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules2014.

(e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect of adequacy of the internal financial controls with reference tofinancial Company and the operating effectiveness of such controls refer to our separatereport 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. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 43 (b) (c) and (d) of financialstatements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transfer to the Investor Educationand Protection Fund by the Company.

for K.S.RAO& CO.
Chartered Accountants
Firm’s Regn No. 003109S
(M.NAGA PRASADU)
Place: Hyderabad Partner
Date : 30.05.2018 Membership No.231388

Annexure - A to the Auditor’s Report:

The Annexurereferred to in Para 1 under the heading of “Report on Other Legal andRegulatory Requirements” of our report of even date to the members ofSURYAVANSHISPINNING MILLS LIMITED SECUNDERABAD for the year ended March 312018.

1. a. The Company has maintained proper records showing full particulars includingquantitative details and situation offixed assets

b. As explained to us the management has physically verified the fixed assets duringthe year and there is a regular programme of physical verification which in our opinionis reasonable having regard to the size of the Company and the nature of the assets. Nodiscrepancies were noticed on such verification

c. According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the immovable properties have been transferredto Suryavanshi Spinning Mills Limited (Demerged company) as per the scheme of demergerapproved by Hon’ble High Court at Hyderabad.

2. As explained to us the inventories have been physically verified by the managementat reasonable intervals during the year. In our opinion the frequency of verification isreasonable. The discrepancies noticed on physical verification between the physical stocksand book records were not material.

3. a. During the year 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 Companies Act 2013. b. In view of our comments inpara (a) above Clause (III) (a) (b) and (c) of paragraph 3 of the aforesaid order arenot applicable to the Company.

4. In our opinion and according to the information and explanation given to us theCompany has not advanced any loan to any Director and no investments were made during theyear as referred to in sections 185 and 186 of the Act. Therefore the provisions ofParagraph 3(iv) of the Companies (Auditor’s Report) Order 2016 are not applicable tothe Company.

5. The Company has not accepted any deposits from the public. Hence the provisions ofSections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed there under do not apply to this Company.

6. W e have broadly reviewed the cost records maintained by the Company pursuant tosub-section (1) of section 148 of the Companies Act 2013 and are of the opinion thatprime facie the prescribed accounts and records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or Complete.

7. a. According to the records the company is not regular in depositing undisputedstatutory dues including provident fund employees ‘state insurance Income-taxSales-tax Service tax Goods and Services Tax Duty of customs Duty of excise Valueadded tax Cess and all other statutory dues with the appropriate authorities.

According to the information and explanations given to us there are no arrearsofoutstanding statutory dues as at March 31 2018 for a period more than six months fromthe date they became payable are as follows.

Name of statute Nature of the dues Amount (In Lakhs) Period to which the amount relates Due Since Date of Payment
TS VAT Sales Tax 40.88 2016-17 Since June 2016 Not yet paid
Sales tax 2017-18
APGST Deferment 25.41 2017-18 Since June 2017 Not yet paid

b. According to the records of the Company and the information and explanations givento us the dues of Sales tax Income tax Custom Duty Wealth Tax Service Tax ExciseDuty Cess which have not been deposited on account of dispute are as follows:

Nature of the Statute Nature of Dues Amount (Rs in Lakhs) Period to which the amount relates (Financial year) Forum where dispute is pending
Andhra Pradesh General Sales Tax (APGST) Act 1957 Sales Tax dues 23.51 2001-2002 Hon’ble High CourtHyderabad

8. In our opinion and according to the information and explanations given to us theCompany has defaulted in repayment of loans to financial institutions and Banks.

Name of the Bank Amount of default as at the Balance Sheet date (Rs in Lakhs)* Period of default
i) Andhra Bank – I 36.00 From Sep’2016
ii) Andhra Bank – II 127.00 From Sep’2016
iii) Andhra Bank – Corp 119.00 From Sep’2016
iv) SBH – Corp 50.50 From Sep’2016

9. During the year under review the company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) and Term loansduring the year. Accordingly the provisions of paragraph 3(ix) of theCompanies(Auditor’s Report) Order 2016 is not applicable.

10. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

11. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of theCompanies(Auditor’s Report) Order 2016 is not applicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Companies (Auditor’s Report) Order 2016 is not applicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

for K.S.RAO& CO.
Chartered Accountants
Firm’s Regn No. 003109S
(M.NAGA PRASADU)
Place: Hyderabad Partner
Date : 30.05.2018 Membership No.231388

Annexure B to the Auditor’s Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (“the Act”) We have audited the internalfinancial controls over financial reporting ofSURYAVANSHI SPINNING MILLS LIMITEDSECUNDERABAD (“the Company”) as of 31st March 2018 in conjunction with ouraudit 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (‘ICAI’). These responsibilities include the designimplementation andmaintenance of adequate internal financial controls that were operatingeffectively forensuring the orderly and efficient conduct of its business including adherencetocompany’s policies the safeguarding of its assets the prevention and detection offrauds anderrors the accuracy and completeness of the accounting records and the timelypreparation ofreliable financial information as required under the 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 tothe extent applicable to an audit of internal financial controls both applicable to anaudit 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 withethical requirements and plan and perform the audit to obtain reasonableassuranceaboutwhetheradequateinternalfinancialcontrols over financial reporting wasestablished and maintained and if such controls operated effectively in all materialaspects.

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 reporting included obtaining an understanding of internalfinancial controls over financial a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor’s judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud anderror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial accordance with generally accepted accounting principles.A company’s internal financial control over financial includes those policies andprocedures that:

1. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditure of the Company are being made only inaccordance with authorisations of management and directors of the Company; and 3. providereasonable assurance regarding prevention or timely detection of unauthorised acquisitionuse or disposition of the Company’s assets that could have a material effect on thefinancial 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 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 31 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 K.S.RAO& CO.
Chartered Accountants
Firm’s Regn No. 003109S
(M.NAGA PRASADU)
Place: Hyderabad Partner
Date : 30.05.2018 Membership No.231388