The Members of Vippy Spinpro Limited
Report on the Audit of the Financial Statements
We have audited the financial statements of Vippy Spinpro Limited("the Company") which comprise the Balance Sheet as at 31st March 2021 and theStatement of Profit and Loss (including Other Comprehensive Income) Statement of Changesin Equity and Cash Flow Statement for the year then ended and notes to the financialstatements including a summary of the significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards ("Ind AS")prescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31st March 2021and its profit total comprehensive income changes in equity and its cash flows for theyear ended on that date.
Basis for Opinion
We conducted our audit of the aforesaid financial statements inaccordance with the Standards on Auditing ("SAs") specified under Section143(10) of the Act. Our responsibilities under those SAs are further described in theAuditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ("ICAI") together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethicsissued by ICAI. We believe that the audit evidence obtained by us is sufficient andappropriate to provide a basis for our opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
We have determined the following matters to be the 'Key Audit Matters'to be communicated in our report.
|Key Audit Matter ||Auditor's Response |
|Contingent liabilities in respect of litigations of labour court not acknowledged as Debt (Note No. 31). || |
|The Company has materially uncertain labour litigation under dispute which involves significant judgment to determine the possible outcome of these disputes. The Company's assessment is supported by the facts of matter their own judgment past experience and advices from legal consultants wherever considered necessary. Accordingly unexpected adverse outcomes may significantly impact the Company's reported profit and the Balance Sheet. ||Our audit approach involved: - |
|We determined the above area as a Key Audit Matter in view of associated uncertainty relating to the outcome of these matters. ||a. Understanding the current status of the litigations of labour disputes; |
| ||b. Examining communication received from various Authorities/ Judicial forums and follow up action thereon; |
| ||c. Evaluating the merit of the subject matter under consideration with reference to available independent legal advice; and |
| ||d. Review and analysis of evaluation of the contentions of the Company through discussions collection of details of the subject matter under consideration and the likely outcome. |
Information Other than the Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in theCompany's Annual Report such as Directors' Report Management Discussion &Analysis Report etc. but does not include the financial statements and ourauditors' report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors are responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the state of affairs profit and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India and Ind AS specified under Section133 of the Act.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and 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 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 ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the management either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so. The Board ofDirectors is also responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection143 (3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin-
(i) planning the scope of our audit work and in evaluating the resultsof our work; and
(ii) to evaluate the effect of any identified misstatements in thestandalone financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters.
We describe these matters in our auditors' report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1) As required by Section 143(3) of the Act were report that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with theIndAS specified under Section 133 of the Act.
e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2021 from being appointed as a director in termsof Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate report in "Annexure B". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company'sinternal financial controls over financial reporting.
g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of Section 197(16) of the Actas amended in our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of Section 197 of the Act.
h) With respect to the other matters to be included in theAuditors' Report in accordance with Rule11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us:
(i) The Company has disclosed the impact of pending litigations as at31st March 2021 on its financial position in its financial statements - Refer Note 31 tothe financial statements;
(ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
(iii) There was no amount required to be transferred to the InvestorEducation and Protection Fund by the Company.
2) As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
Annexure - A to the Independent Auditor's Report
As referred to in our Independent Auditor's Report of even date tothe members of Vippy Spinpro Limited for the year ended March 31 2021
(i) Fixed Assets:
a. As informed to us the company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets. The entirerecords have been maintained on computer system.
b. As informed and explained to us the management during the yearhas physically verified the items of the fixed assets of the company at reasonableinterval and no material discrepancies were noticed on such physical verification.
c. As per the information and explanations given to us and on the basisof our examination of the records of the company the title deeds of immovable propertiesare held in the name of the Company. In respect of immovable properties been taken onlease and disclosed as fixed asset in the Ind AS financial statements the leaseagreements are in the name of the company where the company is the lessee in theagreement.
a. As informed and explained to us the inventory has been physicallyverified during the year by the management at regular intervals.
b. In our opinion and according to the information and explanationgiven to us the procedure of physical verification of inventories followed by themanagement is reasonable and adequate in relation to the size of the Company and thenature of its business.
c. In our opinion and according to the information given to us thecompany has maintained proper records of its inventories. No material discrepancies havebeen noticed on physical verification of stock.
(iii) Loans granted:
As per the information and explanation given to us the company has notgranted secured/unsecured loans to companies firms LLPs or other parties covered in theregister maintained under Section 189 of the Companies Act 2013.
(iv) Loan Investment and Guarantees:
As per information and explanation given to us the company has notgranted any loan or given any guarantee on such loans covered under Section 185 of theCompanies Act 2013 and the company has complied with the provision of Section 186 of theCompanies Act 2013 in respect of investment made.
(v) Public Deposit:
In our opinion and as per the information and explanation given to usthe company has not accepted any deposits from the public within the meaning of Section 73to 76 of the Act and rules framed there under to the extent notified. Therefore theprovisions of Section 73 to 76 of the Act are not applicable to the company.
(vi) Cost Records:
We have broadly reviewed the books of accounts maintained by thecompany pursuant to the Companies (Cost Records and Audit) Rules 2014 as amendedprescribed by the Central Government under sub section (1) of Section 148 of the Act inrespect of products where the maintenance of cost records has been specified and we areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the records with a view todetermine whether they are accurate or complete.
(vii) Statutory Dues:
a. According to the information and explanation given to us and therecords of the company examined by us in our opinion the company is generally regular indepositing undisputed statutory dues relating to Provident Fund Employees' StateInsurance Income Tax Duties of Customs Goods and Service Tax Cess and other materialstatutory dues as applicable to it with appropriate authorities. There are no undisputedstatutory dues payable which are outstanding as at 31st March 2021 for a period of morethan 6 months from the date they became payable.
b. According to the information given to us and the records of thecompany examined by us there are no dues of Income tax Sales Tax Custom duty Exciseduty Value added tax Goods and Service Tax Cess Professional tax and other statutoryliabilities which have not been deposited with appropriate authorities on account of anydispute other than mentioned below:
|S. ||Name of the || |
|Period to ||Amount |
| ||Statute (Nature of || |
Matter is pending
|which the amounts || |
|No. || || || || ||(in `) |
| || || || ||relates || |
| ||the Dues) || || || || |
|1 . ||M.P. Industrial ||Hon'ble M.P ||High ||2014 -15 to ||924195/- |
| ||Relation Act ||Court || ||2020 -21 || |
(viii) Default in repayment of dues to Financial Institutions BanksGovernment or debenture holders:
According to the records of the company examined by us and theinformation and explanation given to us the company the has not defaulted in repayment ofloans or borrowings to any bank. The Company did not have dues to the financialinstitutions government and to the debenture holders.
(ix) Utilization of Term Loans and Initial/Further Public offer:
According to the information and explanations given to us and based ondocuments provided to us term loans availed by the company were prima-facie applied bythe company for the purposes for which the loans were obtained. However the company hasnot raised any moneys by way of initial public offer and further public offer (includingdebt instruments) during the year ended March 31 2021.
(x) Fraud Noticed or Recorded:
During the course of our examination of the books and records ofthe company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of fraud by the company or on the company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the Management.
(xi) Managerial Remuneration:
According to the information and explanations give to us and basedon our examination of the records of the company the company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.
(xii) Nidhi Company:
The company is not a chit fund or a Nidhi mutual benefit fund/society. Therefore the provisions of clause (xii) of the said order is not applicable tothe company.
(xiii) Transaction with Related Parties:
According to the information and explanations given to us and basedon our examination of the records of the company transactions with the related partiesare in compliance with Sections 177 and 188 of the Act where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable Ind AS.
(xiv) Preferential Allotment/Private Placement:
According to the information and explanations give to us and based onour examination 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. Hence reporting under this clause of the Order is not applicable to thecompany.
(xv) Non-Cash Transactions:
According to the information and explanations given to us and based onour examination of the records of the company the company has not entered into anynon-cash transactions with directors or persons connected with him. Hence reporting underthis clause of the Order is not applicable to the company.
(xvi) Registration with Reserve Bank of India:
The company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.
Annexure - B to the Independent Auditor's Report
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of Vippy Spinpro Limited ("the company") as of 31st March 2021 inconjunction with our audit of the Ind AS financial statements of the company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by The Institute of Chartered Accountants of India(ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI prescribed under section 143(10) of the Companies Act 2013 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 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Statements
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that-
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany;
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us the company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2021 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by TheInstitute of Chartered Accountants of India.
| ||For R.S. Bansal & Company |
| ||Chartered Accountants |
| ||FRN: 000939C |
|Place: Dewas ||(CA. Vijay Bansal) |
|Date: June 25 2021 ||Partner |
| ||M No. 075344 |