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Winsome Textile Industries Ltd.

BSE: 514470 Sector: Industrials
NSE: N.A. ISIN Code: INE837B01031
BSE 00:00 | 14 Oct 51.95 -0.95
(-1.80%)
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52.55

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54.90

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NSE 05:30 | 01 Jan Winsome Textile Industries Ltd
OPEN 52.55
PREVIOUS CLOSE 52.90
VOLUME 6974
52-Week high 68.95
52-Week low 13.01
P/E 7.50
Mkt Cap.(Rs cr) 103
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 52.55
CLOSE 52.90
VOLUME 6974
52-Week high 68.95
52-Week low 13.01
P/E 7.50
Mkt Cap.(Rs cr) 103
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Winsome Textile Industries Ltd. (WINSOMETEXTILE) - Auditors Report

Company auditors report

To

The Members of

Winsome Textile Industries Limited

REPORT ON THE FINANCIAL STATEMENTS OPINION

We have audited the accompanying financial statements of M/s Winsome TextileIndustries Limited ('the Company') which comprise the Balance Sheet as at 31 March2020 the Statement of Profit and Loss (including Other Comprehensive Income) Statementof Changes in Equity and Statement of Cash Flow for the year then ended and Notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ('Act') in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including IndianAccounting Standards ('Ind AS') specified under section 133 of the Act of the state ofaffairs (financial position) of the Company as at 31st March 2020 and loss(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in

accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ('ICAI') together with the ethical requirements that are relevant to our audit ofthe financial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

KEY AUDIT MATTER

Key audit matters are those matters that in our professional judgment were of mostsignificance in our 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.For each matter below our description of how our audit addressed the matter is providedin that context

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Ind AS financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Ind AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Ind AS financial statements.

ASSESSMENT OF IMPACT OF CORONA VIRUS DISEASE (COVID-19)

Key Audit Matter How the matter was addressed in our audit
On account of prevalent financial economic and health crises caused due to global pandemic - COVID-19 having impacted the assumptions used for the continuity of operations. As a part of our audit we have carried out the following procedures:
• Obtained an understanding of the process and testing the operating effectiveness of internal controls and preparation of the cash flow forecast based on assumptions and inputs to the model used to estimate the future cash flows.
The Company has evaluated and factored in to the extent possible the likely impact that may result from COVID-19 pandemic as well as all events and circumstances up to the date of approval of these financial results on the carrying value of its assets and liabilities as on 31st March 2020 as disclosed in note 32.
• We assessed the assumptions around the key drivers of the cash flow forecasts including discount rates
• We compared the cash flow forecasts to approved budget and other relevant market and economic information as well as testing the underlying calculations.
Further the management has evaluated that there was no pandemic impact on the operations of the hydro power generation unit of the company since the same was covered under Essential services. • We discussed the potential changes in key drivers as compared to previous year / actual performance with management and considering impact of COVID-19 in order to evaluate whether the inputs and assumptions used in the cash flow forecasts were suitable;
• We engaged expert to assess the assumption and methodology used by the management to determine the recoverable amount and also assessed the recoverable value headroom by performing sensitivity testing of key assumptions used.
• We tested the arithmetical accuracy of the models.
• We evaluated disclosures related to management assessment on impact of COVID-19 for the continuity of operations.

INVENTORIES (REFER NOTE 4.1 TO THE FINANCIAL STATEMENTS)

Key Audit Matter How the matter was addressed in our audit
Inventories held by the Company comprising of Raw Material Work-in- Our audit procedures included:
Progress Finished Goods and Others represents 28.87% of the Company's total assets. • Through discussions with management we understood the Company's basis of estimated selling price for the goods;
Under Ind AS the Company is required to measure inventory at lower of Cost or Net Realizable Value (NRV). However the raw material and work- in progress is not written down below cost when completed units are expected to be sold at or above cost. • Evaluating the design & testing controls related to Company's review of key estimates including estimated future selling prices and estimated cost of completion for work-in-progress inventory.
Assessing NRV
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale.
The assessment and application of write-down of inventory to NRV are subject to significant judgement by Company.
Considering the company's present situation significant judgements made by the company in light of future market & economic conditions for determination of NRV and considering materiality in context of total assets of the Company we have considered the valuation of inventory to be the key audit matter.

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 information included in the Annual Report but does not includethe financial statements 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 in the audit or otherwiseappears to be materially misstated. If based on the work we have performed we concludethat there is a material misstatement of this other information we are required to reportthat fact. We have nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE FINANCIALSTATEMENTS

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the state of affairs (financial position) profit or loss(financial

performance including other comprehensive income) changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Ind AS specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF 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 withStandards on Auditing 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 Standards on Auditing 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 control relevant to the audit in order todesign audit procedures that are appropriate

in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are alsoresponsible for expressing our opinion on whether the company has internal financialcontrols with reference to Financial Statements in place and the operating effectivenessof such controls

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions 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 charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence 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.

OTHER MATTER

The financial statements of the company's foreign branch has been audited by otherauditor whose report have been furnished to us by the management and our opinion on thefinancial statements in so far as it relates to the amounts and disclosures included inrespect of the said branch and our report in terms of sub-sections (3) and (11) of Section143 of the Act in so far as it relates to the said branch is based solely on the reportsof the other auditor (refer note no. 27 to the notes of accounts).

Our opinion on the financial statements and our report on Other Legal and RegulatoryRequirements below is not modified in respect of the above matters with respect to ourreliance on the work done and the reports of the other auditor and the financialstatements.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 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) Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account;

(d) in our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act;

(e) on the basis of the written representations received from the directors as on 31March 2020 taken on record by the

Board of Directors none of the directors is disqualified as on 31 March 2020 frombeing appointed as a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

(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 according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act

(h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. the Company has to the extent ascertainable disclosed the impact of pendinglitigations on its financial position in its financial statements - Refer Note 13 and Note15 to the financial statements;

ii. the Company does not have any material foreseeable losses on long term contractsincluding derivative contracts which would impact its financial position;

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

For B. CHHAWCHARIA & CO.
Chartered Accountants
Firm Registration No. 305123E
Abhishek Gupta
Partner
Place: Chandigarh (Camp) Membership No. 529082
Date: 31st July 2020 UDIN: 20529082AAAAFU9841

Annexure - A to the Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the financial statements for the year ended 31st March 2020 we report that:

(i) (a) The Company is maintaining proper records showing full

particulars including quantitative details and situation of fixed assets. The companyis also in the process of migrating the Fixed Assets Register from its old accountingsoftware to the new accounting software.

(b) According to the information and explanations given to us the fixed assets havebeen physically verified by the management according to the programme of periodicalverification in phased manner which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. No material discrepancies were noticedon such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) According to the information and explanations given to us the management hasconducted physical verification of inventory at various intervals during the year whichin our opinion is reasonable having regard to the size of the company and nature of itsbusiness. No material discrepancies were noticed on such verification.

(iii) According to the information and explanations given to us the Company has notgranted secured/unsecured loans to companies firms Limited Liability Partnerships orother parties covered in the register maintained under section 189 of the Companies Act2013 ('the Act').

(iv) In our opinion and according to the information and

explanations given to us the Company has complied with the provisions of section 185and 186 of the Companies Act 2013 in respect of loans investments guarantees andsecurities made by the company.

(v) In our opinion and according to the information and

explanations given to us the Company has not accepted any deposits within the meaningof Sections 73 to 76 of the Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014 (as amended).

(vi) As certified by a Cost Accountant the company has maintained cost records for theyear under review as prescribed under sub-section (1) of Section 148 to the extentapplicable to the company. We have however not made a detailed examination of suchrecords.

(vii) (a) According to the records of the company the company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees' state insurance income-tax Goods and Service Tax duty of customs Cessand other material statutory dues as applicable and no such statutory dues wereoutstanding as at the last day of the financial year under review for a period of morethan six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome-tax Goods and Service Tax duty of customs and cess as applicable which have notbeen deposited on account of any dispute except the following:

Name of Statute Nature of Dues Period Amount unpaid (In Lacs ') Forum
Income Tax Act Income Tax 2011-12 2303.89 CIT (Appeal)
HP Sales Entry 2010-11 452.02 The High
Tax Act Tax to 2017-18 Court of Shimla

(viii) In our opinion and according to the information and explanations given to usthe company has not defaulted in repayment of loans or borrowing to a financialinstitution bank Government. The company does not have any outstanding debentures duringthe year.

(ix) In our opinion and according to the information and explanation given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) during the year under review. Further term loans have beenapplied for the purposes for which those were raised.

(x) According to the information and explanations given to us no fraud by the Companyand no material fraud on the Company by its officers or employees has been noticed orreported during the course of the audit.

(xi) 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.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act and the details of such transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.

(xiv) According to the information and explanations give 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.

(xv) 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-cash transactions with directors or personsconnected with him.

(xvi) In our opinion the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For B. CHHAWCHARIA & CO.
Chartered Accountants
Firm Registration No. 305123E
Abhishek Gupta
Partner
Place: Chandigarh (Camp) Membership No. 529082
Date: 31st July 2020 UDIN: 20529082AAAAFU9841

Annexure - B to the Auditors' 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 internal financial controls over financial reporting of WinsomeTextile Industries Limited ("the Company") as of 31st March 2020in conjunction with our audit of the 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 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

AUDITORS' 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over

financial reporting and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.

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

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 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 ofthe internal financial controls over financial reporting to future periods are subject tothe risk that the internal financial control over financial reporting may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

OPINION

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020based on the internal control over financial reporting criteria established by the Companyconsidering

the 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 B. CHHAWCHARIA & CO.
Chartered Accountants
Firm Registration No. 305123E
Abhishek Gupta
Partner
Place: Chandigarh (Camp) Membership No. 529082
Date: 31st July 2020 UDIN: 20529082AAAAFU9841

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