1. We have audited the accompanying Standalone financial statements of Sambandam Spinning Mills
Limited (“the Company”), which comprise the Standalone Balance Sheet as at 31st March 2025, the
Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone
Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended on
that date and notes to the financial statements, including a summary of material accounting policies and
other explanatory information (hereinafter referred to as the “Standalone financial statements”).
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid
Standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the
manner so required and give a true and fair view in conformity with the Indian Accounting Standards
prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,
2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of
affairs of the Company as at 31st March 2025, its loss including other comprehensive income, the changes
in equity and its cash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section
143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's
Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are
independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the
Standalone financial statements under the provisions of the Act, and the Rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics
issued by the Institute of Chartered Accountants of India. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion on the Standalone financial
statements.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the Standalone financial statements of the current period. These matters were addressed in the
context of our audit of the Standalone financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
We have determined the matter described below to be the key audit matter to be communicated in our
report.
|
Key Audit Matters
|
Auditor's Response
|
|
Revenue Recognition
|
Principal Audit Procedures
|
|
(Refer to the accompanying Note 2(c) of Material
Accounting Policies and Note 28 of accompanying
Notes to the Standalone financial statements)
|
In the view of the significance of the matter, our audit
procedures mainly comprised of test of controls and
substantive procedures including the following:
|
|
The Company's revenue is mainly derived from sale
of products viz. yarn and yarn related products.
Revenue from sale of products is recognized when
the performance obligations are satisfied and the
control of the products is being transferred to
debtors as per the terms of contract agreed.
Revenue is recognized when collectability of the
resulting receivable is reasonably assured.
|
a.
b.
|
We assessed the appropriateness of whether
the accounting policy for revenue recognition
was in line with relevant Ind AS - 115 “Revenue
from Contracts with Customers”.
We performed procedures to assess the design
and implementation of internal controls
established by the management and tested the
operating effectiveness of relevant controls
relating to revenue recognition.
|
|
we have identified Revenue recognition as a key
audit matter as revenue recognition is a key
performance indicator of the Company given the
inherent area of audit risk
|
c.
|
We have performed testing with the sample of
revenue transaction to ensure whether specific
revenue transactions before and after the
reporting date have been recognized in the
appropriate period by comparing the
transactions selected with relevant underlying
documents including goods delivery notes,
s h i p p i n g d o c u m e n ts , c u s to m e r
acknowledgement/proof of acceptance and the
other terms of sales.
|
| |
d.
|
We have also tested the journal entries
affecting revenue recognition on a sample
basis to identify any unusual or irregular items
and validated subsequent credit notes and
sales returns up to the date of this report to
ensure the appropriateness and accuracy of
the recognition of revenue.
|
| |
e.
|
Based on the above procedures, no material
exception on the revenue recognition has been
observed.
|
Information other than the Standalone Financial Statements and Auditor's Report thereon
5. The Company's Board of Directors is responsible for the preparation of the other information. The other
information comprises the Management discussion and analysis, Board's Report including Annexures to
Board's Report, Corporate Governance and Shareholder's Information, but does not include the
Standalone financial statements and our auditor's report thereon.
6. The other information is expected to be made available to us after the date of this auditor's report. Our
opinion on the Standalone financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
7. In connection with our audit of the Standalone financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
Standalone financial statements, or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement, if any, of this other information, we are required to report that fact. We have nothing to report
in this regard.
Responsibilities of Management and those Charged with Governance for the Standalone
Financial Statements
8. The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Act with
respect to the preparation of these Standalone financial statements that give a true and fair view of the
financial position, financial performance (including other comprehensive income), changes in equity and
cash flows of the Company in accordance with the accounting principles generally accepted in India,
including the Ind AS. This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
Standalone financial statements that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
9. In preparing the Standalone financial statements, the Board of Directors is responsible for assessing the
Company's ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Board of Directors either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
10. Those Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
11. Our objectives are to obtain reasonable assurance about whether the Standalone financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an
audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
Standalone financial statements.
12. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(a) Identify and assess the risks of material misstatement of the Standalone financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
(b) Obtain an understanding of internal controls relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible
for expressing our opinion on whether the Company has adequate internal financial controls system
in place and the operating effectiveness of such controls.
(.c.) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
(d) Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company's ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the Standalone financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the
date of our auditor's report. However, future events or conditions may cause the Company to cease
to continue as a going concern.
(e) Evaluate the overall presentation, structure and content of the Standalone financial statements,
including the disclosures, and whether the standalone financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
13. We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
14. We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
15. From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the Standalone financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
16. As required by the Companies (Auditor's Report) Order, 2020 (“the Order”), issued by the Central
Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, we give in the
“Annexure - A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
17. 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 best of 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 the Company so far as
it appears from our examination of those books.
(c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including Other
Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone
Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone financial statements comply with the Indian Accounting
Standards specified under Section 133 of the Act, read with Companies (Indian Accounting
Standard) Rules, 2015 as amended.
(e) On the basis of the written representations received from the directors as on 31st March 2025 taken
on record by the Board of Directors, none of the directors is disqualified as on 31st March 2025
from being 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 financial reporting of the Company
and the operating effectiveness of such controls, refer to our separate Report in “Annexure - B”.
(g) With respect to the matter to be included in the Auditors' Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid
by the Company to its directors during the year is in accordance with the provisions of Section 197 of
the Act.
(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information
and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financial position in its
Standalone financial statements - Note 43 to the Standalone financial statements.
(ii) The Company did not have any long-term contracts including derivative contracts for which
there were any material foreseeable losses as at 31st March 2025.
(iii) There has been no delay in transferring amounts required to be transferred to the Investor
Education and Protection Fund by the Company.
(iv) a) The management has represented that, to the best of its knowledge and belief, no funds
have been advanced or loaned or invested (either from borrowed funds or share premium
or any other sources or kind of funds) by the Company to or in any other persons or
entities, including foreign entities (“Intermediaries”) with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall whether directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate
Beneficiaries”) by or on behalf of the Company or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.
b) The management has represented, that, to the best of its knowledge and belief, no funds
have been received by the Company from any persons or entities, including foreign
entities (“Funding Parties”), with the understanding, whether recorded in writing or
otherwise, that the Company shall whether directly or indirectly, lend or invest in other
persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on
behalf of the Funding Party or provide any guarantee, security or the like on behalf of
the Ultimate Beneficiaries; and
c) Based on such audit procedures as considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that
the representations under subclause (i) and (ii) of Rule 11 contain any material
misstatement.
(v) The Company has not declared or paid any dividend during the year.
(vi) a) Based on our examination which included test checks, the company and its associate has
used an accounting software for maintaining its books of account which has a feature of
recording audit trail (edit log) facility. The audit trail function has operated throughout the
year for all relevant transactions recorded in the software. During the course of our audit,
we did not come across any instance of audit trail feature being tampered with.
b) Further, the audit trail has been preserved by the Company as per the statutory
requirements for record retention.
For P N Raghavendra Rao & Co
Chartered Accountants
Firm Registration Number : 003328S
Pon Arul Paraneedharan - Partner
Salem Membership Number : 212860
24th May 2025 UDIN : 25212860BMJKPD5689
|