We have audited dee Sjtocoimp allying financial statements cf SlIRYAAMEA SPINNING MILLS LIMITED the " Company'i. which comprise? the Balance Sheei as ai March 31, 2024. die iitnemeat cf Profit ar.d Lies including the Other Comprehensive Income), due Statement cf Cash Flows and the Statement of Chan set in Equity fc: the year ended en that date and notes to the inaneiai statements, including a summary of material accounting policies and ofoer explanatory information hereinafter referred to as "the financial statements" i
In o‘jt opinion and to the best of our information artel according to the explanation's given to us. the aforesaid financial statements, give the information, required by the Companies Act. 2013. as amended i "the Act" i m the manner -so required and give a true and fan view m ccciormit; Ý with the Indian Accounting Standards prescribed under section 133 of the Act read Kith the Companies Ý Indian Accounting Standards.1 Rules. 2015. a-: amended i. "Lad AS"), and other accounting principle: generally accepted in India, of the stete of affairs of the Company as at March 31. 2024. and its profits including total comprehensive income i.iossei!, its cash flows and the changes in equire for the year ended on chat date
Basis of Opinion
We conducted cur audit of the financial statement: 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 Ussponsibilities for the And:: of the fnxinchil slMemertis' section of our reptrt. We are independent of the Company in accordance with the Code of Ethics issued bv the Institute of Chartered Accountants of India . "the IC.AI" i together with the ethical requirements that are relevant to cur audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Cede of Ethics. We believe that the audit evidence, tve have obtained is sufficient and appropriate to pro-.tide a basis for our audit opinion on the financial statements
Key Audit Matters
Key audit matters are those matters that m our professional judgment, were of most Significance in our audit of the financial statements of the current period. These matters were addressed in foe context of our audit of the financial statements as a whole, and in forming our opinion thereon, and tve do not provide a separate opinion on these matters. For each matter below, -our description of how our audit addressed the matter is provided in that context.
We have determined the matters described be lev to be the key audit matter: and to be communicated in our report We have fulfilled the responsibilities, described in the Auditor's responsibilities for the audit of the financial statements section of our report, sueluding in relation to these matters Accordmslv. cur audit included the performance of procedures designed (c- respond to our assessment of the risk of material misstatement of the financial statements. The results of our audit procedures, including the procedure: performed to address foe matter below, provide the basis for our audit opinion on foe accompanying financial statements.
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The Key Audit Martel's
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Hmv was the matter addressed in our Audit
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Revenue Recognition (Refer Xote \'o. 1.4.id) and 25 of the Financial Stalemontx)
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Revenue is one sf the key profit drivers and is therefore susceptible to misstatement' Revenue is measured m net of any discounts. and rebates. Revenue from sale of products is considered as key audit matter as there is a risk of accuracy of recognition and measurement of sales in the financial statements considering the following aspects:
* Determination of performance obligation for recognition of revenue
* Estimation of variable consideration in pricing.
* Cut-off’ :s the key assertion in so far as revenue recognition i-s concerned, since an inappropriate cut-off car. result m material misstatement of results for the periods
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Our audit procedures with re sards to revenue recognition is a combination of internal controls and substantive procedures which included the fell owing
* Evaluated the design of l eternal control.
* For evaluation of operating effectiveness of internal controls, tested revenue by verifying ca s am pie basis, agreements executed with the customers, relevant dccumentar evidence of satisfaction of performance obligation for timing of recognition of revenue, accuracy of revenue recognition including variable consideration included pricing, cut off tiansactions at the year e:id and tax amount of the invoices
* Performed substantive testma by verifying the sale: invoice and usher relevant dccumentar.' evidence ca sample bads.
*Ý Obtain the balance oonfirnintian form selected samples and verified the reconciliation, if any, for the confirmation received.
* Evaluated rise appropriateness of accounting policies, related disclosures made and Overall presentation in the financi al stat em e nts
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Existence and Valuation of Invemeries
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The Company's inventories a: at the end of the reporting period are ' ITS9.G6 Lakhs representing M.OTSft erf the Company's total assets. fRefer Note „Vo. 6" of the financial statements';
The existence of inventories is a he-- audit matteis due to in’, ulvdrtietii of hish ns-:, basis the nature and size of the products wherein YaliHt psr unit is relatively insignificant but high "ciumes are -involved which are distributed across different units of the Company
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Lr. response tc these key matters, cur audit included, among others. ±e following principle audit procedures
*Ý ’understood the management's control aver physical inventor- connl-s and their valuation
* Evaluation of design and testing of the operating effectiveness- of the internal controls relating to physical inventory counts at the plant. Tn resting these controls, we observed the inventory cycle count process on a sample basis, inspected the results of the inventory cycle count and confirmed that the "inances were approved and appropriately accounted for.
* Evaluation of design ar.d testing of the operating effectiveness of the internal controls relating to purchases, sales and inventories including the automated controls.
* We have performed the physical '-eiiEcation of
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inventories on a sample basis for establishing the existence of inventor.' as at the end of the reporting period.
* For a representative sample, verification that the finished goods inventories were correctly measured, using a recalculation cu" the measurement cf those inventories based on the cost of acquiring them from suppliers and considering the costs cf directly attributable to such goods
* Assessed the hey estimates used by the Company A management to determine the net realisable "aloe and the consistency thereof with the Company’s policy on provision for non-mo-.frig inventory and performed a sensitivity analysis on the estimated selling price and compared with.flue cost per item.
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Carrying Value of Trade Receivables
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As at March 31. 2GZ4. trade receivables constitute approximately 1634% ci total assets of the Company Ý Refer ' ora .Yo. " of the financial statements) The Companv is required to regularly assess the recoverability ef its trade receivables.
The Company applied, expected credit Loss (EGLl model for measurement and recognition of impairment lost on trade receivables. The Company uses a provision matrix to determine impairment loss allowances. The provision matrix is based on its historically ebsered default rates over the expected life cf trade receivable1 and is adiusted for forward looting estimates.
This is a hey audit matters as significant judgement is involved to establish the provision matrix.
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Our audit procedures included, among other the followings:
* Evaluated die Company’s accounting policies pertaining to impairment of financial assets and assessed compliance with those policies m term of bid AS - 109. “FmayiSUdifesframerits ”
f Assessed and tested the design and operating effectiveness- of the Comp an’-':- internal financial controls over, provision for expected credit Less (ECL Ý
* Evaluated the management s assumption and judgement relating to various parameters which included die historic a! default rates and business environment in which the entity operates for estimating the amount of-such provision.
* Evaluated the management's assessment of recoverability of the outstanding recewables and recoverability of the overdue aged receivables throng Ei inquiry with the management, and analysis of the collection fends in respect cf receivables.
* Assessed and read the disclosures made by the Company in the financial statements.
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Information Oilier them the Financial Statements and Auditor’? Report thereon
Ins Company's Management and tiie Board of Directors are responsible far the other information. The ether information comprises the information included in the Management's Discussion sad .Analysis Beard's Report including Armjejture Eo the Beard’s Report, Report on Corporate Governance. Business Responsibility and
Sustainability Report and Shareholder's mforaiaticiij but doea not me Jude the consolidated financial statements, standalone financial statement-: and cur auditor's report thereon
Our opinion on the financial statements dees not ccver the other information and we dc not express any form of assurance conclude a thereon.
In connection with cur audit of the financial statements. our responsibility is to read the other information and. in doing so. consider ivhecher the other information is materially inconsistent with the financial statement:-, or cur knowledge obtained during the course of our audit or otherwise appears to be materially imsstated
If, based on the wort we have perfcrimed, we conclude that there 13 a material misstatement of this ether information; we are required to report that fact We have nothtr.g to report in this regard
Manasemenfs Responsibility" for the Financial Statements
The Company's Management -and the Board of Directors are responsible for the matters stated in Section 13-^' :i of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, the financial performance including the other comprehensive income i Losses), cash flows ana changes m equity of the Company in accordance with the accounting principle generally accepted m India, including the Indian Accounting Standards <Ind AS) as specified under Section 133 of the Act, read with the Companies ..Indian Accounting Standards! Rules. 2015. as amended, time to time. This responsibility also includes maintenance of adequate accounting records m accordance with the piovisious of the Ad for safeguarding of the asset: cf the Compaa" and lor preventing and detecting frauds and other irregularities, selection and -application of appropriate accounting policies; making tudgmer.ts and estimates that are reasonable and prudent, and design, implementation anti inaintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the acco tutting records, relevant to the preparation and presentations cf the financial statements that give a true and fair view and are free fie m material ruts statement, whether due to fraud or error.
Li preparing the financial statements, the Company's Management and the Board of Directors, are 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 cf accounting unless the (Company’s management and Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so
The Company's Board of Directors are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities far cite Audit of Financial Statements
Our objectives are ic obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due zc fraud or error, and tc issue an auditor's report that includes our cpinion Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 3As 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 financial statements.
As nan cf an audit in accordance with SAa, we exercise professional lodgment and maintain professional skeptic ism throughout the audit. We alsc: 1
* Evaluate the appropriateness cf account ins policies used ant the reasonableness of accounting estimates and related disclosures made by the Company.: Managempnjt and Board of Directors
* Conclude on the appropriateness of management7 s use of the going concern basis of accounting and. based on the audit evidence obtained. whether a materia: unceriainr.- exLsts related to events or conditions that mav cast significant doubt on the Company's ability to continue as a gc-ing concern If’-ve conclude that a material uncertainty exists, we are required to draw attention m our auditor's report to the related disclosures na the financier statements or. if such disclosure? 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.
* Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying trails actions and events in a manner that achieves fair presentation
Materiality is the magnitude of misstatements in the fir.aiiCLai statements that, individually or in aggregate, makes it probable that the economic decisions of reasonably knowledgeable users of the financial statements may be influenced We consider quantitative materiality and qualitative factors in (i) planning the scope of cur audit wort and in evaluating the results cf cur work, and (ii) to evaluate die effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and siamncant audit hndmas. including ar.v significant deficiencies m internal control that we identif.1 during our audit.
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 tc bear on our independence, and where applicable, related safeguards.
From the matters c o oimunicaied with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements at the current serio-d and are therefore the key audit matters. We describe these matters in our auditor’s re-sors unless lav or regulation precludes uublic disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated m our report because the adverse consequences cf doing -so would reasonably be expected to outweigh ±e public interest benefits of such communication.
Repo it on Other Legal and Regulatory Requirements
1. As required by the Companies ( Auditor’s Reporti Order. 2020 ( the Order’1'- issued by the Central Government of India in terms of sub-section (Li) of Section 141 of the Act we gi'-e in the Annevure “A", a statement c n the matters specified in paragraph 3 and paragraph 4 of the said Order.
2. As-required by Section 143131 of die Act based on our audit, we report that:
a. We have sought and obtained all tii-e information and explanations which to the best of c-ur knowledge and belief were necessary for the purpose: of our audit.
b. In our opinion, proper bocks of account as required by law have been kept by the Company :o far as- it appears from our examination of those books
c. the Balance Sheet the Statement of Profit and Loss including the Other Comprehensive Income .Losses... the Statement of Cash Flows and die Statement of Changes in Equity.1 dealt with this Reports are in agreement with the relevant books of account.
d. In cur opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of die Act. read with the Companies (Indian Accounting Standardsi Rules, 2015. as amended, time tG time.
e. On the basis of the written representation received horn the directors as on March SI. 202 A taken on the record by the Board of Directors, none of directors j: disqualified a3 on March 31. 2024. from being appointed a:- a director in term of Section 1|54( 2'- cfthe AcL
f. Willi respect to Edequacv of the internal financial controls with reference to these financial statements of the Company and the operaiatg Effedweness of such centre], refer tc our separate report in Annexure L"B“ Our reteon expresses an unmodified cpmicG outlie adequacy and operating effectiveness of the Company's internal financial controls with reference to financial state men:;.
g. With, respect tv the ether matters 1g be included m the Auditor's Report tn accordance with the requirement? of Section 197{1 b; of the Act. as amended, time to time, in our opinion and to the best of our information and. explanations given to us. the remunerations paid provided by the Company to its directors during the reporting period is in accordance with the provision of Sechon 197 bf the .Act. Tlie remuneration paid to any directors is not tn excess cf the limit laid down under section 19” of the Acts The Ministry of Corporate Affairs ("MCA”} has not prescribed other details under section 19”; 16) of the Act which are required to be commented upon by us
h With respect tc the other matters tc be included m the independent Auditor s Report in accordance with Rule 11 cf the Companies i Audit and Auditors'! Rules. It; 4. as amended, time tc time, m cur cuinicn and to the best of cur information and according to the explanations given to us.
,.ii The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer '‘Nofe.Xo. 41’ of the financial statements.
. li :Ý The Company did net have any long-term contracts including derivative contract? for which there were aw material foreseeable losses
(tui There has been no delay in traitsferring the amounts required to be transferred to the investor Education and Protect ion Fund by the Company
; iy a) Tlte Management has represented that tc the best of its knowledge and belief, no funds (which are material either individually or in the aggregate Ý have been advanced or teamed or invested (either from borrowed fund or share premium or any other sources or hind cf funds'i by the Company tc or in any other person or entities, including the foreign entities (“Intermediaries” i. with the understanding, whether recorded m writing or otherwise, that the Intermediaries shall, whether, directly or indirectly tend or rawest in ether persons or entities identified m any manner whatsoever by or on behalf of the Company [ "LTtnnate Beneficiaries'7; or provide any guarantee., security or the like tc or on behalf of the Ultimate Beneficiaries;
b) The Management ha? rep?etented, that, to the best of it? knowledge and belief, no funds {which are material either individually or in the aggregate i have been received bv the Compatv arum an" person or entities, including foreign entities ( "Funding Parties”). with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, dtreat!;, or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (‘'Ultimate Beneficiaries” ;Ý or provide any guarantee, security or the like on behalf o: the Ultimate Beneficiaries:
c) Based ea such audit procedures that have been considered reasonable and appropriate n: the circumstances, nothing ha:- come to our notice that has caused us to believe that the representations under sub clause (ii and (h) of Rule 11(e), as prc-'ided under -a- and (b above contain any material misstatement
(v) As stated in 'Xotc No. 44 " tc the fininciai statements:
a) The final divideod proposed in the previous year, declared acid paid by the Comtanv durins the reporting period is in accordance with section 123 of file Act, as- applicable
b) During the reporting period and until the date of this report the Company has not declared or paid any interim dividend m accordance with section 113 of the Act. as applicable.
c) The Board of Directors of the Compaiv- has proposed the final dividend for the period, which is subiect to the approval of the shareholders at their ensuing Annual General Meeting i.AGMj The amount of dividend proposed is in accordance with the section III of the Act. as applicable
:v- 3ased :n cur esaminaticn. which included teat check, tie Coapar.v has used accounting software for maintaining Ltv hboka| cf accdunls for the financial period ended March 11. 21124 which has a feature of reccr-dian audit crab edit J02) facilities and the sair.e has operated throughout the 'aerird for all the relevant transactions recorded til the software Further durtr.a the course of car audit, did cot come ? cross any instance of the audit trail feature ieing tampered with
As proviso tc Rule 3(1 Ý of the Companies (A:counts Ý Rules. 2014 is applicable from April 01. 2022. reporting under ?.ule ll^ai of the Companies (Audit and Auditors;1 Rule 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial period ended March 11, 2!)24
Fcr SLAVISH N JAIX £ CO-
Chartq*ed Acca xtiian:: FRK NTo. 013S4J0W
Place i Nagpur AHPIT AGRAWAL
Dated: May 28. 2024 Partner
UDIN Np.: 241 -r539SEKAQOPd525 Membership No. 1753OS
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Identify and assess the risks cf material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to zhese risks, and obtain audit evidence that is sufficient and appropriate tc provide a basis fer our opinion. The risk of not detecting a material misstatement resulting fiom fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls
* Obtain an understanding of internal financial control: relevant to the audit m order to design audit procedures that are appropiiate in. the circumstances. Voder Section I43j3\;- of the Act, we are also responsible for expressing our :pinion on whether the Company has an adequate internal financial controls svstem with, reference tc financial statements in place and the operating effectiveness of nuch controls.
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