SURYA LRKSHMI COTTON MILLS LIMITED
UUe have audited the accompanying financial statements of SURyfiLRKSHmi COTTOn miLLS LimiTED ("the company'}, which comprise the Balance Sheet as at march 31, 2024, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and a summary of the material accounting policies and other explanatory information (herein after referred to as "the financial statements’)
In our opinion and to the best of our information and according to the explanations given to us, the accompanying financial statements give the information required by the Companies fict, 201 3 (“the fict") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at march 31, 2024, the Profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
UUe conducted our audit of the financial statements in accordance with the Standards on fiuditing (Sfis) specified under Section 143(10) of the fict. Our responsibilities under those standards are further described in the fiuditors responsibility for the fiudit of Financial Statements section of our report. UUe are independent of the company in accordance with the Code of Ethics issued by the Institute of Chartered ficcountants of India (ICfil) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the fict and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. UUe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Key fiudit mattersare those matters that in our professional judgement, were 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 statementsasa whole, and in forming ouropinion thereon, and we do not provide a separate opinion on these matters. UUe have determined the matters described below to be the key audit matters to be communicated in our report.
Key fiudit matters
Auditor's Response
Evaluation of uncertain tax positions
Principal audit procedures
The Company operates in different states and is subject to periodic challenges by local tax authorities on a range of tax matters during the normal course of business including direct and indirect tax matters.
Our audit procedures include the following substantive procedures:
Ý Obtained understanding of key uncertain tax positions; and
• UUe along with our internal tax experts -
• evaluated the Design and tested the operating effectiveness of controls around the assessment of the matter;
• Read and analysed select key correspondences, external legal opinions / consultations by management for key uncertain tax positions;
Key Audit matters
auditor's Response
These involve significant management judgment to determine the possible outcome of the uncertain tax positions, consequently having an impact on related accounting and disclosures in the financial statements. Refer note 1.3 and note 34.1 to the financial statements.
• Discussed with appropriate senior management and evaluated management's underlying key assumptions in estimating the tax provisions; and
• Assessed management's estimate of the possible outcome of the disputed cases;
Assessed the appropriateness of disclosures made under the head 'Contingent Liabilities' in the financial Statements.
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and cue do not express any form of assurance conclusion thereon.
In connection cuith our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider mhether the other information is materially inconsistent ujith the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. UJe have nothing to report in this regard.
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Pet with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flowsand changes in equity ofthe Company in accordance with the Indian Recounting Standards (Ind PS) prescribed under Section 133 ofthe Ret read with relevant rules issued there under and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Ret for safeguarding of the assets of the company and for preventing and detecting the 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the 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.
The Board of Directors are responsible for overseeing the Company's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the 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 SRs 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.
Rs part of an audit in accordance with SRs, we exercise professional judgment and maintain professional scepticism throughout the audit. UJe also:
Ý Identify and assess the risks of material misstatement of the 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.
• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedu res that are appropriate in the circumstances. Under section 143{3){i) of the Oct, uje are also responsible for expressing our opinion on mhether the Company has adequate internal financial controls in place and the operating effectiveness of such controls.
• evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, ujhether 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 uje conclude that a material uncertainty exists, uje are required to draiu attention in our auditor's report to the related disclosures in the 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.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
UUe 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. UUe also provide those charged with governance with a statement that we have complied with relevantethical 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.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. LUe 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.
1} Rs required by the Companies (Auditors Report) Order,2020 ("the Order”) issued by the Central Government of India in terms of sub-section (II) of section 143 of the fict, we give in the finnexure fi, a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2) Ps required by Section 1 43(3) of the Ret, we report that:
a) UUe 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) Inouropinion, proper booksofaccount as required by law have been kept 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 other comprehensive income, statement of changes in equity and the cash flow statement dealt with by this Report are in agreement with the books of account,
d) In our opinion, the aforesaid financial statements comply with the Indian Recounting Standards (Ind RS) prescribed under Section 133 of the fict.
e) On the basis of written representations received from the directors as on march 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on march 31, 2024 from being appointed as a director in terms of Section 1 64(2) of the fict,
f) UUith respeetto theadequacy of internalfinancial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in "finnexure B".
g) UUith respect to the managerial remuneration to be included in the auditor's report in accordance with the requirements of section 197(16) of the fict, as amended:
In our opinion and to the best of our information and according to the 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 Ret.
h) UJith respect to the other matters to be included in the Auditor's report in accordance ujith 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 financial statements - Refer note 34,1 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for Luhich there luere any material foreseeable losses;
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 knomledge and belief, no funds (uuhich are material either individually or in the aggregate) have been advanced or loaned or invested (either from borroujed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (“Intermediaries"), uuith the understanding, whether recorded in uuriting or otheruuise, that the Intermediary shall, uuhether, directly or indirectly lend or invest in other persons or entities identified in any manner uuhatsoever by or on behalf of the Company (“Ultimate Beneficiaries") 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 knomledge and belief, no funds (mhich are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties"), mith the understanding, mhether recorded in mriting or othermise, that the Company shall, mhether, directly or indirectly, lend or invest in other persons or entities
identified in any manner mhatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
c. Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) above, contain any material misstatement.
v. The Company neither declared nor paid any dividend during the year.
vi. Based on our examination, the Company has used an accounting softmare for maintaining its books of account mhich has a feature of recording audit trail (edit log) facility. The audit trail feature has been operated throughout the year for all transactions recorded in the accounting softmare. Further, during the course of our audit, me did not come across any instance of the audit trail feature being tampered mith.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 01,2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended march 31,2024.
Chartered Accountants Firm's Regn no. 0005135
(K.SHRRVRn)
Partner
Place : Hyderabad membership no. 215798
Date: 24.05.2024 UDin: 2421 5798BKESSJ5531