Kush Industries Ltd Directors Report.

To,

The Members of

KUSH INDUSTRIES LIMITED (formerly known as SNS TEXTILES LTD.)

Opinion

We have audited the accompanying standalone financial statements of Kush Industries Limited (Earlier Known as SNS Textiles Limited) (“the Company”), which comprise the balance sheet as at 31st March 2021, 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 then ended, and summary of the significant accounting policies and other explanatory information (herein after referred to as “standalone Ind AS financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, give the information required by the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2021;

b) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, 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 statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matters Auditors Response
Unsecured loan:
The Company has not provided the loan agreement in respect of loans availed from directors and corporate We are unable to form an opinion about the timely repayment of these outstanding debts. However, management is confident for repayment of the said loan.

Information other than the financial statements and auditors report thereon

The Companys board of directors is responsible for the preparation of the other information. The other information comprises the information included in the Boards Report including Annexures to Boards Report, Business Responsibility Report but does not include the financial statements and our auditors report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the 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 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. We have nothing to report in this regard.

Managements responsibility for the financial statements

The Companys Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (“Ind AS”) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 Ind AS 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, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditors Responsibilities for the Audit of the Financial Statements

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companys preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We are also responsible to conclude on the appropriateness of managements 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 entitys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditors report to the related disclosures in the financial statements or, if such disclosures are inadequate to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditors report. However, future events or conditions may cause an entity to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 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.

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 best of our knowledge and belief were necessary for the purpose 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 Balance Sheet, Statement of Profit and Loss, and 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 Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014,

(e) On the basis of written representations received from the directors as on March 31,2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2021 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 report in Annexure - ‘B.

(g) With respect to the other matters to be included in the Auditors 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 financial statements - Refer Note - Disclosure as required by AS 29 “Provisions, Contingent Liability and contingent Assets” to the financial statements.

ii. the Company has not undertaken any long-term contracts including derivative contracts.

iii. The Company is not required to transfer any amount to Investor Education and Protection Fund.

For V H GUNDARWALA & CO.,
Chartered Accountants
Place : Surat (V. H. GUNDARWALA)
Date : 26-06-2021 PROPRIETOR
M.NO:-046851
FRN:-113291w
UDIN : 21046851AAAACO3208

ANNEXURE-A TO THE AUDITORS REPORT

Referred to in our Report of even date an annexure on the matters specified in paragraphs 3 and 4 of the CARO on the Statements of Accounts of Kush Industries Limited (Earlier Known as SNS Textiles Limited) as at and for the Year ended March 31, 2021 we report that:

1. Fixed Assets

The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

The company has a regular program of physical verification of fixed assets by the management during the year. The procedure and periodicity of verification in our opinion is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties other than self-constructed immovable property (buildings), as disclosed in fixed assets to the financial statement, are held in the name of the company except the following:

Nature of Property Total number of cases Name in the Lease / Sale Deed Gross Block as on 31-03-2021 ( in Lakh) Net Block as on 31-03-2021 ( in Lakh)
Land 01 Suzlon Fibres Ltd. 9.34 9.34

The Company was formerly named as Suzlon Fibres Ltd.

2. Inventory

As explained to us, the physical verification of inventories has been conducted at reasonable intervals by the management. No discrepancies were noticed on physical verification.

3. Loans granted by the company

According to the information and explanations given by the management, the Company has not granted any loans, secured or unsecured to companies, Firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 and therefore the Clause 3(iii) of the Companies (Auditors Report) Order, 2016 is not applicable.

4. Loans, investments, guarantees and security

In our opinion and according to the information and explanations given to us, the company has not advanced any loan or given any guarantee or provided any security or made any investment covered under section 185 and 186 of the Act.

5. Deposits

The Company has not accepted any deposits as per the directive issued by the Reserve Bank of India and as per the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under. Accordingly, the clause 3 (v) of the Companies (Auditors Report) Order, 2016 is not applicable to the company.

6. Cost Records

Maintenance of cost records as specified by the Central Government under sub section (1) of section 148 of the Companies act is not applicable to the company. Accordingly, the clause 3(vi) of the Companies (Auditors Report) Order, 2016 is not applicable to the company.

7. Statutory Dues

According to information and explanations given to us and on the basis of our examination of the books of accounts, the company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Employees State Insurance, Income T ax, Service tax, Sales tax, Goods and Service tax, Excise duty, Custom duty and other statutory dues.

According to the information and explanation given to us, there were no outstanding statutory dues as at March 31, 2021 for a period of more than six months from the date they became payable.

According to the information and explanation given to us and the records of the company, there are no dues of provident fund, income tax, central sales tax, VAT, excise duty, service tax, GST and other statutory dues which have not been deposited on account of any dispute except the following-

Name of the Statute Nature of Dues Amount under Dispute (Rs.) Period to which the amount relates Forum where dispute is pending Amount deposited against ()
Foreign Trade, 1992 Custom Duty / Export Obligation Not yet determined 1997-98 Deputy Commissioner of Customs, Raigad, Maharashtra 21,00,000/-
Central Excise Act, 1944 Excise Duty 30,42,620/- Jul95 to Feb97 CESTAT, Mumbai 6,80,000/-
Income Tax Act, 1961 Income Tax 54,49,019/- A.Y. 1994-95 ITAT, Ahmedabad 3,84,530/-
Income Tax Act, 1961 Income Tax 18,64,220/- A.Y. 1996-97 ITAT, Ahmedabad -Nil-
Income Tax Act, 1961 Income Tax 81,64,171/- A.Y. 2017-18 Commissioner Appeal -Nil-
Sales tax Act, 1969 Sales Tax 32,99,845/- 2001-02 Joint Commissioner Gujarat Value Added Tax Dept. -Nil-

The aforesaid legal disputes and resulting liability in some of the cases does not quantify the amount of interest or penalty vide respective show cause notice or order of the jurisdictional officer, which may increase the liability eventually when the respective cases are finally adjudicated.

8. Repayment of financial dues

In our opinion and according to information and explanations given by the management, the Company has neither borrowed funds from any financial institutions, banks or government, nor it has issued debentures till 31st March, 2021. Consequently, in our opinion, the question of reporting on defaults in repayment of dues to financial institutions, banks, government and debenture holders does not arise.

9. Public Offer:

According to information and explanation given to us, the company has not raised money by way of initial public offer or further public offer (including debt instruments) or obtained term loans during the year.

10. End use of funds

On the basis of our examination of records and information and explanations given to us the term loans have been applied for the purpose for which they were raised.

11. Fraud

Based on our audit procedure, as per our opinion and according to the information and explanation given by the management, no fraud by the company or on the company by its officers or employees has been noticed or reported during the year.

12. Managerial Remuneration

According to the information and explanations given to us and based on our examination of the books and records of the Company, we are of the opinion that the Company has not paid any managerial remuneration during the year under audit and consequently, the requirements of clause 3(xi) of Companies (Auditors Report) Order, 2016 is not applicable.

13. Nidhi Company

In our opinion and according to the information and explanations given by the management, the Company is not a Nidhi company. Accordingly, Clause 3(xii) of the Companies (Auditors Report) Order, 201 6 is not applicable.

14. Preferential Allotment of shares/debentures

Based on our audit procedures and as per the information and explanations given by the management, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and accordingly the provision of clause 3(xiv) of the CARO is not applicable to the Company.

15. Related party transactions

According to the information and explanations given by the management and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

16. Non-cash transactions

According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

17. NBFC company

The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For V H GUNDARWALA & CO.,
Chartered Accountants
Place: Surat (V. H. GUNDARWALA)
Date : 26-06-2021 PROPRIETOR
M.NO:-046851
FRN:-113291w
UDIN : 21046851AAAACO3208

Annexure B: Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of KUSH INDUSTRIES LIMITED (formerly known as SNS TEXTILES LTD.) as of 31st March 2021 in conjunction with our audit of the standalone financial statements of the Company for the period ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2021, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For V H GUNDARWALA & CO.,
Chartered Accountants
Place: Surat (V. H. GUNDARWALA)
Date : 26-06-2021 PROPRIETOR
M.NO:-046851
FRN:-113291w
UDIN : 21046851AAAACO3208