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Gini Silk Mills Ltd.

BSE: 531744 Sector: Industrials
NSE: N.A. ISIN Code: INE548B01018
BSE 10:58 | 17 Jan 56.50 -2.05
(-3.50%)
OPEN

55.65

HIGH

60.75

LOW

55.65

NSE 05:30 | 01 Jan Gini Silk Mills Ltd
OPEN 55.65
PREVIOUS CLOSE 58.55
VOLUME 1158
52-Week high 71.90
52-Week low 41.55
P/E 88.28
Mkt Cap.(Rs cr) 32
Buy Price 56.50
Buy Qty 1606.00
Sell Price 60.50
Sell Qty 75.00
OPEN 55.65
CLOSE 58.55
VOLUME 1158
52-Week high 71.90
52-Week low 41.55
P/E 88.28
Mkt Cap.(Rs cr) 32
Buy Price 56.50
Buy Qty 1606.00
Sell Price 60.50
Sell Qty 75.00

Gini Silk Mills Ltd. (GINISILKMILLS) - Auditors Report

Company auditors report

Opinion

1. We have audited the accompanying Ind AS financial statements of GiniSilk Mills Limited (“the Company”) which comprise the Balance Sheet as at March312020 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformitywith the accounting principles generally accepted in India including IndianAccounting Standards (‘Ind AS') specified under section 133 of the Act of the stateof affairs of the Company as at March 312020 and its profit including othercomprehensive income its cash flows and changes in equity for the year ended on thatdate.

Basis for opinion

3. We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act. Our responsibilities under those standards arefurther described in the Auditor's Responsibilities for the audit of Ind AS financialstatements section of our report. We are independent of the company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI')together with the ethical requirements that are relevant to our audit of financialstatements under the provisions of the act and the rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

Key Audit Matters

4. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of thecurrent period. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr.No. Key Audit Matter Auditor's Response
1. Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 “Revenue from Contracts with Customers" (new revenue accounting standard) Principal Audit Procedures
Our audit process included to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
• Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
The application of the revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.
• Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation performance and inspection of evidence in respect of operation of these controls.
• Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard
• Selected a sample of continuing and new contracts and performed the following procedures:
• Read analyzed and identified the distinct performance obligations in these contracts.
Refer Notes 47 to the Financial Statements
• Compared these performance obligations with that identified and recorded by the Company.
• Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation
• Samples in respect of revenue recorded for time and material contracts were tested using a combination customer acceptances subsequent invoicing and historical trend of collections and disputes.
Performed analytical procedures for reasonableness of revenues disclosed.

Information other than the Financial Statements and Auditor'sReport thereon

5. The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the Ind AS financial statements and our auditor's reportthereon.

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

In connection with our audit of the Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Ind AS financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed weconclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance forthe Financial Statements

6. The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013(“the Act”) with respect tothe preparation of these Ind AS financial statements to give a true and fair view of thefinancial position financial performance cash flows and changes in equity of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

7. In preparing the Ind AS financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

8. The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

9. Our objectives are to obtain reasonable assurance about whether theInd AS financial statements as a whole are free from material misstatement whether due tofraud or error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with Standards on Auditing will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.

10. As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

• Identify and assess the risks of material misstatement of theInd AS financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for explaining our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theInd AS financial statements including the disclosures and whether the Ind AS financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

11. We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

12. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

13. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the Ind ASfinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

14. As required by ‘the Companies (Auditor's Report) Order 2016'issued by the Central Government of India in terms of subsection(11) of section 143 of theAct (hereinafter referred to as the “Order”) and on the basis of such checks ofthe books and records of the Company as we considered appropriate and according to theinformation and explanations given to uswe give in the Annexure A a statement on thematters specified in paragraphs 3 and 4 of the Order.

15. As required by Section 143 (3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b) in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) the Balance sheet Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this report are in agreement with the books of account;

d) in our opinion the aforesaid Ind AS financial statements complywith the Indian Accounting Standard specified under Section 133 of the Act;

e) on the basis of the written representations received from thedirectors as on March 312020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312020 from being appointed as a director in termsof Section 164 (2) of the Act;

f) with respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in “Annexure B”; and

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 ouropinion and to the best of our knowledge and belief and according to the information andexplanations given to us:

i. the Company has disclosed the impact of pending litigations as atMarch 312020 on its financial position in its Ind AS financial statements to the extentdeterminable/ascertainable. - Refer Note 35 to the financial statements;

ii. the Company does not have any long term contract includingderivative contracts for which there are any material foreseeable losses;

iii. There has been no delay in transferring amount required to betransferred to the Investor Education and Protection Fund.

For Bilimoria Mehta & Co.
Chartered Accountants
Firm Registration Number: 101490W
CA Jalpesh K Vora
Partner
Membership No.: 106636
UDIN: 20106636AAAACA8434
Mumbai July 27 2020

Annexure A to the Independent Auditor's Report

Referred to in paragraph 14 of the Independent Auditors' Report of even date tothe members of Gini Silk Mills Limited on the Ind AS financial statements for the yearended March 31 2020.

i (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of

fixed assets.

(b) As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on 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 asdisclosed in Note 2 on fixed assets to the Ind AS financial statements are held in thename of the Company.

ii The inventory excluding stocks with third parties has been physically verified bythe management at regular intervals which we consider to be reasonable. No materialdiscrepancies were noticed on physical verification of inventories as compared to bookrecords.

iii According to information and explanation given to us the Company's has not grantedany loan secured or unsecured to companies firms Limited Liability Partnership firm orother parties covered in the register maintained under section 189 of the Companies Act2013 and hence sub clause (a) (b) and (c) are not applicable.

iv In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of the loans and investments made.

v The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi According to the information and explanation given to us the rules made by theCentral Government of India the Company is not required to maintain cost records asspecified under sub section (1) of section 148 of the Companies Act 2013 in respect of itsproducts. Accordingly provision of Clause 3(vi) of the Order is not applicable.

vii (a) According to the information and explanations given to us the Company isgenerally regular in depositing with

appropriate authorities undisputed statutory dues including Provident Fund Employees'State Insurance Income Tax Goods & Service Tax Custom Duty Cess and other materialstatutory dues applicable to it as per the available records as far as ascertained by uson our verification.

According to the information and explanations given to us there were no undisputedamounts payable in respect of outstanding statutory dues as aforesaid as at 31stMarch 2020 for a period of more than six months from the date they became payable.

(b) The dues outstanding in respect of Cess and Excise Duy on account of any disputeare as follows:

Name of the Statute Nature of Dues / Period to which the amount relates Amount (INR) Forum where dispute is pending
Textile Committee Act & Cess Rules 1975 Cess (Various years from 1998 to 2008) 709232/- Textile Committee Cess Appellate Tribunal
Central Excise Act Demand on differential amount of excise duty. (16/12/1998 to 28/02/2001) 18509688/- Supreme Court of India

viii According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of dues of loans takenfrom banks. There are no loans or borrowings payable to government and financialinstitution and the company has not issued any debentures.

ix The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes the loans were obtained.

x During the course of our examination of the books and records of the Company andaccording to information and explanation given to us we have neither come across anyinstance of fraud on or by the Company its officers or employees noticed or reportedduring the period nor have we been informed of such case by the management.

xi According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid or 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 the information and explanation given to us theCompany is not a Nidhi Company. Accordingly provision of Clause 3(xii) of the Order isnot applicable.

xiii According to the information and explanation given to us and based on ourverification of the records of the Company and on the basis of review and approval by theBoard and Audit Committee the transactions with related parties are in compliance withSection 177 and 188 of the Act where applicable and the details of such transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.

xiv According to the information and explanation given 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 period under review. Accordingly the provision of Clause 3(xiv) of the Order is notapplicable.

xv According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with its directors or persons connected with them. Accordingly the provisionof Clause 3(xv) of the Order is not applicable.

xvi The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Bilimoria Mehta & Co.

Chartered Accountants Firm Registration Number: 101490W

CA Jalpesh K Vora
Partner
Membership No.: 106636
UDIN: 20106636AAAACA8434
Mumbai July 27 2020

Annexure B to the Independent Auditor's Report

Referred to in paragraph 15(f) of the Independent Auditors' Report of even date tothe members of Gini Silk Mills Limited

on the Ind AS financial statements for the year ended March 31 2020.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013

1. We have audited the internal financial controls over financial reporting of GiniSilk Mills Limited (“the Company”) as of March 31 2020 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. 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 Act.

Auditors' Responsibility

3. 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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Ind AS financial statements whether due to fraud or error.

5. 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

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

i. Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

ii. Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Ind AS financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and

iii. Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the Ind AS financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. 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 of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

8. 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 March 312020 based on theinternal control over financial reporting criteria established by the Company consideringthe 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 Bilimoria Mehta & Co.

Chartered Accountants Firm Registration Number: 101490W

CA Jalpesh K Vora
Partner
Membership No.: 106636
UDIN: 20106636AAAACA8434
Mumbai July 27 2020

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