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Himatsingka Seide Ltd.

BSE: 514043 Sector: Industrials
NSE: HIMATSEIDE ISIN Code: INE049A01027
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VOLUME 25145
52-Week high 225.55
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OPEN 69.55
CLOSE 69.85
VOLUME 25145
52-Week high 225.55
52-Week low 68.50
P/E
Mkt Cap.(Rs cr) 709
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Himatsingka Seide Ltd. (HIMATSEIDE) - Auditors Report

Company auditors report

To the Members of Himatsingka Seide Limited

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the standalone financial statements of HimatsingkaSeide Limited (the "Company") which comprise the standalone balance sheet as at31 March 2022 and the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone financial statementsincluding a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2022and its profit and other comprehensive income changes in equity and its cash flows forthe year ended on that date.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia "ICAI" together with the ethical requirements that are relevant to ouraudit of the standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence obtained issufficient and appropriate to provide a basis for our opinion on the standalone financialstatements.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone financial statementsfor the current year. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

REVENUE RECOGNITION

See note 2.1 and 20 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
Revenue from the sale of goods in the ordinary course is measured at the fair value of the consideration received or receivable when the goods are delivered and control has passed to the buyer. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Revenue from sale of goods is recognized at the point in time when control is transferred to customer. 1. We evaluated the revenue recognition accounting policies by comparing it with the applicable accounting standards.
We identified revenue recognition as a key audit matter because the Company and its external stakeholders focus on revenue as a key performance indicator. This could result in a risk of revenues being overstated or recognised before control has been transferred. 2. We tested the design of key controls and operating effectiveness of the relevant key controls with respect to revenue recognition on certain transactions selected on a sample basis.
3 We performed substantive testing for the revenue transactions using statistical sampling and tested the supporting documents.
4. We tested on a sample basis specific revenue transactions recorded before and after the financial year-end date to determine that the period in which the revenue has been recognized is appropriate.
5. We tested specific manual journal entries posted to revenue to identify any unusual items.

Independent Auditors' Report on the Audit of the Standalone FinancialStatements of Himatsingka Seide Limited for the year ended 31 March 2022 (continued)

KEY AUDIT MATTER _CONTINUED_

CARRYING VALUE OF INVESTMENTS IN SUBSIDIARIES AND ASSESSMENT OFIMPAIRMENT

See note 2.14 and 4A to the standalone financial statements

The key audit matter How the matter was addressed in our audit
The Company has made significant investments in subsidiaries which are recorded at cost less impairment. The investments in subsidiaries are tested for impairment by Company at least annually. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Company's assessment of impairment contains a number of parameters which involve significant judgements and estimates including revenue growth cashflow forecasting weighted average cost of capital and other recent financing transactions. Changes in these assumptions if any could lead to higher valuation of investment in subsidiaries and accordingly impairment provision. 1. We tested the design of key controls and operating effectiveness of the relevant key controls around the assessment of impairment of investments in subsidiaries.
Impairment assessment of investments in subsidiaries have been identified as a key audit matter because of the estimation and judgements involved in computation of the recoverable value of investments in subsidiaries. 2. We together with the valuation specialists tested the underlying assumptions used by management along with their external experts in computing recoverable value of investments in subsidiaries such as weighted average cost of capital growth rates and profitability.
3. We performed sensitivity analysis on key assumptions used by the Company in computing fair value of the investments in subsidiaries to identify impairment charge if any and when identified an appropriate recognition including disclosure of the impairment in the standalone financial statement.
4. We tested the arithmetical accuracy of the management's impairment testing model.

RECOGNITION FOR GOVERNMENT GRANTS AND ASSESSMENT OF RECOVERABILITY

See note 2.5 6 and 8 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
The Company is eligible for government grants under various schemes issued by the State and the Central Government. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Each of these schemes requires fulfilment of conditions by the Company to be eligible to receive the grant. The Company also assesses the recoverability of these grants at each balance sheet date. 1. We evaluated the government grant accounting policies by comparing with the applicable accounting standards.
Recognition of grants (including its classification as capital or revenue grant) requires a suitable assurance by the Company towards compliance with the conditions specified in the relevant schemes and that the grants will be received. The assessment of fulfilment of relevant conditions specified in the grant at the time of recognition involves judgement and assumptions. 2. We tested the design of key controls and operating effectiveness of relevant key controls with respect to recognition of grant (including its classification as capital and revenue grant) and assessment of recoverability of government grants.
Further the Company needs to assess at each balance sheet date the recoverability of the grant. 3. We performed substantive testing on a sample basis towards recognition of grants in accordance with the relevant schemes its classification as revenue or capital grant and verified the supporting documents.
We have identified recognition of grant and its recoverability as a key audit matter because of the complexities in establishing the compliance with the eligibility conditions of the grant and judgement involved towards the assessment of its recoverability. 4. We evaluated the Company's assessment of recoverability of respective grants based on ageing analysis and obtained explanations from management to assess the adequacy of the level of provision if any required for amounts considered recoverable.

OTHER INFORMATION

The Company's Management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's Annual Report but does not include the standalone financial statements andour Auditor's Report thereon. The other information is expected to be made availableto us after the date of this Auditor's Report.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read the Annual Report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance and take necessary actions as applicable under the relevant laws andregulations.

MANAGEMENT'S AND BOARD OF DIRECTORS' RESPONSIBILITIES FOR THESTANDALONE FINANCIAL STATEMENTS

The Company's Management and Board of Directors are responsiblefor the matters stated in Section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs profit/loss and other comprehensive income changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements the Management andBoard of Directors are responsible for assessing the Company's ability to continue asa going concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. The Board of Directors is also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs 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 standalone financial statements.As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone 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 expressing our opinion onwhether the Company has adequate internal financial controls with reference to standalonefinancial statements in place and the operating effectiveness of such controls.

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

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTS _CONTINUED_

• Conclude on the appropriateness of the Management's andBoard of Directors' use of the going concern basis of accounting in preparation ofstandalone financial statements and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our Auditor'sReport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our Auditor's Report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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

We also provide those charged with governance with a statement that wehave 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.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our Auditor's Report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. (A) As required by Section 143(3) of the Act we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The standalone balance sheet thestandalone statement of profit and loss (including other comprehensive income) thestandalone statement of changes in equity and the standalone statement of cash flows dealtwith by this Report are in agreement with the books of account. d) In our opinion theaforesaid standalone financial statements comply with the Ind AS specified under Section133 of the Act. e) On the basis of the written representations received from the directorsas on 31 March 2022 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2022 from being appointed as a director in terms of Section164(2) of the Act. f) With respect to the adequacy of the internal financial controls withreference to standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B".(B) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on itsfinancial position in its standalone financial statements - Refer note 28 to thestandalone financial statements. b) The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses. c)There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

d) (i) The Management has represented that to the best of it'sknowledge and belief as disclosed in the note 37.2 to the standalone financialstatements no funds have been advanced or loaned or invested (either from borrowed fundsor share premium or any other sources or kind of funds) by the Company to or in any otherperson or entities including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shall:

• directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Company("Ultimate Beneficiaries") or

• provide any guarantee security or the like to or on behalf ofthe Ultimate Beneficiaries. (ii) The Management has represented that to the best of itsknowledge and belief as disclosed in the note 37.2 to the standalone financialstatements no funds have been received by the Company from any person or entitiesincluding foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall:

• directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Company("Ultimate Beneficiaries") or

• provide any guarantee security or the like on behalf of theUltimate Beneficiaries. (iii) Based on such audit procedures as considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11 (e) contain anymaterial misstatement. e) The final dividend paid by the Company during the year inrespect of the same declared for the previous year is in accordance with Section 123 ofthe Companies Act 2013 to the extent it applies to payment of dividend.

As stated in note 40 to the standalone financial statements the Boardof Directors of the Company have proposed the final dividend for the year ended 31 March2022 which is subject to approval of the members at the ensuing Annual General Meeting.The dividend declared is in accordance with Section 123 of the Act to the extent itapplies to declaration of dividend.

(C) With respect to the matter to be included in the Auditor'sReport under Section 197(16) of the Act:

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) ofthe Act which are required to be commented upon by us.

 

for B S R & Co. LLP

Chartered Accountants

Firm's Registration No. 101248W/W-100022

Umang Banka

Partner

Membership No. 223018

UDIN:22223018AJXJMR5822

Place: Bengaluru

Date: 30 May 2022

Annexure A to the Independent Auditor's Report on standalonefinancial statements of Himatsingka Seide Limited for the year ended 31 March 2022

With reference to the Annexure A referred to in paragraph 1 in Reporton Other Legal and Regulatory Requirements of the Independent Auditor's Report to themembers of Himatsingka Seide Limited (‘the Company') on the standalone financialstatements for the year ended 31 March 2022 we report that: (i) (a) (A) The Company hasmaintained proper records showing full particulars including quantitative details andsituation of property plant and equipment. (B) The Company has maintained proper recordsshowing full particulars of intangible assets.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has a regularprogramme of physical verification of its property plant and equipment by which allproperty plant and equipment are verified in a phased manner over a period of two years.In accordance with this programme certain property plant and equipment were verifiedduring the year. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties (other than immovable properties where the Company is the lessee and the leaseagreements/ lease cum sale agreements are duly executed in favour of the lessee) disclosedin the standalone financial statements are held in the name of the Company.

(d) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not revaluedits Property Plant and Equipment or intangible assets or both during the year.

(e) According to information and explanations given to us and on thebasis of our examination of the records of the Company there are no proceedings initiatedor pending against the Company for holding any benami property under the Prohibition ofBenami Property Transactions Act 1988 and rules made thereunder.

(ii) (a) The inventory except goods-in-transit and stocks lying withthird parties has been physically verified by the management during the year. For stockslying with third parties at the year-end written confirmations have been obtained and forgoods-in-transit subsequent evidence of receipts has been linked with inventory records.In our opinion the frequency of such verification is reasonable and procedures andcoverage as followed by management were appropriate. No discrepancies were noticed onverification between the physical stocks and the book records that were more than 10% inthe aggregate of each class of inventory.

Annexure-A to the Independent Auditors' Report (Continued)

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has beensanctioned working capital limits in excess of five crore rupees in aggregate from bankson the basis of security of current assets. In our opinion the quarterly statements filedby the Company with such banks are in agreement with the books of account of the Companyexcept as follows:

(Amount in Lakhs)
Quarter Particulars Amount as per books of account Amount as reported in the quarterly statement Amount of difference Whether statement subsequently recti_ed Name of the Banks
Qtr. 1 (a) Inventories 35177 33428 1749 No Canara Bank The HSBC
Qtr. 1 (b) Trade receivables 74644 74841 (197) No Ltd. Indusland Bank Ltd.
Axis Bank Kotak Bank RBL
Qtr. 1 (c ) Subsidy receivable under various government schemes Interest subsidy receivable and Balances with government authorities 32337 - 32337 No Bank Ltd. DCB Bank Ltd.
Yes Bank Ltd. Karur Vysya
Bank Ltd. IDBI Bank Ltd.
Bank of India HDFC Bank
Ltd. Bank of Maharashtra
Qtr. 1 (d) Trade payables 58479 25254 33225 No
Qtr. 1 Net (a+b+c-d) 83679 83015 664
Qtr. 2 (a) Inventories 41190 40619 571 No
Qtr. 2 (b) Trade receivables 73341 70186 3155 No
Qtr. 2 (c ) Subsidy receivable under various government schemes Interest subsidy receivable and Balances with government authorities 38648 - 38648 No
Qtr. 2 (d) Trade payables 54489 22617 31872 No
Qtr. 2 Net (a+b+c-d) 98690 88188 10502
Qtr. 3 (a) Inventories 41510 40864 646 No
Qtr. 3 (b) Trade receivables 83319 68093 15226 No
Qtr. 3 (c ) Subsidy receivable under various government schemes Interest subsidy receivable and Balances with government authorities 36643 - 36643 -
Qtr. 3 (d) Trade payables 59673 20213 39460 No
Qtr. 3 Net (a+b+c-d) 101799 88744 13055
Qtr. 4 (a) Inventories 41101 41380 (279) No
Qtr. 4 (b) Trade receivables 95139 84330 10809 No
Qtr.4 (c ) Subsidy receivable under various government schemes Interest subsidy receivable and Balances with government authorities 42765 - 42765 -
(d) Trade payables 64855 20540 44345 -
Qtr. 4 Net (a+b+c-d) 114210 105170 8950 -

(iii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not providedany guarantee or security or granted any advances in the nature of loans secured orunsecured to companies firms limited liability partnership or any other parties duringthe year. The Company has not made any investments in firms limited liability partnershipor in any other parties. The Company has not granted any loans secured or unsecured tocompanies firms or limited liability partnership during the year. The Company has madeinvestments in companies and has granted loans (other parties) in respect of which therequisite information is given below.

(a) Based on the audit procedures carried on by us and as per theinformation and explanations given to us the Company has provided loans to employees(other parties) as below:

(Amount in lakhs)
Particulars Loans
Aggregate amount during the year
- Subsidiaries -
- Others 56.43
Balance outstanding as at balance sheet date
- Subsidiaries -
- Others 144.64

(b) According to the information and explanations given to us and basedon the audit procedures conducted by us in our opinion the investments made during theyear and the terms and conditions of the grant of loans to employees (other parties) areprima facie not prejudicial to the interest of the Company. The Company has not providedany guarantees security or advance in the nature of loans during the year.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company in the case of loans given toother parties in our opinion the repayment of principal have been regular. The loan givento other parties are interest free and hence there are no stipulation with respect to thepayment of interest. Further the Company has not given any advance in the nature of loanto any party during the year.

(d) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no overdue amount formore than ninety days in respect of loans given to employees. Further the Company has notgiven any advances in the nature of loans to any party during the year.

(e) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no loan grantedfalling due during the year which has been renewed or extended or fresh loans granted tosettle the overdues of existing loans given to same parties. Further the Company has notgiven any advance in the nature of loan to any party during the year.

(f) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not grantedany loans or advances in the nature of loans either repayable on demand or withoutspecifying any terms or period of repayment. (iv) According to the information andexplanations given to us and on the basis of our examination of the records of theCompany the Company has not given any loans as specified under Section 185 and 186 of theCompanies Act 2013 ("the Act"). In respect of the investments made andguarantee provided or security given by the Company in our opinion the provisions ofSection 186 of the Act have been complied with. (v) The Company has not accepted anydeposits or amounts which are deemed to be deposits from the public. Accordingly clause3(v) of the Order is not applicable.

(vi) We have broadly reviewed the books of accounts maintained by theCompany pursuant to the rules prescribed by the Central Government of India formaintenance of cost records under Section 148(1) of the Act in respect of its manufacturedgoods and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. However we have not carried out a detailed examination of therecords with a view to determine whether these are accurate or complete.

(vii) (a) The Company does not have liability in respect of Servicetax Duty of excise Sales tax and Value added tax during the year since effective 1 July2017 these statutory dues have been subsumed into Goods and services tax. According tothe information and explanations given to us and on the basis of our examination of therecords of the Company in our opinion amounts deducted / accrued in the books of accountin respect of undisputed statutory dues including Goods and services tax Provident fundEmployees' state insurance Income-tax Duty of customs Cess and other statutorydues have been regularly deposited with the appropriate authorities though there has beenslight delay in one month in respect of Employees' state insurance; According to theinformation and explanations given to us and on the basis of our examination of therecords of the Company no undisputed amounts payable in respect of Goods and servicestax Provident fund Employees' state insurance Income-tax Duty of customs Cessand other statutory dues were in arrears as at 31 March 2022 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there are no statutory duesrelating to Goods and service Tax Sales tax Service tax Value added tax ProvidentFund Employees State Insurance Income-Tax Duty of excise Duty of customs or Cess orother statutory dues which have not been deposited by the Company on account of anydispute except for the following:

Name of the statute Nature of the dues Amount (Rs.) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 69013594 AY 2006-07 2009-10 Income Tax Appellate Tribunal Kolkata Commissioner of Income Tax (Appeals) Kolkata
2010-11 and 2013-14
Income Tax Act 1961 Income Tax 35255977 AY 2008-09 AY 2014-15
2016-17 and 2017-18
Central Excise Act 1944 Excise duty and penalty 53079936 FY 2003-04 to FY 2008-09 Commissioner of Customs Bengaluru
Central Excise Act 1944 Excise duty and penalty 2186141 Feb 2009 to Dec 2009 Commissioner of Customs Bengaluru
(500000)*
Central Excise Act 1944 Excise duty and penalty 11624025 FY 2012 – 2016 Commissioner of Customs Bengaluru
(967767)*

*represents amounts paid under protest

(viii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has notsurrendered or disclosed any transactions previously unrecorded as income in the books ofaccount in the tax assessments under the Income Tax Act 1961 as income during the year.(ix) (a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not defaulted in repayment ofloans and borrowing or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not beendeclared a wilful defaulter by any bank or financial institution or government orgovernment authority. (c) In our opinion and according to the information and explanationsgiven to us by the management term loans were applied for the purpose for which the loanswere obtained other than Rs 35 crores which remain unutilised as at 31 March 2022 as thefunds were received towards the end of the year. The Company has temporarily placed suchunutilised balance in current account as at 31 March 2022.

(d) According to the information and explanations given to us and on anoverall examination of the balance sheet of the Company we report that no funds raised onshort-term basis have been used for long-term purposes by the Company. (e) According tothe information and explanations given to us and on an overall examination of thestandalone financial statements of the Company we report that the Company has not takenany funds from any entity or person on account of or to meet the obligations of itssubsidiaries as defined under the Act. The Company doesn't hold any interest inassociates or joint ventures.

(f) According to the information and explanations given to us andprocedures performed by us we report that the Company has raised loans during the year onthe pledge of securities held in its subsidiaries as per details below:

Nature of loan taken Name of lender Amount of loan raised during the year Name of the subsidiaries Relationship Details of security pledged
Term Loan Export Import Bank 200 crores Himatsingka Holdings North America Inc (Wholly owned Subsidiary) and Himatsingka America Inc (Step Subsidiary) Subsidiary including step subsidiary 100% pledge of shares of Himatsingka America Inc. and Himatsingka Holdings North America

The above loan has a moratorium period till 1 August 2023 and hencethere is no repayment due in the current year. (x) (a) The Company has not raised anymoneys by way of initial public offer or further public offer (including debtinstruments). Accordingly clause 3(x)(a) of the Order is not applicable.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly clause 3(x)(b) of the Order is not applicable.

(xi) (a) Based on examination of the books and records of the Companyand according to the information and explanations given to us no material fraud by theCompany or on the Company has been noticed or reported during the course of the audit. (b)According to the information and explanations given to us no report under sub-section(12) of Section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribedunder Rule 13 of the Companies (Audit and Auditors) Rules 2014 with the CentralGovernment of India.

(c) As represented to us by the management there are no whistle blowercomplaints received by the Company during the year. (xii) According to the information andexplanations given to us the Company is not a Nidhi Company. Accordingly clause 3(xii)ofthe Order is not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us the transactions with related parties are in compliance with Section 177 and188 of the Act where applicable and the details of the related party transactions havebeen disclosed in the standalone financial statements as required by the applicable Indianaccounting standards.

(xiv) (a) Based on information and explanations provided to us and ouraudit procedures in our opinion the Company has an internal audit system commensuratewith the size and nature of its business.

(b) We have considered the internal audit reports of the Company issuedtill date for the period under audit.

(xv) In our opinion and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with its directorsor persons connected to its directors and hence provisions of Section 192 of the Act arenot applicable to the Company. (xvi) (a) The Company is not required to be registeredunder Section 45-IA of the Reserve Bank of India Act 1934. Accordingly clause 3(xvi)(a)of the Order is not applicable.

(b) The Company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934. Accordingly clause 3(xvi)(b) of the Order is notapplicable.

(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of theOrder is not applicable.

(d) The Company is not part of any group (as per the provisions of theCore Investment Companies (Reserve Bank) Directions 2016 as amended). Accordingly therequirements of clause 3(xvi)(d) are not applicable.

(xvii) The Company has not incurred cash losses in the current and inthe immediately preceding financial year.

(xviii) There has been no resignation of the Statutory Auditors duringthe year. Accordingly clause 3(xviii) of the Order is not applicable. (xix) According tothe information and explanations given to us and on the basis of the financial ratiosageing and expected dates of realisation of financial assets and payment of financialliabilities our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that the Company is not capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date. We however state that this is not an assurance as to the futureviability of the Company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the Company as and when they fall due.

Also refer to the Other Information paragraph of our main audit reportwhich explains that the other information comprising the information included in Annualreport is expected to be made available to us after the date of this Auditor'sReport. (xx) (a) In our opinion and according to the information and explanations given tous there is no unspent amount under sub-section (5) of Section 135 of the Act pursuant toany project other than ongoing projects. Accordingly clause 3(xx)(a) of the Order is notapplicable.

(b) In respect of ongoing projects the unspent amount has beentransferred to a Special Account which is in compliance with Section 135(6) of theCompanies Act 2013.

 

for B S R & Co. LLP

Chartered Accountants

Firm's Registration No. 101248W/W-100022

Umang Banka

Partner

Membership No. 223018

UDIN: 22223018AJXJMR5822

Place: Bengaluru

Date: 30 May 2022

Annexure B to the Independent Auditors' report on the standalonefinancial statements of Himatsingka Seide Limited for the period ended 31 March 2022

Report on the internal financial controls with reference to theaforesaid standalone financial statements under Clause (i) of Subsection 3 of Section 143of the Companies Act 2013

(Referred to in paragraph 2A (f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

OPINION

We have audited the internal financial controls with reference tostandalone financial statements of Himatsingka Seide Limited ("the Company") asof 31 March 2022 in conjunction with our audit of the standalone financial statements ofthe Company for the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to financial statements and such internalfinancial controls were operating effectively as at 31 March 2022 based on the internalfinancial controls with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note. These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act").

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to standalone financial statements based on our audit.We conducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofsuch internal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to standalone financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS

A company's internal financial controls with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of standalone financial statementsfor external purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to standalone financial statementsinclude those policies and procedures that (1) pertain to the maintenance of records thatin reasonable detail accurately and fairly reflect the transactions and dispositions ofthe assets of the company; (2) provide reasonable assurance that transactions are recordedas necessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOFINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

 

For B S R & Co. LLP

Chartered Accountants

Firm's Registration No. 101248W/W-100022

Umang Banka

Partner

Membership No. 223018

UDIN: 22223018AJXJMR5822

Place: Bengaluru

Date: 30 May 2022

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