To The Shareholders Of Satyam Silk Mills Limited'
Report on Financial Statements
We have audited the accompanying Financial Statements of Satyam Silk Mills Limited (the"Company") which comprise the Balance Sheet as at 31st March 2017the Statement of Profit and Loss and the Ca'sh Flow Statement for the year then ended anda summary of significant accounting policies and other explanatory . information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 (the act) with respect to the preparation ofthese Financial statements that give a true and fair view of the financial position andfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with rule 7 of Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent;design implementation and maintenance of adequate internal financial controls that areoperating 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.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Companys Directors as wellas evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements.
1. As required by the Companies (Auditors Report) Order 2015 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure a statement on the matters Specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act we further report that:
(a) we have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as appears from our examination of those books;
(c) the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;
(d) in our opinion the aforesaid financial statements comply with the applicableAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) on the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2017 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
(g) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
(i) The Company does not have any pending litigations which would impact its financialposition
(ii) The Company did not have any long-term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise
(iii) There has not been an occasion in case of the Company during the year underreport to transfer any sums to the Investor Education and Protection Fund.
(h) The Company did not have any holdings or dealings in Specified Bank Notes duringthe period from 8th November 2016 to 30th December 2016.
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Annexure "A" to The Independent Auditors Report to the members ofSatyam Silk Mills Ltd.
(The Annexure referred to in paragraph 1 under the heading "Report on Other Legaland Regulatory Requirements" of our report of even date).
1. In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and the situation of its fixed assets.
(b) The fixed assets have been physically verified by the Management during the year inaccordance with a regular programme of verification which in our opinion provides forphysical verification of the fixed asset at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.
(c) According to the information and explanation given to us the title deeds ofimmovable properties are held in the name of the company.
2. In respect of inventories:
No inventories were held by the Company throughout the year.
3. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the Register maintained under section 189 of the Companies Act2013.
4. In our opinion and according to the information and explanation given to usprovisions of section 185 and 186 of the Companies Act 2013 have been complied with inrespect of loans investments guarantees and security.
5. The Company has not accepted deposits from the public.
6. According to the information and explanation given to us maintenance of cost auditrecords has not been specified by the Central Government.
7. In respect of statutory dues :
(a) According to the records of the Company it is regular in depositing withappropriate authorities undisputed amount of Provident Fund Investor Education ProtectionFund Employees State Insurance Income Tax Sales Tax Service Tax Custom Duty ExciseDuty Value Added Tax Cess and other statutory dues applicable to it and according to theinformation and explanation given to us no undisputed amounts payable were outstanding asat 31st March 2017 for a period of more than six months from the date theybecame payable.
(b) There are no dues of Income Tax Sales Tax Wealth Tax Custom Duty etc. which havenot been deposited on account of any dispute.
8. According to the information and explanations given by the management the Companyhas not taken any borrowings from financial institutions banks Government and not issuedany debenture. Therefore the provisions of clause (viii) of paragraph 3 of the Order arenot applicable to the Company.
9. To the best of our knowledge and according to the information and explanations givento us no fraud on or by the Company has been noticed or reported during the year.
10. According to the information and explanation given to us the provisions of section197 read with Schedule V to the Companies Act are not applicable to the managerialremuneration paid by the Company.
11. According to the information and explanation given to us there were notransactions with the related parties during the year.
12. According to the information and explanation given to us the Company has notentered into any noncash transactions with directors or persons connected with him.
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Annexure "B" to independent auditors report to the members of SatyamSilk Mills Ltd.
(Referred to in paragraph 2 (f) under the heading "Report on other legal andregulatory requirements" of our report of even date on the accounts for the yearended 31st March 2017)
Report on the Internal Financial Controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Satyam SilkMills Ltd. ("the Company") as of March 31 2017 in conjunction with our audit ofthe financial statements of the Company for the year ended on that date.
Managements responsibility for internal financial controls
The Companys 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 Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
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 Reportingand the Standards on Auditing prescribed under section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe 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 auditors judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Annexure a to independent auditor s report (Contd...)
Inherent Limitations of Internal Financial Controls over Financial Reporting
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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note.
Membership No.: 016940