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Satyam Silk Mills Ltd.

BSE: 503893 Sector: Financials
NSE: N.A. ISIN Code: INE07MC01015
BSE 05:30 | 01 Jan Satyam Silk Mills Ltd
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Satyam Silk Mills Ltd. (SATYAMSILKMILL) - Auditors Report

Company auditors report

To the members of Satyam silk mills Limited

Report on the audit of the financial statements

Opinion

We have audited the accompanying standalone financial statements ofSatyam silk mills Limited (“the Company”) which comprise the Balance Sheet asat March 31 2021 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearended on that date and a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as “the standalone financialstatements”). 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 (“the Act”) in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended (“Ind AS”) and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021the profit and total comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis for opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the standalonefinancial statements.

Key audit matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial 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
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)
The application of the new 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.
Refer to Notes to the Standalone Financial Statements
Auditor's Response Principal Audit Procedures We assessed the Company's process 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.
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 re- 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 analysed and identified the distinct performance obligations in these contracts.
-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 of the variable consideration.
-Samples in respect of revenue recorded for time and material contracts were tested using a combination of approved time sheets including customer acceptances subsequent invoicing and historical trend of collections and disputes.
-Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts.
-In respect of samples relating to fixed-price contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts from the time recording and budgeting systems. We also tested the access and change management controls relating to these systems.
-Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts.
-Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.
-We reviewed the collation of information and the logic of the report generated from the budgeting system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.
2 Key Audit Matter
Accuracy of revenues and onerous obligations in respect of fixed-price contracts involves critical estimates
Estimated effort is a critical estimate to determine revenues and liability for onerous obligations. This estimate has a high inherent uncertainty as it requires consideration of progress of the contract efforts incurred till date and efforts required to complete the remaining contract performance obligations.
Refer Notes to the Standalone Financial Statements.
Auditor's Response Principal Audit Procedures
Our audit approach was a combination of test of internal controls and substantive procedures which included the following :
Evaluated the design of internal controls relating to recording of efforts incurred and estimation of efforts required to complete the performance obligations.
Tested the access and application controls pertaining to time recording allocation and budgeting systems which prevents unauthorised changes to recording of efforts incurred.
Selected a sample of contracts and through inspection of evidence of performance of these controls tested the operating effectiveness of the internal controls relating to efforts incurred and estimated.
Selected a sample of contracts and performed a retrospective review of efforts incurred with estimated efforts to identify significant variations and verify whether those variations have been considered in estimating the remaining efforts to complete the contract.
Reviewed a sample of contracts with unbilled revenues to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligations.
Performed analytical procedures and test of details for reasonableness of incurred and estimated efforts.
3. Key Audit Matter
Evaluation of uncertain tax positions
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes.
Refer Notes to the Standalone Financial Statements
Auditor's Response
Principal Audit Procedures
Obtained details of completed tax assessments and demands for the year ended March 31 2021 from management. We involved our internal experts to challenge the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions.
Additionally we considered the effect of new information in respect of uncertain tax positions as at April 1 2018 to evaluate whether any change was required to management's position on these uncertainties.
4 Key Audit Matter
Recoverability of Indirect tax receivables
As at March 31 2021 non-current assets in respect of withholding tax and others includes Cenvat recoverable amounting to Rs. cross which are pending adjudication.
Refer Note to the Standalone Financial Statements.
Auditor's Response
Principal Audit Procedures
We have involved our internal experts to review the nature of the amounts recoverable the sustainability and the likelihood of recoverability upon final resolution.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the standalone financial statementsand our auditor's report thereon. Our opinion on the standalone financial statementsdoes not cover the other information and we do not express any form of assuranceconclusion thereon. In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments 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 ofthe accounting 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 financialstatements management is responsible for assessing the Company's ability to continueas a going concern disclosing as applicable matters related to going concern and usingthe going concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so. The Board ofDirectors are responsible for overseeing the Company's financial reporting 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 judgment and maintainprofessional 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 controls. Obtain an understanding of internal financial controls relevant tothe audit in order to design audit procedures that are appropriate in the circumstances.Under section 143(3)(i) of the Act we are also responsible for expressing 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 thegoing concern basis of accounting 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 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.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

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.

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 2016(“the Order”) issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the Annexure a statement on the mattersspecified in paragraph 3 and 4 of the Order to the extent applicable.

2. 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 the statement of profit and loss(including totalcomprehensive income) and the cash flow statement dealt with by this Report are inagreement with the books of account;

(d) In our opinion the aforesaid Standalone Ind ASFinancial Statementscomply with the Accounting Standards specified under section 133 of the Act read withrelevant rules issued thereunder.

(e) On the basis of the written representations received from thedirectors as on 31 March 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2018 from being appointed as a director in termsof Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure.

(g) with respect to the other matters to be included in theAuditor's 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 theexplanations given to us:

(i)The Company has No impact of pending litigations on its financialposition in its Standalone Ind AS Financial Statements as referred to in Note no. 20 tothe financial statements.

(ii). The Company does not have long term contracts includingderivative contracts for which there were any material foreseeable losses.

For Joy Dalia & Company
Chartered Accountants
Firm Reg. N0.104460W
Sd/- J.H. Dalia PROPRIETOR
Membership No.: 43863
UDIN: UDIN:21043863AAAAJE6093
Mumbai
Dated 15 June 2021

Annexure to the Independent Auditors' Report

With reference to the Annexure referred to in paragraph 1 in“Report on Other Legal and Regulatory Requirements” of the IndependentAuditors' Report to the members of the Company on the financial statements for theyear ended 31 March 2021 we report that:

1a) The company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

1b) As explained to us all the assets have been physically verified bythe management during the year together with is a regular programe of verification whichin our opinion is reasonable having regard to the size of the company and the nature ofits assets. No material discrepancies were noticed on such verification.

1c)The title deeds of immoveable properties are held in the name of thecompany.

2. The Company is a service company primarily rendering leas ofimmovable properties. Accordingly it does not hold any physical inventories.

3. The Company has not granted any loans secured or unsecured tocompanies firms or other parties covered in the register maintained under Section 189 ofthe Act.

4. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provision u/s section 185 and 186 of theCompanies Act 2013 in respect of loans and investments made and guarantees andsecurities provided by it.

5. The Company has not accepted any deposits from the public.

6. The Central Government has not prescribed the maintenance of costrecords under section 148(1) of the Act for any of the services rendered by the Company.

7 (a) According to the information and explanations given to us and onthe basis of our examination of the records of the Company amounts deducted / accrued inthe books of account in respect of undisputed statutory dues including Provident fundIncome tax Wealth tax Goods & value added tax and any other material statutory dueshave generally been regularly deposited during the year by the Company with theappropriate authorities. As explained to us the Company did not have any dues on accountof Employees' State Insurance Custom Duty and Excise duty. According to theinformation and explanations given to us no undisputed amounts payable in respect ofProvident Fund Income tax Wealth tax Goods & value added tax and other materialstatutory dues were in arrears as at 31 March 2021 for a period of more than six monthsfrom the date they became payable.

b) According to the information and explanations given to us there areno dues of Wealth tax Customs duty and Cess which have not been deposited with theappropriate authorities on account of any dispute.

8. The Company does not have funds from any financial institutionbank Government or dues to debenture holders.

9. The company has not raised moneys by way of initial public offer orfurther public offer (including debt instrument) and term loans

10.Based upon the audit procedures performed and according to theinformation and explanations given to us no fraud by the company or any fraud on thecompany by its officers or employees has been noticed or reported during the course of ouraudit that causes the financial statements to be materially misstated.

11) No Managerial remuneration has been paid or provided.

12) The company is not a Nidhi Company hence this clause is notapplicable.

13) Based upon the audit procedures performed and according to theinformation and explanations given to us no related transactions were reported.

14) The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. 15)The company has not entered into any non-cash transactions with directors orpersons connected with him. 16)The company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934.

For Joy Dalia & Company
Chartered Accountants
Firm Reg. N0.104460W
Sd/- J.H. Dalia PROPRIETOR
Membership No.: 43863
Mumbai
Dated 15 June 2021

ANNEXURE “A” TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 5(ii)(f) of our Report of even date to theMembers of Satyam silk mills Limited for the year ended 31st March 2021.

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (“the Act”) We haveaudited the internal financial controls over financial reporting of Satyam silk millsLimited as of 31st March 2021 in conjunction with our audit of the Standalone Ind ASfinancial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting(the “Guidance Note”)issued by the Institute of CharteredAccountants of India. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting and the Standards on Auditing issued by ICAI and deemed to be prescribed undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks 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 toprovide a basis for our audit opinion on the Company's internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of 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 (1)Pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) Provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2018 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Joy Dalia & Company
Chartered Accountants
Firm Reg. N0.104460W
Sd/- J.H. Dalia PROPRIETOR
Membership No.: 43863
Mumbai
Dated 15 June 2021

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