To the Members of SIYARAM SILK MILLS LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone nancial statements of Siyaram Silk MillsLimited(the Company) which comprise the Balance Sheet as at 31stMarch 2021and the Statement of Pro t and Loss (including other comprehensive income) Cash FlowStatement and Statement of Changes in Equity for the year then ended and notes to thestandalone nancial statements including a summary of signi cant accounting policies andother explanatory information (hereinafter referred to as the standalone nancialstatements).
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone nancial statements give the information required bythe Companies Act 2013 (the Act) in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31 March 2021 and its pro t (including othercomprehensive income) changes in equity and its cash ows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) as speci edunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone 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 together with theethical requirements that are relevant to our audit of the standalone nancial statementsunder the provisions of the Act and the Rules there under and we have ful lled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is suf cient and appropriate to provide abasis for our opinion.
Emphasis of Matter
We draw attention to Note no. 49 of the accompanying standalone nancial statementswhich describes the management's evaluation of impact of uncertainties related to COVID-I9and its consequential effects on the operations of the Company. Our opinion is not modi edin respect of this matter.
Key Audit Matters
Key audit matters ('KAM') are those matters that in our professional judgment were ofmost signi cance in our audit of the standalone nancial statements of the current period.These matters were addressed in the context of our audit of the standalone nancialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.We have determined the matters described below to be thekey audit matters to be communicated in our report
|Key Audit Matters ||How our audit addressed the key audit matter |
|Revenue Recognition ||Principal audit procedures |
|(as described in note 1 (i) of the standalone Ind AS nancial statements) For the year ended March 31 2021 the Company has recognized revenue from contracts with customers amounting to 108751.92 lakhs. ||Our audit procedures included the following: Assessed the Company's revenue recognition policy prepared as per Ind AS 115 'Revenue from contracts with customers'. |
|Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that re ects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that as principal it typically controls the goods or services before transferring them to the customer. ||Assessed the design and tested the operating effectiveness of internal controls related to revenue recognition discounts and rebates. |
|The variety of terms that de ne when control are transferred to the customer as well as the high value of the transactions give rise to the risk that revenue is not recognized in the correct period. ||Performed sample tests of individual sales transaction and traced to sales invoices sales orders and other related documents. Further in respect of the samples checked that the revenue has been recognized as per the shipping terms. |
|Revenue is measured net of returns and allowances cash discounts trade discounts and volume rebates (collectively 'discount and rebates'). There is a risk that these discount and rebates are incorrectly recorded as it also requires a certain degree of estimation resulting in understatement of the associated expenses and accrual. ||To test cut off selected sample of sales transactions made pre-and post-year end agreeing the period of revenue recognition to third party support such as transporter invoice and customer con rmation of receipt of goods. |
|Revenue is also an important element of how the Company measures its performance. The Company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the risk and rewards have been transferred. ||Tested the provision calculations related to management incentives discounts and rebates by agreeing a sample of amounts recognized to underlying arrangements with customers and other supporting documents |
|Accordingly due to the signi cant risk associated with revenue recognition in accordance with terms of Ind AS 115 'Revenue from contracts with customers' it was determined to be a key audit matter in our audit of the standalone Ind AS nancial statements. || |
|Claims against the company not acknowledged as debts ||Principal audit procedures |
|As at 31st march2021 the company has exposures to litigation relating to various matters as set out in note no.40(a).Signi cant management judgement is required to assess such matters to determine the probability of occurrence of material out ow of economic resources and whether a provision should be recongnised or a disclosure should be made. The management judgement is supported with legal advice in certain cases as considered appropriate. ||Our audit procedures included the following substantive procedures: |
|At the ultimate outcomes of the matters are uncertain and the position taken by the management are based on application of their best judgement related legal advice including those relating to interpretation of laws/ regulations it is considered to be a key audit matter. ||We understood assessed and tested the design and operating effectiveness of key controls surrounding assessment of litigations relating to relevant laws and regulations. |
| ||Obtained details of all the claims against the Company for the year ended 31st March 2021 from the management. |
| ||Read and analysed key correspondences legal opinion and consultations by the management. |
| ||Discussed with the appropriate senior management and evaluated management's estimate of the possible outcome of the disputed cases. |
| ||Based on the above procedures management's assessment in respect of litigations and related disclosures relating to contingent liabilities/other signi cant litigations in the Standalone Financial Statements are considered to be reasonable. |
Information other than the standalone Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Company's annual report but doesnot include the standalone nancial statements and our auditor's report thereon.
Our opinion on the standalone nancial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone nancial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone nancial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone nancial statementsthat give a true and fair view of the state of affairs pro t or loss (including othercomprehensive income) changes in equity and cash ows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) speci ed under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe 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 nancial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone nancial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone nancial statements management and Board of Directors areresponsible 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.
Board of Directors is also responsible for overseeing the Company's nancial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone nancialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to in uence the economic decisions of users taken on thebasis of these standalone nancial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone nancialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is suf cient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(I) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal nancial controls with reference to standalone nancial statements inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast signi cant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Standalone nancial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalone nancialstatements including the disclosures and whether the standalone nancial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and signi cant audit ndings including any signicant de ciencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most signi cance in the audit of the standalone nancial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditors' report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest bene ts of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 (the Order)issued by the Central Government of India in terms of Section 143(11) of the Act we givein Annexure A a statement on the matters speci ed in paragraphs 3 and 4 of theOrder to the extent applicable.
2. (A) As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b)In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Pro t and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.
(d)In our opinion the aforesaid standalone nancial statements comply with the Ind ASspeci ed under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31stMarch2021 taken on record by the Board of Directors none of the directors is disquali edas on 31st March2021from being appointed as a director in terms of Section 164(2) of theAct.
(f) With respect to the adequacy of the internal nancial controls over nancialreporting of the Company with reference to these standalone nancial statements of theCompany and the operating effectiveness of such controls refer to our separate ReportinAnnexure B.
(g)With respect to the matter to be included in the Auditors' Report under section197(16) of the Act as amended:
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act.
(h) 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 has disclosed the impact of pending litigations as at 31stMarch2021onits nancial position in its standalone nancial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii.There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
ANNEXURE - A TO THE INDEPENDENT AUDITORS'REPORT
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone nancial statements for the year ended 31st March 2021 we report that:
(i) a) In our opinion the Company has maintained proper records showing fullparticulars including quantitative details and situation of xed assets.
b) As explained to us the company has a regular programme for physical veri cation ina phased periodic manner which in our opinion is reasonable having regards to the sizeof the Company and nature of its assets. According to the information and explanationsgiven to us no material discrepancies were noticed on such veri cation.
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/lease deeds of immovableproperties (which are included under the Note 2 of the nancial statements 'Property plantand equipments') are held in the name of the Company except for the immovable propertieswhich were acquired by entity that have since been amalgamated with the Company.
(ii) As explained to us physical veri cation of inventory has been conducted atreasonable intervals by the management and discrepancies noticed on such physical verication between physical stocks and book records were not material considering theoperations of the Company and the same have been properly dealt with in the books ofaccount.
(iii) The Company has granted unsecured loans to a subsidiary company covered in theregister maintained under section 189 of the Act; and with respect to same;
a) In our opinion the terms and conditions of grant of such loans are not prima facieprejudicial to the Company's interest
b) The schedule of repayment of principal and payment of interest has been stipulatedand the repayment/ receipts of the principal amount and the interest are regular;
c) There is no overdue amount in respect of loans granted to such company.
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 Act with respectto loans and advances given investments made guarantees and securities made.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit within the meaning of Section 73 to 76 of the Actand the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where pursuant to the Rules made by the Central Government the maintenanceof cost records have been prescribed under Section 148 (1) of the Act and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determining whether they are accurate or complete.
(vii)(a) According to the records of the Company and the information and explanationsgiven to us the Company has generally been regularly depositing with the appropriateauthorities undisputed statutory dues including Provident Fund Employees' StateInsurance Income tax Sales-Tax Service tax Duty of Customs Duty of Excise Valueadded Tax Goods and Service Tax Cess and any other statutory dues applicable to it.There are no undisputed statutory dues as referred to above as at 31st March 2021outstanding for a period of more than six months from the date they become payable.
(b)According to the information and explanations given to us the dues in respect ofIncome Tax Property Tax Textile Cess Excise Duty and Service Tax that have not beendeposited with the appropriate authorities on account of dispute and the forum where thedisputes are pending are given below :-
|Name of Statute ||Nature of Dues ||Amount (Rs. in lakhs) ||Period to which the Amount Relates ||Forum where dispute is pending |
|Income Tax Act ||Income Tax ||568.46 ||A.Y.2012-13 || |
| || ||183.38 ||A.Y. 2013-14 || |
| || ||125.87 ||A.Y. 2014-15 ||Assessing Authority of Income tax |
| || ||36.12 ||A.Y. 2015-16 || |
| || ||149.31 ||A.Y. 2017-18 || |
| || ||79.02 ||A.Y. 2018-19 || |
|Brihan Mumbai || || || || |
|Mahanagar Palika ||Property Tax ||87.89 ||April 2010 to March 2018 ||Bombay High Court |
|Textile Committee Act ||Cess ||15.92 ||1998-2000 ||Bombay High Court |
|Central Excise ||Excise Duty/ Service tax ||106.96 ||1992-94 ||Assessing authority |
|And Service ||(Including Interest and ||751.26 ||1998-00 ||Assessing authority |
|Tax Act ||Penalty) ||4.87 ||2003-04 ||Assessing authority |
(viii) Based on our audit procedures and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans frombank/ government. Further as per the records of the Company during the year there were noloans or borrowings from any nancial institution or debenture holders.
(ix) In our opinion and according to the information and the explanations given to usthe term loans have been applied for the purposes for which they were obtained. Further asper the records the Company did not raise any money by way of initial public offeror further public offer (including debt instruments).
(x) Based upon the audit procedures performed and to the best of our knowledge andbelief and according to the information and explanations given to us no fraud by thecompany or any fraud on the Company by its of cers or employees has been noticed orreported during the year.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the nancial statements as required by the applicableIndian Accounting Standards.
(xiv) According to the information and explanations 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 year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly paragraph3(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 Songira & Associates
(Firm Reg. No. 128085W)
Dharmendra S. Songira
Date: 27th May 2021