TO THE MEMBERS OF GINI SILK MILLS LIMITED REPORT ON THE FINANCIAL STATEMENTS
Opinion
1. We have audited the accompanying Ind AS financial statements of Gini Silk Mills
Limited ("the Company"), which comprise the Balance Sheet as at March 31,2021,
the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow
Statement and the Statement of changes in Equity for the year then ended, and a summary of
the significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Ind AS financial statements give the information required by
the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India including Indian Accounting Standards
(‘Ind AS) specified under section 133 of the Act, of the state of affairs of the
Company as at March 31, 2021, and total comprehensive income (comprising of loss for the
year and other comprehensive income), its cash flows and changes in equity for the year
ended on that date.
Basis for opinion
3. We conducted our audit in accordance with the Standards on Auditing specified under
section 143(10) of the Act. Our responsibilities under those standards are further
described in the Auditors Responsibilities for the audit of Ind AS financial statements
section of our report. We are independent of the company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India (‘ICAI) together
with the ethical requirements that are relevant to our audit of financial statements under
the provisions of the act and the rules thereunder, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the Code of Ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the Ind AS financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these
matters. We have determined the matters described below to be the key audit matters to be
communicated in our report.
| Key Audit Matter |
Auditor’s Response |
| 1. Accuracy of recognition, measurement, presentation and disclosures of
revenues and other related balances in view of adoption of Ind AS 115 "Revenue from
Contracts with Customers" |
Principal Audit Procedures |
| The application of the revenue accounting standard involves certain key judgements
relating to identification of distinct performance obligations, determination of
transaction price of the identified performance obligations, the appropriateness of the
basis used to measure revenue recognized over a period. Additionally, new revenue
accounting standard contains disclosures which involves collation of information in
respect of disaggregated revenue and periods over which the remaining performance
obligations will be satisfied subsequent to the balance sheet date. |
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, performance and inspection of
evidence in respect of operation of these controls. |
|
• Tested the relevant information technology systems access and change
management controls relating to contracts and related information used in recording and
disclosing revenue in accordance with the new revenue accounting standard |
|
• Selected a sample of continuing and new contracts and performed the following
procedures: |
|
• Read, analyzed and identified the distinct performance obligations in these
contracts. |
|
• Compared these performance obligations with that identified and recorded by the
Company. |
|
• Considered the terms of the contracts to determine the transaction price
including any variable consideration to verify the transaction price used to compute
revenue and to test the basis of estimation |
|
• Samples in respect of revenue recorded for time and material contracts were
tested using a combination customer acceptances, subsequent invoicing and historical trend
of collections and disputes. |
|
Performed analytical procedures for reasonableness of revenues disclosed. |
Information other than the Financial Statements and Auditor’s Report thereon
5. The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual Report, but does not include
the Ind AS financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements, our responsibility is
to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the Ind AS financial statements or our knowledge obtained in
the audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information; we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
6. The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013("the Act") with respect to the preparation of
these Ind AS financial statements to give a true and fair view of the financial position,
financial performance, cash flows and changes in equity of the Company in accordance with
the accounting principles generally accepted in India, including the Indian Accounting
Standards specified under Section 133 of the Act. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
7. In preparing the Ind AS financial statements, management is responsible for
assessing the Companys ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
8. The Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
9. Our objectives are to obtain reasonable assurance about whether the Ind AS financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with
Standards on Auditing will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these financial statements.
10. As part of an audit in accordance with Standards on Auditing, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Ind AS financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the 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 explaining our opinion on whether the Company has
adequate internal financial controls system in place and the operating effectiveness of
such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the Ind AS financial
statements, including the disclosures, and whether the Ind AS financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
11. We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
13. From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the Ind AS financial
statements of the current period and are therefore the key audit matters. We describe
these matters in our auditors report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
14. As required by ‘the Companies (Auditors Report) Order, 2016, issued by the
Central Government of India in terms of subsection (11) of section 143 of the Act
(hereinafter referred to as the "Order"), and on the basis of such checks of the
books and records of the Company as we considered appropriate and according to the
information and explanations given to us, we give in the "Annexure A", a
statement on the matters specified in paragraphs 3 and 4 of the Order.
15. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit;
b) i n our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books;
c) the Balance sheet, Statement of Profit and Loss including the Statement of Other
Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt
with by this report are in agreement with the books of account;
d) i n our opinion, the aforesaid Ind AS financial statements comply with the Indian
Accounting Standard specified under Section 133 of the Act;
e) on the basis of the written representations received from the directors as on March
31,2021 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31,2021 from being appointed as a director in terms of Section 164 (2) of the
Act;
f) with respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B"; and
g) with respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies(Audit and Auditors) Rules, 2014, in our opinion
and to the best of our knowledge and belief and according to the information and
explanations given to us:
i. the Company has disclosed the impact of pending litigations as at March 31,2021 on
its financial position in its Ind AS financial statements to the extent
determinable/ascertainable. - Refer Note 35 to the financial statements;
ii. the Company does not have any long term contract including derivative contracts for
which there are any material foreseeable losses;
iii. There has been no delay in transferring amount required to be transferred to the
Investor Education and Protection Fund.
|
For Bilimoria Mehta & Co. |
|
Chartered Accountants |
|
Firm Registration Number: 101490W |
|
CA Jalpesh K Vora |
|
Partner |
|
Membership No.: 106636 |
|
UDIN: 20106636AAAACA8434 |
| Mumbai, 21st June, 2021 |
|
Annexure A to the Independent Auditor’s Report
Referred to in paragraph 14 of the Independent Auditors’ Report of even date to
the members of Gini Silk Mills Limited on the Ind AS financial statements for the year
ended March 31, 2021.
i (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation, of fixed assets.
(b) The Company has a regular programmeme for physical verification of its fixed assets
by which its fixed assets are verified in a phased manner. In our opinion, this
periodicity of physical verification is reasonable having regard to the size of the
Company and the nature of its fixed assets. However, physical verification of fixed assets
which were not verified during the year as planned due to outbreak of Covid-19 pandemic.
As represented by the management, these will be covered for verification in the subsequent
period.
(c) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties, as
disclosed in Note 2 on fixed assets to the Ind AS financial statements, are held in the
name of the Company.
ii The inventory excluding stocks with third parties has been physically verified by
the management at regular intervals, which we consider to be reasonable. No material
discrepancies were noticed on physical verification of inventories as compared to book
records.
iii According to information and explanation given to us, the Companys has not granted
any loan, secured or unsecured to companies, firms, Limited Liability Partnership firm or
other parties, covered in the register maintained under section 189 of the Companies Act
2013 and hence sub clause (a), (b) and (c) are not applicable.
iv In our opinion, and according to the information and explanations given to us, the
Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013
in respect of the loans and investments made.
v The Company has not accepted any deposits from the public within the meaning of
Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent
notified.
vi According to the information and explanation given to us the rules made by the
Central Government of India, the Company is not required to maintain cost records as
specified under sub section (1) of section 148 of the Companies Act 2013 in respect of its
products. Accordingly, provision of Clause 3(vi) of the Order is not applicable.
vii (a) According to the information and explanations given to us the Company is
generally regular in depositing with appropriate authorities undisputed statutory dues
including Provident Fund, Employees State Insurance, Income Tax, Goods & Service Tax,
Custom Duty, Cess and other material statutory dues applicable to it as per the available
records as far as ascertained by us on our verification.
According to the information and explanations given to us, there were no undisputed
amounts payable in respect of outstanding statutory dues as aforesaid as at 31st
March 2021 for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of Cess and Excise Duty on account of any dispute,
are as follows:
| Name of the Statute |
Nature of Dues / Period to which the amount relates |
Amount (INR) |
Forum where dispute is pending |
| Textile Committee Act & Cess Rules 1975 |
Cess (Various years from 1998 to 2008) |
7,09,232/- |
Textile Committee Cess Appellate Tribunal |
| Central Excise Act |
Demand on differential amount of excise duty. (16/12/1998 to 28/02/2001) |
1,85,09,688/- |
Supreme Court of India |
viii According to the records of the Company examined by us and the information and
explanation given to us, the Company has not defaulted in repayment of dues of loans taken
from banks. There are no loans or borrowings payable to government and financial
institution and the company has not issued any debentures.
ix The Company did not raise any money by way of initial public offer or further public
offer (including debt instruments). In our opinion the term loans were applied for the
purposes the loans were obtained.
x During the course of our examination of the books and records of the Company, and
according to information and explanation given to us, we have neither come across any
instance of fraud on or by the Company, its officers or employees, noticed or reported
during the period, nor have we been informed of such case by the management.
xi According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has paid or provided for managerial
remuneration in accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Act.
xii In our opinion and according the information and explanation given to us, the
Company is not a Nidhi Company. Accordingly, provision of Clause 3(xii) of the Order is
not applicable.
xiii According to the information and explanation given to us and based on our
verification of the records of the Company and on the basis of review and approval by the
Board and Audit Committee, the transactions with related parties are in compliance with
Section 177 and 188 of the Act where applicable and the details of such transactions have
been disclosed in the financial statements as required by the applicable accounting
standards.
xiv According to the information and explanation given to us and based on our
examination of the records of the Company, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the period under review. Accordingly, the provision of Clause 3(xiv) of the Order is not
applicable.
xv According to the information and explanation given to us and based on our
examination of the records of the Company, the Company has not entered into any non-cash
transactions with its directors or persons connected with them. Accordingly, the provision
of Clause 3(xv) of the Order is not applicable.
xvi The Company is not required to be registered under Section 45-IA of the Reserve
Bank of India Act, 1934.
For Bilimoria Mehta & Co.
Chartered Accountants
Firm Registration Number: 101490W
CA Jalpesh K Vora
Partner
Membership No.: 106636
UDIN: 20106636AAAACA8434
Mumbai, 21st June, 2021
Annexure B to the Independent Auditor’s Report
Referred to in paragraph 15(f) of the Independent Auditors’ Report of even date to
the members of Gini Silk Mills Limited on the Ind AS financial statements for the year
ended March 31, 2021.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act 2013
1. We have audited the internal financial controls over financial reporting of Gini
Silk Mills Limited ("the Company") as of March 31, 2021 in conjunction with our
audit of the Ind AS financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
2. The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities
include the design, implementation and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly and efficient conduct of its
business, including adherence to companys policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable financial information, as
required under the Act.
Auditors Responsibility
3. Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the "Guidance Note") and the Standards on Auditing deemed to be prescribed
under section 143(10) of the Act to the extent applicable to an audit of internal
financial controls, both applicable to an audit of internal financial controls and both
issued by the ICAI. Those Standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy
of the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the Ind AS financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. A companys internal financial control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of Ind AS financial statements for external purposes in accordance
with generally accepted accounting principles. A companys internal financial control over
financial reporting includes those policies and procedures that
i. Pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
ii. Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of Ind AS financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and
iii. Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the companys assets that could have a
material effect on the Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31,2021, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
For Bilimoria Mehta & Co.
Chartered Accountants
Firm Registration Number: 101490W
CA Jalpesh K Vora
Partner
Membership No.: 106636
UDIN: 20106636AAAACA8434
Mumbai, 21st June, 2021
+91-9892691696
