himatsingka seide ltd Auditors report

To the Members of Himatsingka Seide Limited

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the standalone financial statements of Himatsingka Seide Limited (the "Company"), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

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

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the Standalone 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 the standalone 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 obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements for the current year. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

REVENUE RECOGNITION

See note 2.1 and 20 to the standalone financial statements

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

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

KEY AUDIT MATTER _CONTINUED_

CARRYING VALUE OF INVESTMENTS IN SUBSIDIARIES AND ASSESSMENT OF IMPAIRMENT

See note 2.14 and 4A to the standalone financial statements

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

RECOGNITION FOR GOVERNMENT GRANTS AND ASSESSMENT OF RECOVERABILITY

See note 2.5, 6 and 8 to the standalone financial statements

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

OTHER INFORMATION

The Companys Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companys Annual Report, but does not include the standalone financial statements and our Auditors Report thereon. The other information is expected to be made available to us after the date of this Auditors Report.

Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the relevant laws and regulations.

MANAGEMENTS AND BOARD OF DIRECTORS RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS

The Companys Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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 judgements 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors is also responsible for overseeing the Companys financial reporting process.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the standalone 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 SAs 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 standalone financial statements. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone 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 expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements 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 the Management and Board of Directors.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS _CONTINUED_

• Conclude on the appropriateness of the Managements and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements 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 standalone 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 standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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 de_ciencies in internal control that we identify during our audit.

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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone 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

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

2. (A) As required by Section 143(3) of the Act, we report that: a) 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) In 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account. d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act. e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 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 with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". (B) 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 information and according to the explanations given to us: a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer note 28 to the standalone financial statements. b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

d) (i) The Management has represented that, to the best of its knowledge and belief, as disclosed in the note 37.2 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

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

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

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

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

As stated in note 40 to the standalone financial statements, the Board of Directors of the Company have proposed the final dividend for the year ended 31 March 2022 which is subject to approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.

(C) With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act:

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

 

for B S R & Co. LLP

Chartered Accountants

Firms Registration No. 101248W/W-100022

Umang Banka

Partner

Membership No. 223018

UDIN:22223018AJXJMR5822

Place: Bengaluru

Date: 30 May 2022

Annexure A to the Independent Auditors Report on standalone financial statements of Himatsingka Seide Limited for the year ended 31 March 2022

With reference to the Annexure A referred to in paragraph 1 in Report on Other Legal and Regulatory Requirements of the Independent Auditors Report to the members of Himatsingka Seide Limited (‘the Company) on the standalone financial statements for the year ended 31 March 2022, we report that: (i) (a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment. (B) The Company has maintained proper records showing full particulars of intangible assets.

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

(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 (other than immovable properties where the Company is the lessee and the lease agreements/ lease cum sale agreements are duly executed in favour of the lessee) disclosed in the standalone financial statements are held in the name of the Company.

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

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

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

Annexure-A to the Independent Auditors Report (Continued)

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks on the basis of security of current assets. In our opinion, the quarterly statements filed by the Company with such banks are in agreement with the books of account of the Company except as follows:

						(Amount in Lakhs)
Quarter	Particulars	Amount as per books of account	Amount as reported in the quarterly statement	Amount of difference	Whether statement subsequently recti_ed	Name of the Banks
Qtr. 1	(a) Inventories	35,177	33,428	1,749	No	Canara Bank, The HSBC
Qtr. 1	(b) Trade receivables	74,644	74,841	(197)	No	Ltd., Indusland Bank Ltd.,
						Axis Bank, Kotak Bank, RBL
Qtr. 1	(c ) Subsidy receivable under various government schemes, Interest subsidy receivable and Balances with government authorities	32,337	-	32,337	No	Bank Ltd., DCB Bank Ltd.,
						Yes Bank Ltd., Karur Vysya
						Bank Ltd., IDBI Bank Ltd.,
						Bank of India, HDFC Bank
						Ltd., Bank of Maharashtra
Qtr. 1	(d) Trade payables	58,479	25,254	33,225	No
Qtr. 1	Net (a+b+c-d)	83,679	83,015	664
Qtr. 2	(a) Inventories	41,190	40,619	571	No
Qtr. 2	(b) Trade receivables	73,341	70,186	3,155	No
Qtr. 2	(c ) Subsidy receivable under various government schemes, Interest subsidy receivable and Balances with government authorities	38,648	-	38,648	No
Qtr. 2	(d) Trade payables	54,489	22,617	31,872	No
Qtr. 2	Net (a+b+c-d)	98,690	88,188	10,502
Qtr. 3	(a) Inventories	41,510	40,864	646	No
Qtr. 3	(b) Trade receivables	83,319	68,093	15,226	No
Qtr. 3	(c ) Subsidy receivable under various government schemes, Interest subsidy receivable and Balances with government authorities	36,643	-	36,643	-
Qtr. 3	(d) Trade payables	59,673	20,213	39,460	No
Qtr. 3	Net (a+b+c-d)	101,799	88,744	13,055
Qtr. 4	(a) Inventories	41,101	41,380	(279)	No
Qtr. 4	(b) Trade receivables	95,139	84,330	10,809	No
Qtr.4	(c ) Subsidy receivable under various government schemes, Interest subsidy receivable and Balances with government authorities	42,765	-	42,765	-
	(d) Trade payables	64,855	20,540	44,345	-
Qtr. 4	Net (a+b+c-d)	114,210	105,170	8,950	-

(iii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not provided any guarantee or security or granted any advances in the nature of loans, secured or unsecured to companies, firms, limited liability partnership or any other parties during the year. The Company has not made any investments in firms, limited liability partnership or in any other parties. The Company has not granted any loans secured or unsecured to companies, firms or limited liability partnership during the year. The Company has made investments in companies and has granted loans (other parties), in respect of which the requisite information is given below.

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

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

(b) According to the information and explanations given to us and based on the audit procedures conducted by us, in our opinion the investments made during the year and the terms and conditions of the grant of loans to employees (other parties) are, prima facie, not prejudicial to the interest of the Company. The Company has not provided any guarantees, security or advance in the nature of loans during the year.

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

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is no overdue amount for more than ninety days in respect of loans given to employees. Further, the Company has not given any advances in the nature of loans to any party during the year.

(e) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is no loan granted falling due during the year, which has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to same parties. Further, the Company has not given any advance in the nature of loan to any party during the year.

(f) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not granted any loans or advances in the nature of loans either repayable on demand or without specifying any terms or period of repayment. (iv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not given any loans as specified under Section 185 and 186 of the Companies Act, 2013 ("the Act"). In respect of the investments made and guarantee provided or security given by the Company, in our opinion the provisions of Section 186 of the Act have been complied with. (v) The Company has not accepted any deposits or amounts which are deemed to be deposits from the public. Accordingly, clause 3(v) of the Order is not applicable.

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

(vii) (a) The Company does not have liability in respect of Service tax, Duty of excise, Sales tax and Value added tax during the year since effective 1 July 2017, these statutory dues have been subsumed into Goods and services tax. According to the information and explanations given to us and on the basis of our examination of the records of the Company, in our opinion amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Goods and services tax, Provident fund, Employees state insurance, Income-tax, Duty of customs, Cess and other statutory dues have been regularly deposited with the appropriate authorities, though there has been slight delay in one month in respect of Employees state insurance; According to the information and explanations given to us and on the basis of our examination of the records of the Company, no undisputed amounts payable in respect of Goods and services tax, Provident fund, Employees state insurance, Income-tax, Duty of customs, Cess and other statutory dues were in arrears as at 31 March 2022 for a period of more than six months from the date they became payable.

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

Name of the statute	Nature of the dues	Amount (Rs.)	Period to which the amount relates	Forum where dispute is pending
Income Tax Act, 1961	Income Tax	69,013,594	AY 2006-07, 2009-10,	Income Tax Appellate Tribunal, Kolkata Commissioner of Income Tax (Appeals), Kolkata
			2010-11 and 2013-14
Income Tax Act, 1961	Income Tax	35,255,977	AY 2008-09, AY 2014-15,
			2016-17, and 2017-18
Central Excise Act, 1944	Excise duty and penalty	53,079,936	FY 2003-04 to FY 2008-09	Commissioner of Customs, Bengaluru
Central Excise Act, 1944	Excise duty and penalty	2,186,141	Feb 2009 to Dec 2009	Commissioner of Customs, Bengaluru
		(500,000)*
Central Excise Act, 1944	Excise duty and penalty	11,624,025	FY 2012 – 2016	Commissioner of Customs, Bengaluru
		(967,767)*

*represents amounts paid under protest

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

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

(d) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term purposes by the Company. (e) According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries as defined under the Act. The Company doesnt hold any interest in associates or joint ventures.

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

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

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

(b) According to the information and explanations given to us and on the basis of 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 year. Accordingly, clause 3(x)(b) of the Order is not applicable.

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

(c) As represented to us by the management, there are no whistle blower complaints received by the Company during the year. (xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, clause 3(xii)of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the transactions with related parties are in compliance with Section 177 and 188 of the Act, where applicable, and the details of the related party transactions have been disclosed in the standalone financial statements as required by the applicable Indian accounting standards.

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

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

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

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

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

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

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

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

Also refer to the Other Information paragraph of our main audit report which explains that the other information comprising the information included in Annual report is expected to be made available to us after the date of this Auditors Report. (xx) (a) In our opinion and according to the information and explanations given to us, there is no unspent amount under sub-section (5) of Section 135 of the Act pursuant to any project other than ongoing projects. Accordingly, clause 3(xx)(a) of the Order is not applicable.

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

 

for B S R & Co. LLP

Chartered Accountants

Firms Registration No. 101248W/W-100022

Umang Banka

Partner

Membership No. 223018

UDIN: 22223018AJXJMR5822

Place: Bengaluru

Date: 30 May 2022

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

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

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

OPINION

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

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls were operating effectively as at 31 March 2022, based on the internal financial controls with reference to financial statements 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 (the "Guidance Note").

MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Companys management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. 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 Companies Act, 2013 (hereinafter referred to as "the Act").

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. 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 with reference to standalone financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of such internal financial controls, 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 judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

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 with reference to standalone financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

A companys internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls with reference to standalone financial statements, 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 with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

For B S R & Co. LLP

Chartered Accountants

Firms Registration No. 101248W/W-100022

Umang Banka

Partner

Membership No. 223018

UDIN: 22223018AJXJMR5822

Place: Bengaluru

Date: 30 May 2022