We have audited the accompanying financial statements of Gini Silk Mills Limited (“the Company”), which comprises the Balance Sheet as at
March 31, 2026, 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 on that date, and notes to the financial statements, including a summary of the material accounting
policies and other explanatory information (hereinafter referred to as “Financial Statements”).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Financial Statements give the
information required by the Companies Act, 2013 ('the Act') in the manner so required and give a true and fair view in conformity with the
Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31st, 2026,
and its profit, total comprehensive income, its cash flows and the change in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the
Act. Our responsibilities under those Standards are further described in the “Auditor's Responsibilities for the Audit of the 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 Financial Statements under the provisions of the Act
and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s
Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the
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 Ind AS Financial Statements
for the year ended March 31,2026. 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 the key audit matters to be communicated in our report.
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S. No.
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Key Audit Matter
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Auditor’s Response
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Accuracy of recognition, measurement, presentation and disclosures
of revenues and other related balances in view of adoption of Ind AS
115 “Revenue from Contract 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 reflects 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.
The variety of terms that define 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 current period.
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.
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.
Accordingly, due to the significant 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 financial statements.
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Principal Audit Procedures
Our audit approach consisted testing of the design and
operating effectiveness of the internal controls and substantive
testing as follows:
• Evaluated the design, implementation, and operating
effectiveness of key internal controls relating to order
processing, dispatch of goods, invoicing, and revenue
recognition.
• Tested selected sales transactions by examining customer
purchase orders, sales invoices, delivery challans, e-way bills,
transport documents, and other supporting records to verify
that revenue had been recognized upon transfer of control of
goods.
• Performed year-end cut-off testing by verifying sales
transactions recorded immediately before and after the
balance sheet date to ensure that revenue was recognized in
the correct accounting period.
• Reviewed sales returns, credit notes, rebates, and discounts
issued after the year-end to assess whether any adjustments
to revenue were necessary.
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Information other than the Financial Statements and Auditor's Report thereon
The Company's Management and Board of Directors is responsible for the preparation of other information. The other information comprises
the information included in the Board's Report including Annexures to Board's Report but does not include the Financial Statements and our
auditor's report thereon. The other information is expected to be made available to us after the date of the Auditor's Report.
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 Financial Statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the Financial Statements or our knowledge obtained during the course of 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.
Responsibility of Management and Those Charged with Governance for the Financial Statements
The Company's Management and Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation
of these Financial Statements to give a true and fair view of the financial position, financial performance including other comprehensive income,
cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the 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 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.
In preparing the Financial Statements, Management and Board of Directors are responsible for assessing the Company's 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 Company's Management and Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditors’ Responsibility for the Audit of the Financial Statement
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an 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 financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We
also:
• Identify and assess the risks of material misstatement of the 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 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 Management and Board of Directors.
• Conclude on the appropriateness of management's 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 Company's ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's 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 auditor's 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 Financial Statements, including the disclosures, and whether the Financial
Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Financial Statements that, individually or in aggregate, makes it probable that the economic
decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider quantitative materiality and qualitative
factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified
misstatements in the Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of audit and significant
audit findings, including any significant deficiencies 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 Ind As financial statements of the year ended March 31,2026 and are therefore the key audit matters. We describe these matters in our
auditor's 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 (Auditor's Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub¬
section (11) of section 143 of the Companies Act, 2013 (hereinafter referred to as the “Order”), we give in the “Annexure A” of this report,
a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, based on our audit we report, to the extent applicable 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 of the aforesaid Ind AS Financial Statement;
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 except for the matter stated in the paragraph h(vi) given below on reporting under Rule 11(g);
c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity
and the statement of Cash Flow dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133
of the Act;
e. On the basis of the written representations received from the directors as on 31st March, 2026 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2026 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 financial statements of the Company and the operating
effectiveness of such controls, refer to our separate report in “Annexure B”; Our report expresses unmodified opinion on the adequacy
and operating effectiveness of the Company's internal financials control with reference to financial statements.
g. With respect to the other matters to be included in the Auditor's Report in accordance with the requirement section 197(16) of the Act,
as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remunerations paid by the
Company to its directors during the year is in accordance with the provisions of section 197 of the Act read with Schedule V of the Act
and the rules thereunder.
3. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, as amended, in our opinion and 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 March 31, 2026 on its financial position in its Ind AS financial
statements to the extent determinable/ascertainable. - Refer Note 39 to the Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable
losses; and
iii. There has been no delay in transferring Amounts, required to be transferred, to the Investor Education and Protection Fund by the
company. During the year amount of Rs 8,011/- was transferred to the Investor Education and Protection Fund by the Company.
iv. (a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kinds of funds) by the Company to or in any
other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall, whether , directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company or (“Ultimate Beneficiaries”) or provide any guarantee, security or the like
to or on behalf of the ultimate Beneficiaries.
(b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company
from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing
or otherwise, that the Company shall. Whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding party (“ultimate Beneficiaries”) or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.
(c) 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 iv(a) and iv (b) contain any material mis¬
statement.
v. The company has neither declared nor paid any dividend during the year.
4. With respect to the matter to be included in the Auditors' Report under section Rule 11(g) of Companies (Audit and Auditors) Rules, 2014,
based on our examination which included test checks, except for the instances mentioned below, the company has used TERP software for
maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout
the year for all relevant transactions recorded in the software:
a. There is no feature of recording audit trail (edit log) facility for the payroll processing software throughout the year.
b. The Fixed Assets Register relating to Property, Plant and Equipment is maintained in excel format and there is no feature of recording
audit trail (edit log) throughout the year.
Further, where audit trail (edit log) facility was enabled and operated throughout the year for the respective accounting software, we did
not come across any instance of the audit trail feature being tampered with and the audit trail has been preserved by the Company as per
statutory requirements for record retention.
For Vatsaraj & Co.
Chartered Accountants
FRN: 111327W
CA Nitesh K Dedhia
Partner
M. No. 114893
Mumbai, May 22, 2026 UDIN: 26114893HPDCOM6744
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