We have audited the Financial Statements of K K SILK MILLS LIMITED (“the Company”), which comprisethe Balance sheet as at March 31, 2026, the statement of Profit and Loss, Cash Flow Statement for the year endedand notes to the Financial Statements, including a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaidFinancial Statements give the information required by the Companies Act, 2013 (“Act”) in the manner so requiredand gives a true and fair view in conformity with the accounting principles generally accepted in India, of thestate of affairs of the Company as at March 31, 2026, the profit and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of Financial Statements in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor’sResponsibilities for the Audit of the Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India(“ICAI”) together with the Independence requirements that are relevant to our audit of the Financial Statementsunder the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the FinancialStatements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit ofthe Financial Statements of the financial year ended March 31, 2026. These matters were addressed in the contextof our audit of the financial statements, and in forming our opinion thereon, we do not provide a separate opinionon these matters.
We have determined the matters describe below to be the key audit matters to be communicated in ourreport.
Sr
No.
How our audit addressed the key audit matter
1
Revenue Recognition: (Refer significant accounting policies in Note 2(vii) and Disclosure Note20 respectively of the financial statements.)
The Company is engaged in the
We obtained an understanding of and tested the
manufacture and domestic sale of textile
design and operating effectiveness of internal
goods including yarn and fabric. Revenue
controls over the order-to-cash process, including
is recognised in accordance with AS 9 —
controls over dispatch, invoicing, and recording of
Revenue Recognition, when significantrisks and rewards of ownership are
sales returns, credit notes, and discounts.
transferred to the buyer, no effective
We performed cut-off testing by examining sales
control is retained by the Company, and
invoices, lorry receipts, and e-way bills issued
ultimate collection is reasonably certain.
around the balance sheet date to assess whether
Revenue constitutes the most significant
revenue was recorded in the correct accounting
line item in the Statement of Profit and
period and whether transfer of significant risks and
Loss. Given the high volume of domesticsales transactions across multiple
rewards had occurred as at year-end.
customers and product categories, there
On a sample basis, we traced sales invoices to the
exists an elevated cut-off risk, particularly
underlying purchase orders, delivery challans, proof
around the balance sheet date, where
of dispatch, and subsequent customer receipts to
goods dispatched may not have been
verify the existence and completeness of revenue
received by the customer.
transactions. We also assessed the reasonableness of
Additionally, the Company offers trade
provisions for trade discounts, scheme incentives,
discounts and cash discounts to its
and sales returns by comparing management
customers, which require appropriate
estimates with actual historical credit note
estimation and deduction from grossrevenue. Incorrect or inconsistent
settlements.
estimation of such deductions could result
"We reconciled revenue reported in the books of
in overstatement of revenue. Further,
account with GST returns (GSTR-1) filed during the
reconciliation of revenue as per bookswith GST returns (GSTR-1 / GSTR-3B) isnecessary to ensure completeness andaccuracy of reported revenue. Given themateriality and the judgements involved,revenue recognition was identified as akey audit matter.
year and investigated material differences, if any.
We also performed analytical procedures on monthlyand product-wise revenue to identify unusual trendsor fluctuations and obtained managementexplanations for significant variations. Based on ourprocedures, we found revenue to be recognised inaccordance with AS 9 and materially appropriate.
2
Trade Receivables: (Refer Disclosure Note 16 respectively of the financial statements.)
Trade receivables represent a significant
We obtained and verified the debtor ageing schedule
asset on the Company's balance sheet,
as at the balance sheet date by reconciling it to the
arising from domestic sales to
general ledger and sub-ledger balances and assessed
wholesalers, traders, and institutional
whether ageing had been computed consistently from
buyers across the textile value chain.Under Indian GAAP, there is no
the invoice date or due date across all debtors.
prescribed impairment model for trade
We evaluated the Company's provisioning policy and
receivables. Accordingly, the Company
assessed its appropriateness, consistency with prior
recognises a provision for doubtful debts
periods, and alignment with the prudence concept
based on management's assessment of
under AS 1. For debtors outstanding beyond 180
recoverability, guided by the prudence
days and 1 year, we specifically challenged
concept under AS 1 and historical
management on recoverability by reviewing
collection experience.
subsequent collections post year-end, customercorrespondence, legal notices issued, and the status
The provisioning policy is largelyjudgement-based, and there exists a risk
of any disputed amounts.
of under-provisioning particularly in
We circularised balance confirmation requests to a
respect of long outstanding balances.
sample of trade debtors and performed alternative
Certain debtors in the domestic
.procedures, including review of subsequent receipts
unorganised textile trade carry elevated
and sales ledger entries, for non-respondents.
credit risk due to limited financial
' Differences reported by confirming debtors were
disclosures and dependence on seasonaldemand cycles. Receivables outstanding
reconciled and investigated.
beyond 180 days and 1 year require
We verified compliance with CARO 2020 reporting
specific assessment as they may indicate
requirements by confirming whether any overdue
disputes, credit deterioration, or
receivables exist from companies or firms in which
weaknesses in the collection process.
Directors are interested and assessed the adequacy of^related disclosures.
We also assessed the adequacy of disclosuresrelating to trade receivables and the ageing scheduleas required under Schedule III to the Companies Act,2013. Based on our procedures, we found theprovision for doubtful debts to be adequate and thecarrying value of trade receivables to be fairly statedunder Indian GAAP.
Information Other than the Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the preparation of other information. The other informationcomprises the information included in the Board of Directors Report but does not include the FinancialStatements and our auditor’s report thereon.
Our opinion on the Financial Statements does not cover the other information and we do not express any form ofassurance conclusion thereon.
In connection with our audit of the Financial Statements, our responsibility is to read the other informationidentified above when it becomes available and, in doing so, consider whether the other information is materiallyinconsistent with the Financial Statements, or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
When we read Board’s Report, if we conclude that there is a material misstatement therein, we are required tocommunicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
The Company’s 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 Financial Statements that give a true and fair vewof thefinancial position, financial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India, including the accounting Standards specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; making judgments and estimates thatare 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 tothe preparation and presentation of the Financial Statements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
In preparing the Financial Statements, management is responsible for assessing the Company’s ability to continueas a going concern, disclosing, as applicable, matters related to going concern and using the going concern basisof accounting unless management either intends to liquidate the Company or to cease operations, or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free frommaterial 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 accordancewith SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or errorand are considered material if, individually or in the aggregate, they could reasonably be expected to influence theeconomic 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 professionalskepticism 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 andappropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,misrepresentations, or the override of internal control.
• Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are responsible forexpressing our opinion on whether the Company has adequate internal controls system in place and the operatingeffectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on theaudit evidence obtained, whether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If we conclude that materialuncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in theFinancial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based onthe audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may causethe Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the Financial Statements, including the disclosures, andwhether the Financial Statements represent the underlying transactions and events in a manner that achieves fairpresentation.
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 statementsmay be influenced. We consider quantitative materiality and qualitative factors in (i) Planning the scope of ouraudit work and in evaluating the results of our work; and (ii) evaluating the effect of any identified misstatementsin the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal control that weidentify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by Companies (Auditor Report) Order, 2020, issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the Annexure A, a statement on the matters specified underParagraph 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and beliefwere 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 appearsfrom our examination of those books.
(c) The Balance Sheet, the Statement of Profit and the Cash Flow Statement dealt with by this Report are inagreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014
(e) On the basis of the written representations received from the Directors as on March 31, 2026, taken on record bythe Board of Directors, none of the Directors is disqualified as on March 31, 2026, from being appointed as aDirector 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 theoperating effectiveness of such controls, refer to our separate report in “Annexure B”. Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with the requirements ofsection 197(16) of the Act, in our opinion and to the best of our information and according to the explanationsgiven to us, the remuneration paid by the Company to its Directors during the year is in accordance with theprovisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according tothe explanations given to us:
i. The Company does not have any pending litigations which would impact its financial position.
i. The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses.
i. There are no amounts required to be transferred to the Investor Education and Protection Fund by the Company.
v.
A. The Management has represented that, to the best of it's knowledge and belief, no funds have been advanced orloaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by theCompany to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with theunderstanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly orindirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the UltimateBeneficiaries;
B. The Management has represented, that, to the best of it's knowledge and belief, no funds have been received bythe Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with theunderstanding, 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 FundingParty ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the UltimateBeneficiaries; and
C. Based on such audit procedures that we have considered reasonable and appropriate in the circumstances; nothinghas come to our notice that has caused us to believe that the representations under sub-clause (1) and (2) containany material misstatement.
v. The Company has not declared or paid any dividend during the year.
i. Based on our examination, which included test checks, the Company has used accounting software system formaintaining its books of account for the financial year ended March 31, 2026 which have the feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded inthe software system. Further, during the course of our audit we did not come across any instance of the audit trailfeature being tampered with. Audit trail has been preserved by the Company as per the statutory requirements forrecord retention.
For Borkar & MuzumdarChartered Accountants
FRN: 101569W
Sd/-
Deepak Kumar Jain
Partner
Membership No. 154390UDIN: 26154390JHFXMK7607
Place: MumbaiDate: May 29, 2026