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Sheela Foam Ltd.

BSE: 540203 Sector: Industrials
NSE: SFL ISIN Code: INE916U01025
BSE LIVE 15:40 | 22 Sep 1398.95 -44.45
(-3.08%)
OPEN

1450.00

HIGH

1450.00

LOW

1382.00

NSE 15:31 | 22 Sep 1400.85 -51.00
(-3.51%)
OPEN

1451.85

HIGH

1451.85

LOW

1390.00

OPEN 1450.00
PREVIOUS CLOSE 1443.40
VOLUME 2458
52-Week high 1584.00
52-Week low 860.00
P/E 62.87
Mkt Cap.(Rs cr) 6,824
Buy Price 0.00
Buy Qty 0.00
Sell Price 1398.95
Sell Qty 200.00
OPEN 1450.00
CLOSE 1443.40
VOLUME 2458
52-Week high 1584.00
52-Week low 860.00
P/E 62.87
Mkt Cap.(Rs cr) 6,824
Buy Price 0.00
Buy Qty 0.00
Sell Price 1398.95
Sell Qty 200.00

Sheela Foam Ltd. (SFL) - Auditors Report

Company auditors report

To the members of 'Sheela Foam Limited'

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Sheela Foam Limited(the "Company") which comprise the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditors'judgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2017 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by 'the Companies (Auditor's Report) Order 2016' ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure-A' a statement on the matters specified inparagraph 3 and 4 of the Order.

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 bestof our knowledge and belief were necessary for the purposes of our audit.

b. in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.

c. the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d. in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e. on the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

f. with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure-'B'; and

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition

in its financial statements - Refer Notes 29.1 to the financial statements;

ii. The Company has not entered into any long-term contracts including derivativecontracts.

iii. There has been no amount required to be transferred to the Investor Educationand Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the financial statements as tothe holdings as well as dealing in Specified Bank Notes during the period from 8 November2016 to 30 December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with the books of accountas maintained and produced to us by the Management - Refer Note 29.16 to the financialstatements.

For S.P. CHOPRA & CO.
Chartered Accountants
Firm Regn. No. 000346N
(Pawan K. Gupta)
Place : New Delhi Partner
Dated: 10 May 2017 M. No. 092529

ANNEXURE-A' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of the independent auditors' report of even date on the standalone financialstatements of Sheela Foam Limited for the year ended 31 March 2017)

(i) In respect of its Property Plant & Equipments;

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.

b. As explained to us the fixed assets are physically verified by the management oncein a period of three years which in our opinion is reasonable having regard to the sizeof the Company and nature of its assets. No material discrepancies were noticed on suchphysical verification.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in Note 11 on Fixed Assets to the financial statements are held in the name ofthe Company.

(ii) As explained to us inventories have been physically verified by the management atregular intervals during the year. The discrepancies noticed on such physical verificationas compared to book records were not material and have been appropriately dealt with inthe books of accounts.

(iii) The Company had granted unsecured loans to companies covered in the Registermaintained under Section 189 of the Companies Act 2013.

a. I n our opinion the rate of interest and other terms and conditions on which theloans were granted were not prima facie prejudicial to the interest of the Company.

b &c As the loan has been recovered during the year and there is no such loanoutstanding as at the year end hence these clauses are not applicable.

(iv) In our opinion and according to the information and explanations given to us theCompany in respect of loans investments guarantees and security has complied with theprovisions of section 185 and 186 of the Act.

(v) The Company has not accepted any deposits from the public within the meanings ofSections 73 to 76 of the Act and the rules framed thereunder to the extent notified.

(vi) Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under subsection (1) of Section 148 of theAct in respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed cost records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.

(vii) I n respect of statutory dues:

a. According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including Provident Fund Employees' State Insurance IncomeTax Sales tax Service Tax Duty of Customs Duty of Excise Value Added Tax Cess andother statutory dues as applicable with the appropriate authorities though there has beena delay in few cases. According to the information and explanations given to us noundisputed amounts payable in respect of the aforesaid dues were outstanding as at 31March 2017 for a period of more than six months from the date they became payable.

b. The disputed statutory dues aggregating to Rs. 1513.72 Lakhs that have not beendeposited on account of matters pending in appeals before appropriate authorities are asunder:

Name of the Statute Nature of the dues Amount Rs. in Lakhs) Period to which the amount relates Forum where dispute is pending
Central Excise Act 1944 Excise duty 791.24 2010-16 Central Excise and Service Tax Appellate Tribunals
58.91 2011-17 Commissioner (Appeal)
1.29 2009-10 Suprintendent -Excise
Sales Tax 46.01 2003-05 Appellate Authority - Supreme Court
Central Sales Tax and Sales 319.00 1999-2000 Appellate Authority - High Court
Tax Act of various states 0.72 2012-13 Appellate Authority -Tribunal
Entry Tax 83.83 2001-14 Appellate Authority -Supreme Court
Income Tax Act 1961 Income Tax 209.00 2004-05 Commissioner of Income Tax (Appeals)
3.72 2005-13 Income Tax Appellate Tribunal

(viii) Based on the audit procedures and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings tofinancial institution banks and Government.

(ix) The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) and term loans. During the year one of the existingshareholder of the Company raised the money through initial public offer by selling itsequity shares.

(x) In our opinion and according to the information and explanations given to us nofraud by the Company or material fraud on the Company by its officers / employees has beennoticed or reported during the course of our audit.

(xi) The managerial remuneration paid/provided is within the limit and in compliance ofthe provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company hence the requirement of this clause is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with Directors or persons connectedwith them.

(xvi) As explained to us the Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934

For S.P. CHOPRA & CO.
Chartered Accountants
Firm Regn. No. 000346N
(Pawan K. Gupta)
Place : New Delhi Partner
Dated: 10 May 2017 M. No. 092529

ANNEXURE-'B' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of the independent auditors' report of even date on the standalonefinancial statements of Sheela Foam Limited for the year ended 31 March 2017)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Sheela FoamLimited ("the Company") as of 31 March 2017 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the "Guidance Note on Audit of Internal Financial Controls Over FinancialReporting" (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the 'Guidance Note') and the Standards on Auditing issued by the Institute of CharteredAccountants of India and deemed to be prescribed under section 143(10) of the Act to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and Directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as

at 31 March 2017 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

For S.P. CHOPRA & CO.
Chartered Accountants
Firm Regn. No. 000346N
(Pawan K. Gupta)
Place : New Delhi Partner
Dated: 10 May 2017 M. No. 092529