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Sarla Performance Fibers Ltd.

BSE: 526885 Sector: Industrials
NSE: SARLAPOLY ISIN Code: INE453D01025
BSE 00:00 | 19 Feb 24.05 0.70
(3.00%)
OPEN

23.45

HIGH

25.60

LOW

23.10

NSE 00:00 | 19 Feb 24.20 0.60
(2.54%)
OPEN

24.30

HIGH

24.50

LOW

23.55

OPEN 23.45
PREVIOUS CLOSE 23.35
VOLUME 5969
52-Week high 61.00
52-Week low 23.00
P/E 8.53
Mkt Cap.(Rs cr) 201
Buy Price 23.50
Buy Qty 55.00
Sell Price 24.45
Sell Qty 200.00
OPEN 23.45
CLOSE 23.35
VOLUME 5969
52-Week high 61.00
52-Week low 23.00
P/E 8.53
Mkt Cap.(Rs cr) 201
Buy Price 23.50
Buy Qty 55.00
Sell Price 24.45
Sell Qty 200.00

Sarla Performance Fibers Ltd. (SARLAPOLY) - Auditors Report

Company auditors report

We have audited the accompanying standalone Ind AS financial statements of SarlaPerformance Fibers Limited ( the Company ) which comprise the Balance Sheet as at31stMarch 2018 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 endedand a summary of significant accounting policies and other explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE IND AS 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 of thesestandalone Ind AS financial statements that give a true and fair view of the state ofaffairs (financial position) profit or loss(financial performance)including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including Indian AccountingStandards (Ind AS)prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these standalone Ind ASfinancialstatements based on our audit.

We have taken into account the provisions of the Actthe 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 of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whetherthe standalone Ind AS financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlsrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS specifiedunder Section 133 of the Act of the state of affairs (financial position) of the Companyas at 31stMarch 2018 and its profit (financial performance including other comprehensiveincome) its cash flows and the changes in equity for the year ended on that date.

OTHER MATTER

The comparative financial information of the Company for the year ended 31stMarch 2017and the transition date opening Balance Sheet as at 1st April 2016 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 (as amended) audited by the predecessor auditor whose reports for the yearended 31st March 2017 and 31st March 2016 dated 27th May 2017 and 30th May 2016respectively expressed an unmodified opinion on those financial statements as adjustedfor the differences in accounting principles adopted by the Company on transition to theInd AS which have been audited by us. Our opinion is not qualified in respect of thismatter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016issued by the CentralGovernment of India in terms of subsection (11) of Section 143 of the Act ( the Order )and on the basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us we give in theAnnexure A a statement on the matters specified in paragraphs 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 purpose of our audit.

b) In our opinion proper books of accounts as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss(including Other ComprehensiveIncome) the Cash Flow Statement andStatement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act.

e) On the basis of the written representation received from the directors as on 31stMarch 2018 taken on record by the Board of

Directors none of the directors are disqualified as on 31stMarch2018 from beingappointed as director in terms of section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in Annexure B .

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 as amended inour opinion and to the best of our knowledge and belief and according to the informationand explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements - Refer Note 47.1 of the standaloneInd AS financial statements;

ii. The Company has made provision as required under applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For C N K & Associates LLP
Chartered Accountants
Firm Registration Number: 101961W/W-100036
Himanshu Kishnadwala
Place: Mumbai Partner
Date: 29th May 2018 Membership No.: 37391

Annexure A to Independent Auditor's Report

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditor's Report of even date to the members of Sarla PerformanceFibers Limited ( the Company ) on the standalone Ind AS financial statements for the yearended 31stMarch 2018]

(I) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) The Company has a regular program of physical verification of fixed assets underwhich fixed assets are verified in a phased manner over a period of three years which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. In accordance with this program certain fixed assets were verified during theyear and no material discrepancies were noticed on such 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 property are heldin the name of the company except in the following case:

Particulars Number of Cases Gross Block (Rs. in Lakhs) Net Block (Rs. in Lakhs) Remarks
Freehold Land 1 3028.83 3028.83 Document of title in the name of two directors of the company. The company is in the process of getting the title deeds registered in its name.

(ii) As explained to us the inventories were physically verified during the year bythe management at reasonable intervals and no material discrepancies were noticed onphysical verification;

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly paragraphs 3(iii)(a) 3(iii)(b) and 3(iii)(c) of theOrder are not applicable;

(iv) According to the information and explanations given to us the Company hascomplied with the provisions of Section 185 of the Act. The Company has made equityinvestments has given interest free loans and provided stand by letter of credit to itswholly owned subsidiaries. According to information and explanations given to us saidloans given investments made and stand by letter of credit given are for business purposeand are within the limit of Sec 186(2) of the Act;

(v) According to the information and explanations given to us the Company has notaccepted any deposits from public within the provisions of Sections 73 to 76 of the Actread with The Companies (Acceptance of Deposits) Rules 2014 and other relevant provisionsof the Act and therefore provisions of paragraph 3(v) of the Order are not applicable tothe Company; (vi) We have broadly reviewed the cost records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 as specified by theCentral Government under sub section (1) of Section 148 of the Act 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 same with a view to determining whetherthey are accurate or complete;

(vii) According to the information and explanations given to us in respect of statutorydues: (a) The Company has been regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax service tax Goods andService tax duty of customs duty of excise value added tax cess and any other materialstatutory dues applicable to it to the appropriate authorities;

(b) There were no undisputed amounts payable in respect of provident fund employees'state insurance income-tax sales- tax service tax Goods and Service tax duty ofcustoms duty of excise value added tax cess and other material statutory duesapplicable to it were outstanding as on the last day of the financial year for a periodof more than six months from the date they became payable;

(c) Details of income-tax sales-tax service tax Goods and Service tax duty ofcustoms duty of excise value added tax have not been deposited as on March 31 2018 onaccount of any dispute are as under:

Name of the Statute Forum where dispute is pending Period to which the amount relates Amount

(Rs. in Lakhs)

Central Excise Act 1944 Supreme Court of India FY 1995-96 1996-97 75.00
Central Excise Act 1944 CESTAT FY 1995-96 1996-97 971.96
Custom Act 1962 CESTAT FY 2011-12 2016-17 41.05

(viii) According to the information and explanations given to us based on ourexamination of books and records the Company has not defaulted in the repayment of loansor borrowing to banks. The Company does not have any loans and borrowings from financialinstitutions government and has not issued any debentures;

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. According to the informationand explanations given to us money raised by way of term loans during the year have beenapplied for the purpose for which those were raised;

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no instances of fraud by theCompany or on the Company by its officers or employees have been noticed or reportedduring the year;

(xi) According to the information and explanations given to us the Company has paid /provided managerial remuneration in accordance with the requisite approvals mandated bythe provisions of Section 197 read with schedule V to the Act;

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable;

(xiii) According to the information and explanations given to us transactions with therelated parties are in compliance with Sections 177 and 188 of the Companies Act2013where applicable for all transactions with related parties and the details of suchtransactions have been disclosed in the financial statements etc. as required by theapplicable Indian Accounting Standards;

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. Accordingly paragraph 3(xiv) of the Order is notapplicable;

(xv) According to the information and explanations given to us during the yearthe Company has not entered into non-cash transactions with directors or persons connectedwith them;

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For C N K & Associates LLP
Chartered Accountants
Firm Registration Number: 101961W/W-100036
Himanshu Kishnadwala
Place: Mumbai Partner
Date: 29th May 2018 Membership No.: 37391

Annexure B to Independent Auditor's Report

[Referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of SarlaPerformance Fibers Limited ("the Company")on the standalone Ind AS financialstatements for the year ended 31stMarch 2018]

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION143 OF THE ACT

We have audited the internal financial controls with reference to financial statementsof Sarla Performance Fibers ("the Company") as of 31stMarch 2018 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrols stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditingspecified under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls withreference to financial statements were established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto 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 withreference to financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statements includes those policies and procedures that:

1. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

OPINION

In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to financial statements and such internal financialcontrols with reference to financial statements were operating effectively as at 31stMarch

2018 based on the internal control with reference to financial statements 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 ICAI.

For C N K & Associates LLP
Chartered Accountants
Firm Registration Number: 101961W/W-100036
Himanshu Kishnadwala
Place: Mumbai Partner
Date: 29th May 2018 Membership No.: 37391