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Shahlon Silk Industries Ltd.

BSE: 542862 Sector: Industrials
NSE: N.A. ISIN Code: INE052001018
BSE 00:00 | 03 Aug 81.35 -0.65
(-0.79%)
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NSE 05:30 | 01 Jan Shahlon Silk Industries Ltd
OPEN 79.55
PREVIOUS CLOSE 82.00
VOLUME 39274
52-Week high 105.05
52-Week low 33.10
P/E
Mkt Cap.(Rs cr) 145
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 79.55
CLOSE 82.00
VOLUME 39274
52-Week high 105.05
52-Week low 33.10
P/E
Mkt Cap.(Rs cr) 145
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shahlon Silk Industries Ltd. (SHAHLONSILK) - Auditors Report

Company auditors report

TO THE MEMBERS OF SHAHLON SILK INDUSTRIES LIMITED

Report on the Audit of the Financial Statements

Opinion:

We have audited the accompanying financial statements of SHAHLON SILK INDUSTRIESLIMITED (“the Company”) which comprises the Balance Sheet as at March31 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of changes in Equity and the Cash Flow statement for the year ended on that dateand a summary of significant accounting policies and other explanatory information(hereinafter referred to as “the financial statements”).

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statement give the information required by theCompanies Act 2013 (“the Act”) in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(“Ind AS”) and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and its profit including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion:

We conducted our audit of the Financial Statements in accordance with the Standards onAuditing specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibility for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the independence requirements that are relevant to our audit ofthe financial statements under the provision of the Act and Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence we have obtained aresufficient 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 mostsignificant in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statement as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inthe audit of the current period we do not have observed any key audit matters required tobe reported separately.

Information Other than the Financial Statements and Auditor's Report Thereon:

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the 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 including other comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014 and the Companies (IndianAccounting Standards)

Rules 2015 as amended. This responsibility also includes the maintenance of adequateaccounting records in accordance with the provision of the Act for safeguarding of theassets of the Company and for preventing and detecting the frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the financial statement management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibility for the Audit of the Financial Statement:

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(I) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 2016 (“the Order”)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the “Annexure A” a statement on the matters specified inparagraphs 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 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 including Other ComprehensiveIncome the statement of Changes in Equity and the statement of Cash Flow dealt with bythis Report are in agreement with the books of accounts.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014Companies (Indian Accounting Standards) Rules 2015 as amended.

e) On the basis of written representations received from the directors as on March 312020 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2020 from being appointed as a director in terms of section 164(2) of theAct.

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”;

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

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 inaccordance with the provisions of section 197 of the Act.

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

I. The Company does not have any pending litigation which would materially impact itsFinancial position; (Refer Point XV of Notes to Accounts)

ii. The company did not have any long-term contracts including derivative contracts forwhich they were any material foreseeable losses under the applicable law or accountingstandards.

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

For Rasesh Shah & Associates
Chartered Accountants
Firm Reg. No.: .: 0108671W
(Rasesh B. Shah)
Partner
Membership No.: 034217
Place : Surat
UDIN : 20034217AAAAAF4061
Date : 11th July 2020

Annexure A to the Independent Auditor's Report:

The Annexure-A referred to in Independent Auditor's Report to the members of theCompany on the financial statements of the company for the year ended March 31 2020 wereport that:

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

(b) According to information and explanations given to us all the assets have beenphysically verified by the management during the year there is a regular program ofverification which in our opinion is reasonable having regard to the size of the companyand the nature of its assets. No material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties other than self-constructed immovableproperty (buildings) as disclosed in fixed assets to the financial statements are heldin the name of the company.

(ii) (a) According to information and explanations give to us the management of thecompany has conducted physical verification at reasonable intervals of inventories duringthe period and the procedure of physical verification of inventories followed by themanagement is reasonable and adequate in relation to nature and size of the company and nomaterial discrepancies have been noticed during such verification.

(iii) (a) In our opinion and according to the information and explanation given to usthe company has not granted any loan secured or unsecured to the companies firms or otherparties covered in the register maintained under section 189 of the Companies Act 2013.

(b) As the company has not granted any loan as specified in Paragraph (iii) (a)reporting under Paragraph (iii) (b) and (iii) (c) of Companies (Auditor's Report) Order2016 is not applicable.

(iv) In our opinion and according to the information and explanations given to us theCompany has not advanced any loan under section 185 and 186 of the Act. However theCompany has complied with the provisions of section 185 and 186 of the Companies Act 2013with respect to investments made guarantee given and security provided.

(v) The company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2020 as per the directives issued by the Reserve Bankof India and the provisions of sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 and the rules framed thereunder and therefore the provisions of theclause 3 (v) of the Order are not applicable to the company.

(vi) We have broadly reviewed the cost records maintained by the company pursuant tothe Companies (Cost Accounting Records) Rules 2014 prescribed by the Central Governmentunder section 148(1) of the Companies Act 2013 and are of the opinion that prima faciethe prescribed cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) (a) According to the information and explanation given to us and on the basis ofour examination of the records of the Company the company is regular in depositingundisputed statutory dues including Provident Fund Employees State Insurance Income TaxSales Tax Service Tax Custom duty Excise duty VAT Cess and any other Statutory duesto the appropriate authorities.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax wealth tax service tax dutyof customs value added tax cess and other material statutory dues were in arrears as at31st March 2020 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us there are dues of IncomeTax Excise Duty have not been deposited as at March 31 2020 on account of any disputeare given below:

Nature of Dues Period to which dispute relates Forum where dispute is pending Amount under dispute
Excise Duty including penalty AY 2018-19 Central Excise & Service Tax Appellate Tribunal 9.61 Lakhs
Excise Duty including penalty AY 2017-18 Central Excise & Service Tax Appellate Tribunal 33.32 Lakhs
Income Tax Customs AY 2012-13 Commissioner of Income Tax (Appeals) 23.59 Lakhs
A.Y.2015-16 Commissioner of Customs ( Appeal) 2.58Lakhs

(viii) The company has not defaulted in repayment of any loans or borrowings taken fromany financial institution banks government or debenture holders during the year. Thecompany has not issued debentures during the year.

(ix) The company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly paragraph (ix) ofOrder is not applicable. The term loans/ working capital loans obtained during the yearhave been applied for the purpose which they were raised.

(x) According to the information and explanation given to us no material fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) In our opinion and according to the information and explanations given to us thecompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with rule Schedule V to the Act.

(xii) In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company in terms of section 406 of the Companies Act 2013.Accordingly paragraph (xii) of the order is not applicable.

(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 sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) According to the information and explanations give 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. Consequently requirements of clause (xiv) of paragraph 3 of the order are notapplicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the company the Company has not entered into non-cashtransactions with directors or persons connected with them covered u/s. 192 of the Act.Accordingly paragraph (xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Rasesh Shah & Associates
Chartered Accountants
Firm Reg. No.: .: 0108671W
(Rasesh B. Shah)
Partner
Membership No.: 034217
Place : Surat
UDIN : 20034217AAAAAF4061
Date : 11th July 2020

Annexure B to the Independent Auditor's Report:

(Referred to in paragraph 2 (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Shahlon Silk Industries Limited ofeven date)

Report on the Internal Financial Controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of SHAHLONSILK INDUSTRIES LIMITED (“the Company”) as of March 31 2020 in conjunctionwith our audit of the 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 Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' 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 ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit of

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 auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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

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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Rasesh Shah & Associates
Chartered Accountants
Firm Reg. No.: .: 0108671W
(Rasesh B. Shah)
Partner
Membership No.: 034217
Place : Surat
UDIN : 20034217AAAAAF4061
Date : 11th July 2020

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