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Shahlon Silk Industries Ltd.

BSE: 542862 Sector: Industrials
NSE: N.A. ISIN Code: INE052001018
BSE 00:00 | 05 Mar 86.65 -1.35
(-1.53%)
OPEN

85.00

HIGH

89.45

LOW

84.55

NSE 05:30 | 01 Jan Shahlon Silk Industries Ltd
OPEN 85.00
PREVIOUS CLOSE 88.00
VOLUME 3546
52-Week high 100.00
52-Week low 29.55
P/E
Mkt Cap.(Rs cr) 155
Buy Price 86.65
Buy Qty 25.00
Sell Price 89.45
Sell Qty 302.00
OPEN 85.00
CLOSE 88.00
VOLUME 3546
52-Week high 100.00
52-Week low 29.55
P/E
Mkt Cap.(Rs cr) 155
Buy Price 86.65
Buy Qty 25.00
Sell Price 89.45
Sell Qty 302.00

Shahlon Silk Industries Ltd. (SHAHLONSILK) - Auditors Report

Company auditors report

TO THE MEMBERS OF SHAHLON SILK INDUSTRIES LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion :

We have audited the accompanying standalone financial statements of SHAHLON SILKINDUSTRIES LIMITED ("the Company ) which comprises the Balance Sheet as at March 312019 the Statement of Profit and Loss the Statement of changes in Equity and the CashFlow statement for the year ended on that date and a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "thestandalone financial statements ).

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statement give the information required bythe Companies Act2013( the Act") in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under section 133 ofthe 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 2019 and its standalone profit includingother comprehensive income its standalone cash flows and the standalone changes in equityfor the year ended on that date.

Basis for Opinion :

We conducted our audit of the standalone Financial Statements in accordance with theStandards on Auditing specified under section 143(10) of the A ct. Our responsibilitiesunder those Standards are further described in the Auditor s Responsibility for the Auditof the Financial 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 standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statement as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. In the audit of the current period we do not have observed any key auditmatters required to be reported separately.

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

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

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course 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. ^Ve 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 of thesestandalone 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 themaintenance of adequate accounting records in accordance with the provision of the Act forsafeguarding of the assets of the Company and for preventing and detecting the frauds andother irregularities) 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 standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial state m ent management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the company or to cease operations or has norealistic alternative but to do so.

Auditor s Responsibility for the Audit of the Financial Statement

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 accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing issued by the Institute of Chartered Accountants of India asspecified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement. Reasonable assuranceis the high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists. As a partof an audit in a ccordance with SA s we exercise professional judgement and maintain theprofessional scepticism throughout the audit.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures selected depend on theauditors judg m ent including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Co m panyspreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances but not for thepurpose of expressing an opinion on whether the Company has in place an adequate internalfinancial control system over financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of the accounting estimates made by the Company;s Directorsas well as evaluating the overall presentation of the standalone financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.

Other Matter :

The merger of Fairdeal Filament Limited with Shahlon Silk Industries Limited is aBusiness combinations of entities under Common control within the meaning of IndianAccounting Standard ("Ind- AS") 103 is sued by the Central Government u/s. 133of the Companies Act 2013.

We did not audit the standalone financial statements of erstwhile Fairdeal FilamentsLimited (the Transferor Company ) whose annual financial statements reflect total assetsof Rs. 8910.42 lakhs as at March 31 2019 total revenue of Rs. 21951.64 lakhs for theyear ended M arch 31 2019. These annual financial statements and other financialinformation of the Transferor Company only have been audited by other auditor whosereports have been furnished to us by the management and our opinion on the financialstatements to the extent they have been derived from such financial statements is based onsuch report of other auditor. Our opinion on the financial statements is not modified inrespect of the above matter with respect to our reliance on the work done and the reportof the other auditor.

Report on Other Legal and Regulatory Requirements :

1. A s 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 in paragraphs 3and 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 s ought 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 standalone balance sheet the standalone statement of Profit and Loss includingOther Comprehensive Income the standalone statement of Changes in Equity and thestandalone statement of Cash Flow dealt with by this Report are in agreement with thebooks of accounts. (Refer Note No.: XXIV)

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act re ad with Rule 7 of the Companies (Accounts)Rules 2014 Companies (Indian Accounting Standards) Rules 2015 as amended.

e) On the basis of written representations received from the directors as on M arch312019 taken on record by the Board of Directors none of the directors is disqualifiedas on M arch 312019 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 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.

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these standalone financial statements since they do not pertainto the financial year ended M arch 312019.

For Rasesh Shah & Associates
Chartered Accountants
Firm Reg. No.: 108671W
(Rasesh B. Shah)
Partner
Place i Surat Membership No.: 034217
Date : 16.08.2019 UDIN : 19034217AAAAAL8008

Annexure — A to the Independent Auditor s Report.

The Annexure'A referred to in Independent Auditors Report to the members of the Companyon the financial statements of the company for the year ended M arch 31 2019 we reportthat:

(i) (a) T he 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)Order 2016 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 M arch 31 2019 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 bee n 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 M arch 2019 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 M arch 312019 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 AY 2017-18 Central Excise & Service Tax Appellate Tribunal 6.69 Lakhs
Excise Duty AY 2018-19 Central Excise & Service Tax Appellate Tribunal 24.63 Lakhs (excluding interest)
Penalty on Excise Duty AY 2018-19 Central Excise & Service Tax Appellate Tribunal 2 Lakhs
Income Tax AY 2012-13 Commissioner of Income Tax (Appeals) 23.59 Lakhs
Income Tax AY 2013-14 Commissioner of Income Tax (Appeals) 24.71 Lakhs

(viii) The company as not defaulted in repayment of any loans or borrowing 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.: 108671W
(Rasesh B. Shah)
Partner
Place : Surat Membership No.: 034217
Date : 16.08.2019 UDIN : 19034217AAAAAL8008

Annexure — B to the Independent Auditor s Report.

(Referred to in paragraph 2 (f) under Report on Other Legal and Regulatory Requirementssection of our report to the (Members of Shahlon Silk Industries Limited of even 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 M arch 31 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 con ducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the Guidance Note ) and the Standards on Auditing issued by ICAI and deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 op era ting effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor 's judgment including the assessment of therisks of material 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 wit h 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 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) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial 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 2019 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.: 108671W
(Rasesh B. Shah)
Partner
Place : Surat Membership No.: 034217
Date : 16.08.2019 UDIN : 19034217AAAAAL8008

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