To The Members of Shaily Engineering Plastics Limited
Report on the Ind AS Financial Statements
We have audited the financial statements ofSHAILY ENGINEERINGPLASTICS LIMITED (the "Company") which comprise the balance sheet as at 31March 2019 and the statement of profit and loss (including other comprehensive income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the financial statements including a summary of the significant accountingpolicies and other explanatory information
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters
Revenue from the sale of goods has been recognised when the control ofthe goods is transferred which is generally in accordance with the terms of salescontracts
We have identified the recognition of revenue as key audit matterbecause revenue is a key performance indicator of Company and therefor there is aninherent risk that revenue is manipulated to meet financial expectations or targets Thecompany has various customers with different terms of trade which increase the risk oferror in the timing of revenue recognition
Refer note to the Financial Statements
How the matter was addressed in our audit;
Our procedures included the following
Obtain understanding of and assessing the design implementationand operating effectiveness of management's key internal financial controls inrelation to revenue recognition
Inspecting customer contracts on sample basis to identify theterms and condition relating to the transfer of control of the products sold and assessingthe Company's timing of revenue recognition
Selecting a sample of revenue transactions before and after thefinancial year end and assessing the timing of revenue recognition by comparing details ofthe revenue with underlying documents which includes goods delivery note gate outwardregister lorry receipts shipping documents etc
Circulation of balance confirmation to customer and reconcilingthe differences if any on amounts confirmed by customer and amounts recorded by management
Information Other than the Financial
Statements and Auditors' Report Thereon
The Company's management and Board of Directors are responsiblefor the other information The other information comprises the information included in theDirectors' Report Corporate Governance Report and Management discussion and Analysisincluded in Company's annual report but does not include the financial statementsand our auditors' report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact We have nothing to report in thisregard
Management's Responsibility for the Financial Statements
The Company's management and Board of Directors are responsiblefor the matters stated in section 134(5) of the Act with respect to the preparation ofthese financial statements that give a true and fair view of the state of affairs profitand other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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
In preparing the financial statements management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so
Board of Directors is also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it existsMisstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances Undersection 143(3) (i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion Our conclusions are based on the audit evidence obtainedup to the date of our auditor's report However future events or conditions may causethe Company to cease to continue as a going concern
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters We describe thesematters in our auditors' report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
The financial information of the Company for the year ended 31 March2018 included in these financial statements had been audited by another firm of CharteredAccountants who had expressed an unmodified opinion thereon as per their reports dated 14May 2018
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditors' Report) Order 2016(the "Order") issued by the Central Government in terms of section 143 (11) 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 As required by Section 143(3) ofthe Act we report that:
a We have sought and obtained all the information and explanationswhich to the best of 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 beenkept by the Company so far as it appears from our examination of those books
c The balance sheet the statement of profit and loss (including othercomprehensive income) the statement of changes in equity and the statement of cash flowsdealt with by this Report are in agreement with the books of account
d In our opinion the aforesaid financial statements comply with theInd AS specified under section 133 of the Act.
e On the basis of the written representations received from thedirectors as on 31 March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2019 from being appointed as a director in termsof Section 164(2) of the Act
f With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".
2 With respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
i The Company has disclosed the impact of pending litigations as at 31March 2019 on its financial position in its financial statements - Refer Note -- to thefinancial statements;
ii The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
iii There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company
iv The disclosure in the standalone financial statements regardingholdings as well as dealings in specified bank notes during the period from 8 November2016 to 30 December 2016 have not been made in these financial statements since they donot pertain to the financial year ended 31 March 2019.
3 With respect to the matter to be included in the Auditors'Report under section 197(16):
In our opinion and according to the information and explanations givento us the remuneration paid by the company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act read with Schedule V to the ActThe remuneration paid to any director is not in excess of the limit laid down underSection 197 of the Act read with Schedule V to the Act The Ministry of Corporate Affairshas not prescribed other details under Section 197(16) which are required to be commentedupon by us
For B S R & Associates LLP
(Firm's Registration No: 116231W/W-100024)
(Membership No: 045754)
Vadodara 18 May 2019
Annexure A to the Independent Auditors' Report 31 March 2019
With reference to the Annexure A referred to in the IndependentAuditors' Report to the members of the Company on the financial statements for theyear ended 31 March 2019 we report the following:
i a The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets. However details withrespect to quantity needs to be updated for certain categories of fixed assets.
b The Company has a regular programme of physical verification of itsfixed assets and by which all the fixed assets are verified in phased manner over a periodof three years. In our opinion this periodicity y of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets. In accordance withthe policy the Company has physically verified its fixed assets during the year and weare informed that no material discrepancies were noticed on such verification.
c According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company Immovable properties of land and buildingswhose title deeds have been pledged as security for loans are held in the name of theCompany based on the confirmations directly received by us from lenders.
In respect of immovable properties been taken on lease and disclosedunder property plant and equipment in the financial statements the lease arrangementsare in the name of the Company.
ii The inventory except goods in transit has been physically verifiedby the management during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records were not material and have been properly dealt with in the books of account
iii The Company has not granted any loans secured or unsecured tocompanies firms LimitedLiability Partnership or other parties covered in the registermaintained under Section 189 of the Act Accordingly paragraph 3 (iii) (a) (b) and (c) ofthe Order are not applicable
iv According to the information and explanations given to us theCompany has not given any loans or provided any guarantees or security to the partiescovered under Section 185 of the Act In our opinion and according to the information andexplanations given to us the Company has complied with the provisions of Section 186 ofthe Act in respects of investment made
v According to the information and explanations given to us theCompany has not accepted deposits during the year as per the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder Accordingly paragraph 3 (v) of theOrder is not applicable to the Company
vi We have broadly reviewed the books of accounts maintained by theCompany pursuant to the rules prescribed by the Central Government for the maintenance ofcost records under Section 148(1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete
vii a According to the information and explanations given to us and onthe basis of our examination of the records of the Company amounts deducted/accrued inthe books of account in respect of undisputed statutory dues including provident fundemployees' state insurance income-tax goods and service tax cess and othermaterial statutory dues have been regularly deposited during the year with the appropriateauthorities According to the information and explanations given to us no materialundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax goods and service tax cess and other material statutory dues were in arrearsas at 31 March 2019 for a period of more than six months from the date they became payablePending clarity on the matter as explained in Note -- to the Financial Statements theCompany is currently unable to determine the extent of arrears of provident fund due as at31 March 2019 outstanding for a period of more than six months from the date they becomepayable
b According to the information and explanations given to us there areno dues of service tax duty of custom income tax value added tax goods and service taxand other material statutory dues have not been deposited with the appropriate authoritieson account of any dispute except as stated below:
|Sr. No ||Name of Statute ||Nature of Dues ||Period to which it relates ||Amount demanded ||Forum where dispute is pending ||Amount unpaid/ Refund withheld |
| || || || ||( र in lakhs) || ||( र in lakhs) |
|1 ||Central Excise Act 1944 ||Excise Duty ||2007-08 to 2009-10 ||52 27 ||The Hon' ble Supreme Court ||52 27 |
|2 ||Central Excise Act 1944 ||Service Tax ||2004-05 to 2016-17 ||42 49 ||Commissioner of Customs Excise and Service Tax(Appeals) ||42 49 |
|3 ||Central Excise Act 1944 ||Service Tax ||2008-09 to 2017-18 ||16 12 ||Customs Excise & Service Tax Appellate Tribunal ||15 38 |
|4 ||Central Excise Act 1944 ||Service Tax ||2007-08 to 2015-16 ||35 24 ||Assistant Commissioner of Excise and Service Tax ||33 36 |
|5 ||The Income Tax Act 1961 ||Income Tax ||2007-08 ||2 46 ||Commissioner of Income Tax (Appeal) ||2 46 |
|6 ||The Income Tax Act 1961 ||Income Tax ||2017-18 ||0 08 ||Income Tax Appellate Tribunal ||0 08 |
|7 ||Gujarat Value Added Tax 2003 ||VAT ||1996-97 ||5 74 ||Commercial Tax Dept Halol ||5 74 |
viii According to the information and explanations given to us theCompany has not defaulted in repayment of loans and borrowings to the banks The Companydid not have any outstanding loans and borrowings to Government Financial institution anddebenture holders
ix According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not raised any moneys byway of initial public offer or further public offer (including debt instruments) duringthe year In our opinion and according to the information and explanations given to us theterm loans taken by the Company during the year have been applied for the purpose forwhich they are raised
x During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the management
xi According to the information and explanations given to us and basedon our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act
xii According to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to itAccordingly paragraph 3 (xii) of the Order is not applicable to the Company
xiii According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with Sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby applicable accounting standards.
xiv According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year Accordingly paragraph 3 (xiv) of the Order is notapplicable to the Company
xv According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered into anynon-cash transactions with directors or persons connected with them Accordingly paragraph3 (xv) of the Order is not applicable to the Company
xvi According to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934 Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company
For B S R & Associates LLP
(Firm's Registration No: 116231W/W-100024)
(Membership No: 045754)
Vadodara 18 May 2019
Annexure B to the Independent Auditors' report on the financialstatements of Shaily Engineering Plastics Limited for the year ended 31 March 2019
Report on the internal financial controls with reference to theaforesaid financial statements under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013
(Referred to in paragraph 1(A) (f) under Report on Other Legaland Regulatory Requirements' section of our report of even date)
We have audited the internal financial controls with reference tofinancial statements of Shaily Engineering Plastics Limited (the "Company") asof 31 March 2019 in conjunction with our audit of the financial statements of the Companyfor the year ended on that date.
In our opinion the Company has in all material respects adequateinternal financial controls with reference to financial statements and such internalfinancial controls were operating effectively as at 31 March 2019 based on the internalfinancial controls with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls
Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as the "Act").
Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to financial statements based on our audit Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to financial statements Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements were established and maintained and whether suchcontrols operated effectively in all material respects
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due tofraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to financial statements.
Meaning of Internal Financial controls with Reference to FinancialStatements
A company's internal financial controls with reference tofinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to financial statements includethose policies and procedures that (1) pertain to the maintenance of records that inreasonable detail accurately and fairly reflect the transactions and dispositions of theassets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could havea material effect on the financial statements.
Inherent Limitations of Internal Financial controls with Reference toFinancial Statements
Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financialcontrols with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate
For B S R & Associates LLP
(Firm's Registration No: 116231W/W-100024)
(Membership No: 045754)
Vadodara 18 May 2019