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Shaily Engineering Plastics Ltd.

BSE: 501423 Sector: Industrials
NSE: SHAILY ISIN Code: INE151G01010
BSE 00:00 | 20 May 1757.85 1.25
(0.07%)
OPEN

1724.65

HIGH

1810.70

LOW

1699.50

NSE 00:00 | 20 May 1760.20
(%)
OPEN

1755.45

HIGH

1819.95

LOW

1750.00

OPEN 1724.65
PREVIOUS CLOSE 1756.60
VOLUME 133
52-Week high 2323.00
52-Week low 1101.05
P/E 43.03
Mkt Cap.(Rs cr) 1,612
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1724.65
CLOSE 1756.60
VOLUME 133
52-Week high 2323.00
52-Week low 1101.05
P/E 43.03
Mkt Cap.(Rs cr) 1,612
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shaily Engineering Plastics Ltd. (SHAILY) - Auditors Report

Company auditors report

To the Members of Shaily Engineering Plastics Ltd.

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the financial statements of Shaily Engineering Plastics Ltd. ("theCompany") which comprise the balance sheet as at 31 March 2021 and the statement ofprofit and loss (including other comprehensive income) statement of changes in equity andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 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) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements 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 on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Key Audit Matters

Description of Key Audit Matter

Revenue recognition

See note 20 to the financial statements

The key audit matter How the matter was addressed in our audit
Revenue Recognition Our procedures included the following:
Revenue from the sale of goods has been recognised when the control of the goods is transferred which is generally in accordance with the terms of sales contracts. • Obtain understanding of and assessing the design implementation and operating effectiveness of the Company's key internal financial controls in relation to revenue recognition
We have identified the recognition of revenue as key audit matter because revenue is a key performance indicator of Company and therefore there is an inherent risk that revenue is overstated to meet financial expectations or targets. The Company has various customers with different terms of trade which increase the risk of error in the timing of revenue recognition. • Inspecting customer contracts on random sample basis to identify the terms and conditions relating to the transfer of control of the products sold and assessing the Company's timing of revenue recognition
• Comparing on random sample basis revenue transactions recorded before the financial year end with relevant underlying documents including gate outward register and shipping documents to assess whether revenue has been recognised in the appropriate financial period and
• Circulation of selected balance confirmation to customers on random sample basis and reconciling the 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 responsible for the otherinformation. The other information comprises the information included in the Directors'Report Corporate Governance Report and Management discussion and Analysis included inCompany's annual report but does not include the financial statements and our auditors'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 in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

MANAGEMENT'S AND BOARD OF DIRECTORS' RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs profit and other comprehensiveincome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting 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 controls that were operating effectively forensuring accuracy and completeness of the accounting records relevant to the preparationand presentation of the financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

In preparing the financial statements the Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends

to liquidate the Company or to cease operations or has no realistic alternative but todo so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

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 skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS (CONTINUED)

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)

(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to financial statements inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the financial statements made by theManagement and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going 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's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a 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.

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 ourauditors' 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 (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it 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 flows dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164(2) of the Act.

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

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

i. The Company has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its financial statements - Refer Note 34 to the financialstatements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses on derivative contracts. The Company did nothad any long term contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from

8 November 2016 to 30 December 2016 have not been made in these financial statementssince they do not pertain to the financial year ended 31 March 2021.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Associates LLP

Chartered Accountants Firm's Registration No : 116231W/W-100024

Jeyur Shah
Partner
Place: Ahmedabad Membership No: 045754
Date: 29 May 2021 UDIN: 21045754AAAACC7110

ANNEXUREA TO THE INDEPENDENT AUDITORS' REPORT - 31 MARCH 2021

With reference to the Annexure A referred to in the Independent Auditors' Report to themembers of the Company on the financial statements for the year ended 31 March 2021 wereport the following:

(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment. However details withrespect to quantity needs to be updated for certain categories of property plant andequipment.

b) The Company has a regular programme of physical verification of its property plantand equipment by which all the property plant and equipment are verified in phased mannerover a period of three years. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Inaccordance with the policy the Company has physically verified its property plant andequipment during the year and we are informed that no material discrepancies were noticedon 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 properties areheld in the name of the Company. Immovable properties of land and buildings whose titledeeds have been pledged as security for loans are held in the name of the Company based onthe confirmations directly received by us from lenders.

In respect of immovable properties been taken on lease and disclosed under propertyplant and equipment in the financial statements the lease arrangements are in the name ofthe Company.

(ii) The inventory except goods in transit has been physically verified by themanagement 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 to companies firmsLtd. Liability Partnership or other parties covered in the register maintained underSection 189 of the Act. Accordingly paragraph 3 (iii) (a) (b) and (c) of the Order arenot applicable.

(iv) According to the information and explanations given to us the Company has notgiven any loans or provided any guarantees or security to the parties covered underSection 185 of the Act. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 186 of the Act inrespects of investment made.

(v) According to the information and explanations given to us the Company has notaccepted deposits during the year as per the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly paragraph 3(v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules prescribed by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have 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 explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including employees' state insuranceprovident fund income-tax goods and service tax and other material statutory dues havebeen regularly deposited during the year with the appropriate authorities.

According to the information and explanations given to us no material undisputedamounts payable in respect of employees' state insurance income-tax goods and servicetax and other material statutory dues were in arrears as at 31 March 2021 for a period ofmore than six months from the date they became payable except in case of Provident fundwhere amount of ' 8.50 Lacs is outstanding for more than six months as at 31 March 2021.

Pending clarity on the matter as explained in Note 34 to the Financial Statements theCompany is currently unable to determine the extent of arrears of provident fund.

b) According to the information and explanations given to us there are no dues of dutyof custom income tax goods and service tax and other material statutory dues that havenot been deposited with the appropriate authorities on account of any dispute except asstated below:

Name of the Statute Nature of Dues Period to which it relates Amount demanded (Rs in lakhs) Forum where dispute is pending Amount unpaid/ Refund withheld (Rs in lakhs)
1 Central Excise Act 1944 Excise Duty 2007-08 to 2009-10 52.27 The Hon' ble Supreme Court 52.27
2 Finance Act 1994 Service Tax 2004-05 to 2016-17 41.95 Commissioner of Customs Excise and Service Tax(Appeals) 41.95
3 Finance Act 1994 Service Tax 2009-10 to 2012-13 7.22 Customs Excise & Service Tax Appellate Tribunal 6.48
4 Finance Act 1994 Service Tax 2007-08 to 2015-16 21.93 Additional Commissioner of Excise and Service Tax 20.06
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
8 Customs Act 1962. Custom Duty 2009-10 to 2017-18 97.84 Commissioner of Customs (Appeals) Mumbai -
9 Finance Act 1994 Service Tax 2014-2016 185.74 Commissioner Appeals CGST & Central Excise Vadodara 171.81

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans and borrowings to the banks. The Company did not have anyoutstanding loans and borrowings to Government Financial institution and debentureholders.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any moneys by way ofinitial public offer or further public offer (including debt instruments) during the year.In our opinion and according to the information and explanations given to us the termloans taken by the Company during the year have been applied for the purpose for whichthey are 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 we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us the Company is not aNidhi company and the Nidhi Rules 2014 are not applicable to it. Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

(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 applicableaccounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(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 any noncashtransactions with directors or persons connected with them. Accordingly paragraph 3 (xv)of the Order is not applicable to the Company.

(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.Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Associates LLP

Chartered Accountants Firm's Registration No : 116231W/W-100024

Jeyur Shah
Partner
Place: Ahmedabad Membership No: 045754
Date: 29 May 2021 UDIN: 21045754AAAACC7110

ANNEXUREB TO THE INDEPENDENT AUDITORS'REPORT ON THE FINANCIAL STATEMENTS

OF SHAILY ENGINEERING PLASTICS LTD. FOR THE YEAR ENDED 31 MARCH 2021

Report on the internal financial controls with reference to the aforesaid financialstatements under Clause (i) of Subsection 3 of Section 143 of the Companies Act 2013

(REFERRED TO IN PARAGRAPH 2(A)(f) UNDER 'REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS' SECTION OF OUR REPORT OF EVEN DATE)

Opinion

We have audited the internal financial controls with reference to financial statementsof Shaily Engineering Plastics Ltd. ("the Company") as of 31 March 2021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2021 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial 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 are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 (hereinafter referred to as"the Act").

AUDITORS' 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 and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls 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 controlswith reference to financial statements include 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 authorisations of management and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised 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 controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For B S R & Associates LLP

Chartered Accountants Firm's Registration No : 116231W/W-100024

Jeyur Shah
Partner
Place: Ahmedabad Membership No: 045754
Date: 29 May 2021 UDIN: 21045754AAAACC7110

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