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Shilchar Technologies Ltd.

BSE: 531201 Sector: Engineering
NSE: N.A. ISIN Code: INE024F01011
BSE 15:10 | 28 Oct 200.85 18.20
(9.96%)
OPEN

200.90

HIGH

200.90

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195.00

NSE 05:30 | 01 Jan Shilchar Technologies Ltd
OPEN 200.90
PREVIOUS CLOSE 182.65
VOLUME 7680
52-Week high 206.00
52-Week low 70.00
P/E 41.33
Mkt Cap.(Rs cr) 77
Buy Price 195.50
Buy Qty 50.00
Sell Price 200.85
Sell Qty 3.00
OPEN 200.90
CLOSE 182.65
VOLUME 7680
52-Week high 206.00
52-Week low 70.00
P/E 41.33
Mkt Cap.(Rs cr) 77
Buy Price 195.50
Buy Qty 50.00
Sell Price 200.85
Sell Qty 3.00

Shilchar Technologies Ltd. (SHILCHARTECH) - Auditors Report

Company auditors report

TO THE MEMBERS OF SHILCHAR TECHNOLOGIES LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying Financial Statements of SHILCHAR TECHNOLOGIES LIMITED("the Company") which comprise the Balance Sheet as at 31st March2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then ended andnotes to the Financial Statements including a summary of significant accounting policiesand other explanatory information.

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 (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 31st March 2020 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the Financial Statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the independence requirements that arerelevant to our audit of the Financial Statements under the provisions of the CompaniesAct 2013 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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Sr no Key Audit Matter Auditor's Response
1 Recoverability and Recognition of Receivables w.r.t Export Incentives under Merchandise Export from India Scheme (MEIS) This has been considered as a key audit matter given the involvement of management judgement and estimate and any variation may have consequential impact on the recognised revenue.
Under the Foreign Trade Policy (FTP) 2015-20 of Government of India the company has claimed export benefits under Merchandise Export from India Scheme (MEIS). Our audit approach consisted testing of design and effectiveness of internal controls and substantive testing as follows:
Company recognizes these benefits in the period in which the right to receive the same is established i.e. the year during which the exports for grant of MEIS benefits are done. • Evaluation and testing of the design of internal controls relating to recognition of MEIS Income;
(Please refer Note No. 2(L)(ii) and Note No. 28 of the financial statement) • Relied on management judgements key assumptions and estimations regarding revenue recognition for which Exports have been made but pending for receipt of MEIS License at the year ended.
• We have also verified the subsequent realisation of MEIS Receivable as on 31st March 2020 to evaluate whether any change was required to management's positions on this Income Provisioning.
• The status of such claims has been reviewed on regular basis.

Information other than the Financial Statement 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 Board's Reportincluding Annexures to that Board's Report Corporate Governance and Shareholder'sInformation but does not include the Financial Statements and our auditor's reportthereon.

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 auditor 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.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

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 total comprehensive income changes in equity and cash flows of theCompany in accordance with the Ind AS and other accounting principles generally acceptedin India including the accounting Standards 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 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 also responsible for overseeing the company's financialreporting process.

Auditor's Responsibilities for the Audit of 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 scepticism 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;

• 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the 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 Cash Flow Statement dealt with by thisReport are in agreement with the relevant books of account;

(d) In our opinion the aforesaid Financial Statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;

(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 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; and

(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) 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 on its financialposition in its financial statements – Refer Note 38 to the Financial Statements;

ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses;

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

For CNK & Associates LLP
Chartered Accountants
Firm Registration No. 101961W/W-100036
Alok Shah
Partner
Membership No. 042005
Place: Vadodara
Date: 27th June 2020
UDIN:20042005AAAAGJ1567

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in Para 1 ‘Report on Other Legal and Regulatory Requirements' in ourIndependent Auditor's Report to the members of the Company on the Financial Statements forthe year ended 31st March 2020.

I. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets;

(b) As informed to us the company has regular programme of physical verification ofits fixed assets by which the fixed assets are verified in phased manner over a period oftime. In accordance with this programme certain fixed assets were verified during theyear and no material discrepancies were noticed on such verification. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets;

(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;

II. As per the information and explanations given to us physical verification ofinventory has been conducted at reasonable intervals by the management and no materialdiscrepancies were noticed on physical verification;

III. According to the information and explanations given to us the Company has notgranted any secured or unsecured loans to Companies Firms Limited Liability Partnershipor any other parties covered in the register maintained under section 189 of the CompaniesAct 2013. Therefore the requirements of sub-clause (a) (b) and (c) of clause (iii) arenot applicable to the Company.

IV. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable;

V. In our opinion and as explained to us the Company has not accepted any depositsduring the year and therefore the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed thereunder are not applicableto the Company;

VI. We have broadly reviewed the cost records maintained by the Company as prescribedby the Central Government under sub section (1) of Section 148 of the Companies Act 2013and are of the opinion that prima facie the prescribed cost records have been made andmaintained by the Company. We have however not made a detailed examination of the costrecords with a view to determine whether they are accurate or complete;

VII. According to the information and explanations given to us in respect of statutorydues:

(a) According to the information and explanations given to us and the records examinedby us the Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income-tax Goods andService Tax (GST) custom duty cess and other statutory dues and there are no undisputedstatutory dues outstanding as at 31st March 2020 for a period of more thansix months from the date they became payable;

(b) According to the information and explanations given to us and the records examinedby us there are no dues of income tax sales tax wealth-tax service tax duty ofcustoms duty of excise value added tax or cess that has not been deposited on account ofdisputes.

VIII. Based on our audit procedure and according to the information and explanationgiven by the management we are of the opinion that the Company has not defaulted inrepayment of dues to financial institutions or banks Government or dues to debentureholders;

IX. According to the information and explanations given to us no moneys were raised byway of initial public offer or further public offer (including debt instruments) and theterm loans were applied for the purpose for which the loan were obtained during the year;

X. During the course of our examination of the books of account and records of theCompany carried out in accordance with the generally accepted auditing practices in Indiaand according to the information and explanations given to us we have neither came acrossany incidence of fraud on or by the Company noticed or reported during the year nor wehave been informed of any such case by the management;

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 Schedule V to the Act;

XII. In our opinion and according to the information and explanation given to us theprovisions related to Nidhi Company are not applicable; XIII. In our opinion and accordingto the information and explanations given to us the Company is in compliance with Section177 and 188 of the Companies Act 2013 where applicable for all transactions with therelated parties and the details of related party transactions have been disclosed intheFinancial Statements as required by the applicable accounting standards;

XIV. According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review; XV. According to the information andexplanation given to us and based on our examination of the records the Company has notentered into non-cash transactions with the directors or persons connected with them.Hence the provisions of Section 192 of the Act are not applicable;

XVI. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For CNK & Associates LLP
Chartered Accountants
Firm Registration No. 101961W/W-100036
Alok Shah
Partner
Membership No. 042005
Place: Vadodara
Date: 27th June 2020
UDIN: 20042005AAAAGJ1567

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SHILCHARTECHNOLOGIES LIMITED ("the Company") as of 31st March 2020 inconjunction with our audit of the Financial Statementsof the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls with reference to financial statements of the Company that wereoperating effectively for ensuring the orderly and efficient conduct of its business thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the 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 prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements of thecompany were established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to financial statements of the company and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting 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 judgment including the assessment of therisks of material 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 systemover financial reporting.

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 authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 internal financial controls withreference to financial statements of the Company and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For CNK & Associates LLP
Chartered Accountants
Firm Registration No. 101961W/W-100036
Alok Shah
Partner
Membership No. 042005
Place: Vadodara
Date: 27th June 2020
UDIN: 20042005AAAAGJ1567

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