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Silveroak Commercial Ltd.

BSE: 512197 Sector: Others
NSE: N.A. ISIN Code: INE798C01017
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NSE 05:30 | 01 Jan Silveroak Commercial Ltd
OPEN 4.54
PREVIOUS CLOSE 4.54
VOLUME 101
52-Week high 4.57
52-Week low 2.57
P/E
Mkt Cap.(Rs cr) 1
Buy Price 4.17
Buy Qty 4.00
Sell Price 4.54
Sell Qty 95.00
OPEN 4.54
CLOSE 4.54
VOLUME 101
52-Week high 4.57
52-Week low 2.57
P/E
Mkt Cap.(Rs cr) 1
Buy Price 4.17
Buy Qty 4.00
Sell Price 4.54
Sell Qty 95.00

Silveroak Commercial Ltd. (SILVEROAKCOMM) - Auditors Report

Company auditors report

TO THE MEMBERS OF SILVEROAK COMMERCIALS LIMITED

Report on the Financial Statements

1. We have audited the accompanying financial statements of Silveroak CommercialsLimited ("the Company") which comprise the Balance Sheet as at March 312019 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the statement of changes in equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

Basis of Opinion

2. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Our responsibilities under those standards 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 (‘ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Management's Responsibility for the Financial Statements

3. 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 to give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with relevant rules there under. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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.

4. 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.

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

Auditors' Responsibility

6. 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 withStandards on Auditing will always detect a material misstatement when it exists.Misstatements 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.

7. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain 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.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances.

• 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.

8. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

9. From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooverweigh the public interest benefits of such communication.

Opinion

10. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act

2013 in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Indian Accounting Standards(Ind AS) specified under sec 133 of the Act the state of affairs of the Company as atMarch 31 2019 and its total Comprehensive income (including profits and othercomprehensive income) its cash flows and the changes in Equity for the year ended on thatdate.

Qualifications

1. The Management has confirmed that they have not provided for gratuityexpenses in the FY 2018-19.

2. The investments disclosed in current assets pertain to investments made bythe company in shares. These shares are valued at cost of acquisition.

3. The Management has confirmed that the company has not accounted for deferredtax because the computation as per the Ind AS leads to generation of Deferred Tax Asset.However due to the events like arbitration Loan NPA's & insolvency proceedingssince the Company does not expect immediate future cash flows to utilize this Deferred TaxAsset therefore Deferred Tax Asset is not recognised for the current financial year andDeferred tax Liability is reversed to the extent of deferred tax asset.

4. The Management has confirmed during the year 2018-19 the Company has notappointed a Company Secretary as KMP per the provision of Companies Act 2013 and rulesmade there under.

5. The management has confirmed that during the year 2018-2019 Form-22A (Active)is not filed by the company.

6. The management has confirmed that the securities of the company are listedat BSE Limited. The Company has not paid listing fees for the year 2018-19.

Key Audit Matters

1. The Management has made provision for doubtful debt of Rs. 62399069/- againstamount receivable from Girna Infraprojects Private Limited since the company is in theprocess of corporate insolvency resolution and recoverability of outstanding amount isuncertain. One of the Director of M/s. Girna Infraprojects Private Limited i.e. Mr.Shivaji Bhosale is a partner of Mr. Amar Patil (Director in Silveroak Commercials Limited)in the business of M/s. Black Rock (Partnership Firm).

2. The Management has confirmed that the Borrowing from Nashik Merchant Co operativebank was under Arbitration and that the loan account has gone NPA due to pendency ofArbitration. Term Loan & Working capital Loan from M/s Nasik Merchant Co-op Bank Ltd.Nasik was availed during FY 15-16. The company has defaulted in repayment of interest andprincipal 31-Mar-2019. The Banker has charged penal interest for FY 2018-19. However theCompany has recomputed interest as per the direction given in arbitration order bearingnumber ARB/KJP/NAMCO/147 of 2017 dtd. 16/04/2019 (Term Loan) & order bearing numberARB/KJP/NAMCO/146 of 2017 dtd. 16/04/2019. (Working Capital). Another arbitrationapplication was made dated 30/06/2019 bearing arbitration no 1 of 2019 before the solearbitrator Shri R B Agrawal (Retd. District Judge). The loan account of the Company hasNPA status as on balance sheet date. (Refer note no 1.16 (b))

3. The management has confirmed that the Company had availed Loan from Citi Co-opcredit & Capital Ltd & has defaulted in repayment of interest and principal as on31-Mar-2019. As such the loan account of the Company has NPA status as on balance sheetdate. (Refer note no 1.16 (b))

4. The Management has confirmed that one of its creditors M/s. Ultratech cement haslodged a complaint in NCLT for payments due to them after end of audit period. The NCLT(Mumbai Bench) has passed order on 01.05.2019 to appoint Interim Resolution ProfessionalMr Rajendra Khadelwal under section 9 of IBC Act 2016 in matter of Ultratech Cement LtdMumbai (Petitioner) V/s Silveroak Commercials Limited Nashik (Corporate Debtor). FurtherNCLT has passed order on 19.08.2019 to replace the Interim Resolution Professional toResolution Professional In the meeting of Creditors resolution was approved forreplacement of IRP Mr Rajendra Khandelwal is replaced with Mr. Alkesh Rawka as ResolutionProfessional.

5. Due to the events like Debtors provisioning arbitration Loan NPA's &insolvency proceedings the company's financial position is degraded to a very largeextent. However management is still hopeful of overcoming the existing situation andrunning the business afresh. As such the management has prepared the books of accounts ongoing concern basis.

6. The Management has confirmed that major business activity falls within a singlesignificant business segment viz. "Construction & related trades" as suchno separate segment information is enclosed.

7. The Management has confirmed that there were no related party transactions exceptthe ones reported in note 3.02 & 3.08 of financial statements impacting the operationsof the Company which were incurred during the year therefore the same is not disclosed inthe Ind AS financial statements.

8. The Management has confirmed that they have designed robust financial riskmanagement objective and policies thereupon in conformity to the size and operations ofthe Company.

Report on Other Legal and Regulatory Requirements

1. As required by ‘the Companies (Auditor's Report) Order 2016' issued by theCentral Government of India in terms of sub-section (11) of section 143 of the Act(hereinafter referred to as the "Order") and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the Annexure A a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 197 (16) of the act we report that the company has not paidany remuneration to the directors; therefore reporting under the provisions of section 197read with schedule V to the act is not applicable.

3. 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 Cash Flow Statement and the statement of Changes in Equity dealt with by thisReport are in agreement with the books of accounts.

(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule relevant rulesthere under.

(e) On the basis of the written representations received from the directors as on March31 2019 none of the directors is disqualified as on March 31 2019 from being appointedas a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference toInd AS financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in Annexure B.

(g) 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 knowledge and belief and according to the information andexplanations given to us:

i. The Company does not have any pending litigations as at March 31 2019 which wouldimpact its financial position other than those mentioned in note no 1.16(b).

ii. The Company did not have any derivative contracts as at March 31 2019.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2019.

For Karwa Malani Kalantri & Associates
Chartered Accountants
Firm Registration Number: 136867W
Sd/-
Durgesh Kalantri
Nashik Partner
October 14 2019 Membership Number 141042

Annexure A to Independent Auditors' Report

Annexure A to Independent Auditors' Report of even date to the members of SilveroakCommercials Limited on the financial statements as of and for the year ended March 312019

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Managementduring the year and no material discrepancies have been noticed on such verification. Inour opinion the frequency of verification is reasonable.

(c) The title deeds of immovable property as disclosed in Note 2.01 on Property Plantand Equipment to the Ind AS financial statements are held in the name of the Company.

ii. The physical verification of inventory has been conducted at reasonable intervalsby the Management during the year. The discrepancies noticed on physical verification ofinventory as compared to book records were not material.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii) (a) (iii)(b)and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186. Therefore theprovisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. The Central Government of India has not specified the maintenance of cost recordsunder subsection (1) of Section 148 of the Act for any of the products of the Company.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of Service Tax Goods and Service Tax (GST)Provident Fund Employees State Insurance Profession Tax and Tax Deducted at Sourcethough there has been a slight delay in a few cases though the delays in deposit have notbeen serious. Wherever there are delays the payments has been made with applicableinterest and late fees. We were informed that there are no undisputed statutory dues as atyear end outstanding for a period of more than six months from the date they becomepayable except the followings:

1) LBT (Nashik Municipal Corporation) dues payable was Rs. 11.61

2) Goods & Service Tax Payable Rs. 51.27 Lacs

3) Income Tax payable Rs. 30.07 Lacs.

4) Service Tax payable Rs. 5.96 Lacs.

5) TDS payable Rs. 0.67 Lacs

6) Profession tax payable Rs 0.61 lacs

7) Provident fund Rs 5.75 Lacs

8) ESIC Rs. 2.09 Lacs

9) MLWF Rs. 0.02 Lacs

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of service income-tax duty of customs and dutyof excise or value added tax which have not been deposited on account of any dispute.

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date except for the loan from Nashik Merchants Co Operative Bank and CitiCo Operative Credit (Refer Note no 1.16(b)).

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

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. The Company has not paid for managerial remuneration therefore reporting by theprovisions of Section 197 read with Schedule V to the Act are not applicable.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements Note no 3.02 & 3.08 asrequired under Ind AS.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India

Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are not applicableto the Company.

For Karwa Malani Kalantri & Associates
Chartered Accountants
Firm Registration Number: 136867W
Sd/-
Durgesh Kalantri
Nashik Partner
October 14 2019 Membership Number 141042

Annexure B to Independent Auditors' Report

Annexure B to Independent Auditors' Report of even date to the members of SilveroakCommercials Limited on the financial statements for the year ended March 31 2019

Page 1 of 2

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

We have audited the internal financial controls over financial reporting of theSilveroak Commercials Limited ("the Company") as of March 31 2019 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit 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:

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(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 authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the ICAI.

For Karwa Malani Kalantri & Associates
Chartered Accountants
Firm Registration Number: 136867W
Sd/-
Durgesh Kalantri
Nashik Partner
October 14 2019 Membership Number 141042