TO THE MEMBERS OF SILVEROAK COMMERCIALS LIMITED
Report on the Financial Statements
1. We have audited the accompanying financial statements of Silveroak Commercials Limited (the Company) which comprise the Balance Sheet as at March 31 2019 the Statement of Profit and Loss (including Other Comprehensive Income) the Cash Flow Statement and the statement of changes in equity for the year then ended and a summary 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 under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (`ICAI') together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a 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 Section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation of these financial statements to give a true and fair view of the financial position financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act read with relevant rules there under. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement whether due to fraud or error.
4. In preparing the financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
5. The Board of Directors is also responsible for overseeing the Company's financial reporting process.
6. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
7. As part of an audit in accordance with Standards on Auditing we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the 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's report. However future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
8. We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards.
9. From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to overweigh the public interest benefits of such communication.
10. In our opinion and to the best of our information and according to the explanations given to us the aforesaid Ind AS financial statements give the information required by the Companies Act 2013 in the manner so required and give a true and fair view in conformity with the accounting 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 at March 31 2019 and its total Comprehensive income (including profits and other comprehensive income) its cash flows and the changes in Equity for the year ended on that date.
1. The Management has confirmed that they have not provided for gratuity expenses in the FY 2018-19.
2. The investments disclosed in current assets pertain to investments made by the company in shares. These shares are valued at cost of acquisition.
3. The Management has confirmed that the company has not accounted for deferred tax 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 proceedings since the Company does not expect immediate future cash flows to utilize this Deferred Tax Asset therefore Deferred Tax Asset is not recognised for the current financial year and Deferred tax Liability is reversed to the extent of deferred tax asset.
4. The Management has confirmed during the year 2018-19 the Company has not appointed a Company Secretary as KMP per the provision of Companies Act 2013 and rules made 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 listed at 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/- against amount receivable from Girna Infraprojects Private Limited since the company is in the process of corporate insolvency resolution and recoverability of outstanding amount is uncertain. 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 operative bank was under Arbitration and that the loan account has gone NPA due to pendency of Arbitration. 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 and principal 31-Mar-2019. The Banker has charged penal interest for FY 2018-19. However the Company has recomputed interest as per the direction given in arbitration order bearing number ARB/KJP/NAMCO/147 of 2017 dtd. 16/04/2019 (Term Loan) & order bearing number ARB/KJP/NAMCO/146 of 2017 dtd. 16/04/2019. (Working Capital). Another arbitration application was made dated 30/06/2019 bearing arbitration no 1 of 2019 before the sole arbitrator Shri R B Agrawal (Retd. District Judge). The loan account of the Company has NPA 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-op credit & Capital Ltd & has defaulted in repayment of interest and principal as on 31-Mar-2019. As such the loan account of the Company has NPA status as on balance sheet date. (Refer note no 1.16 (b))
4. The Management has confirmed that one of its creditors M/s. Ultratech cement has lodged 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 Professional Mr Rajendra Khadelwal under section 9 of IBC Act 2016 in matter of Ultratech Cement Ltd Mumbai (Petitioner) V/s Silveroak Commercials Limited Nashik (Corporate Debtor). Further NCLT has passed order on 19.08.2019 to replace the Interim Resolution Professional to Resolution Professional In the meeting of Creditors resolution was approved for replacement of IRP Mr Rajendra Khandelwal is replaced with Mr. Alkesh Rawka as Resolution Professional.
5. Due to the events like Debtors provisioning arbitration Loan NPA's & insolvency proceedings the company's financial position is degraded to a very large extent. However management is still hopeful of overcoming the existing situation and running the business afresh. As such the management has prepared the books of accounts on going concern basis.
6. The Management has confirmed that major business activity falls within a single significant business segment viz. Construction & related trades as such no separate segment information is enclosed.
7. The Management has confirmed that there were no related party transactions except the ones reported in note 3.02 & 3.08 of financial statements impacting the operations of the Company which were incurred during the year therefore the same is not disclosed in the Ind AS financial statements.
8. The Management has confirmed that they have designed robust financial risk management objective and policies thereupon in conformity to the size and operations of the Company.
Report on Other Legal and Regulatory Requirements
1. As required by `the Companies (Auditor's Report) Order 2016' issued by the Central 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 the books and records of the Company as we considered appropriate and according to the information and explanations given to us we give in the Annexure A a statement on the matters 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 paid any remuneration to the directors; therefore reporting under the provisions of section 197 read 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 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 been kept 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 other Comprehensive Income) the Cash Flow Statement and the statement of Changes in Equity dealt with by this Report are in agreement with the books of accounts.
(d) In our opinion the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with Rule relevant rules there under.
(e) On the basis of the written representations received from the directors as on March 31 2019 none of the directors is disqualified as on March 31 2019 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to Ind AS financial Statements of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure B.
(g) With respect to the other matters to be included in the Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company does not have any pending litigations as at March 31 2019 which would impact 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 Investor Education and Protection Fund by the Company during the year ended March 31 2019.
|For Karwa Malani Kalantri & Associates|
|Firm Registration Number: 136867W|
|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 Silveroak Commercials Limited on the financial statements as of and for the year ended March 31 2019
i. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion the frequency of verification is reasonable.
(c) The title deeds of immovable property as disclosed in Note 2.01 on Property Plant and 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 intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans secured or unsecured to companies firms Limited Liability Partnerships or other parties covered in the register maintained under Section 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 any guarantees or security to the parties covered under Section 185 and 186. Therefore the provisions 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 of Sections 73 74 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. The Central Government of India has not specified the maintenance of cost records under 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 of the Company examined by us in our opinion the Company is generally regular in depositing undisputed statutory dues in respect of Service Tax Goods and Service Tax (GST) Provident Fund Employees State Insurance Profession Tax and Tax Deducted at Source though there has been a slight delay in a few cases though the delays in deposit have not been serious. Wherever there are delays the payments has been made with applicable interest and late fees. We were informed that there are no undisputed statutory dues as at year end outstanding for a period of more than six months from the date they become payable 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 the Company examined by us there are no dues of service income-tax duty of customs and duty of 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 and explanation given to us the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date except for the loan from Nashik Merchants Co Operative Bank and Citi Co Operative Credit (Refer Note no 1.16(b)).
ix. The Company has not raised any moneys by way of initial public offer further public offer (including debt instruments) and term loans. Accordingly the provisions of Clause 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 Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees noticed or reported during the year nor have we been informed of any such case by the Management.
xi. The Company has not paid for managerial remuneration therefore reporting by the provisions 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 applicable to 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 with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements Note no 3.02 & 3.08 as required under Ind AS.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly the provisions 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 or persons connected with him. Accordingly the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
|For Karwa Malani Kalantri & Associates|
|Firm Registration Number: 136867W|
|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 Silveroak Commercials Limited on the financial statements for the year ended March 31 2019
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act
We have audited the internal financial controls over financial reporting of the Silveroak Commercials Limited (the Company) as of March 31 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note) and the Standards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to the extent applicable to an audit of internal financial controls both applicable to an audit of Internal Financial Controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor's judgment including the assessment of the risks 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 to provide a basis for our audit opinion on the Company's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that:
(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company'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 financial reporting including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and not be detected. Also projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31 2019 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
|For Karwa Malani Kalantri & Associates|
|Firm Registration Number: 136867W|
|October 14 2019||Membership Number 141042|