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Stylam Industries Ltd.

BSE: 526951 Sector: Others
NSE: N.A. ISIN Code: INE239C01020
BSE 14:19 | 27 Jul 1090.00 -3.60
(-0.33%)
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1105.00

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1120.00

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NSE 05:30 | 01 Jan Stylam Industries Ltd
OPEN 1105.00
PREVIOUS CLOSE 1093.60
VOLUME 29267
52-Week high 1120.00
52-Week low 174.15
P/E 29.05
Mkt Cap.(Rs cr) 1,846
Buy Price 1089.10
Buy Qty 1.00
Sell Price 1097.80
Sell Qty 5.00
OPEN 1105.00
CLOSE 1093.60
VOLUME 29267
52-Week high 1120.00
52-Week low 174.15
P/E 29.05
Mkt Cap.(Rs cr) 1,846
Buy Price 1089.10
Buy Qty 1.00
Sell Price 1097.80
Sell Qty 5.00

Stylam Industries Ltd. (STYLAMINDUSTRIE) - Auditors Report

Company auditors report

TO THE MEMBERS OF STYLAM INDUSTRIES LIMITED

REPORT ON THE AUDIT OF THE STANDALONE

FINANCIAL STATEMENTS

Opinion

We have audited the accompanying standalone financial statements ofStylam Industries Limited ("the Company") which comprise the Balance Sheet asat 31 March 2020 the Statement of Profit and Loss (including other comprehensive income)the Statement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "standalonefinancial statements")..

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31stMarch 2020 and its profit total comprehensive income its cash flows and the changes inequity for the year ended on that date.

Basis of Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Companies Act 2013 andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statement.

Key Audit Matter

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matter described below to bethe key audit matter to be communicated in our report.

The Key Audit Matter Auditor's Response
Revenue Recognition • We performed process walk through to understand the adequacy and the design of the revenue cycle. We tested internal controls in the revenue and trade receivables over the accuracy and timing of revenue accounted in the financial statements.
The Company recognises revenue at the point of time when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in
exchange for those goods or services. In determining the transaction price for the sale the Company considers the effects of variable consideration and consideration receivable from the customer. • Understanding the policies and procedures applied to revenue recognition as well as compliance thereof including an analysis of the effectiveness of controls related to revenue recognition processes employed by the Company.
The nature of rebates discounts and sales returns if any involve judgment in determining sales revenues and revenue cut-off. The risk is therefore that revenue may not be recognised in the correct period or that revenue and associated profit is misstated.
• We reviewed the revenue recognition policy applied by the Company to ensure its compliance with Ind-AS 115 requirements.
• We checked the contracts of customers along with revenue recognition policy applied by the Company to ensure satisfaction of performance obligation upon transfer of control of products to customer at a point in time. Our checking procedure includes consideration of the accounting and presentation of the rebates and discount arrangements.
• In addition to substantive analytical reviews performed to understand how the revenue has trended over the year we performed a detailed testing on transactions around the year-end ensuring revenues were recognised in the correct accounting period. We also tested journal entries recognised to revenue focusing on unusual or irregular transactions.
The Key Audit Matter Auditor's Response
Fair value Measurement • We have performed analytical audit measures correctness of capitalisation transaction in the bookkeeping records.
In FY 2019 company has capitalised receivable from one of its customer in Singapore.
• We have also assessed the appropriateness of the notes to the financial statements concerning the valuation.
This capitalisation was done on the basis of scheme approved by High Court in Singapore.
• As regards the valuation calculations the trading shares is suspended by SGX we have assessed management judgement on the valuation and fair value is derived on the basis of input available i.e last stated price of shares.
Owing to practical issues the shares so allotted to the company are assigned in favour of person resident of Singapore. The shares are listed in Singapore Stock Exchange (SGX)

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible 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 management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of Standalone FinancialStatement

Our objectives are to obtain reasonable assurance about whether theStandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• I dentify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial control relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern if we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone 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 thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matters

Pursuant to approval of Scheme of Amalgamation between Golden Chem-TechLimited (Transferor company) and the Company by Hon'ble NCLT Chandigarh Bench witheffective date from September 30 2017. The Financial Statement of Transferor company wasprepared in accordance with Generally accepted accounting principles (GAAP). The audit ofthe Transferor Company for the Financial Year ending on March 31 2019 and previous yearended on March 31 2018 was conducted by other auditor. The auditor of the Transferorcompany expressed unmodified opinion on these Financial Results.

The Statement for the corresponding preceding year ended March 312019 has been re-grouped re-classified re- casted and prepared in accordance withIndian Accounting Standards specified under Section 133 of the Companies Act 2013 readwith relevant rules issued there under which expressed an unmodified opinion on thoseaudited standalone financial results/statements.

The transfer of Assets and liabilities of the Transferor Company in theCompany has been done as prescribed under Indian Accounting Standards (IndAS) 103.

Our opinion on the Statement is not modified in respect of the abovematters.

Report on Other and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our

audit we report that:.

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen 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 othercomprehensive income the Cash Flow Statement and the statement of changes in Equity dealtwith by this Report are in agreement with the relevant books of account.

(d) I n our opinion the aforesaid standalone financial statementscomply with the Ind AS specified under Section 133 of the Act.

(e) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directorsnone of the directors is disqualified as on 31st March 2020 from beingappointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure

A". Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting.

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended

(h) I n our opinion and to the best of our information and according tothe explanations given to us the remuneration paid by the Company to its directors duringthe year is in accordance with the provisions of section 197 of the Act.

(i) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements;

ii. The Company did not have any long term contracts includingderivative contracts for which there were any material foreseeable losses;

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

2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For Mittal Goel & Associates
Chartered Accountants
Firm Reg. No. 017577N
SANDEEP KUMAR GOEL
Date: 29th June 2020 Partner
Place: Chandigarh Membership No. 099212

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Subsection 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Stylam Industries Limited ("the Company") as of March 31 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting 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 judgement 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 andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting 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 control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us 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 2020 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 Institute of CharteredAccountants of India.

For Mittal Goel & Associates
Chartered Accountants
Firm Reg. No. 017577N
SANDEEP KUMAR GOEL
Date: 29th June 2020 Partner
Place: Chandigarh Membership No. 099212

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in Paragraph 2 Under 'Report on other Legal and RegulatoryRequirements' of our Report of Even Date)

The Annexure referred to in Independent Auditors' Report to the membersof the Company on the standalone financial statements for the year ended 31 March 2020 wereport that:

i. (a) The Company has maintained proper records

showing full particulars including quantitative details and situationof the fixed assets.

(b) The Company has a regular programme of physical verification of itsfixed assets by which all fixed assets are verified in a phased manner over a period ofthree years. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogram certain fixed assets were physically verified by the Management during the year.According to the information and explanations given to us no material discrepancies werenoticed on such verification.

(c) According to the information and explanations given to us and therecords examined by us including registered title deeds we report that the title deedscomprising all the immovable properties of land and buildings which are freehold are heldin the name of the Company as at the balance sheet date. In respect of immovableproperties of land that have been taken on lease and disclosed as Right of Use Assets inthe financial statements the lease agreements are in the name of the Company where theCompany is the lessee in the agreement

ii. The inventory except goods-in-transit and stocks lying with thirdparties have been physically verified by the management during the year. In our opinionthe frequency of such verification is reasonable. For stocks lying with third parties atthe year end written confirmations have been obtained. The discrepancies noticed onverification between the physical stocks and the book records were not material and havebeen dealt with in books of account.

iii. According to the information and explanations given to us theCompany has granted loans unsecured to one of its wholly owned subsidiary companycovered in the register maintained under section 189 of the Companies Act 2013 inrespect of which:

(a) The terms and conditions of the grant of such loans are in ouropinion prima facie not prejudicial to the Company's interest

(b) The schedule of repayment of principal and payment of interest hasbeen stipulated and repayments or receipts of principal amounts and interest have beenregular as per stipulations.

(c) There is no overdue amount remaining outstanding as at theyear-end.

iv. In our opinion and according to information and explanations givento us the Company has complied with provisions of Section 185 and 186 of the Act inrespect of grant of loans making investments and providing guarantees and securities asapplicable.

v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposit from the public in accordance withthe provisions of Sections 73 to 76 or any other relevant provisions of the Act and therules framed there under. Accordingly paragraph 3(v) of the Order is not applicable tothe Company.

vi. We have broadly reviewed the cost records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 as amended prescribed bythe Central Government under subsection (1) of Section 148 of the Companies Act 2013 andare of the opinion that prima facie the prescribed cost records have been made andmaintained.

vii. According to the information and explanations given to us inrespect of statutory dues

(a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax CustomsDuty Goods and Service Tax cess and other material statutory dues applicable to it tothe appropriate authorities.

(b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income Tax Customs Duty Goods and Service Tax cessand other material statutory dues in arrears as at 31st March 2020 for aperiod of more than six months from the date they became payable.

(c) Details of dues of Income Tax Sales Tax Service Tax Excise Dutyand Value Added Tax which have not been deposited as on 31st March 2020 onaccount of disputes are given below:

Name of the statue Amount (' in lakh) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Rs. 87.49* AY 2013-14 Tribunal
Income Tax Act 1961 Rs. 130.00* AY 2014-15 Tribunal
Income Tax Act 1961 Rs. 43.31* AY 2017-18 CIT (Appeals)
Custom Duty Rs. 2058.72 13-10-2017 to 10-01-2019 DRI

* Net of amount paid under protest

viii. I n our opinion and according to the information and explanationsgiven to us the Company has not defaulted during the year in repayment of dues to bankersand government. The Company did not have any outstanding dues to financial institutionsand debenture holders during the year.

ix. The Company did not have any term loans outstanding during theyear. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe Order is not applicable.

x. To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no material fraud on the Company byits officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to usmanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. According to the information and explanations given to us theCompany is not a Nidhi Company as prescribed under Section 406 of the Act. Accordinglyreporting under clause (xii) of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us alltransactions with the related parties are in compliance with Section 177 and 188 of Actwhere applicable and the details have been disclosed in the Financial Statements asrequired by the applicable Indian Accounting Standards.

xiv. During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause (xiv) of the Order is not applicable to the Company.

xv. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered into noncashtransactions with directors or persons connected with him and hence provisions of section192 of the Companies Act 2013 are not applicable.

xvi. According to information and explanations given to us the Companyis not required to be registered under Section 45 IA of the Reserve Bank of India Act1934.

For Mittal Goel & Associates
Chartered Accountants
Firm Reg. No. 017577N
SANDEEP KUMAR GOEL
Date: 29th June 2020 Partner
Place: Chandigarh Membership No. 099212

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