TO THE MEMBERS
To,
The Members,
Shantai Industries Ltd.
(Formerly known as Wheel and Axle Textile Limited)
A Report on the standalone Financial Statements
We have audited the accompanying standalone financial statements of Shantai
Industries Limited (formerly known as Wheel and Axle Textiles Limited) ("the
Company"), which comprises the balance sheet as at March 31, 2023, the
statement of profit and loss, statement of cash flows of the Company and the statement of
changes in equity for the year ended on that date, and notes to the standalone financial
statements, including a summary of significant accounting policies and other explanatory
information. (hereinafter referred to as the standalone financial statements)
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone financial statements give the information required
by the Companies Act, 2013 (Act) in the manner so required and give a true and fair view
in conformity with the accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2023, and its profit, cash flows and changes in
equity for the year ended on that date.
B Basis of Opinion
We conducted our audit in accordance with the standards on auditing specified under
section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are
further described in the Auditors Responsibilities for the Audit of the standalone
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 together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Act and the Rules made thereunder, and we
have fulfilled our other ethical responsibilities in accordance with these requirements
and the ICAIs Code of Ethics. We believe that the audit evidence, we have obtained is
sufficient and appropriate to provide a basis for our opinion.
C Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the standalone financial statements of the current period.
These matters were addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. For the matter below, our description of how our audit
addressed the matter is provided in that context.
We have determined the matter described below to be the key audit matter to be
communicated in our report. We have fulfilled the responsibilities described in the
auditors responsibilities for the audit of the standalone financial statements section of
our report, including in relation to that matter. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material
misstatement of the standalone financial statements. The results of our audit procedures,
including the procedures performed to address the matter below, provide the basis for our
audit opinion on the accompanying standalone financial statements.
| The key audit matter |
|
How the matter was addressed in our audit |
|
|
It may be noted that these export benefits are receivable by the company since long
and even during the year under consideration, no amount has been received. The management
of the company have informed us that the company will receive the said export benefits. |
| Export Benefits Receivable. |
|
|
| The following export benefits are receivable by the company since long : |
|
|
| (i) IGST Refundable |
8.44 lacs |
|
| (ii) Duty |
67.44 lacs |
|
| (iii) ROSL |
10.00 lacs |
|
D Information other than the standalone financial statements and auditors report
The Companys management and Board of Directors are responsible for the preparation of
the other information. The other information comprises of the information included in the
Management Discussion and Analysis, Boards Report including Annexures to Boards Report,
Business Responsibility Report, Corporate Governance and Shareholders Infomration, but
does not include the standalone financial statements and our auditors report thereon. Our
opinion on the standalone financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the standaloane financial statements or our knowledge
obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report
in this regard.
E Responsibility of the Management and Board of Directors for the standalone Financial
Statements
The Companys Management and Board of Directors are responsible for the matters stated
in section 134(5) of the Act with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial position, financial
performance, cash flows and changes in equity 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 Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes the 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 statement that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the standalone financial statements, Management and Board of Directors are
responsible for assessing the Companys ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Company
or to cease operations, or has no realistic alternative but to do so. The companys
Mamnagement and Board of Directors are also responsible for overseeing the Companys
financial reporting process.
F Auditors responsibilities for the audit of the standalone financial statements
Our objectives are to obtain reasonable assurance about whether the standalone
financial statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditors 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 SAs 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.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also -
• Identify and assess the risks of material misstatement of the standalone
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. Under section 143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on whether
the company has adequate internal financial controls with reference to standalone
financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by Management and Board of Directors.
• Conclude on the appropriateness of Management and Board of Directors use of the
going concern basis of accounting in preparation of standalone financial statements and,
based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Companys ability to continue
as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditors report to the related disclosures in the standalone
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 auditors
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 standalone
financial statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
Materiality is the magnitude of misstatements in the standalone financial statements
that, individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the standalone financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (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 financial statements.
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.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters. We describe these matters
in our auditors 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 outweigh the public interest benefits of such communication.
G Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditors Report) Order, 2020 (the "Order")
issued by the Central Government in terms of sub-section (11) of section 143 of the Act,
we give in Annexure-A a statement on the matters specified in paragraphs 3 and 4 of the
Order.
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 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 standalone balance sheet, the standalone statement of profit and loss, the
standalone cash flow statement and standalone statement of Changes in Equity dealt with by
this report are in agreement with the books of account;
(d) In our opinion, the aforesaid financial statements comply with the accounting
standards 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 March
31, 2023 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2023 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 over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in Annexure-B. Our report expresses an unmodified opinion on the adequacy
and operating effectiveness of the Companys internal financial controls over financial
reporting;
(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 information and according to the explanations given to us:
(i) The Company does not have any pending litigations which would impact its financial
position;
(ii) The Company did not have any long-term contracts including derivative contracts
for which there were any material foreseeable losses;
(iii) There has been no amount which was required to be transferred to the Investor
Education and Protection Fund by the Company during the year.
(iv) (a) The Management has represented that, to the best of its knowledge and
belief, no funds (which are material either individually or in the aggregate) have been
advanced or loaned or invested (either from borrowed funds or share premium or any other
sources or kind of funds) by the Company to or in any other person or entities including
foreign entities ("Intermediaries"), with the understanding, whether recorded in
writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no
funds (which are material either individually or in the aggregate) have been received by
the Company from any person or entities, including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the
Company shall, whether, directly or indirectly, lend or invest in other persons or
entities identified in any manner whatsoever by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; and
(c) Based on the audit procedures that have been considered reasonable and appropriate
in the circumstances, nothing has come to our notice that has caused us to believe that
the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and
(b) above, contain any material misstatement.
(v) The Board of Directors of the Company has not paid or proposed any dividend either
interim or final in the current previous year.
Annexure-A TO THE INDEPENDENT AUDITORS REPORT
Auditors Report to the matters specified in paragraphs 3 and 4 of the Companies
(Auditors Report) Order, 2020 ("the Order") issued by the Central Government of
India in terms of sub-section (11) of section 143 of the Act.
(Referred to in paragraph 2 under Report on Other Legal and Regulatory Requirements
section of our report to the Members of Shantai Industries Limited (formerly known
as Wheel and Axle Textiles Limited) of even date)
In terms of the information and explanations sought by us and given by the company and
the books of accounts and records examined by us in the normal course of audit and to the
best of our knowledge and belief, we state that : -
1 In respect of the Companys Property, Plant and Equipment and Intangible Assets:
(a) (A) The company has maintained proper records showing full particulars including
quantitative details and situation of Property, Plant and Equipments.
(B) The Company has maintained proper records showing full particulars of intangible
assets.
(b) The Company has a regular program of physical verification of property, plant and
equipments and right-of-use of assets so as to cover all asssets, once every two years
which, in our opinion, is reasonable having regard to the size of the company and the
nature of its assets. Pursuant to the program, the management has physically verified the
property, plant and equipments and no material discrepancies were noticed on such physical
verification
(c) According to the information and explanation given to us and the records examined
by us, since the company is not having any immovable properties as at the balance sheet
date, reporting under Clause 3(i)(c) of the Order is not applicable to the company.
(d) The company has not revalued any of its Property, Plant and Equipments (including
right-of-use assets) or Intangible Assets during the year.
(e) According to the information and explanation given to us, the company is not
holding any Benami Property and hence no proceedings are initiated or are pending against
the company under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) (as amended
in 2016) and rules made thereunder.
2 In respect of its inventories and working capital
(a) The physical verification of the inventory has been conducted at reasonable
interval by the management and in our opinion the coverage and procedure of such
verification by the Management is appropriate consdiering the size of the company and
nature of its business and no material discrepancies were noticed on such physical
3 Investments, guarantees, securities and loans
According to the information and explanation given to us, t he company has not granted
any loans, secured or unsecured to companies, firms or other parties which are covered in
the Register to be maintained under section 189 of the Companies Act 2013.
4 Compliance of Section 185 and 186 of the Companies Act, 2013
In our opinion and according to the information and explanations given to us, the
company has complied with the provisions of sections 185 and 186 of the Act, in respect of
grant of loans, whereas, it has not made any investments or granted any guarantees or
securities during the year.
5 Public Deposits:
The company has neither accepted any deposits from public nor accepted any amounts
which are deemed to be deposits within the meaning of section 73 to 76 of the Companies
Act and the rules made thereunder, to the extent applicable. Accordingly, the reporting
under clause 3(v) of the order is not applicable to the company.
6 Cost Records:
According to the information and explanations given to us, the Central Government has
not prescribed maintenance of cost records under sub-section (1) of section 148 of the
Act, in respect of the activities carried out by the company. Therefore, the provisions of
clause 3(vi) of the Order is not applicable to the Company.
7 Statutory Dues:
(a) In our opinion, the Company has generally been regular in depositing undisputed
statutory dues, including Goods and Services tax, Income Tax, and other material statutory
dues applicable to it with the appropriate authorities.
According to the information and explanation given to us, there were no undisputed
amounts payable in respect of statutory dues which were outstanding as at March 31, 2023
for a period of more than six months from the date they became payable .
(b) There was no amount of statutory dues as referred to in sub-clause (a), which have
not been deposited on account of any disputes as at the year end.
8 Surrender or disclosure of transactions and income not recorded in the books of
accounts:
In our opinion and according to information and explanations given to us, the company
has not surrendered or disclosed any income or transactions which are not recorded in the
books of account, during the year, in the tax assessments under the Income Tax Act, 1961.
9 Repayment of financial dues:
During the yea under consideration , the company does not have any loans or borrowings
from any financial institutions, banks, government or debenture holders. Accordingly, the
reporting under clause 3(ix) of the order are not applicable to the company.
10 Utilization of fund raised by way of Initial Public Offer, Preferential allotment or
Private placement, etc.:
During the year under consideration, the company does not have raised any money be way
of initial public offer (IPO) or further public offer (including debt instruments) and
term loans. Accordingly, the reporting under clause 3(x) of the order are not applicable
to the company.
11 Frauds and whistle-blower complaints
(a) In our opinion and according to the information and explanations given to us, no
fraud by the Company or any fraud on the company has been noticed or reported during the
year.
(b) According to the information and explanations given to us, no report under
sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as
prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central
Government, during the year under consideration.
(c) In our opinion and according to the information and explanations given to us, no
whistle-blower complaints have been received by the company during the year.
12 Compliance of Nidhi Company:
The company is not a Nidhi Company as per the provisions of the Companies Act, 2013.
Therefore, the reporting under clause 3(xii) of the Order is not applicable to the
company.
13 Transactions with the related parties:
In our opinion and according to the information and explanations given to us, the
company is in compliance with Section 177 and 188 of the Companies Act where applicable,
for all transactions with the related parties and the details of related party
transactions have been disclosed in the notes to financial statements as required by the
applicable Accounting Standards.
14 Internal Audit System
(a) The company has an internal audit system commensurate with the size and nature of
its business.
(b) The internal audit reports of the company issued till the date of the audit report,
for the period under audit have been considered by us.
15 Non - Cash Transactions:
In our opinion and according to the information and explanations given to us, the
company has not entered into any non-cash transactions with the directors or the persons
connected with its directors, as provided in Section 192 of the Companies Act, 2013.
Accordingly, the reporting under clause 3(xv) of the order are not applicable to the
company.
16 Registeration u/s. 45 IA of Reserve Bank of India Act.1934:
(a) In our opinion and according to the information and explanations given to us, the
company is not required to be registered under section 45-IA of the Reserve Bank of India
Act, 1934 and accordingly, the provisions of clause 3(xvi)(a) of the order are not
applicable to the company.
(b) In our opinion and according to the information and explanations given to us,the
company has not conducted any Non-Banking Financial or Housing Finance activities and
accordingly, the reporting under clause 3(xvi)(b) of the order are not applicable.
(c) In our opinion and according to the information and explanations given to us,the
company is not a Core Investment Company (CIC) as defined in the regulations made by the
Reserve Bank of India and accordingly, the reporting under clause 3(xvi)(c) of the order
are not applicable.
(d) In our opinion and according to the information and explanations given to us, the
Group hdoes not have any Core Investment Company (CIC) and accordingly, the reporting
under clause 3(xvi)(d) of the order are not applicable.
17 Cash Losses:
According to the information and explanation given to us and the records examined by
us, the company has incurred cash losses of Rs. 9.41 lacs in the financial year.
18 Issues, Observations, etc. raised by outgoing auditors:
There has been no resignation of the statutory auditors during the year and accordingly
requirement to report on Clause 3(xviii) of the Order is not applicable to the Company.
19 Material Uncertainty:
According to the information and explanations given to us and on the basis of the
financial ratios, ageing and expected dates of realisation of financial assets and payment
of financial liabilities, other information accompanying the financial statements, our
knowledge of the Board of Directors and management plans and based on our examination of
the evidence supporting the assumptions, nothing has come to our attention, which causes
us to believe that any material uncertainty exists as on the date of the audit report that
Company is not capable of meeting its liabilities existing at the date of balance sheet as
and when they fall due within a period of one year from the balance sheet date. We,
however, state that this is not an assurance as to the future viability of the Company. We
further state that our reporting is based on the facts up to the date of the audit report
and we neither give any guarantee nor any assurance that all liabilities falling due
within a period of one year from the balance sheet date, will get discharged by the
Company as and when they fall due.
20 Corporate Social Responsibility:
(a) In our opinion and according to the information and explanations given to us, the
company is not covered by the criteria specified under section 135. Hence, the company is
not required to comply with second proviso to subsection (5) of section 135 of the said
Act.
(b) In our opinion and according to the information and explanations given to us, the
company is not covered by the criteria specified under section 135. Hence, the company is
not required to comply with sub-section (6) of section 135 of the said Act.
21 Qualification, adverse remark in CARO of the companies included in consolidated
financial statement:
In our opinion, clause 3(xxi) of the Order is not applicable on standalone Financial
Statement. Hence, we are not required to express our opinion as required in this clause.
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
(Referred to in Paragraph 2(F) under Report on other legal and regulatory
requirements section of our report to the members of Shantai Industries Limited (formerly
known as Wheel and Axle Textiles Limited) , of even date)
Report on the internal financial controls over financial reporting under clause (i) of
sub - section 3 of section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Shantai
Industries Limited (formerly known as Wheel and Axle Textiles Limited) ("the
Company"), as at March 31, 2023, in conjunction with our audit of the standalone
financial statements of the Company for the period ended on that date.
Managements responsibility for internal financial controls
The Companys 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 companys 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 Companies Act, 2013.
Auditors responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting of the Company 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") issued by the Institute of Chartered
Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the
Companies Act, 2013, to the extent applicable to an audit of internal financial controls.
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 auditors judgement, including the assessment of the risks of
material misstatement in 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 Companys internal financial control system
over financial reporting.
Meaning of internal financial controls over financial reporting
A companys 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 companys internal financial control over financial
reporting includes those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) 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 authorisations of
management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys assets that could have a material effect on the standalone 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 of 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.
Opinion
In our opinion and according to the information and explanations given to us, the
Company has, in all material respects, an adequate internal financial control system over
financial reporting and such internal financial controls over financial reporting were
operating effectively as at March 31, 2023, 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.
|
As per our report of even date For DSI & Co. Chartered Accountants ICAI
FRN 127226W |
| Place : Surat Date : 23-05-2023 |
Sd/- Eric Kapadia Partner Membership No. 136712 UDIN:
23136712BGWYKN9213 |
+91-9892691696
