You are here » Home » Companies » Company Overview » Patspin India Ltd

Patspin India Ltd.

BSE: 514326 Sector: Industrials
NSE: PATSPINLTD ISIN Code: INE790C01014
BSE 12:13 | 05 Dec 9.90 -0.10
(-1.00%)
OPEN

9.90

HIGH

9.90

LOW

9.90

NSE 05:30 | 01 Jan Patspin India Ltd
OPEN 9.90
PREVIOUS CLOSE 10.00
VOLUME 502
52-Week high 15.40
52-Week low 5.72
P/E
Mkt Cap.(Rs cr) 31
Buy Price 9.90
Buy Qty 898.00
Sell Price 10.25
Sell Qty 500.00
OPEN 9.90
CLOSE 10.00
VOLUME 502
52-Week high 15.40
52-Week low 5.72
P/E
Mkt Cap.(Rs cr) 31
Buy Price 9.90
Buy Qty 898.00
Sell Price 10.25
Sell Qty 500.00

Patspin India Ltd. (PATSPINLTD) - Auditors Report

Company auditors report

To the Members of Patspin India Ltd.

Report on the Audit of the Standalone Financial Statements Opinion

1. We have audited the accompanying financial statements of Patspin IndiaLimited (the "Company") which comprise the Balance Sheet as at31st March 2021 the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and the Statement of cash flows for the year thenended and notes to the financial statements including a summary of the significantaccounting policies and other explanatory information. (Hereinafter referred to as "Standalonefinancial statements ").

2. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone financial statements for the yearended 31st March 2021 give the information required by the Act in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India of the state of affairs of the company as at 31st March 2021 andloss changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing (SAs)specified under section 143(10) of the

Companies Act 2013. Our responsibilities under those Standards are further describedin the Auditor's Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the Standalone financial statements under theprovisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

Material Uncertainty on Going concern

4. The Company has incurred a net loss of Rs 3796.46 lakhs and cash loss of Rs2775.16 lakhs during the year ended 31st

March 2021 and net worth is eroded as on that date. Since Company has been unable toconclude re-negotiations or obtain replacement financing the Company's future cash flowsare uncertain. This situation indicates that a material uncertainty exists that may castsignificant doubt on the Company's ability to continue as a going concern.

Key Audit Matters

5. Key audit matters are those matters that in our professional judgment were ofmost significance in our audit of the financial statements of the current period. Thesematters were addressed in the context of our audit of the financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters. We have determined that there is no matter to be communicated as a key auditmatter in our report.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

6. The Company's Board of Directors is responsible for the preparation of 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 opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon. In connection with our audit of thestandalone financial statements our responsibility is to read the other information andin doing so consider whether the other information is materially inconsistent with thestandalone financial statements or our knowledge obtained during the course of our auditor otherwise appears to be materially misstated. If based on the work we have performedwe conclude that there is a material misstatement of this other information we arerequired to report that fact. The above information is not available to us as on the dateof our report.

Management's Responsibility for the Standalone Financial Statements:

7. The Company's Board of Directors is responsible for the matters stated inSection 134(5) of the Companies Act 2013

("the Act") with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards (Standalone) specified under section133 of the

Act read with Companies (Indian Accounting Standards) Rules 2015 as amended. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of accounting recordsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.

8. In preparing the financial statements management is responsible for assessingthe Company'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.

9. The Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements:

10. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with

SAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

(i) Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

(ii) Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

(iii) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

(iv) Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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.

(v) 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.

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

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Emphasis of Matter

15. As stated in Note no 40 of the Financial Statement the Company has notrecognised deferred Tax assets amounting to Rs 871.12 lakhs on account of accumulateddepreciation on prudence. But as required under Ind AS-12 Income Taxes the carrying amountof a deferred tax asset shall be reviewed at the end of each reporting period. An entityshall reduce the carrying amount of a deferred tax asset to the extent that it is nolonger probable that sufficient taxable profit will be available to allow the benefit ofpart or all of that deferred tax asset to be utilised. As per the information andexplanation given by the management post restructuring of its debts management ishopeful that there would be sufficient taxable profits in the ensuing years against whichthe unused tax losses and unused tax credits can be utilized / to allow the benefit ofpart or all of that deferred tax asset to be utilized. In view of this the Deferred taxAssets as at 31.3.2020 amounting to Rs 3620.36 lakhs is continued to be recognized in theBooks.

Other Matter

16. The Company had decided to dispose of its Ponneri Unit vide its Meeting of theBoard of Directors held on 18/03/2021 and subsequently the Company has entered into MOUon 19.3.2021 with the potential buyer for sale of the said TN Plant for a Grossconsideration of Rs 110 Cr and net sale consideration after netting off Transaction costsis Rs 105 Cr.

Potential buyer has opened No-lien account and till date deposited Rs 35 Cr as per MOUtowards acquisition value. The

Resolution proposal is under active consideration and approval process with theLenders. The net worth of the Ponneri

Unit is Rs 103 crores (including revaluation reserve of Rs 14.70 crore) as at31-03-2021 and this figure may vary on the sale date. Since the sale is subject to variousconditions the disclosure requirements as specified under "IND-AS 105 - Non-CurrentAssets Held for Sale and Discontinued Operations" are not made. The Resolutionproposal is under active consideration and approval process with the Lenders.

17. The accounts of the company has become NPA with its bankers as at 31.3.2021 dueto non-payment of Term loan dues due to which Company was served with notice under section13 (2) of the SARFAESI Act 2002. The Company has submitted the Resolution plan torestructure the outstanding debt of the Company taking into account proposed sale of itsPonneri plant as mentioned in point no 16.

18. On account of the COVID 19 related lockdown restrictions Management was notable to perform the year end physical

of inventories in aggregating to Rs.1429.33 lakhs at certain locations. Consequentlywe have performed alternative audit procedures to audit the existence of inventory as perthe guidance provided in SA 501 "Audit Evidence Specific consideration to selectiveitems" which includes physical verification done by the management during the yearand their supporting documents relating to purchases construction and sales and haveobtained sufficient audit evidence to issue our unmodified opinion on these standalonefinancial statements.

Report on Other Legal and Regulatory Requirements: 19. As required by Section143(3) of the Act we report that: a) We have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit. b) In our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books. c) The BalanceSheet the Statement of Profit and Loss (Including Other Comprehensive Income) Statementof

Changes in Equity and the Statement of Cash Flow dealt with by this Report are inagreement with the books of account. d) In our opinion the aforesaid Standalone financialstatements comply with the Indian Accounting Standards specified under Section 133 of theAct read with the Companies (Indian Accounting Standards) Rules 2015 as amended. e) Onthe basis of written representations received from the directors as on 31st March 2021taken on record by the board of directors none of the directors are disqualified as on31st March 2020 from being appointed as directors in terms of section 164(2) of the Act.f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure A". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company's internalfinancials controls with reference to financial statements. g) In our opinion accordingto the information and explanations given to us and based on our examination of there-cords of the company the Company has paid/provided for managerial remuneration for theyear ended on March 31 2020 has paid/provided by the Company to its directors inaccordance with the provisions of the section 197 of the Act read with Schedule V to theAct. h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and accord-ing to the explanations given tous: i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone finan-cial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. iii. There were no amounts which wererequired to be transferred to the Investor Education and Protection Fund by the Company.i) With respect to the other matters to be included in the Auditor's Report in accordancewith the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

20. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub section (11) ofsection 143 of the Companies Act 2013 we give in "Annexure - B" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable .

For L. U. Krishnan& Co.
Chartered Accountants
Firm's Registration No: 001527S
P. K. Manoj
Place: Chennai Partner
Date: 30-06-2021 Membership No.207550
UDIN: 21207550AAAAEU1830

Annexure - A to the Independent Auditors' Report

(Referred to in paragraph 19 (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report) Report on the Internal Financial Controls underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference to financial statementsof Patspin India Limited ("the Company") as at 31st March 2021 inconjunction with our audit of the financial statements of the Company for the year endedand as at on 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (‘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 Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements 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 with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements.

A company's internal financial control with reference to financial statements 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 withreference to financial statements includes those policies and procedures that

(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) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to financialstatements.

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as at31st March 2021 based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India.

For L. U. Krishnan& Co.
Chartered Accountants
Firm's Registration No: 001527S
P. K. Manoj
Place: Chennai Partner
Date: 30-06-2021 Membership No.207550
UDIN: 21207550AAAAEU1830

Annexure - B to the Independent Auditors' Report

(Referred to in paragraph 20 under ‘Report on Other Legal and RegulatoryRequirements' section of our report)

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the Standalone financial statements for the year ended 31 March 2020 we report that:

(i) Property Plant and Equipment.

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

(b) The Property Plant & Equipment have been physically verified by theManagement at reasonable intervals in accordance with regular programme of verification.According to the information and explanations given to us no material discrepancies werefound on such verification.

(c) According to the information and explanations given to us and on the basis ofour examination of the records of the

Company the title deeds of immovable properties are held in the name of the Company.

(ii) During the year Inventories has been physically verified by the Managementand there were no discrepancies found during such verification.

(iii) According to the information and explanations given to us the Company hasnot granted any loans secured or unsecured to any company firm Limited LiabilityPartnership or other parties listed in the register maintained under section 189 of theCompanies Act 2013 (‘the Act'). Accordingly clauses from (iii) (a) to (iii) (c) ofparagraph 3 of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to usthe Company has complied with provisions of section 185 and 186 of the Act with respectto loans investments guarantees and security.

(v) According to the information and explanations given to us the Company has notaccepted deposits and does not have any unclaimed deposits within the meaning of Section73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of the clause 3 (v) of the Order are not applicable.

(vi) We have broadly reviewed the books of accounts maintained by the companypursuant to rules prescribed by the

Government of India for maintenance of cost records under sub-section (1) of section148 of the Act and are of the opinion that prima facie the prescribed amounts and recordshave been made and maintained. However we have not made any detailed examination of therecords.

(vii) a) According to the information and explanations given to us and according tothe records as produced and examined by us in our opinion the Company is regular indepositing with appropriate authorities the undisputed statutory dues including incometax sales tax service tax value added tax goods and service tax customs duty exciseduty cess and other material statutory dues applicable to it and there are no arrears ofoutstanding statutory dues as at 31st March 2021 for a period of more than six monthsform date they become payable. b) According to the information and explanationsgiven to us there were no dues in respect of income tax sales tax service tax valueadded tax goods and service tax customs duty excise duty cess and other materialstatutory dues which have not been deposited on account of dispute except for the below:

Name of the Statute Nature of Dues Amount (Rs. in Lakhs) Period for which the amount Relates Forum where Dispute is pending
Central Excise Act1944 Excise Duty 72.99 August 2014 to May 2016 AC Central Excise Pollachi.
CST Act1956 Differential VAT on Interstate billings with local delivery at job work premises of customer as per the instruction of the customer 146.45 April 2009 to March 2012 DC (Appeals) Pollachi.
TANGEDCO Electricity tax on Maximum demand charges 61.21 January 2016 to March 2020 TANGEDCO.
TANGEDCO Deemed demand benefit available for use of self-generated Power. 288.78 April 2015 to March 2020 TANGEDCO.
KVAT Act 2005 Liability for payment of tax on variation in purchase figures between KVATIS - Check post data and books 4.95 April 2011 to March 2012 DC Appeal State Tax Dept Palakkad.

(viii) According to the information and explanations given by the management weare of the opinion that the Company has pending repayment of Rs.1030.77 lakhs as onfinancial year ended 31st March 2021 to Banks and Financial institution which becamepayable for more than six months as on 31st March 2021.

45

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us no fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringour audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions of thesection 197 of the Act read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to usthe Company is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii)According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv)According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly

paragraph 3(xv) of the Order is not applicable.The Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act 1934.

For L. U. Krishnan& Co.
Chartered Accountants
Firm's Registration No: 001527S
P. K. Manoj
Place: Chennai Partner
Date: 30-06-2021 Membership No.207550
UDIN: 21207550AAAAEU1830

.