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Pithampur Poly Products Ltd.

BSE: 530683 Sector: Industrials
NSE: N.A. ISIN Code: INE747D01012
BSE 00:00 | 10 Jun Pithampur Poly Products Ltd
NSE 05:30 | 01 Jan Pithampur Poly Products Ltd
OPEN 11.85
PREVIOUS CLOSE 11.85
VOLUME 1000
52-Week high 11.85
52-Week low 11.85
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Mkt Cap.(Rs cr) 6
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Sell Price 0.00
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OPEN 11.85
CLOSE 11.85
VOLUME 1000
52-Week high 11.85
52-Week low 11.85
P/E
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Pithampur Poly Products Ltd. (PITHAMPURPOLY) - Auditors Report

Company auditors report

To

The Members

PITHAMPUR POLY PRODUCTS LIMITED

(A Company under corporate insolvency resolution process vide

NCLT order)

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying Financial Statements of

PITHAMPUR POLY PRODUCTS LIMITED ("the Company") which comprises the BalanceSheet as at March 31 2020 the Statement of Profit and Loss the Statement of Changes inEquity and the Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as the ‘financial statements').

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31st 2020 and its Loss and Other Comprehensive Income Changes inEquity and its Cash Flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the 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 on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Description of Key Audit Matters

S.No. Key Audit Matters How was the matter addressed in our audit
1 Uncertain tax positions - Direct and Indirect Taxes
The Company has uncertain tax matters pending litigations under direct tax and various indirect tax laws. The litigation involves significant judgement to determine the possible outcome based on which accounting treatment is given to the disputed amount. Our audit procedures included among others the following:
Given the magnitude of potential outflow of economic resources and uncertainty of potential outcome uncertain tax positions are considered to be key audit matters. Obtained details of uncertain tax position and gained understanding thereof;
[Refer Note 28 to the standalone financial statements.] Obtained details of tax assessments and also demands raised;
Along with our internal tax experts read and analysed relevant communication with the authorities;
Evaluated advice obtained by the management from legal consultants on possible outcome of the litigation;
Discussed with senior management and evaluated management's assumptions regarding provisions made or reflected as contingent liabilities;
Assessed whether the disclosures for uncertain tax positions are in accordance with the requirements of Ind AS 37 on "Provisions Contingent Liabilities and Contingent Assets".

Information Other than the Financial Statements and Auditors'

Report Thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the Financial Statements and our Auditors' Reportthereon.

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

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in tsheaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with

Governance for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of 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 the 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements the management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless themanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing

the Company's financial reporting process.

Auditor's Responsibility for the Audit of the Financial

Statements

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 SAswill 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 beexpected to influence the economic decisions of users taken on the basis of thesefinancial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

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.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

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 auditors' 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 auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements for thefinancial year ended March 31 2020 and are therefore the key audit matters. We describethese matters in our auditors' 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the "Annexure-A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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 bestof our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by

the Board of Directors none of the directors is disqualified as on March 31 2020from 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 financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure-B"; and

(g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid/provided by the

Company to its directors in accordance with the provisions of section 197 read withSchedule V to the Act;

(h) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note-28 to the financial statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For S.N. Gadiya & Company

Chartered Accountants

ICAI Firm Reg. No. :002052C

(S.N. GADIYA)

Proprietor

Membership No. : 071229

Place : Indore

Dated : August 14 2020

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of the Independent Auditors' Report of even date to the members ofPITHAMPUR POLY

PRODUCTS LIMITED on the financial statements as of and for the year ended March 31 2020 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.

(b) As explained to us all the Property Plant & Equipment have been physicallyverified by the management in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and the nature of its assets.According to the information and explanations given to us no material discrepancies werenoticed on such physical verification.

(c) According to the information and explanations given to us by the management and onthe basis of our examination of the records of the Company the title deeds of immovableproperties recorded in the books of accounts of the Company are held in the name of theCompany.

(ii) The inventory has been physically verified by the Management during the year. Inour opinion the frequency of such verification is reasonable and adequate in relation tothe size of the Company and the nature of its business. The discrepancies noticed onphysical verification of inventory as compared to books and records were not material andhave been appropriately dealt with in the books of accounts.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the Register maintained underSection 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given tous the provisions of section 185 and 186 of the Companies Act 2013 in respect of loansand advances to entities in which the directors are interested have been complied with bythe Company. The Company has not granted any guarantee or security in terms of section 185and 186 of the Companies Act 2013.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public within the meaning of Sections 73 to 76 of the Actand the rules framed there under.

(vi) As per information and explanations given to us the Central Government hasnot specified the maintenance of cost records under sub-section (1) of section 148 of theAct for the business of the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company in our opinion the Company is generallyregular in depositing the undisputed statutory dues including provident fund employees'state insurance income tax sales tax service tax duty of customs duty of excisevalue added tax goods and services taxes cess and other statutory dues applicable to itwith the appropriate authorities.

` According to the information and explanations given to us no undisputed amountpayable in respect of aforesaid dues were in arrears as on 31st March 2020 for a periodmore than six months from the date they became payable except Professional Tax of Rs. 1.53Lakhs.

(b) According to the information and explanations given to us there are no materialdues of income tax sales tax service tax duty of customs goods and services taxexcise duty entry tax and cess which have not been deposited with the appropriateauthorities on account of any dispute except for the following:

Sr. No. Name of the Statute Nature of Dues Amount (Rs. in Lakhs) Period for which the Amount Relates F.Y. Forum where dispute is pending
1 Income Tax Act 1961. Penalty u/s. 271(1) (c) 5.00 2004-05 Income-Tax Appellate Tribunal Indore
2 Income Tax Act 1961. Penalty u/s. 271(1) (c) 55.56 2006-07 Income-Tax Appellate Tribunal Indore
3 Income Tax Act 1961 Penalty u/s. 271(1) (c) 37.00 2007-08 Commissioner of Income- Tax (Appeals)-I Indore
4 M P Commercial Tax Act 1994 Demand 0.35 1996-97 Dy. Comm. Appellate MP Commercial Tax Dept. Indore
5 M P Commercial Tax Act 1994 Demand 0.18 1999-2000 Dy. Comm. Appellate MP Commercial Tax Dept. Indore
6 M P Commercial Tax Act Demand Penalty 8.25 6.36 2000-01 Dy. Comm. Appellate MP Commercial Tax Dept. Indore
7 M P Commercial Tax Act 1994 Demand Penalty 6.79 5.10 2001-02 Dy. Comm. Appellate MP Commercial Tax Dept. Indore
8 M P Commercial Tax Act 1994 Demand Penalty 5.78 4.16 2002-03 Dy. Comm. Appellate MP Commercial Tax Dept. Indore
9 M P Commercial Tax Act 1994 Demand 10.68 2003-04 Dy. Comm. Appellate MP Commercial Tax Dept. Indore

(viii) The Company had defaulted in repayment of loans and borrowings to the banks.Pursuant to the continuing defaults of the Company a CIRP was initiated against theCompany vide an order of the Bench of the National Company Law Tribunal (‘NCLT')dated January 3rd 2020. Accordingly no payments could be made thereafter to the banksfinancial institutions until the resolution process is concluded. There is noborrowing from the Government financial institutions and there are no debenture holders.

(ix) In our opinion and according to the information and explanations given to us theCompany had not raised money by way of initial public offer or further public offer(including debt instruments) during the year and the term loans taken by the Company havebeen applied for the purpose for which they were raised.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by theManagement.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the paragraph 3(xii) of the Order is notapplicable to the Company. (xiii) In our opinion and according to the information andexplanations given to us all transactions with related parties are in compliance withsection 177 and 188 of the Act and the details as required by the applicable accountingstandards have been disclosed in the financial statements. (xiv) According to theinformation and explanations given to us the Company has not made preferential allotmentof shares during the year under review. Accordingly the provision of clause 3(xiv) of theorder is not applicable.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with themduring the year. Accordingly paragraph 3(xv) of the Order is not applicable to theCompany. (xvi) In our opinion and according to the information and explanations given tous the Company is not required to be registered under Section 45-IA of the Reserve Bankof India Act 1934.

For S.N. Gadiya & Company
Chartered Accountants
ICAI Firm Reg. No. :002052C
(S.N. GADIYA)
Proprietor
Membership No. : 071229

Place : Indore

Dated : August 14 2020

ANNEXURE B TO THE INDEPENDENT AUDITORS'

REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") Referred to in Paragraph 2(f) under‘Report on Other Legal and Regulatory Requirements' section of the IndependentAuditors' Report of even date to the members of Pithampur Poly Products Limited onthe financial statements as of and for the year ended March 31 2020 we report that:

We have audited the internal financial controls over financial reporting of PITHAMPURPOLY PRODUCTS LIMITED ("the Company") as of 31 March 2020 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial

Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting with reference to these financial statements.

Meaning of Internal Financial Controls over Financial

Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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

Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controls

over financial reporting were operating effectively as at

st

31 March 2020 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

For S.N. Gadiya & Company
Chartered Accountants
ICAI Firm Reg. No. :002052C
(S.N. GADIYA)
Proprietor
Membership No. : 071229

Place : Indore

Dated : August 14 2020

.