We have audited the accompanying financial statements of Polymechplast MachinesLimited ("the Company") which comprise the Balance Sheet as at March 312020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information. (hereinafter referred to as "the financialstatements").
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 (the "Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312020 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the independence requirements that arerelevant to our audit of the financial statements under the provisions of the CompaniesAct 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor 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 financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Sr No Key Audit Matter ||Auditor's Response |
|Capital Work- in- progress related to office premises under construction ||Principal Audit Procedures |
|The company is constructing its own new bigger office building which shall provide more space to company and can be utilised for business activities. The amount incurred on above office building is carried in capital work-in-progress. The above office building needs to be capitalized and depreciated once the assets are ready for use as intended by management.. || Our audit procedures included evaluating and testing the design implementation and operating effectiveness of controls related to various cost incurred in respect of capital work in progress. |
|Given the significance of capital expenditure of office building there are risk pertaining to the appropriateness of the capitals expenditure and incorrect accumulation of revenue expenditure as capital expenditure and also the timing of capitalization of the office building and classification of categories of items if done incorrectly could result in material misstatement of capital work-inprogress with a consequent impact on depreciation charge and results for the year. || We tested the source documentation to determine whether the expenditure is of capital nature and has been properly approved and segregated into appropriate categories. we reviewed operating expenses to determine appropriateness of accounting. |
|Refer Note No. 2(B) and 5 to the Financial Statements || We have verified that the appropriate borrowing cost has been capitalised towards the Capital Work in progress. |
| || Further through site visit we physically verified existence of capital work in progress. |
Information other than the Financial Statement and Auditor's Report thereon
The Company's Board of Directors is responsible for preparation the other information.The other information comprises the information included in the Board's Report includingAnnexure to Board's Report and Shareholder's Information but does not include thefinancial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above and in doing so consider whether the otherinformation is materially inconsistent with the financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
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 total comprehensive income changes in equity and cash flows of theCompany in accordance with the IndAS and other accounting principles generally accepted inIndia including the accounting Standards specified under Section 133 of the Act. 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 judgments 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 the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements 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 managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of 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 fromfraud 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.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
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.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 agoing 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.
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.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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 of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
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 Companies Act 2013 we give in the "AnnexureA" a statement on the mattersspecified in paragraphs 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 purposes 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 including other comprehensiveincome statement of changes in equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
(d) in our opinion the aforesaid financial statements comply with the AccountingStandards 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 March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312020 from being appointed as a director in terms of Section 164(2) of theAct.
(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
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with 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.
(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 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 39 to the financial statements.
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe investor Education and Protection Fund by the Company.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in Para 1 'Report on Other Legal and Regulatory Requirements' in ourindependent Auditor's Report to the members of the Company on the Financial Statements forthe year ended March 312020.
On the basis of such checks as considered appropriate and in terms of the informationand explanations given to us we state as under:
1(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
1(b) As informed to us the Company has the policy and programme of physicalverification of its fixed assets over a period of three years. in accordance with thisprogramme certain fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. in our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets;
1(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date. in respect ofimmovable properties of land and building that have been taken on lease and disclosed asproperty plant and equipment in the financial statements the lease agreements are in thename of the Company;
2 As per the information and explanations given to us the inventories held bythe company have been physically verified by the management. in our opinion having regardto the nature and location of stocks the frequency of the physical verification isreasonable;
2(a) in our opinion and according to the information and explanations given to us theCompany is maintaining proper records of inventories and the discrepancies noticed onphysical verification of the same were not material in relation to the operations of theCompany and the same have been properly dealt with in the books of accounts;
3 According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies Firms Limited Liability Partnershipor any other parties covered in the register maintained under section 189 of the Act.Hence clause 3(a) 3(b) and 3(c) are not applicable for the year;
4 in our opinion and according to the information and explanations given to usprovisions of Sections 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and securities have been complied with;
5 The Company has not accepted any deposits within the meaning of sec 73 to 76 of theAct and the Companies (Acceptance of Deposit) Rules 2014 (as amended). Accordingly theprovisions of this clause of the Order are not applicable;
6 We have broadly reviewed the cost records maintained by the Company as prescribed bythe Central Government under sub section (1) of Section 148 of the Companies Act 2013 andare of the opinion that prima facie the prescribed cost records have been made andmaintained by the company. We have however not made a detailed examination of the costrecords with a view to determine whether they are accurate or complete;
7(a) According to the information and explanations given to us and the records examinedby us the Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income-taxsales-tax goods and service tax (GST) service tax custom duty excise-duty value addedtax (VAT) cess and other statutory dues and there are no undisputed statutory duesoutstanding as at 31st March 2020 for a period of more than six months fromthe date they became payable;
7(b) According to the information and explanation given to us there are no disputedstatutory dues payable in respect of provident fund employees' state insurance incometax sales tax goods and service tax (GST) custom duty excise duty service tax valueadded tax (VAT) cess or any other statutory dues with the appropriate authorities to theextent of the arrears of outstanding statutory dues as at the last day of the financialyear concerned for a period of more than six months from the date they became payableexcept following:
|Name of Stature ||Nature of Dues ||Amount (Rs In lakhs) ||Forum where dispute |
|Code of Civil procedure & Companies Act 1956 ||Under Writter Commission ||0.86 ||Civil Court - Mumbai |
|The West Bengal Value Added Tax' department ||Penalty ||4.56 ||The West Bengal Taxation Tribunal Act 1987 |
|Income Tax Act 1961 ||Income Tax ||29.43 ||Income Tax Appellate Tribunal Ahmedabad |
*Net of amount paid under protest
8 In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of any dues to financial Institution or Bank andthere are no dues to debenture holders during the year;
9 According to the information and explanations given to us no moneys during the yearwere raised by way of initial public offer or further public offer (including debtinstruments) and term loans were applied for the purpose for which the loans wereobtained;
10 During the course of our examination of the books of account and records of thecompany carried out in accordance with generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyincidence 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 case by themanagement;
11 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 orprovided in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V of the Act;
12 In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly this clause of the Order is not applicable;
13 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;
14 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 paid convertible debenturesand hence reporting under this clause is not applicable to the Company;
15 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 as referred to in section 192 ofthe Act;
16 The company is not required to be registered under section 45-IAof the Reserve Bankof India Act 1934.
|For CNK & Associates LLP ||Alok Shah |
|Chartered Accountants ||Partner |
|Firm Registration No. 101961W/W-100036 ||Membership No. 042005 |
| ||Place: Vadodara |
| ||Date: 29th June2020 |
| ||UDIN: 20042005AAAAGV7048 |
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting ofPolymechplast Machines Limited("the Company") as of March 31 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria 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. Theseresponsibilities include the design implementation and maintenance of internal financialcontrols with reference to financial statements of the company that were operatingeffectively for ensuring the orderly and efficient conduct of its business thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
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 prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether internal financial controls with reference to financial statements of the companywere established and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to financial statements of the company 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 judgment 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 and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an internal financial controls withreference to financial statements of the company and such internal financial controls overfinancial reporting were operating effectively as at March 31 2020 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For CNK & Associates LLP ||Alok Shah |
|Chartered Accountants ||Partner |
|Firm Registration No. 101961W/W-100036 ||Membership No. 042005 |
| ||Place: Vadodara |
| ||Date: 29th June2020 |
| ||UDIN: 20042005AAAAGV7048 |