To the Members of
M/s. Polyspin Exports Limited Report
on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of M/s. Polyspin Exports Limited (the Company) which comprises the Balance Sheet as at March 31 2019 the Statement of Profit and Loss (including Other Comprehensive Income) Statement of Changes in Equity and statement of cash flows for the year then ended and notes to the financial statements including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and accounting principles generally accepted in India of the state of affairs of the Company as at March 312019 and profit total comprehensive income the changes in equity 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) specified under section 143(10) of the Companies Act 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the 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 standalone Ind AS financial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter:
a. We draw attention to Note No.29.3 to the standalone financial statements which describes the effect of a fire in the company's production facilities.
b. We draw attention to Note No. 36.4 to the standalone financial statements which describes non provision of interest on the amount payable toMSME creditors.
Our opinion is not modified in respect of these matters.
Key Audit Matters:
Key Audit Matters are those matters that in our professional judgement were of most significance in our audit of the standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the Standalone Ind AS financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our Report
|Key Audit Matter||Auditor's Response|
|1.||Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 Revenue from Contracts with Customers (new revenue accounting standard)||Principal Audit Procedures|
|The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised overa period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. Refer Note 2.4 to the Standalone Financial Statements||We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard.Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:|
| Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.|
| Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls.|
| Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard.|
| Selected a sample of continuing and new contracts and performed the following procedures:|
| Read analysed and identified the distinct performance obligations in these contracts.|
| Compared these performance obligations with that identified and recorded by the Company.|
| Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration.|
| Samples in respect of revenue recorded for time and material contracts were tested using a combination of approved time sheets including customer acceptances subsequent invoicing and historical trend of collections and disputes.|
| In respect of samples relating to fixed price contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts from the time recording and budgeting systems. We also tested the access and change management controls relating to these systems.|
| Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts.|
| Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.|
| We reviewed the collation of information and the logic of the report generated from the budgeting system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.|
|2.||Evaluation of uncertain tax positions||Principal Audit Procedures Obtained details of completed tax|
|The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes.|
Refer Note 36.3 to the Standalone Financial Statements
|assessments and demands for the year ended March 312019 from management. We involved our expertise to challenge the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions as at April 1 2018 to evaluate whether any change was required to management's position on these uncertainties|
|3.||Recoverability of Indirect tax receivables||Principal Audit Procedures We have involved our expertise to|
|As at March 31 2019 other current assets in respect of withholding tax GST and CESAT appeal Duty of Rs.26.73 lakhs which are pending adjudication.|
Refer Note 12 to the Standalone Financial Statements.
|review the nature of the amounts recoverable the sustainability and the likelihood of recoverability upon final resolution.|
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis Board's Report including Annexures to Board's Report Business Responsibility Report Corporate Governance and Shareholder's Information but does not include the standalone financial statements and our auditor's 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 standalone financial statements or our knowledge obtained in the 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.
Responsibilities of Management and Those Charged with Governance for the Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position financial performance including other comprehensive income changes in equity and cash flows of the Company in accordance with accounting principles generally accepted in India including Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended. This responsibility also includes 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 implementation and maintenance of 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 standalone Ind AS financial statement that give a true and fair view and are free from material misstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the company's financial reporting process.
Auditor's Responsibilities for the Audit of Standalone IndAS Financial Statement
Our objectives are to obtain reasonable assurance about whether the Standalone Ind AS financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an 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 standalone Ind AS financial statements.
A further description of the auditor's responsibilities for the audit of the standalone Ind AS financial statements is included in Annexure A. This description forms part of our auditor's report.
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 of the Companies Act 2013 we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3)oftheActwereportthat:
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 ouraudit.
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 Balance Sheet the Statement of Profit and Loss and the Cash Flow Statement deal with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March 2019 taken on record by the Board of Directors none of the directors is disqualified as on 31st March 2019 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 Control with reference to Financial Statements of the Company and the operating effectiveness of such controls referto ourseparate Report in Annexure C
g) In our opinion and to the best of our information and according to the explanations given to us the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197(16) of the Act.
h) With respect to the other matters to be included in the Auditor's 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 has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 36.3 to the Standalone IndAS financial statements;
ii) The Company has made provision as required under the applicable law or accounting standards for material foreseeable losses if any on long-term contracts including derivative contracts - Refer Note 30.2 to the Ind AS financial statements;
iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.
For M/s. SRITHAR & ASSOCIATES
Firm Registration No. 015896S
Membership No. 209047
Date : 18.05.2019
Responsibilities for Audit of Standalone Ind AS Financial Statement
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 Ind AS 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 internal financial controls with reference to 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.
Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the standalone Ind AS 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's 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 Ind AS financial statements including the disclosures and whether the standalone Ind AS 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 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 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 Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's 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.
|For M/s. SRITHAR & ASSOCIATES|
|Firm Registration No. 015896S|
|Place: Rajapalayam||(S. SRITHAR)|
|Date : 18.05.2019||Membership No. 209047|
ANNEXURE-B TO INDEPENDENT AUDITOR'S REPORT
Annexure referred to in paragraph 1 of our Report of even date to the members of Polyspin Exports Limited on the accounts of the Company for the year ended 31March 2019
In terms of Companies (Auditor's Report) Order 2016 issued by Central Government of India in terms of Section 143(11) of The Companies Act 2013 we further report on the matters specified in paragraph 3 and 4 of the said Order that: -
1. FIXED ASSET
i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
ii) The Company has instituted a programme of physically verifying its fixed assets in a phased manner over a period of three years. In accordance with this programme scheduled fixed assets were verified during the year and no material discrepancies were noticed during such verification.
iii) According to the information and explanations given to us and on the basis of our examination of the records of the company the title deeds of immovable properties are held in the name of the company
The management has conducted physical verification of its inventories at reasonable intervals during the year. No material discrepancies were noticed during such verification; the discrepancies wherever noticed were accounted for appropriately in the books of account.
3. LOANS TO PARTIES LISTED U/S189 OF THE ACT
The Company has not granted any loans secured or unsecured to parties covered in register maintained under Section 189 of the Companies Act 2013.
4. COMPLIANCE WITH SECTIONS 185 & 186 OF THE ACT
i) In connection with matters specified u/s 185 of the act the Company has not advanced any loans directly or indirectly to any of its directors or to any other person in whom the directors are interested or has given any guarantee or provided security in connection with any loan taken by any other person.
ii) The company has not made any investments in any other companies within the meaning of section 186(1) of the act.
iii) In connection with matters specified under section 186(2) of the act the company has not advanced any loans directly or indirectly to any person or body corporate or has given any guarantee or provided security in connection with any loan taken by any other body corporate or any other person or acquired any securities of companies in excess of limits stipulated.
5. The Company has not accepted any deposits from the public.
6. The Central Government has not stipulated the maintenance of Cost Records under section 148(1) of the act for the industry within which the company operates.
7. STATUTORY DUES
i) According to the records maintained by the company and the information and explanations given to us the company has been generally regular in depositing undisputed statutory dues including Provident Fund Employees State InsuranceIncome Tax VAT / Sales Tax GST Duty of Customs Service Tax Cess.
ii) According to the records maintained by the company and the information and explanations given to us there were no arrears of undisputed statutory dues in respect of provident fund income tax sales tax value added tax GST duty of customs service tax cess which remained outstanding as at 31st March 2019 for a period of more than six months from the date they became payable.
iii) According to the records of the company and the information and explanations given to us the disputed statutory dues relating to Central excise duty under the Central Excise act 1944 pertaining to earlier years aggregating to Rs. 487.72 Lakhs on account of matters pending before appropriate authorities is as underand for which no provision had been made in the accounts.
|Name of the Statue||Nature of the Dues||Forum where the dispute is pending||Period||Amount (Rs. In Lakhs)|
|Central Excise Act 1944||Excise Duty||Commissioner of Central Excise Madurai.||June 2008 To March 2013||71.71|
|Central Excise Act 1944||Excise Duty||Commissioner of Central Excise Madurai.||January 2009 To March 2013||129.11|
|Central Excise Act 1944||Excise Duty||Assistant Commissioner of Central Excise Rajapalayam.||April 2010 To March 2011||3.69|
|Central Excise Act 1944||Excise Duty||Assistant Commissioner of Central Excise Rajapalayam.||April 2013 To December 2014||70.11|
|Central Excise Act 1944||Excise Duty||Assistant Commissioner of Central Excise Rajapalayam.||April 2014 To September 2014||30.04|
|Central Excise Act 1944||Excise Duty||Assistant Commissioner of Central Excise Rajapalayam.||October 2014 To March 2015||30.23|
|Central Excise Act 1944||Excise Duty||Assistant Commissioner of Central Excise Rajapalayam.||April 2015 To September 2015||25.24|
|Central Excise Act 1944||Excise Duty||Assistant Commissioner of Central Excise Rajapalayam.||October 2015 To March 2016||33.51|
|Central Excise Act 1944||Excise Duty||Commission of Central Excise Trichy.||April 2016 To March 2017||94.08|
8. The Company has not defaulted in the repayment of any dues to a financial institution bank or government or debenture holders.
9. Term loans were utilised for the purposes for which they were obtained.
10. Based upon the audit procedures performed and information and explanations given to us by the management no fraud by the company or on the Company by its officers or employees have been noticed or reported during the course of our audit.
11. According to the information and explanations given to us and based on our examination of the records of the company the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
12. The provisions of section 406(1) of the act do not apply to the company.
13. The transactions entered into with related parties are in compliance with requirements of sections 177 & 188 of the act and the details have been disclosed in the financial statements etc. as required by the applicable accounting standards.
14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
15. The Company has not entered into any non-cash transactions with directors or persons connected with directors during the year.
16. The Company is not required to be registered under section 45-IAof the Reserve Bankof India Act 1934.
For M/s. SRITHAR & ASSOCIATES
Firm Registration No. 015896S
Membership No. 209047
Date : 18.05.2019
ANNEXURE-C TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph 2(g) under 'Report on Other Legal and Regulatory Requirements' in our Independent Auditor's Report of even date to the members of the company on the Standalone IND AS financial statements for the year ended 31st March 2019]
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (theAct)
We have audited the internal financial controls over financial reporting of the company asof 31stMarch 2019 in conjunction with our audit of the Standalone IND AS financial statements of the company for the year ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The respective Board of Directors 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 (the Guidance Note) 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 the respective company's 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 Act.
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing specified under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls both issued by the ICAI. 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 were 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 auditor's judgment including the assessment of the risks 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 to provide a basis for our audit opinion on the Holding Company's internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Acompany's internal financial control overfinancial 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 company's internal financial control over financial reporting includes those policies and procedures that
1. pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
2. 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
3. Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition use or disposition of the company'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 financial reporting including the possibility of collusion or improper management 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 controls over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the company in all material respects an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2019 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 issued by the ICAI.
For M/s. SRITHAR & ASSOCIATES
Firm Registration No. 015896S
Membership No. 209047
Date : 18.05.2019