To the Members of
M/s. Polyspin Exports Limited
Report on the Standalone IND AS Financial Statements Opinion
We have audited the accompanying Standalone IND AS financial statementsof M/s. Polyspin Exports Limited ("the Company") which comprisesthe Balance Sheet as at March 31 2021 the Statement of Profit and Loss (including OtherComprehensive Income) Statement of Changes in Equity and statement of cash flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone IND AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the IND AS and accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and profit total comprehensiveincome 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 responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone IND AS financial statements under the provisions of the Companies Act 2013 andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Emphasis of Matter
a. We draw attention to Note No. 36.4 to the standalone financialstatements which describes non provision of interest on the amount payable to MSMEcreditors.
b. We draw attention to Note No.36.7 to the standalone financialstatements which describes the status of confirmation of balance of Trade Debtors TradeCreditors and other Parties.
c. We draw attention to Note No.29.4 to the standalone financialstatements which explains the uncertainties and the management's assessment of thefinancial impact related to COVID-19 pandemic situation for which a definitive assessmentof the impact in subsequent period is highly dependent on future economic developments andcircumstances as they evolve.
Our opinion is not modified in respect of these matters.
Key Audit Matters :
Key Audit Matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone IND AS financialstatements of the current period. These matters were addressed in the context of our auditof the Standalone IND AS financial statements as a whole and informing our opinionthereon and we do not provide a separate opinion on these matters. We have determined thematters described below to be the key audit matters to be communicated in our Report
|Key Audit Matter ||Auditor's Response |
|1. Evaluation of uncertain tax positions ||Principal Audit Procedures |
|The Company has material uncertain tax positions including matters under dispute which involves significant judgement to determine the possible outcome of these disputes. ||Obtained details of completed tax assessments and demands for the year ended March 31 2021 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. |
|Refer Note No.36.3 to the Standalone Financial Statements ||Additionally we considered the effect of new information in respect of uncertain tax positions as at April 1 2020 to evaluate whether any change was required to management's position on these uncertainties |
|2. Recoverability of Indirect tax receivables ||Principal Audit Procedures |
|As at March 31 2021 other current assets in respect of withholding tax GST and CESAT appeal Duty of Rs. 26.73 lakhs which are pending adjudication. ||We have involved our expertise to review the nature of the amounts recoverable the sustainability and the likelihood of recoverability upon final resolution. |
|Refer Note No. 12 to the Standalone Financial Statements. || |
|3. Assessment of the Company's litigations and related disclosure of contingent liabilities ||Our procedures included the following: |
|Refer to Note No. 36.3 to the standalone Financial Statements "Contingent liabilities not provided for" As at March 31 2021 the Company has exposures towards litigations relating to the matter as included in the aforesaid Notes. Significant management judgement is required to assess such matter to determine the probability of occurrence of material outflow of economic resources and whether a provision should be recognised or a disclosure should be made. || We understood assessed and tested the design and operating effectiveness of the Company's key controls surrounding assessment of litigations relating to the relevant laws and regulations; |
|The management judgement is also supported with legal advice in certain cases as considered appropriate. As the ultimate outcome of the matter is uncertain and the position taken by the management are based on the application of their best judgement related legal advice including those relating to interpretation of laws/regulations it is considered to be a Key Audit Matter. || We discussed with management the recent developments and the status of the material litigations which were reviewed and noted by the Company's audit committee; |
| || We performed our assessment on a test basis on the underlying calculations supporting the contingent liabilities made in relation to the Company's Standalone Financial Statements; |
| || We used auditor's experts to gain an understanding and to evaluate the disputed tax matters; |
| || We considered external legal opinions where relevant obtained by management; |
| || We met with the Company's external legal counsel to understand the interpretation of laws/regulations considered by the management in their assessment relating to a material litigation; |
| || We evaluated management's assessments by understanding precedents set in similar cases and assessed the reliability of the management's past estimates / judgements; |
| || We evaluated management's assessment around those matters that are not disclosed or not considered as contingent liability as the probability of material outflow is considered to be remote by the management; and |
| || We assessed the adequacy of the disclosures. |
| || Based on the above work performed management's assessment in respect of the Company's litigations and related disclosures relating to contingent liabilities in the Standalone Financial Statements are considered to be reasonable. |
Information Other than the Standalone Financial Statements andAuditor's Report Thereon
The Company's Board of Directors are responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the standalone financialstatements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.
Responsibilities of Management and Those Charged with Governance forthe Standalone IND AS Financial Statement
The Company's Board of Directors are responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone IND AS financial statements that give a true and fair viewof the financial position financial performance including other comprehensive incomechanges in equity and cash flows of the Company in accordance with accounting principlesgenerally accepted in India including Indian Accounting Standards (IND AS) prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone IND AS financial statement that give a trueand fair view and are free from material misstatement whether due to fraud or error.
In preparing the IND AS financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of Standalone IND AS FinancialStatement
Our objectives are to obtain reasonable assurance about whether theStandalone IND AS financial statements as a whole are free from material misstatementwhether 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone IND AS financialstatements.
A further description of the auditor's responsibilities for the auditof the standalone IND AS financial statements is included in Annexure A. This descriptionforms part of our auditor's report.
Our attendance at the physical verification done by the management wasimpracticable under the current lock down restrictions imposed by the government.Consequently we have performed alternative procedures to audit on the existence andcondition of inventory at year end as per the guidance provided in SA-501 ' Audit Evidence- Specific considerations for selected items' and have obtained sufficient audit evidenceto issue our un-modified opinion on those standalone financial results.
Our opinion on the statement is not modified in respect of this matter.
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 onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
A) As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich 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 beenkept 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 CashFlow Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone IND AS financial statementscomply with the Indian Accounting Standards specified under Section 133 of the Act.
e) On the basis of the written representations received from thedirectors as on 31 March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2021 from being appointed as a director in termsof Section 164 (2) of the Act.
f) With respect to the adequacy of the Internal Financial Control withreference to Financial Statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure C"
B) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i) The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone IND AS financial statements Refer Note 36.3 tothe Standalone IND AS financial statements;
ii) The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts Refer Note 30.2 to the IND AS financialstatements;
iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
C) With respect to the matter to be included in the Auditors' Reportunder section 197(16) of the Act:
In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of section 197 of the Act. The remuneration paid to anydirector is not in excess of the limits laid down under section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under section 197(16) ofthe Act which are required to be commented upon by us.
ANNEXURE - A
Responsibilities for Audit of Standalone IND AS Financial Statement
As part of an audit in accordance with SAs we exercise professionaljudgement and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone IND AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the Company has internal financial controls with reference to FinancialStatements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone IND AS financial statements or if such disclosuresare inadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern. Evaluate the overallpresentation structure and content of the standalone IND AS financial statementsincluding the disclosures and whether the standalone IND AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the resultsof our work; and
(ii) to evaluate the effect of any identified misstatements in thefinancial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied 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.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalone INDAS financial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
ANNEXURE -B TO INDEPENDENT AUDITOR'S REPORT
Annexure referred to in paragraph 1 of our Report of even date to themembers of M/s. Polyspin Exports Limited on the accounts of the Company for the year ended31 March 2021
In terms of Companies (Auditor's Report) Order 2016 issued by CentralGovernment of India in terms of Section 143(11) of the Companies Act 2013 we furtherreport 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 particularsincluding quantitative details and situation of fixed assets.
ii. The Company has instituted a programme of physically verifying itsfixed assets in a phased manner over a period of three years. In accordance with thisprogramme scheduled fixed assets were verified during the year and no materialdiscrepancies were noticed during such verification.
iii. According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
The management has conducted physical verification of its inventoriesat reasonable intervals during the year. No material discrepancies were noticed duringsuch verification; the discrepancies wherever noticed were accounted for appropriately inthe books of account.
3. LOANS TO PARTIES LISTED U/S 189 OF THE ACT
The Company has not granted any loans secured or unsecured to partiescovered in register maintained under Section 189 of The Companies Act 2013.
4. COMPLIANCE WITH SECTIONS 185 & 186 OF THE ACT
In connection with matters specified u/s 185 of the Act the Companyhas not advanced any loans directly or indirectly to any of its directors or to anyother person in whom the directors are interested or has given any guarantee or providedsecurity in connection with any loan taken by any other person.
The Company has not made any investments in any other companies withinthe meaning of section 186(1) of the Act.
In connection with matters specified under section 186(2) of the Actthe Company has not advanced any loans directly or indirectly to any person or bodycorporate or has given any guarantee or provided security in connection with any loantaken by any other body corporate or any other person or acquired any securities ofcompanies in excess of the limits stipulated
5. The Company has not accepted any deposits from the public.
6. The Central Government has not stipulated the maintenance of CostRecords Under Section 148(1) of the Act for the industry within which the Companyoperates.
7. STATUTORY DUES
i. According to the records maintained by the Company and theinformation and explanations given to us the Company has been generally regular indepositing undisputed statutory dues including Provident Fund Employees State InsuranceIncome Tax GST Duty of Customs Service Tax Cess.
ii. According to the records maintained by the Company and theinformation and explanations given to us there were no arrears of undisputed statutorydues in respect of Provident Fund Income Tax GST Duty of Customs Service Tax Cesswhich remained outstanding as at
31 March 2021 for a period of more than six months from the date theybecame payable.
iii. According to the records of the Company and the information andexplanations given to us the disputed statutory dues relating to Central Excise Dutyunder the Central Excise Act 1944 pertaining to earlier years aggregating to Rs. 487.72Lakhs on account of matters pending before appropriate authorities is as under and forwhich 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 Lakh) |
|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. Macura. ||January. 2009 To March. 2013 ||129.11 |
|Central Excise Act. 1944 ||Excise Duty ||Assistant Commissionc- of Central Excise Rajaoalaya-n. ||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 Kajacalayam. ||April. 2014 To September. 2014 ||30.04 |
|Central Excise Act. 1944 ||Excise Duty ||Assistant Commissions' of Central Excise Rajapalayam. ||October. 2014 To March. 2015 ||30.23 |
|Central Excise Act. 1944 ||Excise Duty ||Assistant Commissioner of Central Exciso. Rajapalayam. ||April. 2015 To September. 2015 ||25.24 |
|Central Excise Act. 1944 ||Excise Duty ||Assistant Commissions' 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 |
|TOTAL || || || ||487.72 |
8. The Company has not defaulted in the repayment of any dues to afinancial institution bank or government or debenture holders.
9. Term loans were utilised for the purposes for which they wereobtained.
10. Based upon the audit procedures performed and information andexplanations given to us by the management no fraud by the Company or on the Company byits 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 basedon our examination of the records of the Company the Company has paid / provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.
12. The provisions of section 406(1) of the Act do not apply to theCompany.
13. The transactions entered into with related parties are incompliance with requirements of sections 177 & 188 of the Act and the details havebeen disclosed in the financial statements etc. as required by the applicable accountingstandards.
14. The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.
15. The Company has not entered into any non-cash transactions withdirectors or persons connected with directors during the year.
16. The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934.
ANNEXUREC TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph 2(g) under 'Report on Other Legal andRegulatory Requirements' in our Independent Auditor's Report of even date to the membersof the Company on the Standalone IND AS financial statements for the year ended 31 March2021]
Report on the Internal Financial Controls over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of the Company as of 31 March 2021 in conjunction with our audit of theStandalone 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 andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to the respective Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note and the Standards on Auditing specified under Section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting 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 judgement 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 andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A Company's internal financial control over financial reporting 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 overfinancial reporting includes those policies and procedures that
i) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;
ii) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorisations of management and directors of theCompany; and
iii) Provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the Company's assets thatcould have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING
Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrols over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate
In our opinion the Company in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI.
| ||For SRITHAR & ASSOCIATES |
| ||CHARTERED ACCOUNTANTS |
| ||Firm Registration No. 015896S |
|Place : Rajapalayam ||(S. SRITHAR) |
|Date : June 25 2021 ||Membership No. 209047 |
| ||UDIN : 21209047AAAACD3967 |