To the Members of
POLYTEX INDIA LIMITED
We have audited the Stand alone Financial Statements of POLYTEX INDIA LIMITED("the Company") which comprise the balance sheet as at 31st March 2022 and thestatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity the Statement of Cash Flows and notes to the standalone Ind ASfinancial statements for the year ended on that date and a summary of the significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us our report the aforesaid financial statements give the information requiredby the Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March31 2022 its profit includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.
Basis for Opinion
We conducted our audit in accordance with the Accounting Standards (AS) specified undersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards 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.
Emphasis of Matter;
1. Valuation of the unquoted investment (as per IND AS 109) are subject to thevaluation by independent valuer. As per management explanation they are under process tocarry out fair valuation from registered valuer. Due to not availability of valuationreport we are not able to comment on the same.
2. We draw the Attention that the company create provision for NPA Rs 1206.28 lacsduring the year due to COVID-19 pandemic some unsecured Loans are delay in payment.However the company has discussion for restructure loan accounts.
3. Company is not complied the provision of IND AS -19 for Employee benefit. As permanagement opinion company having only one employee during the year. Our opinion is notmodified in respect on this matter
Material uncertainty related to Going concern :
Company create provision for NPA Rs 1206.28 Lacs during the year. Due to COVID-19pandemic some unsecured Loans there is delay in payment by the parties. However thecompany has discussion for restructure of its loan accounts. These accounts are becomeNPA. Company is not booked interest income in case of NPA account. Hence these event orconditions indicate that a material. Uncertainty exists that may cause significant doubtin the company's ability to continue as a going concern. However the standalone financialof the company have been prepared on a going concern basis for as reason stated on thesaid note.
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 not determined the any matters to described tobe the key audit matters.
Information other than the financial statements and auditors' report thereon
The Company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report but does not include the financial statementsand our auditor's report thereon.
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 during thecourse of our 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 and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards (AS) specifiedunder section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
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 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 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 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 theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness 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 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2020 ("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 Annexure A' 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards (AS) 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 31stMarch 2022 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2022 from being appointed as a director in terms of Section164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure B'.
g) With respect to the matter to be included in the Auditor's Report under section197(16) In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under section 197(16) which arerequired to be commented upon by us.
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. TheCompany does not have any pending litigations which would impact its financial position.ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. (a) The management has represented that to the best of its knowledge and beliefno funds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the company to or in any other person(s)or entity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries")or provide any guarantee security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented that to the best of its knowledge and belief nofunds have been received by the company from any person(s) or entity(ies) includingforeign entities ("Funding Parties") with the understanding whether recordedin writing or otherwise that the company shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party ("Ultimate Beneficiaries") or provide any guarantee securityor the like on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b) above contain any material mis-statement.
v. No dividend have been declared or paid during the year by the company.
The Annexure referred to in paragraph 1 of Our Report on "Other Legal andRegulatory Requirements".
We report that:
(i) (a) (A) The company is maintaining proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment;
(B) The company does not have intangible Assets during the year therefore theseclause is not applicable to the company;
(b) As explained to us Property Plant and Equipment have been physically verifiedby the management at the reasonable interval and no material discrepancies were noticed onsuch verification. Company does not have the property plat and equipment's there for thisclause does not applicable to Company.
(c) According to the information and explanation given to us and based onverification of records provided to us Company does not have the immovable propertiesthere for this clause does not applicable to Company.
(d) The Company has not revalued its Property Plant and Equipment (including Rightof Use assets) during the year.
(e) As explained to us no proceedings have been initiated or are pending againstthe company for holding any benami property under the Benami Transactions (Prohibition)Act 1988 (45 of 1988) and rules made thereunder.
(ii) (a) The Company does not have any inventory and hence reporting under clause3(ii)(a) of the order is not applicable.
(b) According to information and explanations given to us the company has not beensanctioned working capital limits in excess of five crore rupees in aggregate from banksor financial institutions on the basis of security of current assets during any point oftime of the year. Therefore this clause is not applicable.
(iii) (a) The Company being a Non-Banking Finance Company the provisions of clause3(iii)(a) are not applicable to the company.
(b) According to the information and explanations given to us the investmentsmade guarantees provided security given and the terms and conditions of the grant of allloans and advances in the nature of loans and guarantees provided are not prima facieprejudicial to the company's interest;
(c) The Company being a Non-banking Finance company is in the business of asgranting loans and advances in the nature of loans. The schedule of repayment of principaland payment of interest has been stipulated and the repayments or receipts are regularexcept accounts which are overdue are classified as special mention accounts ornon-performing assets as per RBI norms.
(d) The total amount overdue for more than ninety days is Rs 1206.28 Lakhs. Basedon the information and explanations given to us and in our opinion reasonable steps havebeen taken by the company for recovery of principal and interest. due to COVID-19 pandemicsome unsecured Loans are delay in payment. However the company has discussion forrestructure loan account.
(e) The Company being a Non-Banking Finance Company the provisions of clause3(iii)(e) are not applicable to the company.
(f) The company has not granted any loans or advances in the nature of loans eitherrepayable on demand or without specifying any terms or period of repayment.
(iv) The Company is a registered Non-Banking Finance Company to which theprovisions of Sections 185 and 186 of the Companies Act 2013 are not applicable andhence reporting under clause (iv) of CARO 2020 is not applicable.
(v) The Company has not accepted any deposits from the public within the meaningof Section 73 to 76 or any other relevant provisions of the Act and Rules framedthereunder. We are informed that no order has been passed by the Company Law Board orNational Company Law Tribunal or Reserve Bank of India or any court or other tribunal.
(vi) As per information & explanation given by the management the company hasnot required to maintenance of cost records specified by the Central Government undersubsection (1) of section 148 of the Companies Act hence this clause is not Applicable toCompanies.
(vii) (a) According to the records made available to us company is regular indepositing undisputed statutory dues including Goods and Services Tax provident fundemployees' state insurance income-tax sales-tax service tax duty of customs duty ofexcise value added tax cess and any other statutory dues to the appropriate authorities.According to the information and explanation given to us there were no outstandingstatutory dues as on 31st of March 2022 for a period of more than six months from thedate they became payable.
(b) According to the information and explanations given to us there is nostatutory dues referred to in sub-clause (a) that have not been deposited on account ofany dispute.
(viii) As per the information and explanation provided to us and as represented tous there were no transactions not recorded in the books of account which have beensurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961.
(ix) (a) In our opinion and according to the information and explanations given bythe management we are of the opinion that the company has not defaulted in repayment ofloans or other borrowings or in the payment of interest thereon to any lender. Clause isnot applicable because company not having any Loan liabilities.
(b) According to the information and explanations given by the management thecompany is not declared willful defaulter by any bank or financial institution or otherlender;
(c) In our opinion and according to the information and explanations given by themanagement the Company has not obtained money by way of term loans during the year hencethis clause not Applicable.
(d) In our opinion and according to the information and explanations given by themanagement Company has not raised short term funds hence this clause not applicable.
(e) In our opinion and according to the information and explanations given by themanagement the company has not taken any funds from any entity or person on account of orto meet the obligations of its subsidiaries associates or joint ventures
(f) In our opinion and according to the information and explanations given by themanagement the company has not raised loans during the year on the pledge of securitiesheld in its subsidiaries joint ventures or associate companies.
(x) (a) The company has not raised any money by way of initial public offer orfurther public offer (including debt instruments) during the year.
(b) The company has not made any preferential allotment or private placement ofshares or convertible debentures (fully partially or optionally convertible) during theyear.
(xi) (a) According to the information and explanations given by the management nofraud by the company or any fraud on the company has been noticed or reported during theyear;
(b) No report under sub-section (12) of section 143 of the Companies Act has beenfiled by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government;
(c) According to the information and explanations given to us by the management nowhistle-blower complaints had been received by the company
(xii) The company is not a Nidhi Company. Therefore clause xii is not applicableon the company.
(xiii) According to the information and explanations given to us all transactionswith the related parties are in compliance with sections 177 and 188 of Companies Actwhere applicable and the details have been disclosed in the financial statements
(xiv) (a) In our opinion the Company has an adequate internal audit systemcommensurate with the size and the nature of its business.
(xv) On the basis of the information and explanations given to us in our opinionduring the year the company has not entered into any non-cash transactions with directorsor persons connected with him.
(xvi) (a) The Company is required to be registered under section 45-IA of theReserve Bank of India Act 1934 and it has obtained the registration.
(b) The company is in the business of and has carried on the business of Non-Banking Financial activities during with valid Certificate of Registration (CoR) obtainedfrom the Reserve Bank of India as per the Reserve Bank of India Act 1934
(c) The company is not a Core Investment Company (CIC) as defined in theregulations made by the Reserve Bank of India and accordingly reporting under clause3(xvi)(c) of the Order is not applicable.
(d) In our opinion there is no core investment company within the Group (asdefined in the Core Investment Companies (Reserve Bank) Directions 2016) and accordinglyreporting under clause 3(xvi)(d) of the Order is not applicable.
(xvii) Based on our examination the company has not incurred cash losses in thefinancial year and in the immediately preceding financial year.
(xviii) There is no resignation of the statutory auditors during the year.
(xix) On the information obtained from the management and audit proceduresperformed and on the basis of the financial ratios ageing and expected dates ofrealization of financial assets and payment of financial liabilities other informationaccompanying the financial statements the auditor's knowledge of the Board of Directorsand management plans we are of the opinion that no material uncertainty exists as on thedate of the audit report that company is capable of meeting its liabilities existing atthe date of balance sheet as and when they fall due within a period of one year from thebalance sheet date;
(xx) Based on our examination the provision of section 135 is not applicable onthe company. Hence this clause is not applicable on the company.
(xxi) Company have not any Subsidiaries or Joint venture hence there is no need toprepare Consolidated financial Statements therefore Para 3 of Clause (xxi) is notapplicable to company.
Report on Internal Financial Controls with reference to financial statements Report onthe Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of POLYTEXINDIA LIMITED ("the Company") as of March 31 2022 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2022 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 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 audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial 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 authorizations of management and directors of the company; and
3. Provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these standalone financial statementsand such internal financial controls over financial reporting with reference to thesestandalone financial statements were operating effectively as at March 31 2022 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
|For Agrawal Jain & Gupta |
|Chartered Accountants |
|Firm Reg. No. 013538C |
|Ca Narayan Prasad Swami |
|Membership No. 409759 |
|UDIN: 22409759AJWUVK9270 |
|Date: 30th May 2022 |
|Place: Mumbai |