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Shekhawati Poly-Yarn Ltd.

BSE: 533301 Sector: Industrials
NSE: SPYL ISIN Code: INE268L01020
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VOLUME 1325
52-Week high 0.36
52-Week low 0.21
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.23
Buy Qty 18675.00
Sell Price 0.23
Sell Qty 10000.00
OPEN 0.23
CLOSE 0.23
VOLUME 1325
52-Week high 0.36
52-Week low 0.21
P/E
Mkt Cap.(Rs cr) 8
Buy Price 0.23
Buy Qty 18675.00
Sell Price 0.23
Sell Qty 10000.00

Shekhawati Poly-Yarn Ltd. (SPYL) - Auditors Report

Company auditors report

To the Members of Shekhawati Poly- Yarn Limited

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Shekhawati Poly-YarnLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2018 the Statement of Profit and Loss (including other comprehensive income) theStatement of Cash Flows and the Statement of Changes in Equity for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (herein after referred to as "Ind AS financial statements").

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in sub-section 5of Section 134 of the Companies Act 2013 ("the Act") with respect to thepreparation of these Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards ("IndAS") prescribed under Section 133 of the Act read with relevant rules issuedthereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified undersub-section 10 of Section 143 of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial controls relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.

Basis for Qualified Opinion

a) The company has not provided for Interest Expenses amounting to Rs 2256.99 lakhs(P.Y. Rs 2373.73 lakhs) (derived on simple interest basis) which should have beenprovided as per the principle of prudence on the borrowings which have been classified as"Non-performing assets" (NPA) by the banks as referred in Note 42 ofaccompanying notes to financial statement. The company has also not provided penalinterest and other bank charges as the same are not ascertainable. Had these InterestExpenses been debited to the Statement of Profit and Loss Account loss for the year endedand debit balance of Other Equity would have been higher by Rs 2256.99 lakhs and Rs4630.72 lakhs.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except the possible effects of the matter described in the Basis forQualified Opinion paragraph the aforesaid 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 accounting principles generally accepted in India including Ind AS ofthe financial position of the company as at 31st March 2018 and its financialperformance including other comprehensive income its cash flow and the changes in equityfor the year ended on that date.

Emphasis of Matters

During the year the company has suffered heavy losses its net worth has beencompletely eroded. These conditions along with other matters set forth in Note 43 in theaccompanying financials statements indicate the existence of an uncertainty on theCompany's ability to continue as a going concern. However the financial statements of theCompany have been prepared on a going concern basis for the reasons stated in theaforesaid Note. Our opinion is not modified in respect of these 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 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the order.

2. As required by section 143(3) of the Act we further report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of accounts as required by law havebeen kept by the Company so as far as it appears from our examination of those books.

c) The Balance Sheet Statement of Profit and Loss (including other comprehensiveincome) the Statement of Cash Flows and the Statement of Changes in Equity dealt with bythis Report are in agreement with the books of account; d) Except for the possible effectsof the matter described in the Basis for Qualified Opinion paragraph above in ouropinion the aforesaid Ind AS financial statements comply with the Indian AccountingStandards prescribed under Section 133 of the Act read with relevant rules issuedthereunder.

e) The matters described under the Basis for Qualified Opinion paragraph and theEmphasis of Matters paragraph above in our opinion may have a negative effect on thefunctioning of the Company.

f) On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of subsection 2 ofSection 164 of the Act;

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

h) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

i) 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 pending litigation in its financial statements (refer noteno – 38).

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. The company is not required to transfer any amounts as required by the law toInvestor Education and Protection Fund.

For Ajay Shobha & Co.
Chartered Accountants
Firm's Reg. No. 317031E
Sd/-
Ajay kumar Gupta
Place: Mumbai Partner
Date: 30th May 2018 Mem. No. 53071

Annexure ‘A' to the Independent Auditors Report

Annexure referred to in Paragraph 1 of "Report on Other Legal and RegulatoryRequirements" of our Report of even date on the accounts of Shekhawati Poly- YarnLimited for the year ended 31st March 2018.

As required by the Companies (Auditors Report) Order 2016 and according to theinformation and explanations given to us during the course of the audit and on the basisof such checks of the books and records as were considered appropriate we report that:

(i) a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

b) As explained to us the fixed assets have been physically verified by the managementin accordance with a phased programme of verification which in our opinion is reasonableconsidering the size of the company and the nature of its assets. In accordance with thisprogram certain fixed assets were verified during the year. The frequency of verificationis reasonable and no discrepancies have been noticed on such physical verification.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds are held in the name of thecompany.

(ii) The inventories have been physically verified by the management during the year atreasonable intervals. No material discrepancies were noticed on physical verification ofinventories by the management.

(iii) a) During the year the Company has not granted any Loan secured or unsecured toany party covered in the registered maintained under section 189 of the Companies Act2013

b) In view of our comments in para (iii) (a) above clauses 3 (iii) (a) (b) and (c) ofthe said Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanation given to ussection 185 and section 186 of the Companies Act 2013 is not applicable since theCompany has not granted any loan made any investments and provided any guarantee &security.

(v) According to the information and explanations given to us and on the basis of ourexamination of records the company has not accepted any deposits from public.

(vi) The Central Government has prescribed the maintenance of cost record under Section148(1) of the Act. We have not reviewed the cost records maintained by the Company butbased on the information submitted by the Company we are of the view that such accountsand records have been made and duly maintained.

(vii) a) According to the records of the Company amount deducted/accrued in the booksof accounts in respect of the undisputed statutory dues including Provident FundEmployee's State Insurance Income tax Sales tax Service tax Duty of Customs Duty ofExcise Value Added Tax Cess and other Statutory Dues to the extent applicable to theCompany have been regularly deposited with the appropriate authorities except in fewcases of Provident Fund Profession Tax TDS and Service tax there is slight delay inpayment. According to the information and explanations given to us there are noundisputed amount payable in respect of such statutory dues which have remainedoutstanding as at 31st March 2018 for a period more than six months from thedate they became payable.

b) According to the record of the company Income Tax Wealth Tax Sales Tax ServiceTax Duty of Custom Duty of Excise and Value Added Tax which have not been deposited onaccount of any dispute with the appropriate authorities are given below: Amount ( InLakhs)

Name of the statute Nature of dues Rs Amount Amount Paid* Period to which the amount relates Forum where dispute is pending
The Income Tax Act 1961 Income Tax 31351950 6270390 F.Y. 2015-16 CIT (Appeals)
2185920 437184 F.Y. 2013-14 CIT (Appeals)
220 - F.Y. 2012-13 CIT (Appeals)
27270 5454 F.Y. 2009-10 CIT (Appeals)

* Amount paid under protest.

(viii) Based on our audit procedure and as per the information and explanation given bythe management the Company had defaulted in repayment of its dues to Banks. Accordinglyduring the financial year 2015-16 the bank accounts of the company had been classified as"Non-Performing asset" (NPA) by State bank of India Union Bank of India andAxis Bank and during the financial year 2016-17 Allahabad bank and Dena bank has alsodeclared the company accounts as NPA. In respect of above loans the total principaloutstanding is Rs 19126.63 Lakhs (P.Y. Rs 19334.22 Lakhs) and Interest Outstanding is Rs1132.21 Lakhs (P.Y. Rs 1132.21 Lakhs). Also during the year the company has notprovided for interest of Rs 2256.99 lakhs (P.Y. Rs 2373.73 Lakhs) (Refer Note 42).

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

(x) According to the information & explanations given to us no material fraud bythe company or on the company by its officers or employees has been noticed or reportedduring the course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexaminations of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the Ind AS financial statements asrequired by applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.

(xv) 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. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Ajay Shobha & Co.
Chartered Accountants
Firm's Reg. No. 317031E
Sd/-
Ajay kumar Gupta
Place: Mumbai Partner
Date: 30th May 2018 Mem. No. 53071