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Sintex Industries Ltd.

BSE: 502742 Sector: Industrials
NSE: SINTEX ISIN Code: INE429C01035
BSE 00:00 | 27 Sep 3.66 -0.07
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3.78

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3.78

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3.56

NSE 00:00 | 27 Sep 3.65 -0.10
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3.75

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3.75

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OPEN 3.78
PREVIOUS CLOSE 3.73
VOLUME 603976
52-Week high 5.83
52-Week low 1.72
P/E
Mkt Cap.(Rs cr) 219
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3.78
CLOSE 3.73
VOLUME 603976
52-Week high 5.83
52-Week low 1.72
P/E
Mkt Cap.(Rs cr) 219
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sintex Industries Ltd. (SINTEX) - Auditors Report

Company auditors report

The Members of

SINTEX INDUSTRIES LIMITED.

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of SINTEXINDUSTRIES LIMITED ("the company") which comprise the Balance Sheet as at31st March 2019 the Statement of Profit & Loss (including other comprehensiveIncome) the statement of changes in equity and the Statement of Cash Flow for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements read together with significantaccounting policies and accompanying notes thereon give the information required by theCompanies Act 2013 (the "Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs (financial position) of the Company as at 31st March 2019 and itsProfits (financial performance including other comprehensive income) the changes inequity and its cash flow for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Companies Act 2013. Our responsibilities under thosestandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the entity in accordancewith the Code of Ethics issued by ICAI together with the ethical requirement that arerelevant to our audit of the financial statements under the provisions of the CompaniesAct 2013 and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with the Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion.

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 determined the matters described below to be the Key Audit Matters to becommunicated in our report:

I.Impairment of assets of Textile Division of the Company

See Note No. 51 of the standalone financial statements

Key audit matter description The impairment of assets of Textile Division engaged in the manufacturing and processing of structured fabrics identified by the company management as cash generating unit with significant amount of carrying value is considered to be a risk area due to the size of the carrying amount as well as significant judgmental nature of key assumptions which will be in herently subjective. The carrying value of such assets is at the risk of impairment and estimated recoverable amount is subjective due to significant uncertainty involved in such estimation.
Principle Audit Procedures The procedures performed included the following among others:
• Understood the management processes and controls with regard to testing the impairment of assets of aforesaid Textile Division of the company.
• Reviewing the Independent Valuation Report obtained by the management to assist in evaluating the appropriateness of the recoverable value.
• Assessing the appropriateness and judgments applied by the management in determining recoverable amount of the Textile Division.
• Completeness and accuracy of data input into modes and recoverable amount calculations.

2. Recognition measurement of MAT credit for deferred tax computation

(See Note No.40(f) to the standalone financial statements).

Key audit matter description The Company has recognized MAT credit entitlement of Rs. 281.89 Crores as at 31st March 2019. The recognized MAT credit entitlement involves significant judgments as to the extent that there is convincing evidence that the Company will generate future taxable profits sufficient to utilize deductible temporary differences tax credits and tax losses and therefore the entire amount of MAT credit shall be set off/utilized. This has been determined as key audit matter due to the amount of MAT credit recognized and uncertainty in forecasting the amount and timing of future taxable profits for computing utilization of MAT credit.
Principle Audit Procedures Our procedures included the following:
• Obtaining the calculations of future taxable profits;
• Assessing the reasonableness of the future projections and corresponding tax liability;
• Understanding assessing the key underlying assumptions and estimates used in forecasting future tax profits;

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe Standalone financial statements and our auditor's report thereon.

Our opinion on the Standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation; we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management for the Standalone Financial Statements

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 Standalone financial statements that give a true and fair view of the financialposition and financial performance of the Company in accordance with the accountingprinciples generally accepted in India including the accounting Standards specified underSection 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 appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative 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 Standalone 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act 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 reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by 'the Companies (Auditors' Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of Sub-Section (11) ofSection 143 of the Act we give in the "Annexure A" a statement on thematters specified 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 & obtained all the information and explanations which to thebest of 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 appears from our examination of those books

c) The Balance sheet statement of Profit & Loss (including other comprehensiveincome) the statement of Changes in equity and the Cash Flow Statement dealt with by thisreport are in agreement with the relevant books of account.

d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards prescribed under Section 133 of the Act read with Companies (Indian AccountingStandard) Rules 2016

e) On the basis of the written representation received from the directors as on 31stMarch 2019 taken on record by Board of Directors none of the director is disqualified ason 31st March 2019 from being appointed as a director in terms of Section164(2) of the Companies Act 2013.

f) With respect to the adequacy of the internal financial control over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.

g) With respect to the other matters to be included in the Auditor's report inaccordance with the requirements of Section 197(16) of the Act as amended in ouropinion the managerial remuneration for the year ended March 312019 has been paid/provided by the Company to its directors in accordance with the provisions of Section 197read with Schedule V to the Act.

h) With respect to other matters to be included in the Auditors' Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

i) The company has disclosed the impact of pending litigations as at 31stMarch 2019 on its financial position in its Standalone financial statements.

ii) The company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company

For Shah & Shah Associates
Chartered Accountants
FRN:113742W
Vasant C. Tanna
Place : Ahmedabad Partner
Date : 22nd May 2019 Membership Number: 100422

"Annexure A" to the Independent Auditor's Report

(Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date to the standalone financial statements of theCompany for the year ended March 312019):

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The Company has a program of physical verification of its property plant andequipment to cover all the items of property plant and equipment in a phased mannerwhich in our opinion is reasonable having regard to the size of the Company and thenature of its property plant and equipment. Pursuant to the program certain propertyplant and equipment were physically verified by the Management during the year. Accordingto the information and explanations given to us no material discrepancies were noticed onsuch verification.

c) According to the information and explanations given to us and the title deeds andother records examined by us we report that the title deeds in respect of all theimmovable properties comprising of freehold land and buildings are held in the name of theCompany except in respect of freehold lands having aggregate cost of Rs.436.81 crores forwhich documents in favor of the Company have not been executed as at end of the year.(Refer Note- 52 to Standalone financial statements)

2. As explained to us physical verification of the inventories has been conducted atreasonable intervals by the management. No material discrepancies were noticed on theaforesaid verification.

3. As per the information and explanations furnished to us in our opinion the Companyhas not granted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theAct. Consequently the requirement of clause (iii) (a) to clause (iii) (c) of paragraph 3of the Order is not applicable to the Company.

4. In our opinion and according to the information and explanations given to us theCompany has complied with provisions of Section 185 and 186 of the Act in respect ofloans investments providing guarantees and securities as applicable.

5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit nor has any unclaimed deposit within the meaning ofthe provisions of Section s 73 to 76 or any other relevant provision of the Act and therules framed thereunder. Therefore the provisions of Clause (v) of paragraph 3 of theOrder are not applicable to the Company.

6. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 prescribed by the Central Government underSub-Section (1) of Section 148 of the Act applicable in respect of activities undertakenby the Company and are of the opinion that prima facie the prescribed cost records havebeen maintained. We have however not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete.

7. According to the Information and explanations given to us in respect of statutorydues:

a) According to the records of the Company undisputed statutory dues includingprovident fund employees' state insurance income tax Customs duty Goods & ServiceTax cess and other material statutory dues applicable to it have been regularly depositedwith appropriate authorities.

b) According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were outstanding as at March 312019 for aperiod of more than six months from the date they became payable.

c) According to the information and explanations given to us there are no dues ofincome tax sales tax excise duty and value added tax on account of any dispute whichhave not been deposited.

8. Based on our audit procedures and on the basis of information and explanations givento us by the management we are of the opinion that the Company has not defaulted inrepayment of dues to the financial institution banks and debenture holders.

9. In our opinion and according to the information and explanations given to us theterm loans have been applied on an overall basis for the purposes for which they wereobtained other than temporary deployment pending application. The Company has not raisedmoney by way of initial public offer or further public offer (including debt instruments)during the year under review.

10. Based upon the audit procedures performed and as per the information andexplanations given to us we report that no fraud on or by the Company has been noticedor reported during the year.

11. In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of the Section 197 read with Schedule V to the Act.

12. In our opinion Company is not a Nidhi company. Therefore the provisions of clause(xii) of paragraph 3 of the Order are not applicable to the Company.

13. According to the information and explanations given to us all the transactionswith the related parties are in compliance with Section 177 and 188 of the Act whereapplicable and the details have been disclosed in the standalone Ind AS financialstatements as required by the applicable accounting standards.

14. In our opinion and according to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year and hence clause (xiv) of paragraph 3 of theOrder is not applicable to the Company.

15. In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transaction with the directors or personsconnected with them and covered under Section 192 of the Act. Hence clause (xv) ofparagraph 3 of the Order is not applicable to the Company.

16. To the best of our knowledge and as explained the Company is not required to beregistered under Section 45- IA of the Reserve Bank of India Act 1934.

For Shah & Shah Associates
Chartered Accountants
FRN:113742W
Vasant C. Tanna
Place : Ahmedabad Partner
Date : 22nd May 2019 Membership Number: 100422

"Annexure B" to the Independent Auditor's Report

(Referred to in our report of even date)

Report on the Interna! Financial Controls under Clause (i) of SubSection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SINTEXINDUSTRIES LIMITED ("the Company") as of March 312019 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Interna! 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 responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 Companies Act 2013.

Auditors' Responsibility

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 Auditors'judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 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.

Opinion

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 2019 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.

For Shah & Shah Associates
Chartered Accountants
FRN:113742W
Vasant C. Tanna
Place : Ahmedabad Partner
Date : 22nd May 2019 Membership Number: 100422

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