The Members of
Sintex Plastics Technology Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Sintex Plastics TechnologyLimited ("the Company") which comprise the standalone balancesheet as at 31March 2019 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cashflowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information(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 give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 and loss and other comprehensiveincome 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) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of thestandaloneFinancial Statements section of our report. We are independent of the Company inaccordance 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 financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
The Standalone Ind AS financial statements for the year ended 31 March 2018 wereaudited by the predecessor auditor who had expressed an unmodified opinion on thoseStandalone Ind AS financial statements vide their audit report dated 9 May 2018 which hasbeen furnished to us by the management and has been relied upon by us for the purpose ofour audit. We draw attention to note31of the Standalone Ind AS financial statements whichmore fully explains that the comparative information for the year ended 31 March 2018 hasbeen restated in accordance with "Ind AS 8: Accounting Policies Changes inAccounting Estimates and Errors".Our opinion is not modified in respect of thismatter.
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.
| || |
|The key audit matter ||How the matter was addressed in our audit |
|1 Recoverability of carrying value of investment in subsidiaries and loan given to subsidiaries The Company accounts for investments in subsidiaries at cost less accumulated impairment losses if any. Cost includes the purchaseprice and other costs directly attributable to the acquisition of investments. The Company has its investments in equity shares and preference shares of Sintex - BAPL Limited and equity shares of Sintex Prefab and Infra Limited. The carrying value of investment in subsidiaries as at 31 March 2019 is of Rs. 629.80 crores and Rs. 223 crores to Sintex Prefab and Infra Limited and Sintex BAPL Limited respectively.The carrying value of loan given to subsidiary as at 31 March 2019 is Rs. 9.02 crores The assessment of recoverable amount of the Company's investment and loans receivable from subsidiaries involves significant judgement in respect of assumptions such as discount rates current work in hand future contract wins/ future business plan and the recoverability of certain receivables as well as economic assumption such as growth rate. We focused on this area as a key audit matter due to judgement involved in forecasting future cash flows and the selection of assumptions. Refer note 4 and 8 to the standalone Financial Statements. ||Our key procedures include the below amongst others: |
| || Checking the net worth of the subsidiaries and its history of financial performance. |
| || |
| || Considering that investment in subsidiary company is recorded at cost checked whether subsidiary company has made any provision for impairment in its books in accordance with Ind AS 36. |
| || In case where Company has obtained independent valuation report we have assessed the key assumptions for independent valuation obtained by management appliedby comparing them with historical performance to assess the Company's ability to forecast accurately. |
| || Performingsensitivity analysis on Key assumptions including discount rates and estimated future growth. |
| || Assessing the appropriateness of the relevant disclosures in the financial statements. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon. The Other information is expected to be made available to us after the date ofthis auditor's report.
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 amaterial misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the standalone Financial Statements
The Company's management and Board of Directors are responsible forthe matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs loss and othercomprehensive income changes in equity and cashflows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safe guarding of the assets of the company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent & designimplementation and maintenance of adecuate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls withexpressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
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 andother 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 auditors'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 ("the Order")issued by the Central Government in terms of Section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder 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 explanations which to the bestof our knowledgeand 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 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".
(B) With respect to the other matters to be included in the Auditors' 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 does not have any pending litigations which would impact its financialposition.
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. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2019.
(C) With respect to the matter to be included in the Auditors' Report under Section197(16):
In our opinion and according to the information and explanations given to us theCompany has not paid any remuneration to its directors during the current year andaccordingly the compliance with the provisions of Section 197 of the Act read withSchedule V is not applicable to the Company.
The Ministry of Corporate Affairs has not prescribed other details under Section197(16) which are required to be commented upon by us.
| ||For B S R & Associates LLP |
| ||Chartered Accountants |
| ||Firm's Registration No. 116231W/W-100024 |
| ||Jeyur Shah |
|Place : Ahmedabad ||Partner |
|Date : 30 May 2019 ||Membership No. 045754 |
"Annexure A"to Independent Auditors' Report
for the period ended 31 March 2019
The Annexure referred to in Independent Auditor's Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2019 we report thefollowing
(i) The Company does not have any fixed assets hence paragraph 3(i) of the order isnot applicable to the company.
(ii) The Company does not have any inventory. Accordingly the provisions of clause3(ii) of the Order are not applicable.
(iii) The Company has granted unsecured loans to one subsidiary companies covered inthe register maintained under section 189 of the Act; and with respect to the same;
(a) In our opinion the terms and conditions of the grant of such loans are not primafacie prejudicial to the interest of the Company.
(b) There is no stipulation for the repayment of principal and payment of interest.
(c) Since the schedule of repayment has not been stipulated the provisions of clause3(iii) (c) of the Order are not applicable to the Company.
The Company has not granted any loans to firms Limited Liability Partnership or otherparties covered in the register required to be maintained under section 189 of the Act.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with provision of section 185 and 186 of the Act with respect toloans guarantees and investments.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from public in accordance with the provisions ofSections 73 to 76 or any other relevant provisions of the Act and the rules framedthereunder. Accordingly paragraph 3 (v) of the Order is not applicable to the Company.
(vi) According to information and explanation given to us the Central government hasnot prescribed the maintenance of cost records under section 148(1) of the Act for any ofthe products manufactured or service rendered by the Company. Accordingly paragraph 3(vi)of the Order is not applicable to the Company.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund Income taxGoods and Service tax and other material statutory dues as applicable have been regularlydeposited during the year by the Company with the appropriate authorities. As explained tous the provisions relating to Employees' State Insurance is not applicable to the CompanyAccording to the information and explanations given to us no undisputed amounts payablein respect of provident fund Income tax Goods and service tax and other materialstatutory dues were in arrears as at 3l March 2019 for a period of more than six monthsfrom the date they became payable.
b) According to the information and explanations given to us there are no dues ofIncome-tax Sales-tax Service tax and Goods and service tax which have not beendeposited with the appropriate authorities on account of any dispute.
(viii) The Company does not have any loans or borrowings from financial institutionsbankersand Government or dues to debenture holders..
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) or term loans. Accordingly reporting underparagraph 3(ix) of the Order is not applicable to the Company.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or on the Company by its officers or employees noticedor reported during the year nor have we been informed of any such case by the management.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid/provided formanagerial remuneration.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company as prescribed under Section 406 of the Act. Accordinglyparagraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.
(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 within the meaning of section 192 of the Act with directors or personsconnected with him. Accordingly paragraph 3(xv) of the Order is not applicable.
(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act1934.Accordingly paragraph 3(xvi) of the Order is not applicable.
For B S R & Associates LLP
Firm's registration number: 116231W/W-100024
Membership No. 045754
Place : Ahmedabad
Date : 30 May 2019
Annexure B to the Independent Auditors'report on the standalone financial statements ofSintex Plastics Technology Limited for the period ended 31 March 2019.
Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013
(Referred to in paragraph "1 (A)(f)" under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)
We have audited the internal financial controls with reference to financial statementsofSintex Plastics Technology Limited ("the Company") as of 31 March 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2019 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Noteand the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrolswith reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statementswere established and maintained and whether such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. Theproceduresdepend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of thestandalone financial statements whether due to fraud orerror.
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 withreference to financial statements.
Meaning of Internal Financial controls with Reference to standalone financialstatements
A company's internal financial controls with reference to financial statementsis 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 controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial controls with Reference to standalonefinancial statements
Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
For B S R & Associates LLP
Chartered Accountants Firm's Registration Number. 116231W/W-100024
Membership No. 045754
Date: 30 May 2019