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Swadeshi Polytex Ltd.

BSE: 503816 Sector: Infrastructure
NSE: N.A. ISIN Code: INE243N01029
BSE 00:00 | 08 Aug 22.85 -1.20
(-4.99%)
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NSE 05:30 | 01 Jan Swadeshi Polytex Ltd
OPEN 22.85
PREVIOUS CLOSE 24.05
VOLUME 25735
52-Week high 28.40
52-Week low 3.64
P/E 3.49
Mkt Cap.(Rs cr) 89
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 22.85
CLOSE 24.05
VOLUME 25735
52-Week high 28.40
52-Week low 3.64
P/E 3.49
Mkt Cap.(Rs cr) 89
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Swadeshi Polytex Ltd. (SWADESHIPOLYTEX) - Auditors Report

Company auditors report

To

The Members of Swadeshi Polytex Limited

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of Swadeshi Polytex Limited (‘theCompany') which comprise the Balance Sheet as at 31st March 2021 the Statement of Profitand Loss (including Other Comprehensive Income if any) the Statement of Changes inEquity and the Statement of Cash Flows for the year then ended and Notes to financialstatements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements 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 of the Company as at March 312021 and its loss total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing ("SA"s) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India ("ICAI") together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matter described below to be the key audit matters to be communicatedin our report.

S. No Key Audit Matter Auditor's Response
1 Procedures for Revenue Recognition. Our Principal Audit Procedures included :
? We have studied the Agreement to Sell along with Addendums thereto with respect to recognition of revenue. We have also examined the communications received by the Company from its customers.
? We have studied the relinquishment letters issued by the Company to the customers in respect of leasehold plots and applied cut off procedures for revenue recognition.

Emphasis of Matter on COVID 19

We draw attention to Note 30 in the accompanying financial statements which describesthe management's assessment of the impact of uncertainties related to outbreak of COVID-19on the business operations of the Company.

Our opinion is not modified in respect of this matter.

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 in the Management Discussion andAnalysis and Board's Report including Annexures to Board's Report but does not includethe financial statements and our auditor's report thereon. The other information isexpected to be made available to us after the date of this auditor's report. Our opinionon the financial statements does not cover the other information and we do not express anyform 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.

When we read the other information identified above if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance.

Management's Responsibilities for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income changes in equity and cash flows of the Company in accordance withthe Indian Accounting Standards (Ind AS) specified under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 and other accounting principlesgenerally accepted in India.

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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements the 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 theManagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The 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 the 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 theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the 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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements for thefinancial year ended 31st March 2021 and are therefore the key audit matters.We describe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 in terms of Section 143(11) of the Act and on the basisof such checks of the books and records of the Company as we considered appropriate andaccording to information and explanations given to us we give in "AnnexureA" a statement on the matters specified in paragraphs 3 and 4 of the Order tothe extent applicable.

2. As required by Section 143(3) of the Act based on our audit 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 of the aforesaidFinancial Statements.

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 including Other ComprehensiveIncome Cash Flow Statement and the Statement of Changes in Equity 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 specified under section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended.

e) On the basis of the written representations received from the directors of theCompany as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164(2) of the Act.

f) 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". 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 matter to be included in the Auditor's Report in accordance withthe requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its director during the current yearis in accordance with the provisions of section 197 of the Act read with Schedule V to theAct.

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 as amended inour opinion and to the best of our information and according to the information andexplanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 32 to the financial statements.

ii. We are explained that the Company did not have any long term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. We are explained that there were no amounts which were required to be transferredto the Investor Education and Protection Fund by the Company.

For SPMR & ASSOCIATES Chartered Accountants Firm's Regn. No. 007578N
Place : Faridabad

Date : 24-06-2021

Sd/- M S LADHA Partner Membership No.: 088221 UDIN: 21088221AAAADA1976

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Swadeshi Polytex Limited of evendate)

We report that:

i) In respect of the Company's fixed assets comprised in property plant and equipment:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

b) We are explained that the Company has a regular programme of physical verificationof its property plant and equipment by which all property plant and equipment areverified in a phased manner. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the programme certain property plant and equipment were physically verified duringthe year and no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and the based on ourexamination of Conveyance Deed provided to us the title deed of immovable property ownedby the Company are held by it in its own name. Further the provisions of this clause arenot applicable in respect of leasehold land owned by the Company and held as Stock inTrade.

ii) The only inventory in hand is in the form of lease hold plot rights for whichmanagement has conducted physical verification in the form of measurement frequency ofwhich in our opinion is reasonable and no material discrepancies were noticed on thephysical verification of the same as compared to book records.

iii) According to the information and explanations given to us the Company has grantedunsecured loan to a party covered in the register maintained under Section 189 of theCompanies Act 2013 ("the Act") in respect of which:

a) In our opinion the rate of interest and other terms and conditions on which suchloan had been granted were not prima facie prejudicial to the Company's interest.

b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

c) In our opinion no amount is overdue for recovery as at the year-end.

iv) In our opinion and according to the information and explanations given to us theCompany had complied with the provisions of Section 185 and 186 of the Act in respect ofgrant of loan to a party in earlier year.

v) According to the information and explanations given to us and on the basis ofexamination of records of the company and opinion obtained by the management we reportthat the Company has not accepted deposits during the year and does not have any unclaimeddeposits as at March 312021 and therefore the provisions of the clause 3 (v) of theOrder are not applicable to the Company.

vi) We are informed that the maintenance of cost records has not been specified by theCentral Government under section 148(1) of the Companies Act 2013 for the businessactivities carried out by the Company. Thus reporting under clause 3(vi) of the order isnot applicable to the Company.

vii) According to the information and explanations given to us in respect of statutorydues:

a) The Company has been regular in depositing undisputed statutory dues includingIncome Tax Customs Duty Cess Goods and Service Tax and other material statutory duesapplicable to it with the appropriate authorities. As explained to us provisions ofEmployees Provident Fund and Employees' State Insurance Act are not applicable to theCompany for the year under report as it had no employees.

b) According to the information and explanations given to us no undisputed amountspayable in respect of Income-tax duty of Customs Cess Goods and Service tax includingany other material statutory dues were in arrears as at 31 March 2021 for a period ofmore than six months from the date they became payable.

c) According to information and explanation given to us and on the basis of ourexamination of the books of accounts of the company following are the details of salestax/income tax/custom duty/service Tax/excise duty which have not been deposited as atMarch 312021 on account of any dispute:

Name of Statute Nature of Dues Amount (In lacs) Period Forum at which dispute is pending
The Customs Act 1962 Custom Duty & other dues. 17.11 Various Various
The Central Excise Act 1944 Refund of the Central Excise Duty and interest thereon 323.60 2019-20 CESAT
The Income Tax Act1961 Demand for assessment year 2012-13 22.17 2012-13 I.T.A.T.

viii) According to the information and explanation given to us the Company has nottaken any loans or borrowings from financial institutions banks and government and hasnot issued any debentures. Hence reporting under clause 3 (viii) of the Order is notapplicable to the Company.

ix) The Company has neither raised money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans nor applied the previously raisedloans if any during the year under report. Accordingly provisions of clause 3 (ix) ofthe Order are not applicable to the Company.

x) To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the year.

xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 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 to the Company.

xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableaccounting 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 and hence reporting under clause 3 (xiv) of the Order is not applicable to theCompany.

xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and accordingly para 3 (xv) of the Orderis not applicable.

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

For SPMR & ASSOCIATES Chartered Accountants Firm's Regn. No. 007578N
Place : Faridabad

Date : 24-06-2021

Sd/- M S LADHA Partner Membership No.: 088221 UDIN: 21088221AAAADA1976

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Swadeshi Polytex Limited of evendate)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SwadeshiPolytex Limited ("the Company") as of 31 March 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (‘ICAI'). 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 respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required 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") issued by ICAI and the Standards on Auditing prescribedunder section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgment 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:

a) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

b) 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;

c) 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For SPMR & ASSOCIATES Chartered Accountants Firm's Regn. No. 007578N
Place : Faridabad

Date : 24-06-2021

Sd/- M S LADHA Partner Membership No.: 088221 UDIN: 21088221AAAADA1976

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