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Texel Industries Ltd.

BSE: 526638 Sector: Industrials
NSE: N.A. ISIN Code: INE594V01028
BSE 00:00 | 28 Jun 40.00 1.35
(3.49%)
OPEN

39.75

HIGH

40.95

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39.60

NSE 05:30 | 01 Jan Texel Industries Ltd
OPEN 39.75
PREVIOUS CLOSE 38.65
VOLUME 587
52-Week high 104.05
52-Week low 32.10
P/E 25.97
Mkt Cap.(Rs cr) 33
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 39.75
CLOSE 38.65
VOLUME 587
52-Week high 104.05
52-Week low 32.10
P/E 25.97
Mkt Cap.(Rs cr) 33
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Texel Industries Ltd. (TEXELINDUSTRIES) - Auditors Report

Company auditors report

To the Members of Texel Industries Limited

Report on the Audit of Standalone Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of TexelIndustries Limited (‘the Company') which comprise the balance sheet as at 31stMarch 2021 the statement of profit and loss including statement of other comprehensiveincome cash flow statement and statement of changes in equity for the year ended and asummary of significant accounting policies and other explanatory information. In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid standalone 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 Companies (Indian Accounting Standards) Rules 2015 as amended andother accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2021 and profit (including other 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 (SAs) specified under Section 143(10) of the Act. Our responsibilities underthose SAs are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance 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 there underand 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

We draw attention to the Note No 3 and 4 of the standalone financial statementregarding Investment and unsecured loans granted to Texel Industries (Africa) Limited awholly owned subsidiary of the Company. As on balance sheet date the net worth of thesaid wholly owned subsidiary has been fully eroded. The management of the company hastested said investment and unsecured loan for impairment based on their assessment therewas impairment loss of Rs 0.69 Lacs and Rs 53.64 Lacs for investment and unsecured loansrespectively.

Our opinion is not modified in respect of this matter.

Key Audit Matter

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the year ended 31stMarch 2021. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditors ‘responsibilities for the audit of the Standalone Financial Statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Standalone Financial Statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying Standalone Financial Statements.

Sr. No. Key Audit Matter How our audit addressed the key audit matter
1. Effective 1st July 2020 the Company has adopted Ind AS 116 "Leases" and has recognised right of use assets and lease liability of Rs 183065.61 thousand as of 1st July 2020. Application of Ind AS 116 requires significant judgement and estimate in determining the right of use assets and lease liabilities based on terms of the underlying lease agreements hence we considered this as a key audit matter. As part of our audit procedures our procedures included the following:
- Read and assessed the Company's accounting policies in accordance with the requirements of Ind AS 116.
- Obtained an understanding evaluated the design and tested the operating e_ectiveness of controls that the Company has in relation to accounting of leases under Ind AS116;
- Tested the accuracy and completeness of the underlying lease master by agreeing the underlying data pertaining to lease rentals term escalation and other relevant terms and conditions to lease agreements and recomputed the calculations involved on a sample basis.
- Evaluated the underlying assumptions and estimates including the discount rates.
- Assessed the disclosures made in the financial statements by the Company in this regard.

Information Other than the Financial Statements and Auditors' 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 Ind AS financial statements and our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the Standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management 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 preparationand presentation of these Ind AS financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.

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.

In preparing the financial statements management is responsible for assessing thecompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the company or to cease operations or has no realisticalternative but to do so.

The board of directors are responsible for overseeing the company's financial reportingprocess.

Auditor's Responsibility for the audit of Standalone Ind AS 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 auditors' 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 scepticism 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 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 entity hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 auditors ‘report to the related disclosuresin the 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 auditors'report. 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 de_ciencies 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 Statementsfor the financial year ended 31st March 2021and are therefore the key auditmatters. We describe these matters in our auditors' report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

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 subsection (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified in theparagraph 3 and 4 of the order.

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

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

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books; (c) The balance sheetthe statement of profit and loss including other comprehensive income the cash flowstatement and statement of changes in equity dealt with by this Report are in agreementwith the books of account; (d) In our opinion the aforesaid Ind AS financial statementscomply with the Accounting Standards specified under Section 133 of the Act read with thecompanies (Indian Accounting Standards) Rules 2015 as amended.

(e) on the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in termsof 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"; and (g) In our opinion the managerialremuneration for the year ended 31st March 2021 has been paid / provided bythe Company to its directors in accordance with the provisions of Section 197 read withSchedule V to the Act; (h) with respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us: i. The Company has disclosed the impact of pending litigations on itsfinancial position– The company has filed Special Civil Application on 18thMay 2016 before Honourable Gujarat High Court for quash and to set aside the notice ofdemand raised by Employees Provident Fund Organisation for Rs 1131.46 thousands on latepayment of remittance for the period November 1998 to January 2014 vide its noticedated 25th April 2016 and to put a stay on the notice of demand dated 25thApril 2016 during Pending admission and hearing of the present petition. ii. The Companyis not required to make provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts as the company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses. iii. There wereno amount which were required to be transferred to the Investor Education and ProtectionFund by the Company.

For Sunil Poddar & Co.
Chartered Accountants
Firm Reg. No 110603W
CA Pankaj Agarwal
Partner
Place: Ahmedabad M. No. 443450
Date: 29th June 2021 UDIN : 21443450AAAAPN2810

ANNEXURE _ A TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone Ind AS financial statements for the year ended 31st March2021 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) The Company has a regularprogramme of physical verification of its fixed assets by which fixed assets are verifiedin a phased manner over a period of three years which in our opinion is reasonablehaving regard to the size of the company and nature of its business. In accordance withthis programme certain fixed assets were verified during the year and no materialdiscrepancies were noticed on such 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 of immovable properties areheld in the name of the Company.

(ii) (a) The management has conducted the physical verification of inventory atreasonable interval

(b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial.

(iii) According to the information and explanations given to us the Company hasgranted unsecured loan to its subsidiary company amounting to Rs 15331.60 thousand (netof provision) covered in the register maintained under section 189 of the Companies Act2013 in respect of which; (a) The terms and conditions of the grant of such loans are inour opinion prima facie not prejudicial to the Company's interest. (b) The principal andinterest amount is repayable on demand. Interest is overdue at the year end.

(c) In respect of the interest overdue for the period of more than ninety days as atthe year-end aggregating `1149.84 thousand as explained to us the management has takenreasonable steps for recovery of the same and management expects recovery of the same inreasonable time.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section

185 and 186 of the Act with respect to the loans and investments made.

(v) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Section 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the goods or services rendered by 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-taxsales tax value added tax duty of customs service tax cess and other materialstatutory dues have been regularly deposited during the year by the Company with theappropriate authorities. As explained to us the Company did not have any dues on accountof employees' state insurance and duty of excise.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms service tax cess and other material statutory dues were in arrears as at 31stMarch 2021 for a period of more than six months from the date they became payable exceptof the following:

Statue Nature of dues Amount (Rs in ‘000) Forum where dispute is pending Assessment Year
Income Tax Act 1961 Penalty under Income Tax Act 1461.62 CIT (Appeals) 2018-19

(b) According to the information and explanations given to us there are no materialdues of income tax sales tax service tax duty of customs duty of excise value addedtax which have not been deposited with the appropriate authorities on account of anydispute. (viii) In our opinion and according to the information and explanations given tous the Company has not defaulted in the repayment of dues to banks.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year and money raised by way of termloans were applied for the purpose for which it was raised.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the Financial Statements and according to the information and explanationsprovided by the management we report that no fraud by the Company or no material fraud onthe Company by the officers and employees of the Company has been noticed or reportedduring the year.

(xi) A ccording to the information and explanations give 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 Companies Act 2013.

(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 provided by the managementtransactions with the related parties are in compliance with Section 177 and 188 of theAct where applicable and the details have been disclosed in the financial statements asrequired by the applicable accounting standards.

(xiv) According to the information and explanations provided to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) of the Order are notapplicable to the Company and not commented upon.

(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) According to the information and explanations provided to us the provisions ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For Sunil Poddar & Co.
Chartered Accountants
Firm Reg. No 110603W
CA Pankaj Agarwal
Partner
Place: Ahmedabad M. No. 443450
Date: 29th June 2021 UDIN : 21443450AAAAPN2810

ANNEXURE _ B TO INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON

THE STANDALONE IND AS FINANCIAL STATEMENT OF THE TEXEL INDUSTRIES LIMITED _"THECOMPANY"_ Report on the Internal Financial Controls under Clause (i) of Sub-section 3of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of TexelIndustries Limited ("the Company") as of 31st March 2021 inconjunction with our audit of the Standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘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 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.

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 auditor's judgment including the assessment of the risks ofmaterial misstatement of the Ind AS 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 with reference to these financial statements.

Meaning of Internal Financial Controls over Financial Reporting with reference to theseStandalone Financial Statements

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 Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that: (1) Pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial 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 Ind ASfinancial 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 adequate internal financialcontrols over financial reporting with reference to these Standalone Financial Statementsand such internal financial controls over financial reporting with reference to theseStandalone Financial Statements were operating effectively as at 31st March2021 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Sunil Poddar & Co.
Chartered Accountants
Firm Reg. No 110603W
CA Pankaj Agarwal
Partner
Place: Ahmedabad M. No. 443450
Date: 29th June 2021 UDIN : 21443450AAAAPN2810

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