Polyspin Exports Ltd Directors Report.

To the Members of M/s. Polyspin Exports Limited Report on the Standalone IND AS Financial Statements

Opinion

We have audited the accompanying standalone IND AS financial statements of M/s. Polyspin Exports Limited (“the Company”) which comprises the Balance Sheet as at March 31, 2020, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone IND AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the IND AS and accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2020, and profit, total comprehensive income, the 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) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone IND AS financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter:

a. We draw attention to Note No.29.3 to the standalone financial statements, which describes the status of the Fire Accident Claim with the Insurance Company.

b. We draw attention to Note No.36.7 to the standalone financial statements, which describes the status of confirmation of balance of Trade Debtors, Trade Creditors and other Parties.

c. We draw attention to Note No.29.4 to the standalone financial statements, which describes the impact of the COVID-19 pandemic on the business.

Our opinion is not modified in respect of these matters.

Key Audit Matters :

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone IND AS financial statements of the current period. These matters were addressed in the context of our audit of the Standalone IND AS financial statements as a whole, and informing our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our Report

Key Audit Matter Auditors Response
i. Evaluation of uncertain tax positions Principal Audit Procedures
Obtained details of completed tax assessments and demands for the year ended March 31, 2020 from management. We involved our expertise to challenge the managements underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating managements position on these uncertain tax positions. Additionally, we considered the effect of new information in respect of uncertain tax positions as at April 1, 2019 to evaluate whether any change was required to managements position on these uncertainties
The Company has material uncertain tax positions including matters under dispute which involves significant judgement to determine the possible outcome of these disputes.
Refer Note No.36.3 to the Standalone Financial Statements
2. Recoverability of Indirect tax receivables Principal Audit Procedures
We have involved our expertise to review the nature of the amounts recoverable, the sustainability and the likelihood of recoverability upon final resolution.
As at March 31, 2020, other current assets in respect of withholding tax, GST and CESAT appeal Duty of Rs. 26.73 lakhs which are pending adjudication.
Refer Note No. 12 to the Standalone Financial Statements.
3. Assessment of the Companys litigations and related disclosure of contingent liabilities Our procedures included the following:
• We understood, assessed and tested the design and operating effectiveness of the Companys key controls surrounding assessment of litigations relating to the relevant laws and regulations;
Refer to Note No. 36.3 to the standalone Financial Statements - “Contingent liabilities not provided for”, Note 36.3 to the Standalone Financial Statements As at March 31, 2020, the Company has exposures towards litigations relating to the matter as included in the aforesaid Notes. Significant management judgement is required to assess such matter to determine the probability of occurrence of material outflow of economic
• We discussed with management the recent developments and the status of the material litigations which were reviewed and noted by the Companys audit committee;
• We performed our assessment on a test basis on the underlying calculations supporting the contingent liabilities
resources and whether a provision should be recognised or a disclosure should be made. The management judgement is also supported with legal advice in certain cases as considered appropriate. As the ultimate outcome of the matter is uncertain and the position taken by the management are based on the application of their best judgement, related legal advice including those relating to interpretation of laws/regulations, it is considered to be a Key Audit Matter. made in relation to the Companys Standalone Financial Statements;
• We used auditors experts to gain an understanding and to evaluate the disputed tax matters;
• We considered external legal opinions, where relevant, obtained by management;
• Wemetwith the Companys external legal counsel to understand the interpretation of laws/regulations considered by the management in their assessment relating to a material litigation;
• We evaluated managements assessments by understanding precedents set in similar cases and assessed the reliability of the managements past estimates / judgements;
• We evaluated managements assessment around those matters that are not disclosed or not considered as contingent liability, as the probability of material outflow is considered to be remote by the management; and
• We assessed the adequacy of the disclosures.
• Based on the above work performed, managements assessment in respect of the Companys litigations and related disclosures relating to contingent liabilities in the Standalone Financial Statements are considered to be reasonable.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors are responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Boards Report including Annexures to Boards Report, Corporate Governance and Shareholders Information, but does not include the standalone financial statements and our auditors report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone IND AS Financial Statements

The Companys Board of Directors are responsible for the matters stated in section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone IND AS financial statements that give a true and fair view of the financial position, financial performance, including other comprehensive income, changes in equity and cash flows of the Company in accordance with accounting principles generally accepted in India, including Indian Accounting Standards (IND AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone IND AS financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the IND AS financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the companys financial reporting process.

Auditors Responsibilities for the Audit of Standalone IND AS Financial Statement

Our objectives are to obtain reasonable assurance about whether the Standalone IND AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone IND AS financial statements.

A further description of the auditors responsibilities for the audit of the standalone IND AS financial statements is included in Annexure A. This description forms part of our auditors report.

Other Matters

Our attendance at the physical verification done by the management was impracticable under the current lock down restrictions imposed by the government. Consequently, we have performed alternative procedures to audit on the existence and condition of inventory at year end as per the guidance provided in SA-501 Audit Evidence - Specific considerations for selected items and have obtained sufficient audit evidence to issue our un-modified opinion on those standalone financial results.

Our opinion on the statement is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 (“the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order, 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 best 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 the Company so far as it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone IND AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2020 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the Internal Financial Control with reference to Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure C"

B) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its standalone IND AS financial statements - Refer Note 36.3 to the Standalone IND AS financial statements;

ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 30.2 to the IND AS financial statements;

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

C ) With respect to the matter to be included in the Auditors Report under section 197(16) Of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limits laid down under section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under section 197(16) of the Act which are required to be commented upon by us.

For SRITHAR & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Registration No. 015896S
Place : Rajapalayam (S. SRITHAR)
Date : 25.06.2020 Membership No. 209047
UDIN : 20209047AAAAAS7989

ANNEXURE-A

Responsibilities for Audit of Standalone IND AS Financial Statement

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone IND AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has internal financial controls with reference to Financial Statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone IND AS 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 as a going concern. Evaluate the overall presentation, structure and content of the standalone IND AS financial statements, including the disclosures, and whether the standalone IND AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone IND AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

For SRITHAR & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Registration No. 015896S
Place : Rajapalayam (S. SRITHAR)
Date : 25.06.2020 Membership No. 209047
UDIN : 20209047AAAAAS7989

ANNEXURE -B TO INDEPENDENT AUDITORS REPORT

Annexure referred to in paragraph 1 of our Report of even date to the members of Polyspin Exports Limited on the accounts of the Company for the year ended 31st March 2020

In terms of Companies (Auditors Report) Order 2016, issued by Central Government of India, in terms of Section 143(11) of The Companies Act, 2013, we further report, on the matters specified in paragraph 3 and 4 of the said Order, that:-

1. FIXED ASSET

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

ii. The Company has instituted a programme of physically verifying its fixed assets in a phased manner over a period of three years. In accordance with this programme, scheduled fixed assets were verified during the year and no material discrepancies were noticed during such verification.

iii. According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of immovable properties are held in the name of the company

2. INVENTORIES

The management has conducted physical verification of its inventories at reasonable intervals during the year. No material discrepancies were noticed during such verification; the discrepancies wherever noticed were accounted for appropriately in the books of account.

3. LOANS TO PARTIES LISTED U/S 189 OF THE ACT The Company has not granted any loans, secured or unsecured, to parties covered in register maintained under Section 189 of The Companies Act, 2013.

4. COMPLIANCE WITH SECTIONS 185 & 186 OF THE ACT

In connection with matters specified u/s 185 of the act, the Company has not advanced any loans, directly or indirectly, to any of its directors or to any other person in whom the directors are interested, or has given any guarantee or provided security in connection with any loan taken by any other person.

The company has not made any investments in any other companies within the meaning of section 186(1) of the act. In connection with matters specified under section 186(2) of the act, the company has not advanced any loans, directly or indirectly, to any person or body corporate, or has given any guarantee or provided security in connection with any loan taken by any other body corporate or any other person or acquired any securities of companies in excess of limits stipulated

5. The Company has not accepted any deposits from the public.

6. The Central Government has not stipulated the maintenance of Cost Records, under section 148(1) of the act, for the industry within which the company operates.

7. STATUTORY DUES

i. According to the records maintained by the company and the information and explanations given to us, the company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, GST, Duty of Customs, Service Tax, Cess.

ii. According to the records maintained by the company and the information and explanations given to us, there were no arrears of undisputed statutory dues, in respect of provident fund, income tax, GST, duty of customs, service tax, cess which remained outstanding as at 31st March 2020, for a period of more than six months from the date they became payable.

iii. According to the records of the company and the information and explanations given to us, the disputed statutory dues relating to Central excise duty under the Central Excise act, 1944, pertaining to earlier years aggregating to Rs. 487.72 Lakhs on account of matters pending before appropriate authorities is as under and for which no provision had been made in the accounts.

Name of the Statue Nature of the Dues Forum where the dispute is pending Period Amount
Central Excise Act, 1944 Excise Duty Commissioner of Central Excise, Madurai. June 2008 To March, 2013 71.71
Central Excise Act, 1944 Excise Duty Commissioner of Central Excise, Madurai. January, 2009 To March, 2013 129.11
Central Excise Act, 1944 Excise Duty Assistant Commissioner of Central Excise, Rajapalayam. April, 2010 To March, 2011 3.69
Central Excise Act, 1944 Excise Duty Assistant Commissioner of Central Excise, Rajapalayam. April, 2013 To December, 2014 70.11
Central Excise Act, 1944 Excise Duty Assistant Commissioner of Central Excise, Rajapalayam. April, 2014 To September, 2014 30.04
Central Excise Act, 1944 Excise Duty Assistant Commissioner of Central Excise, Rajapalayam. October, 2014 To March, 2015 30.23
Central Excise Act, 1944 Excise Duty Assistant Commissioner of Central Excise, Rajapalayam. April, 2015 To September, 2015 25.24
Central Excise Act, 1944 Excise Duty Assistant Commissioner of Central Excise, Rajapalayam. October, 2015 To March, 2016 33.51
Central Excise Act, 1944 Excise Duty Commission of Central Excise, Trichy. April, 2016 To March, 2017 94.08
TOTAL 487.72

8. The Company has not defaulted in the repayment of any dues to a financial institution, bank or government or debenture holders.

9. Term loans were utilised for the purposes for which they were obtained.

10. Based upon the audit procedures performed and information and explanations given to us by the management, no fraud by the company or on the Company by its officers or employees have been noticed or reported during the course of our audit.

11. According to the information and explanations given to us and based on our examination of the records of the company, the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

12. The provisions of section 406(1) of the act do not apply to the company.

13. The transactions entered into with related parties are in compliance with requirements of sections 177 & 188 of the act and the details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

15. The Company has not entered into any non-cash transactions with directors or persons connected with directors, during the year.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For SRITHAR & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Registration No. 015896S
Place : Rajapalayam (S. SRITHAR)
Date : 25.06.2020 Membership No. 209047
UDIN : 20209047AAAAAS7989

ANNEXURE-C TO THE INDEPENDENT AUDITORS REPORT

[Referred to in paragraph 2(g) under Report on Other Legal and Regulatory Requirements in our Independent Auditors Report of even date, to the members of the company on the Standalone IND AS financial statements for the year ended 31st March, 2020]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of the company as of 31st March, 2020, in conjunction with our audit of the Standalone IND AS financial statements of the company for the year ended on that date.

MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The respective Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company, considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Act.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing specified under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that

i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and

iii) Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate

OPINION

In our opinion, the company in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2020, based on the internal control over financial reporting criteria established by the company, considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For SRITHAR & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Registration No. 015896S
Place : Rajapalayam (S. SRITHAR)
Date : 25.06.2020 Membership No. 209047
UDIN : 20209047AAAAAS7989