We have audited the accompanying financial Statements of Harish Textile Engineers Limited
(“the Company”) which comprises the Balance Sheet as at 31st March, 2024 and the Statement
of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity
and the Cash Flow Statement for the year then ended, and notes to the financial statements,
including a summary of material accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us,
except for the effect of the matters described in the Basis for Qualified Opinion section of our
report, the aforesaid financial Statements give the information required by the Companies Act,
2013 (the “Act”) in the manner so required and give a true and fair view in conformity with the
Indian Accounting Standards prescribed under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting
principles generally accepted in India, of the state of affairs of the Company as at 31st March,
2024, the loss and total comprehensive income, the changes in equity and its cash flows for the
year ended on that date.
Basis for Qualified Opinion
1. The Company has not provided for gratuity liability of employees as required by Ind AS 19 on
“Employee Benefits” (Refer Note No. 28.1). The impact of the same could not be quantified in
the absence of actuarial valuation/management estimate.
2. The company has recently ascertained the particulars of dues to Micro, Small and
Medium enterprises, under MSMED Act, 2006. The interest liability arising out of
delayed payment to undertakings registered under the MSMED Act, has not been
quantified and provided for (Refer Note No. 21).
Our audit opinion on the financial statements for the year ended 31 March 2024 is qualified in
respect of the said matters.
We conducted our audit of the Financial Statements 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 Auditor’s 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 financial Statements under the
provisions of the Companies Act, 2013 and the Rules thereunder, 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 qualified opinion on the Financial Statements.
Emphasis of matter
We draw attention to the following matters. Our opinion is not modified in respect of these
matters:
a. Note 36(1) of notes to the financial statement year ended March 31, 2024 which
states that “the Company has received notice on 14th May 2022 from Shree Nikhil
H Gandhi, Smt. Chhaya N. Gandhi and Smt. Kumudben H. Gandhi, claiming to be
Shareholders of Pacific Haish Industries Limited (“PHIL”), that they have filed a
company petition with Hon. NCLT, Mumbai Bench, inter-alia contending that the
business of Non-Woven and PSF transferred to the Company by PHIL by way of
Slump-sale w.e.f. April 01, 2019 was without obtaining the approval of
Shareholders of PHIL and hence such transfer is invalid. The Company is taking
appropriate legal recourse to protect its interest. Vide order dated 09th June, 2023
Hon. Bombay High Court has instructed parties to maintain Status quo and
subsequently, Hon. NCLT as well vide its order dated 14th June, 2023 has stayed
the further proceedings till the pendency of the Hon. High Court order.
b. Note 36(2) of notes to the financial statement year ended March 31, 2024 which
states that the Term Loan and other Credit facilities from Bank of India are, inter-
alia secured by Corporate Guarantee and mortgage of properties of Kasha Textile
Private Limited (KTPL). One of the Shareholders of KTPL has claimed that the said
corporate guarantee and security were given by KTPL without obtaining consent of
Shareholders as is required in terms of section 186 of Companies Act, 2013. The
company is taking appropriate legal recourse to protect its interest.
c. The Company is not regular in depositing Income Tax/Tax Deducted at
Source/Professional Taxes and GST with appropriate authority.
Our conclusions are not modified in respect of these matters.
Report on Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements of the current period. We have determined that there are
no key audit matters to communicate in our report.
The Company’s Management and Board of Directors are responsible for the other information.
The other information comprises the information included in the Company's annual report, but
does not include the financial statements and auditor’s report thereon.
Our opinion on the 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 Financial Statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the 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 financial
Statements
The Company’s Management and 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
financial Statements that give a true and fair view of the financial position, financial
performance, including total comprehensive income, changes in equity and cash flows of the
Company in accordance with the Ind AS and other accounting principles generally accepted in
India, including Accounting Standards (Ind AS) specified under section 133 of the Act. 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 accounting
policies; making judgments 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 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
Company’s 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 company's financial reporting
process.
Auditor’s Responsibilities for the Audit of financial statement
Our objectives are to obtain reasonable assurance about whether the financial Statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor's 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 financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the 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 adequate internal financial controls system 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 management’s 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 Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in 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 auditor’s 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 financial Statements, including
the disclosures, and whether the financial Statements represent the underlying transactions
and events in a manner that achieves fair presentation.
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 financial Statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the
Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in
the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to
the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
2.A
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 including Other Comprehensive
Income, Statement of Changes in Equity 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 financial statements comply with the Indian
Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the
Companies (Indian Accounting Standards) Rules, 2015, as amended, except requirement
of Ind AS 19 on “Employee Benefits" with regard to matters described in the Basis of
Qualified Opinion paragraph above.
e) On the basis of the written representations received from the directors as on 31st March,
2024 taken on record by the Board of Directors, none of the directors is disqualified as on
31st March, 2024 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 over financial reporting of
the Company and the operating effectiveness of such controls, refer to our separate
Report in Annexure “B”. Our report expresses an unmodified opinion on the adequacy
and operating effectiveness of the Company’s internal financial controls over financial
reporting.
g) In our opinion, the managerial remuneration for the year ended March 31, 2024 has been
paid/provided by the Company to its directors in accordance with the provisions of section
197 read with Schedule V to the Act.
2.B With respect to the other matters to be included in the Auditors’ Report in accordance with
Rules 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and
to the best of our information and according to the explanations given to us and as
represented by the management:
i. The Company has disclosed the impact of pending litigations on its financial position
in its financial statements as referred to in Note 36 to the financial statements;
ii. The Company has made provision, as required under the applicable law or Ind AS, for
material foreseeable losses, if any, on long-term contracts including derivative
contracts;
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
iv.
a. Management has represented to us that, to the best of it’s knowledge and belief, other
than as disclosed in the notes to the accounts no funds (which are material either
individually or in aggregate) have been advanced or loaned or invested (either from
borrowed funds or share premium or any other sources or kind of funds) by the
company to or in any other persons or entities, including foreign entities
(“Intermediaries”), with the understanding whether recorded in writing or otherwise,
that the Intermediary shall whether directly or indirectly lend or invest in other persons
or entities identified in any manner whatsoever by or on behalf of the company
(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of
the Ultimate beneficiaries;
b. Management has represented to us that, to the best of it’s knowledge and belief other
than as disclosed in the notes to the accounts no funds (which are material either
individually or in aggregate) have been received by the company from any persons or
entities, including foreign entities (“Funding parties”), with the understanding whether
recorded in writing or otherwise, that the company shall, whether, directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever by or
on behalf of the funding party (“Ultimate Beneficiaries”) or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries; and
c. Based on our audit procedure conducted that are considered reasonable and
appropriate in the circumstances, nothing has come to our attention that cause us to
believe that the representation under sub-clause (i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any material misstatement.
v. The company has not declared or paid any divided during the current year.
vi. Based on our examination which included test checks, the Company has used
accounting software for maintaining its books of account which has a feature of
recording audit trail (edit log) facility which was not enabled throughout the year for all
relevant transactions recorded in the software, as described in note 37 to the financial
statements. Further, we cannot comment upon whether during the year there was any
instance of audit trail feature being tampered with in respect of the accounting
software.
For K. M. Swadia and Company
Chartered Accountants
(Firm’s Registration No. 110740W)
Arch it Antani
Partner
Place: Vadodara (Membership No. 149221)
Date: May 30, 2024 UDIN: 24149221BKCYZ02297
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