TO THE MEMBERS OF
CHEMTECH INDUSTRIAL VALVES LIMITED Report on the Financial Statements
We have audited the accompanying financial statements of CHEMTECH INDUSTRIAL VALVESLIMITED (the Company) which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss the Cash Flow Statement and a summary of thesignificant accounting policies and other explanatory information for the year then ended.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act) with respect to the preparation ofthese (Standalone) financial statements that give a true and fair view of the financialposition financial performance and cash flow's of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
Emphasis of Matters
We draw' attention to Note 2 in the financial statements which indicates that theCompany has accumulated losses of Rs. 79170090/- and its net worth has beensubstantially eroded. Also the Company has incurred a net loss/net cash loss during thecurrent and previous year(s). This condition indicates the existence of a materialuncertainty that may cast significant doubt about the Companys ability to continueas a going concern. However the financial statements of the Company have been prepared ona going concern basis for the reasons stated in the said Note 1 (1) (e).
Our opinion is not modified in respect of these matters.
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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 and its profit/loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 (theOrder) as amended issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the Annexure A astatement on the matters specified in paragraphs 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 Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure B\
(g) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements-refer Notes 30 to the financial statements
ii. The Company has long term contract but does not have any derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transfer to the InvestorEducation and Protection Fund by the Company during the year ended 31.03.2016.
For S. P. JAIN & ASSOCIATES
Firm Reg. No. 103969W
Place : Mumbai.
Date : 30-05-2016
KAPIL K. JAIN
Membership No. 108521
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT
Referred to in Paragraph 1 under the heading Report on other legal and regulatoryrequirements* of our Independent Auditors Report of even date to the members of CHEMTECHINDUSTRIAL VALVES LIMITED On the financial statements as of and for the year ended31.03.2016
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us fixed assets have been physically verified by the managementduring the year and no material discrepancies were noticed on such verification.
(c) According to information and explanations given to us and on the basis of ourexamination of records the title deeds of immovable properties are held in the name of thecompany.
(ii) The management has conducted the physical verification of inventory at reasonableintervals and no material discrepancies have noticed on physical verification of theinventory as compared to books records.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (c) of theOrder are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us thecompany has not granted loans guarantees and security covered u/s 185 and 186; theinvestment made by the company is in compliance with the provisions of section 186 of theCompanies Act 2013.
(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 Sections 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) Wc have broadly reviewed the accounts and records maintained by the Company inrespect of products where pursuant to the rules made by the Central Government of Indiathe maintenance of cost records has been prescribed under sub-section (1) of section 148of the Act and are of the Opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have not however made a detailed examination of thesame.
(vii) a) According to information and explanations given to us and on the basis of ourexamination of
the books of account and records the Company has been generally regular in depositingundisputed statutory' dues including Provident Fund Employees State Insurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Value added Tax Cess andany other statutory dues wherever applicable and any other applicable statutory dueswith the appropriate authorities. According to the information and explanations given tous no undisputed amounts payable in respect of the above wrere in arrears asat March 31 2016 for a period of more than six months from the date on w'hen they becomepayable except the following:
|STATUTES ||NATURE OF DUES ||AMOUNT (Rs.) ||PERIOD ||DUE DATE ||DATE OF PAYMENT |
|Sales tajc || |
|1268966 || |
1999-00 to 2001-02
b) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute except as mentioned below:
|Sr. No. ||Name of Statute || |
Nature of Dues
Forum where Dispute is pending
Amount in Rs.
|1 ||Central Sales tax || |
Comm of sales Tax
|2 ||Central Sales tax || |
Comm of sales Tax
|3 ||Central Sales tax || |
Comm of sales Tax
|4 ||Income tax || |
Income tax officer
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of Loans or borrowing to financialinstitution and to banks. The Company did not have any loan or borrowing from governmentand Debenture holders.
(ix) The company has not raised moneys by way of initial public offer or further publicoffer including debt instruments during the year. Further the term loan taken during theyear was applied for the purpose for which it is raised.
(x) During the course of our examination of the books and records of the companycarried in accordance with auditing standard generally accepted in India we have neithercome across any instance of fraud on the Company by its officers or employees noticed orreported during the course of our audit nor have we been informed of any such instance bythe management.
(xi) As explained to us the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.
(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Order are not applicable to the Company.
(xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
(xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3(xv) of the Order are not applicable to the Company.
(xvi) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company.
For S. P. JAIN & ASSOCIATES
\ Firm Reg. No. 103969W
KAPIL K. JAIN 1 A
Membership No. 108521
Annexure B to the Independent Auditors Report of even date on theStandalone Financial Statements of CHEMTECH INDUSTRIAL VALVES LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of CHEMTECHINDUSTRIAL VALVES LIMITED (the Company) as of March 31 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to companys policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
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 auditors judgement 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 Companys internal financial controlssystem over 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 (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompanys 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 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 or for otherreasons.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.