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Bluechip Tex Industries Ltd.

BSE: 506981 Sector: Industrials
NSE: N.A. ISIN Code: INE472D01017
BSE 00:00 | 30 Nov 152.85 3.70
(2.48%)
OPEN

149.40

HIGH

154.90

LOW

146.05

NSE 05:30 | 01 Jan Bluechip Tex Industries Ltd
OPEN 149.40
PREVIOUS CLOSE 149.15
VOLUME 967
52-Week high 203.00
52-Week low 82.55
P/E 7.90
Mkt Cap.(Rs cr) 30
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 149.40
CLOSE 149.15
VOLUME 967
52-Week high 203.00
52-Week low 82.55
P/E 7.90
Mkt Cap.(Rs cr) 30
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bluechip Tex Industries Ltd. (BLUECHIPTEXIND) - Auditors Report

Company auditors report

To The Members of Blue Chip Tex Industries Limited Report on the Audit of the FinancialStatements

Opinion

We have audited the accompanying Financial Statements of Blue Chip Tex IndustriesLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 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 andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "FinancialStatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and its Profit includingOther Comprehensive Income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of Financial Statements in accordance with the Standards onAuditing specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance 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 theFinancial Statements under the provisions of the Act and the Rules made there under andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion on financial statements.

Key Audit Matters

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

1. Key Audit Matters

Determination of value of inventories

(See note no B.2 (c) of significant accounting policy and note 6)

As the Country was under lockdown as on 31st March 2020 the physicalverification of stock could not be conducted and the Management has carried out physicalverification on resumption of activities at Plant. The Company has inventories with acarrying value ' 727.80 lakhs as on 31st March 2020. We considered the value ofthe inventories as a key audit matter given the relative size of the same in the financialstatements and the significant judgments involved in consideration of factors indetermination of realizable value such as fluctuation of raw materials prices in themarket and in determination of net realizable value.

Auditor's Response

We understood and tested the design and operating effectiveness of controls asestablished by the management in determination of net realizable value of inventory.Assessing the appropriateness of Company's accounting policy for valuation of inventoriesand compliance of the policy with the requirements of the prevailing accounting standards.

We considered various factors including the actual selling price prevailing around andsubsequent to the year-end. Compared the cost of the finished goods with the estimated netrealizable value and checked if the finished goods were recorded at net realizable valuewhere the cost was higher than the net realizable value. For the purpose of determinationof cost the Company has considered the prevailing market situation. We have relied uponthe records produced by the company in respect of arriving of the Net realizable value.

Further for the purpose of determination of physical quantity of the inventory as atthe year ended 31st March 2020 the Company has carried out the physicalverification after the operations at the respective plants resumed. We have relied upontheir inventory report. Based on the above procedures performed the management'sdetermination of the net realizable value of the inventory as at the year end andcomparison with cost for valuation of inventory is considered to be reasonable.

2. Key Audit Matter

Allowances for credit losses

(See note no B.2 (n) of significant accounting policy and note 7)

The Company determines the allowance to be made for expected credit losses based on itshistorical loss experience and as adjusted to reflect current and estimated futureeconomic conditions. The Company considered current and anticipated future economicconditions relating to industries that the Company deals with and the wherein it operates.In calculating expected credit loss the Company has also considered credit reports andother related credit information for its customers to estimate the probability of defaultin future and has taken into account estimates of possible effect from the COVID-19pandemic.

Auditor's Response

Our audit procedures related to the allowance for expected credit losses for tradereceivables included inter alia:

Testing the effectiveness of controls over the

• Development of the methodology for the allowance for expected credit lossesincluding consideration of the current and estimated future economic conditions

• Completeness and accuracy of information used in the estimation of probabilityof default; and

• Computation of the allowance for credit losses. For a sample of customers wetested input data such as credit reports and other credit related information used inestimating the probability of default by comparing them to external and internal sourcesof information. We tested the mathematical accuracy and computation of the allowances byusing the same input data used by the Company.

Other Information

The Company's Management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the financial statements and our auditors' report thereon.Our opinion on the financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. We have been informed that otherinformation will be adopted by the Board of Directors at a later date and we will reportif other information so adopted is materially inconsistent with the financial statements.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company's Board of Directors are responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Financial Statements that givea true and fair view of the financial position financial performance changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified under section 133of the Act. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of 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.

In preparing the Financial Statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so. The Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these Financial Statements.

As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain 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 Companies Act 2013 as amended we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such 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 auditor's report to the related disclosures inthe Financial Statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the FinancialStatements including the disclosures and whether the Financial Statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Financial Statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Financial Statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Financial Statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe 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 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 197(16) of the Act we report that the company has paidremuneration to its directors during the year in accordance with the provisions of thelimits laid down under Section 197 read with Schedule V of the Act.

3. 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 including Other ComprehensiveIncome the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid Financial Statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2015 as amended.

(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigation on its financial positionin its Financial Statements as referred to in Note 33 to the Financial Statements.

ii. There are no foreseeable losses as required on long term contracts includingderivatives contracts.

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

For D K P & Associates Chartered Accountants Firm's Registration No. 126305W
Place: Mumbai Date: June 29 2020 D. K. Doshi Partner Membership No. 037148 UDIN: 20037148AAAABG3182

"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS

OF BLUE CHIP TEX INDUSTRIES LIMITED

(Referred to in Paragraph 1 under the heading of "Report on Other Legal andRegulatory

Requirements" section of our report of even date)

i. In respect of its fixed assets :

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b. As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

c. According to the information and explanation given to us the records examined by usand based on the examination of the conveyance deeds provided to us we report that thetitle deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date. In respect ofimmovable properties of land and building that have been taken on lease and disclosed asfixed assets in the Financial Statements the lease agreement are in the name of theCompany.

ii. As explained to us physical verification of the inventories have been conducted atreasonable intervals by the management which in our opinion is reasonable having regardto the size of the Company and nature of its inventories. No material discrepancies werenoticed on such physical verification.

iii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013 and hence clause (iii) of the Order is not applicable to the Company.

iv. According to the information and explanations given to us the Company has notgiven loans guarantees and security to directors or to any other person in whom thedirectors is interested and provision of Section 186 have been complied for investmentsmade by the Company.

v. According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of provisions of sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed thereunder. Therefore the clause(v)of paragraph 3 of the Order is not applicable to the Company.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 prescribed by the Central Government underSection 148(1) of the Act and are of the opinion that prima facie the prescribedaccounts and cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

vii. In respect of Statutory dues :

a. According to the records of the Company undisputed statutory dues includingProvident Fund Employees' State Insurance Income Tax Sales Tax Goods and Service TaxService Tax Duty of Custom Duty of Excise Value Added Tax Cess and any other statutorydues have been generally regularly deposited with appropriate authorities. According tothe information and explanations given to us no undisputed amounts payable in respect ofthe aforesaid dues were outstanding as at 31st March 2020 for a period ofmore than six months from the date becoming payable except Value Added Tax ' 2.27 Lakhsand Provident Fund ' 0.32 Lakhs;

b. According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Goods and Service Tax Service Tax Duty of Custom Duty of ExciseValue Added Tax cess on account of any dispute which have not been deposited on accountof any dispute as on 31st March 2020 except for Income Tax dues as follows;

Sr. no Assessment Year ' In Lakhs Forum where dispute is pending
1 2009-10 4.39 Rectification pending with Income tax Officer
2 2010-11 3.72 Rectification pending with Income tax Officer
3 2014-15 15.68 Rectification pending with Income tax Officer
4 2018-19 2.93 Submitted e-proceeding response for correction
Total 26.72

viii. In our opinion and according to the information given to us the Company has notdefaulted in repayment of loans to the Bank.

ix. According to the information and explanation given to us and based on our auditprocedures the Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans during the year and hence clause(ix) of the Order is not applicable to the Company.

x. In our opinion based on the audit procedures performed for the purpose of reportingthe true and fair view of the Financial Statements and as per information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid/ provided in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under the provisions ofclause (xii) of paragraph 3 of the Order are not applicable to the Company.

xiii. In our opinion and according to information and explanations provided by themanagement transactions with related parties are in compliance with section 177 and 188of the Act where applicable and the details have been disclosed in notes to the FinancialStatements as required by the applicable accounting standards.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Therefore provisions of clausexiv of paragraph 3 of the Order are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transaction with thedirectors or persons connected with him and covered under section 192 of the Act and hencereporting under clause (xv) of the paragraph 3 of the Order is not applicable to theCompany.

xvi. In our opinion to the best of our knowledge and according to the information andexplanations given to us the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For D K P & Associates Chartered Accountants Firm's Registration No. 126305W
Place: Mumbai Date: June 29 2020 D. K. Doshi Partner Membership No. 037148 UDIN: 20037148AAAABG3182

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS

OF BLUE CHIP TEX INDUSTRIES LIMITED

(Referred to in paragraph 3 (f) under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date)

Report on the Internal Financial Controls with reference to Financial Statements underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct").

We have audited the Internal Financial Control with reference to Financial StatementsBLUE CHIP TEX INDUSTRIES LIMITED ("the company") as of 31st March2020 in conjunction with our audit of the Financial Statements of the Company for the yearthen ended.

Management Responsibility for the Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to Financial Statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India ("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to Financial Statements based on our audit. We conducted our auditin accordance with the Guidance Note issued by ICAI and the Standards on auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to Financial Statementswas established and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to Financial Statements and theiroperating effectiveness. Our audit of internal financial controls with reference toFinancial Statements included obtaining an understanding of internal financial controlswith reference to Financial Statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the FinancialStatements 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 systemwith reference to Financial Statements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control with reference to Financial Statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Financial Statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to Financial Statements includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Financial Statements in accordance

with generally accepted accounting principles and that receipts and expenditures ofthe company are being made only in accordance with authorisations of management anddirectors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the Financial Statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls with reference toFinancial Statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to Financial Statements to future periods are subject to the risk that theinternal financial control with reference to Financial Statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem with reference to Financial Statements and such internal financial controls wereoperating effectively as at 31st March 2020 based on the internal financialcontrols with reference to Financial Statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI.

For D K P & Associates Chartered Accountants Firm's Registration No. 126305W
Place: Mumbai Date: June 29 2020 D. K. Doshi Partner Membership No. 037148 UDIN: 20037148AAAABG3182

.