To the Members of M/s CRIMSON METAL ENGINEERING COMPANY LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of M/s CRIMSON METALENGINEERING COMPANY LIMITED ("the Company") which comprise the balancesheet as at March 31st 2020 and the statement of Profit and Loss (includingother comprehensive income ) and the Cash flow statement and the statement of change inEquity for the year then ended and a summary of significant accounting policies and otherexplanatory information.
Management's Responsibility for the Financial Statements
The Company's Board Of Directors is responsible for the matters stated in section134(5) of the companies Act 2013("the act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial position andfinancial performance including other comprehensive income cash flows & change in theequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards prescribed under Section 133 of the Actread with rule 7 of the Companies ( Accounts) Rules 2014.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143 (10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation andfair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bymanagement as well as evaluating the overall 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.
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: (a) In the case of the Balance Sheet of the stateof affairs of the Company as at March 31st 2020; and (b) In the case of theStatement of Profit and Loss of the profit for the year ended on that date. (c) In thecase of Cash flow statement for the year ended on that date. And changes in Equity for theyear ended as on that day.
Report on Other Legal and Regulatory Requirements
1. As required by the companies (Auditor's Report) Order2016 (the Order') issuedby 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 in theparagraph 3 and 4 of the order.
2. As required by section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books
c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statement andstatement of change in equity dealt with by this Report are in agreement with the books ofaccount maintained for the purpose of preparations of this financial statement.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with relevant rule issued Thereunder. e) On the basis of written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 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' and
g) With respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the Companies(Audit and Auditors )Rules 2014as amended 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 litigation on its financialposition in its Ind AS financial statements (ii) The Company has made provision asrequired under the applicable law of Accounting Standard for material foreseeable lossesif any on long term contracts including derivative contracts
(iii) There has been no delay in transferring amount required to be transferred tothe investors education and protection Fund by the Company.
|LAKHOTIA & REDDY |
|CHARTERED ACCOUNTANT |
|FIRM REG.No. 009331S |
|CA.M.M.LAKHOTIA PARTNER |
|UDIN No. 20208704AAAABH2849 |
|DATE : 31.07.2020 |
|PLACE : Chennai |
Annexure A'to the Auditors' Report
The annexure referred to in paragraph 1 of our report of even date to the members ofCrimson Metal Engineering company Limited on the accounts of the Company for the yearended 31march 2020
On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of audit we report that
(1) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The company has a regular programme of physical verification of its fixed assetsare verified in phased manner over a period of every year. In accordance with thisprogramme certain fixed assets verified during the year and no material discrepancieswere noticed on such verification. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the company and the nature of itsassets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deed & immovable properties areheldin the name of the company.
(2) (a) As explained to us physical Verification of the inventory was carried out bythe management at reasonable intervals.
(b) In our opinion and according to the information and explanation given to us theprocedure of physical verification of inventory followed by the management are reasonableand adequate in relation to the size of the company and nature of its business. Thecompany is generally maintaining proper records of its inventories. No materialDiscrepancy was noticed on physical verification of Stocks by the management of thecompany as compared to the book recaords
(3) According to the information and explanation given to us the company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under section 189 of the Companies Act.2013
(4))In our opinion and according to the information and explanations given to us thecompany has not provided any loans and Investments Guarantees and Security during theyear as such section 185 and 186 of the Companies Act 2013 is not applicable on thecompany.
(5) The Company has not accepted any deposits from the public within the meaning ofsection 7374 75 and 76 of the act and the rules framed there under to the extendnotified.
(6) We have broadly reviewed the cost records maintained by the Company pursuant to therules prescribed by the Central Government under Section 148(1) of the Companies Act 2013and are of the opinion that prima facie the prescribed cost records have been made andmaintained . We have however not made a detailed examination of the cost record with aview to determine whether they are accurate or complete.
(7) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues such Sales Tax Service Tax Duty ofCustoms Duty of Excise Value added Tax Cess and any other material statutory dues havegenerally been regularly deposited during the year by the Company with the appropriateauthorities.
b) According to the information and explanation given to us and the records of thecompany examined by us the particulars of dues of income tax Sales tax Duty of exciseduty value added tax as at ( balance sheet ) which have not been deposited on account ofa dispute are as follows:
|Name of the Statute ||Nature of dues ||Amount (Rs. In Lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|Central Excise Act 1944 ||Adoption of incorrect Job work Value ||9.71 ||A/Y 2005-06 ||Hon-ble Madras High Court |
|Central Excise Act 1944 ||Wrong Avaliment of Cenvat ||154.69 ||A/Y 2006-07 ||Hon-ble Madras High Court |
|ESI ||Additional Demand ||7.09 ||A/Y 2009-13 ||ESI Court Puducherry |
(viii) According to the records of the company examined by us and theinformation and explanation given to us the Company has not defaulted in repayment ofloans or borrowings to any financial institution or bank or government as of the balancesheet date.
(ix) The company has not raised money by way of initial public offer further offer(including debt instruments) and term loans. Accordingly the provisions of clause 3(9) ofthe order are not applicable to the company.
(x) During the course of our examination of the books and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanation given to us we have neither come across anyinstances of material fraud by the company or on the company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.
(xi) The Company has provided for managerial remuneration in accordance with theprovision of section 197 read the section V to the act. The Company has made the paymentto managing director in excess of approved amount as per the information and explanationgiven to us this shall be ratified in forth coming annual general meeting.
(xii) As the Company is not a Nidhi Company and the Nidhi rules 2014 are notapplicable to it the provision of clause 3(12) of the order are not applicable to thecompany.
(xiii) In our opinion and according to the information and explanations given to usall transactions with the related parties are in compliance with sec 177 & 188 of thecompanies' act 2013 wherever applicable for all transactions with the related partiesand the details of related party transactions have been disclosed in the Ind AS Financialstatements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3(xiv) of the Order is not applicable to the Company.
(xv) The Company has not entered into any non-cash transaction with its directors orperson connected with him. Accordingly the provisions of clause 3(15) of the order arenot applicable to the company.
(xvi) The Company is not required to be registered under Section 45-I of the ReserveBank of India Act 1934. Accordingly the provision of clause 3(16) of the order are notapplicable to the company.
| ||For Lakhotia& Reddy |
| ||Chartered Accountants |
| ||Firm's Reg .No.009331S |
| ||M.M.Lakhotia |
|Place : Chennai ||Partner |
|Date : 31.07.2020 ||Membership No.: 208704 |
"Annexure B" to the Independent Auditor's Report
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 M/s CRIMSONMETALS ENGINEERING COMPANY LIMITED ("the Company") as of March 31 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial ReportingIssued by Institute of Chartered Accountants of India. These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 were established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's 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.
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 2019 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.
| ||For Lakhotia& Reddy |
| ||Chartered Accountants |
| ||Firm's Reg .No.009331S |
|Place :Chennai ||M.M.Lakhotia |
|Date : 31.07.2020 ||Partner |
| ||Membership No.: 208704 |