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Emkay Taps & Cutting Tools Ltd.

BSE: 532586 Sector: Engineering
NSE: EMKAYTOOLS ISIN Code: INE332S01011
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Emkay Taps & Cutting Tools Ltd. (EMKAYTOOLS) - Auditors Report

Company auditors report

To

The Members of

M/s Emkay Taps and Cutting Tools Limited

Report on the standalone Financial Statements

Opinion

We have audited the accompanying Standalone financial statements of M/s. Emkay Taps andCutting Tools Limited ("the Company") which comprises the Balance Sheet as atMarch 31 2021 the Statement of Profit and Loss and statement of cash flows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2021 and profit/loss 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) specifiedunder section 143(10) of the Companies Act 2013. 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 Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the standalone financialstatements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibility of Management for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate implementation and maintenance ofaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

That Board of Directors is also responsible for overseeing the company's financialreporting process

Auditor's Responsibility for the Audit of the Financial Statements Our objectives areto obtain reasonable assurance about whether the financial statements as a whole are freefrom material misstatement whether due to fraud or error and to issue an auditor'sreport that includes our opinion. Reasonable assurance is a high level of assurance butis not a guarantee that an audit conducted in accordance with SAs will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial statements.

Report on Other Legal and Regulatory Requirements As required by the Companies(Auditor's Report) Order 2016 ("the Order") issued by the Central Governmentof India in terms of subsection (11) of section 143 of the Companies Act 2013 we give inthe Annexure "A" statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

As required by Section 143(3) of the Act we report that:

We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.

a. 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.

b. 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.

c. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

d. On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act.

e. 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".

f. 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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

Annexure - A - To The Independent Auditor's Report

The annexure referred to in our independent auditor's report to the members of EmkayTaps And Cutting Tools Limited ("the Company") on the Financial Statements forthe period ended 31st March 2021 we report that:

i. In respect of Fixed Assets:

a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

b) As per the policy of the Company physical verification of fixed assets is donecovering all the fixed assets over a period of three years. In our opinion having regardto the size of the Company and the nature of its operations the frequency of verificationis reasonable.

ii. In respect on inventories

a) The inventories (excluding stocks with third parties) were physically verifiedduring the year by the Management at reasonable intervals. In our opinion the frequencyof verification is reasonable.

b) The procedure of physical verification of inventories followed by the management isreasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c) The Company is maintaining proper records of inventory. There were no discrepanciesnoticed on verification between the physical stocks as compared to the book records.

iii. The Company has not granted or taken any loans secured or unsecured to/fromcompanies firms or other parties covered under the registered maintained under section189 of the Companies Act.

iv. The Company has complied with all the provisions in respect of loans investmentsand guarantees where the provisions of Section 185 and 186 of the Companies Act 2013were applicable.

v. The directives issued by the Reserve Bank of India and the provisions of sections 73to 76 or any other relevant provisions of the Companies Act 2013 and the rules framedthere under where applicable have been complied with by the Company.

vi. The company has not defaulted in repayment of any dues to a financial institutionor bank or debenture holders.

vii. We have broadly reviewed the books of accounts and records maintained by theCompany relating to the products of the Company pursuant to the rules made by the CentralGovernment for the maintenance of Cost records under sub section (1) of Section 148 of theCompanies Act and we are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. We have however not made detailed examination ofthe records with a view to determine whether they are accurate or complete.

viii. In respect of statutory dues:

a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employee's state insurance incometax sales tax wealth tax service tax custom duty excise duty cess and otherstatutory dues applicable to it. There are no undisputed amounts payables in respect ofthe aforesaid dues as on 31st March 2021 for a period more than six months fromthe date of becoming payable.

b) The Company has no disputed statutory dues pending to be deposited as on 31stMarch 2021 in respect of provident fund employee's state insurance income tax salestax wealth tax service tax custom duty excise duty cess and other statutory duesapplicable to it.

ix. Money raised by way of public issue/ follow-on offer (including debt instruments)and term loans were applied by the Company for the purposes for which those are raisedduring the period under reporting.

x. The Managerial Remuneration paid / provided by the Company is in accordance with therequisite approvals mandated by the provisions of section 197 read with schedule V to theCompanies Act 2013.

xi. During the period under reporting No fraud by the company or any fraud on theCompany by its officers/ employees has been noticed or reported.

xii. The Company is not a Nidhi Company and hence provisions of Nidhi Companies ofmaintaining Net Owned Fund in the ratio of 1: 20 to meet out the liability and to maintain10% liquid assets to meet out the unencumbered liability are not applicable to theCompany. Accordingly Para (xii) of the Order is not applicable.

xiii. As per the information and explanations given to us the Company has not made anypreferential allotment / private placement of shares or fully or partly convertibledebentures during the year under review.

xiv. As per the information and explanations given to us all transactions with therelated parties are in compliance with Section 188 and 177 of Companies Act 2013 whereapplicable and details have been disclosed in the Financial Statements etc. as required bythe accounting standards and Companies Act 2013.

xv. The Company during the period under reporting has not entered into any non-cashtransactions with directors or persons connected with him. Hence Para xv of the Order isnot applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

Annexure B - To The Independent Auditor's Report Of Even Date On The StandaloneFinancial Statements

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 Emkay Taps& Cutting Tools Limited ("the Company") as of March 31 2021 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal controls 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". Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

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 deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols 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 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 n accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 ofthe inherent limitations of internal financial controls over financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

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 2021 based oninternal 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.

Place: Nagpur For and on Behalf of
Date: 29/06/2021 M/S P.S. THAKARE & CO.
Chartered Accountants
FRN: 128572W
B.S.Thakare
Partner
Membership No. 127522

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