THE MEMBERS OF
MUKAT PIPES LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Mukat PipesLimited ("The Company") which comprise the Balance Sheet as at March 312020the statement of Profit and Loss the statement of changes in Equity and the Cash FlowStatement for the year then ended and a summary of the significant accounting policiesand 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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind As") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 312020 and its loss the changes inequity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statement in accordance with theStandards on Auditing (SAs) specified under Section 143(10) of the Companies Act 2013("the Act"). Our responsibilities under those standards are further described inthe Auditor's Responsibilities for the Audit of the standalone financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence obtained by us is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statement.
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 standaloned financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. we have determined the matters described below to bethe key audit matters to be communicated in our report.
1. Description of Key Audit Matter
The company has not provided for Income Tax Central Excise & Service Taxliabilities aggregating to Rs. 1163.56 Lacs. This is a Key audit matter since it willadversely effect the current ratio.
How our audit addressed the key audit matter
a) Discussed the matter with the management and obtained an understanding of thematter.
b) The company has preferred appeals against the outstanding demand and they have beenadvised by their counsel that the demands will be dropped.
As a result of the above audit procedure the Managements assessment of not providingwas considered to be reasonable.
2. Description of Key Audit Matter
The company has yet to transfer Rs. 11.41 Lac on account of unpaid dividend to InvestorEducation and Protection Fund.
How our audit addressed the key audit matter
a) Discussed the matter with the management and obtained an understanding of thematter.
b) The company does not have record of share holders to whom the unpaid dividend amountbelongs to. The company has several times approached Investor Education Protection Fund(IEPF) through emails to know the procedure to transfer the above said unpaid dividendamount to IEPF in the absence of names of share holders and other concerned records neededin the matter. We have not received any response from the IEPF. The company will pursuethe matter with the IEPF to expedite the matter.
As a result of the above audit procedure the Managements plea of not remitting theamount be considered appropriate.
Information other than the Financial Statement and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including annexures to Board's Report Report on Corporate Governance andbusiness responsibility report but does not include the standalone financial statementsand our auditor's report thereon.
Our opinion on the standalone financial statement 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 in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring 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.
Management's Responsibility 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 (changes in equity) & cash flows of the Company inaccordance with the (Ind. AS) and other accounting principles generally accepted in India.
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 design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.
Auditor's Responsibility for the Audit of the Standalone Financial Statements.
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statement as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decision of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
a) Identify and assess the risks of material misstatement of the standalone 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.
b) Obtain an understanding of internal financial control relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the companyhas adequate internal financial controls system in place and the operating effectivenessof such controls.
c) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.
d) Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as going concern.
e) Evaluate the overall presentation structure and content of the standalone financialstatement including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate make it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit finding 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 Section 143 (3) of the Act we report to the extent applicable 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 statement of changes in equityand the cash flow statement dealt with by this Report are in agreement with the books ofaccount.
(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the director is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct.
(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 "A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the company's internal financial controls overfinancial reportings.
(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 litigations on its financialposition in its standalone financial statements - Refer Note 24 to the financialstatements.
ii) the Company does not have any material foreseeable losses on long-term contractsincluding derivative contracts therefore no provision is required.
iii) there has been delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company Refer Note 32 of the financialstatements.
2. As required by the Companies (Auditor's Report) Order 2016 ("the order) issuedby the Central Government in terms of Section 143(11) of the Act we give in the"Annexure "B" a statement on the matters specified in paragraphs 3 and 4 ofthe order.
FOR GURPREET KAUR & ASSOCIATES
Place : RAJPURA
Dated : 26/06/2020
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date).
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act").
We have audited the internal financial controls over financial reporting of MUKAT PIPESLIMITED ("the Company") as of March 312020 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on 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 FinancialReporting" issued 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 respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal financial Controls overfinancial reporting (the Guidance Note) issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143 (10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 was 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 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 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 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 over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 312020 based on the criteria forinternal financial control over financial reporting 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 GURPREET KAUR & ASSOCIATES
Place : RAJPURA
Dated : 26/06/2020
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in paragraph 2 under Report on other Legal and RegulatoryRequirements section of our Report to the members of Mukat Pipes Limited on the financialstatements for the year ended 31 March 2020 we report that:
(i) In respect of the Company's Fixed Assets.
The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a program of verification of fixed assets to cover all the items ina phased manner which in our opinion is reasonable having regard to the size of thecompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the copies of registered sale deeds provided to uswe report that the title deeds comprising the immovable properties of land (freehold)and buildings are held in the name of the Company.
(ii) As explained to us the inventories were physically verified during the .year bythe management at reasonable intervals and no material discrepancies were noticed onphysical verification.
(iii) According to the information and explanations given to us the Company has notgranted any unsecured loan during the year.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans and investments made.
(v) As informed the company has not accepted deposits during the year. .
(vi) The maintenance of cost records has been specified by the Central Government undersection 148 (1) of the Companies Act 2013 but since the Turnover of the company is belowthe specified limit cost records has not been maintained in the prescribed format.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax Cess Goods and Service Tax and other materialstatutory dues applicable to it to with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income- tax Excise Duty Value Added Tax Goods and Service Tax cessand other material statutory dues in arrears as at March 312020 for a period of more thansix months from the date they became payable.
(c) Details of dues of Income-tax Service Tax and Excise Duty which have not beendeposited as on March 312020 on account of disputes are given below:
|Name of the Statute ||Nature of the dues ||Forum where pending ||Total Amount involved (Rs. Lacs) ||Amount paid under protest (Rs. Lacs) ||Period to which the amount relates |
|Central Excise ||Excise duty Penalty and Interest ||CESTAT ||77.64 ||18.67 ||Earlier Years |
|Income Tax ||Income Tax Penalty Interest ||Income Tax Authorities ||965.15 ||- ||A.Y. 2012-2013 |
|Income Tax ||Income Tax Penalty Interest & TDS ||Income Tax Authorities ||119.24 ||- ||Earlier Years |
|Income Tax ||Income Tax Penalty Interest & TDS ||Income Tax Authorities ||1.53 ||- ||Earlier Years |
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of dues to financial institutions banksand government and dues to debenture holder.
(ix) The Company has not raised moneys by way of initial public offer or further publicoffer during the year.
(x) To the best of our knowledge and according to the 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 us theCompany has paid/provided managerial remuneration in accordance with the terms ofappointment approved by the Board of Directors and in A.G.M.
(xii) The Company is not a Nidhi Company and hence reporting under clause XII is notapplicable.
(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards. According to the information and explanations given tous. The company in order to implement the BIFR sanctioned scheme has leased out the excessland and building to Mukat Educational Trust related party. As informed the terms of leaseare not prejudicial to the interest of the company.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(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 transactions with itsdirectors or persons connected with them and hence provisions of section 192 of theCompanies Act 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
FOR GURPREET KAUR & ASSOCIATES
Firm Registration No. 015358N
Place : RAJPURA
Dated : 26/06/2020.