TO THE MEMBERS OF MUKAT PIPES LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements ofMukat Pipes Limited ("The Company") which comprise the Balance Sheet as atMarch 31 2021 the statement of Profit and Loss the statement of changes in Equity andthe Cash Flow Statement for the year then ended and a summary of the significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind As") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021and its loss the changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statement inaccordance with the Standards on Auditing (SAs) specified under Section 143(10) of theCompanies Act 2013 ("the Act"). Our responsibilities under those standards arefurther described in the Auditor's Responsibilities for the Audit of the standalonefinancial 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 (ICAI) together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules madethereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidenceobtained by us is sufficient and appropriate to provide a basis for our audit opinion onthe standalone financial statement.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate 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 Tax liabilities aggregating to Rs. 1164.18 Lacs. This is a Key audit matter sinceit will adversely effect the current ratio.
How our audit addressed the key audit matter
a) Discussed the matter with the management and obtained anunderstanding of the matter.
b) The company has preferred appeals against the outstanding demand andthey have been advised by their counsel that the demands will be dropped.
As a result of the above audit procedure the Managements assessment ofnot providing was considered to be reasonable.
2. Description of Key Audit Matter
The company has yet to transfer Rs. 11.41 Lac on account of unpaiddividend to Investor Education and Protection Fund.
How our audit addressed the key audit matter
a) Discussed the matter with the management and obtained anunderstanding of the matter.
b) The company does not have record of share holders to whom the unpaiddividend amount belongs to. The company has several times approached Investor EducationProtection Fund (IEPF) through emails to know the procedure to transfer the above saidunpaid dividend amount to IEPF in the absence of names of share holders and otherconcerned records needed in the matter. We have not received any response from the IEPF.The company will pursue the matter with the IEPF to expedite the matter.
As a result of the above audit procedure the Managements plea of notremitting the amount be considered appropriate.
Information other than the Standalone Financial Statements andAuditor's Report thereon
The Company's Board of Directors is responsible for thepreparation of other information. The other information comprises the information includedin the Management Discussion and Analysis Board's Report including annexures toBoard's Report Report on Corporate Governance and business responsibility reportbut does not include the standalone financial statements and our auditor's reportthereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("The Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance changes in equity & cash flows of theCompany in accordance with the accounting principles generally accepted in India includingThe Indian Accounting Standard specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and 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 standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors are alsoresponsible for overseeing the Company's financial reporting process.
Auditor's Responsibility for the Audit of the Standalone FinancialStatements.
Our objectives are to obtain reasonable assurance about whether thestandalone financial statement as a whole are free from material misstatement whether dueto fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decision of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
a) Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
b) Obtain an understanding of internal financial controls relevant tothe audit in order to 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 onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
c) Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by the management.
d) Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as going concern.
e) Evaluate the overall presentation structure and content of thestandalone financial statement including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate make it probable that the economicdecisions of a reasonably knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work and (ii) to evaluatethe effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit.
(b) In our opinion proper books of account as required by law havebeen kept by the company so far as it appears from our examination of those books.
(c) The Balance Sheet the statement of Profit and loss statement ofchanges in equity and the cash flow statement dealt with by this Report are in agreementwith the books of account.
(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards "Ind AS" prescribed under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 (as amended).
(e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the Board of Directors none of thedirector is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the company and the operating effectiveness of such controlsrefer to our separate report in "Annexure "A". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the company'sinternal financial controls over financial reportings.
(g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us.
i) the Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements Refer Note 24 to the financialstatements. ii) the Company does not have any material foreseeable losses on long-termcontracts including derivative contracts therefore no provision is required. iii) therehas been delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company Refer Note 32 of the financial statements.
2. As required by the Companies (Auditor's Report) Order 2016("the order) issued by the Central Government of India in terms of Section 143(11) ofthe Act we give in the "Annexure "B" a statement on the matters specifiedin paragraphs 3 and 4 of the order to the extent applicable.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date).
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Subsection 3 of Section 143 of the Companies Act 2013 ("theAct").
We have audited the internal financial controls over financialreporting of MUKAT PIPES LIMITED ("the Company") as of March 31 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the "Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting" issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to respective company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting of the company based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal financialControls over financial reporting (the Guidance Note) issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143 (10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting with reference to these standalone financialstatements.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us 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 with reference toStandalone Financial Statement based on the criteria for internal financial control overfinancial reporting established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
The Annexure referred to in paragraph 2 under Report on other Legal andRegulatory Requirements section of our Report to the members of Mukat Pipes Limited on thefinancial statements for the year ended 31 March 2021 we report that:
(i) In respect of the Company's Fixed Assets.
The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) The Company has a program of verification of fixed assets to coverall the items in a phased manner which in our opinion is reasonable having regard to thesize of the company and the nature of its assets. Pursuant to the program certain fixedassets were physically verified by the management during the year. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.
(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the copies of registered sale deedsprovided to us we report that the title deeds comprising the immovable properties ofland (freehold) and buildings are held in the name of the Company.
(ii) As explained to us the inventories were physically verifiedduring the year by the management at reasonable intervals and no material discrepancieswere noticed on physical verification.
(iii) According to the information and explanations given to us theCompany has not granted any unsecured loan during the year.
(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theCompanies Act 2013 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 CentralGovernment under section 148 (1) of the Companies Act 2013 but since the Turnover of thecompany is below the specified limit cost records has not been maintained in theprescribed format.
(vii) According to the information and explanations given to us inrespect of statutory dues:
(a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income-tax SalesTax Service Tax Customs Duty Excise Duty Value Added Tax Cess Goods and Service Taxand other material statutory dues applicable to it to with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income- tax Excise Duty Value Added Tax Goods andService Tax cess and other material statutory dues in arrears as at March 31 2021 for aperiod of more than six months from the date they became payable.
(c) Details of dues of Income-tax Service Tax and Excise Duty whichhave not been deposited as on March 31 2021 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 ||CESTAT ||77.64 ||18.67 ||Earlier Years |
|Income Tax ||Income Tax ||Income Tax ||965.15 ||- ||A.Y. |
| || ||Authorities || ||- ||2012-2013 |
|Income Tax ||Income Tax ||Income Tax ||119.71 ||- ||Earlier Years |
| || ||Authorities || ||- || |
|Income Tax ||Income Tax & TDS ||Income Tax Authorities ||1.68 ||- ||Earlier Years |
| || || || ||- || |
(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in the repayment of dues to financialinstitutions banks and government and dues to debenture holder.
(ix) The Company has not raised moneys by way of initial public offeror further public offer during the year.
(x) To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company and no material fraud on the Company byits officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanationsgiven to us the Company has paid/provided managerial remuneration in accordance with theterms of appointment approved by the Board of Directors and in A.G.M.
(xii) The Company is not a Nidhi Company and hence reporting underclause XII is not applicable.
(xiii) In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the financial statements etc. asrequired by the applicable accounting standards. The company in order to implement theBIFR sanctioned scheme has leased out the excess land and building to Mukat EducationalTrust related party. As informed the terms of lease are not prejudicial to the interest ofthe company.
(xiv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.
(xv) In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non- cash transactionswith its directors or persons connected with them and hence provisions of section 192 ofthe Companies Act 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
|FOR GURPREET KAUR & ASSOCIATES |
|CHARTERED ACCOUNTANTS |
|Firm Registration No. 015358N |
|GURPREET KAUR |
|M.No. 095722 |
|Place : RAJPURA |
|Dated : 28/06/2021 |