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Texmo Pipes & Products Ltd.

BSE: 533164 Sector: Industrials
NSE: TEXMOPIPES ISIN Code: INE141K01013
BSE 10:46 | 10 Aug 65.80 0.60
(0.92%)
OPEN

67.90

HIGH

67.90

LOW

65.25

NSE 10:34 | 10 Aug 65.60 0.40
(0.61%)
OPEN

66.55

HIGH

66.90

LOW

65.25

OPEN 67.90
PREVIOUS CLOSE 65.20
VOLUME 11893
52-Week high 100.90
52-Week low 43.50
P/E 13.16
Mkt Cap.(Rs cr) 192
Buy Price 65.80
Buy Qty 3364.00
Sell Price 65.90
Sell Qty 20.00
OPEN 67.90
CLOSE 65.20
VOLUME 11893
52-Week high 100.90
52-Week low 43.50
P/E 13.16
Mkt Cap.(Rs cr) 192
Buy Price 65.80
Buy Qty 3364.00
Sell Price 65.90
Sell Qty 20.00

Texmo Pipes & Products Ltd. (TEXMOPIPES) - Auditors Report

Company auditors report

To

The Members

TEXMO PIPES AND PRODUCTS LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone Financial Statements of TexmoPipes And Products Limited ("the Company") which comprises the StandaloneBalance Sheet as at March 31st 2021 the Standalone Statement of Profit and Loss(including Other Comprehensive Income) the Standalone Statement of Changes in Equity andthe Standalone Statement of Cash Flows for the year then ended and notes to thestandalone financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as the ‘standalonefinancial statements').

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 accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31st2021 and its Profit and Other Comprehensive Income Changes in Equity and its Cash Flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs 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 together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion on the standalonefinancial statements.

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.

Description of Key Audit Matters
S.No. Key Audit Matters How was the matter addressed in our audit
1 Uncertain tax positions - Direct and Indirect Taxes Our audit procedures included among others the following:
The Company has uncertain tax matters pending litigations under direct tax and various indirect tax laws. • Obtained details of uncertain tax position and gained understanding thereof;
The litigation involves significant judgement to determine the possible outcome based on which accounting treatment is given to the disputed amount. • Obtained details of tax assessments and also demands raised;
Given the magnitude of potential outflow of economic resources and uncertainty of potential outcome uncertain tax positions are considered to be key audit matters. • Along with our internal tax experts read and analysed relevant communication with the authorities;
[Refer Note 36 to the standalone financial statements.] • Evaluated advice obtained by the management from legal consultants on possible outcome of the litigation;
• Discussed with senior management and evaluated management's assumptions regarding provisions made or reflected as contingent liabilities;
• Assessed whether the disclosures for uncertain tax positions are in accordance with the requirements of Ind AS 36 on "Provisions Contingent Liabilities and Contingent Assets".

Information Other than the Standalone Financial Statements andAuditors' Report Thereon

The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the Standalone Financial Statements andour Auditors' Report thereon.

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 in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's and Board of Directors' Responsibility for theStandalone Financial Statements

The Company's Management and Board of Directors are responsiblefor the matters stated in section 134(5) of the Act with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the state ofaffairs profit/ loss and other comprehensive income changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing 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 statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the Standalone financial statements the Management andBoard of Directors are responsible for assessing the Company's ability to continue asa going concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.

The Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditors' Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to 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 materialif individually or in the aggregate they could reasonably be expected to influence theeconomic decisions 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:

• 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.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to Standalonefinancial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures in the Standalone financialstatements made by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board ofDirectors use of the going concern basis of accounting and based on the audit evidenceobtained whether a material uncertainty exists related to events or conditions that maycast significant doubt on the Company's ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the Standalone financial statementsor if such disclosures are inadequate to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone financial statements including the disclosures and whether the Standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 auditors' 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 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 of the Act we give in the "Annexure-A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. 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 purposes of ouraudit;

(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 Standalone Balance Sheet the Standalone Statement of Profitand Loss (including Other Comprehensive Income) the Standalone Statement of Changes inEquity and the Standalone Statement of Cash Flows dealt with by this Report are inagreement with the books of account;

(d) In our opinion the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from thedirectors as on March 31st 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31st 2021 from being appointed as a director interms of Section 164 (2) of the Act;

(Rs) With respect to the adequacy of the internal financial controlswith reference to Standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate report in "Annexure-B";

(g) In our opinion the managerial remuneration for the year endedMarch 31 2021 has been paid/provided by the Company to its directors in accordance withthe provisions of section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

(i) The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements - Refer Note - 36 to thestandalone financial statements.

(ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.

ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 1 under ‘Report on Other Legal andRegulatory Requirements ' section of the Independent Auditors' Report of evendate to the members of Texmo Pipes And Products Limited on the standalone financialstatements as of and for the year ended March 31st 2021 we report that:

(i) (a) The Company has maintained proper records showing fullparticulars including

quantitative details and situation of Fixed Assets.

(b) The Company has a regular programme for physical verification in aphased periodic manner which in our opinion is reasonable having regards to the size ofthe Company and the nature of its assets. According to the information and explanationsgiven to us no material discrepancies were noticed on such physical verification.

(c) According to the information and explanations given to us by themanagement and on the basis of our examination of the records of the Company the titledeeds of immovable properties recorded in the books of accounts of the Company are held inthe name of the Company. In respect of Immovable Property taken on lease the leaseagreements are in the name of the company.

(ii) The inventory has been physically verified by the Managementduring the year. In our opinion the frequency of such verification is reasonable andadequate in relation to the size of the Company and the nature of its business. Thediscrepancies noticed on physical verification of inventory as compared to books andrecords were not material and have been appropriately dealt with in the books of accounts.

(iii) In respect of the granting of loans by the Company:

(a) The Company has granted unsecured loan to only one company i.e. acompany in which the relatives of Directors are Directors covered in the registermaintained under section 189 of the Companies Act 2013. In our opinion the terms andconditions of such loan are not prejudicial to the Company's interest.

(b) The loan has been granted without stipulating any schedule ofrepayment of principal and interest. As the loan is repayable on Demand along withinterest the question as to regularity of the repayment or interest receipts does notarise.

(c) There being no stipulated schedule of repayment and the Companyhaving not demanded the repayment of loan the loan so granted has not become overdue.

(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 theAct in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) According to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 73 to76 of the Act and the relevant rules framed there under.

(vi) Pursuant to the rules made by the Central Government of India theCompany is required to maintain cost records as specified under Section 148(1) of the Actin respect of its products. We have broadly reviewed the same and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.

(vii) (a) According to the information and explanations given to us andon the basis of examination of the records of the Company in our opinion the Company isgenerally regular in depositing the undisputed statutory dues including provident fundemployees' state insurance income tax duty of customs goods and services taxescess and other material statutory dues applicable to it with the appropriate authorities.

According to the information and explanations given to us noundisputed amount payable in respect of aforesaid dues were in arrears as on March 31st2021 for a period more than six months from the date they became payable except ExciseDuty amounting to Rs. 158.56 Lakhs which is payable due to reversal of CENVAT Credit onthe Lost Goods. It has been informed to us that the outstanding amount of Rs. 158.56 Lakhswill be paid by the company as and when the insurance claim against the goods lost will bereceived by it.

(b) According to the information and explanations given to us thereare no material dues of income tax sales tax service tax duty of customs goods andservices tax excise duty entry tax and cess which have not been deposited with theappropriate authorities on account of any dispute except for the following:

[Rs in Lakhs]

Name of the Statute Nature of Dues Amount Amount Deposited Period to which the amount relates (F.Y.) Forum where the dispute is pending
Income Tax Act 1961 Income Tax 32.10 32.09 2009-10 Income Tax Appellate Tribunal Indore
42.75 42.75 2010-11 Income Tax Appellate Tribunal Indore
29.90 6.00 2010-11 Commissioner of Income Tax Appeals Indore
151.71 28.00 2011-12 Commissioner of Income Tax Appeals Indore
60.31 12.10 2012-13 Commissioner of Income Tax Appeals Indore
154.51 31.00 2013-14 Commissioner of Income Tax Appeals Indore
198.18 40.00 2015-16 Commissioner of Income Tax Appeals Indore
655.23 133.65 2016-17 Commissioner of Income Tax Appeals Indore
Madhya Pradesh Value Added Tax 2002 Value Added Tax 119.78 5.99 2007-08 Hon'ble High Court of Madhya Pradesh Jabalpur
6.70 - 2011-12 M.P. Commercial Tax Appellate Board
17.86 7.11 2014-15 M.P. Commercial Tax Appellate Board
24.25 6.06 2010-11 Additional Commissioner of Commercial Tax Indore
13.14 3.29 2015-16 Additional Commissioner of Commercial Tax Indore
39.94 9.99 2016-17 Additional Commissioner of Commercial Tax Indore
Central Sales Tax Act 1956 Central Sales Tax 47.32 2.37 2007-08 Hon'ble High Court of Madhya Pradesh Jabalpur
Entry Tax Act 1976 Entry Tax 38.23 1.91 2007-08 Hon'ble High Court of Madhya Pradesh Jabalpur
21.55 8.62 2008-09 M.P. Commercial Tax Appellate Board
17.46 6.99 2014-15 M.P. Commercial Tax Appellate Board

(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 borrowing to any financial institution or bank. There is no borrowing from theGovernment and there are no debenture holders.

(ix) In our opinion and according to the information and explanationsgiven to us the Company had not raised money by way of initial public offer or furtherpublic offer (including debt instruments) during the year and the term loans taken by theCompany have been applied for the purpose for which they were raised.

(x) During the course of our examination of the books and records ofthe Company carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of fraud by the Company or any fraud on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any suchinstance by the Management.

(xi) According to the information and explanations given to us andbased on our examination of the records of the Company the managerial remuneration hasbeen paid/provided in accordance with the requisite approvals mandated by the provisionsof Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company. Accordingly the paragraph 3(xii) of theOrder is not applicable to the Company.

(xiii) In our opinion and according to the information and explanationsgiven to us all transactions with related parties are in compliance with section 177 and188 of the Act and the details as required by the applicable accounting standards havebeen disclosed in the standalone financial statements.

(xiv) According to the information and explanations given to us duringthe year the Company has made preferential allotment of equity shares. We report thatwhile making preferential allotment the requirements of Section 42 of the Companies Act2013 as applicable have been complied with and the amounts raised through preferentialallotment have been used by the Company during the year for the purposes for which thefunds were raised.

(xv) According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith them during the year. Accordingly paragraph 3(xv) of the Order is not applicable tothe Company.

(xvi) In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.

ANNEXURE-B TO THE INDEPENDENT AUDITORS' REPORT Report on theInternal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the

Companies Act 2013 ("the Act")

Referred to in Paragraph 2(Rs) under ‘Report on Other Legal andRegulatory Requirements ' section of the Independent Auditors' Report of evendate to the members of Texmo Pipes and Products Limited on the standalone financialstatements as of and for the year ended March 31st 2021 we report that:

We have audited the internal financial controls over financialreporting of TEXMO PIPES AND PRODUCTS LIMITED ("the Company") as of 31stMarch 2021 in conjunction with our audit of the standalone financial statements of theCompany for the year 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 Controls overFinancial Reporting issued by the Institute of Chartered Accountants of 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 offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 judgment 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 internalfinancial controls system over financial reporting with reference to these standalonefinancial statements.

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 financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 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.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Anil Kamal Garg & Company
Chartered Accountants
ICAI Firm Registration No. : 004186C
Devendra Bansal
Partner
Place : Indore Membership No. : 078057
Dated : June 25th 2021 ICAI UDIN: 21078057AAAAEW1270

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