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Texmo Pipes & Products Ltd.

BSE: 533164 Sector: Industrials
NSE: TEXMOPIPES ISIN Code: INE141K01013
BSE 00:00 | 15 Jun 49.70 2.35
(4.96%)
OPEN

47.35

HIGH

49.70

LOW

46.40

NSE 00:00 | 15 Jun 49.70 2.35
(4.96%)
OPEN

48.00

HIGH

49.70

LOW

47.65

OPEN 47.35
PREVIOUS CLOSE 47.35
VOLUME 71642
52-Week high 65.85
52-Week low 10.60
P/E 18.83
Mkt Cap.(Rs cr) 145
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 47.35
CLOSE 47.35
VOLUME 71642
52-Week high 65.85
52-Week low 10.60
P/E 18.83
Mkt Cap.(Rs cr) 145
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company auditors report

To the Members of

TEXMO PIPES AND PRODUCTS LIMITED

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone Financial Statements of Texmo Pipes AndProducts Limited (“the Company') which comprises the Standalone Balance Sheet as atMarch 31st 2020 the Standalone Statement of Profit and Loss (including OtherComprehensive Income) the Standalone Statement of Changes in Equity and the StandaloneStatement of Cash Flows for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as the ‘standalone financial statements').

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 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31st 2020 and its Profit and Other ComprehensiveIncome Changes in Equity 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 those SAs arefurther described in the Auditors 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 Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these 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 on thestandalone financial statements.

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. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Description of Key Audit Matters

Key Audit Matters How was the matter addressed in our audit
1 Uncertain tax positions - Direct and Indirect Taxes
The Company has uncertain tax matters pending litigations under direct tax and various indirect tax laws. The litigation involves significant judgement to determine the possible outcome based on which accounting treatment is given to the disputed amount. Our audit procedures included among others the following:
• Obtained details of uncertain tax position and gained understanding thereof;
• 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 37 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 37 on “Provisions Contingent Liabilities and Contingent Assets'.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the Standalone Financial Statements and our Auditors'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 in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 including other comprehensive income changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial 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 the 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 unlessthe management 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 for overseeing the Company's financialreporting process.

Auditors' Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements 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 can arise from fraud or error and are considered material ifindividually 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 professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 auditors' 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 ourauditors' report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings 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 statementsfor the financial year ended March 31st 2020 and are therefore the key auditmatters. We describe these matters in our auditors' report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

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 ofthe Act we give in the “Annexure-A” a statement on the matters specified inparagraphs 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 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 Standalone Balance Sheet the Standalone Statement of Profit and Loss(including Other Comprehensive Income) the Standalone Statement of Changes in Equity andthe Standalone Statement of Cash Flows dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31st 2020 taken on record by the Board of Directors none of the directors isdisqualified as on March 31st 2020 from being appointed as a director in terms of Section164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlsover financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in “Annexure-B”;

(g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditors' 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 has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note - 37 to the standalonefinancial statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which 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.

For Anil Kamal Garg & Company
Chartered Accountants
ICAI Firm Registration No. : 004186C
Place : Indore
Dated : July 24th 2020 Devendra Bansal
Partner
Membership No. : 078057
UDIN: 20078057AAAAAT2736

ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements ' section of the Independent Auditors' Report of even date to the membersof Texmo Pipes And Products Limited on the standalone financial statements as of and forthe year ended March 31st 2020 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets.

(b) The Company has a regular programme for physical verification in a phased periodicmanner which in our opinion is reasonable having regards to the size of the Company andthe nature of its assets. According to the information and explanations given to us nomaterial discrepancies were noticed on such physical verification.

(c) According to the information and explanations given to us by the management and onthe basis of our examination of the records of the Company the title deeds of immovableproperties recorded in the books of accounts of the Company are held in the name of theCompany. In respect of Immovable Property taken on lease and recognized as Right-of-useAssets in the financial statements the lease agreements are in the name of the company.

(ii) The inventory has been physically verified by the Management during the year. Inour opinion the frequency of such verification is reasonable and adequate in relation tothe size of the Company and the nature of its business. The discrepancies noticed onphysical verification of inventory as compared to books and records were not material andhave 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. a company in whichthe relatives of Directors are Directors covered in the register maintained under section189 of the Companies Act 2013. In our opinion the terms and conditions of such loan arenot prejudicial to the Company's interest.

(b) The loan has been granted without stipulating any schedule of repayment ofprincipal and interest. As the loan is repayable on Demand along with interest thequestion as to regularity of the repayment or interest receipts does not arise.

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

(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 Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public within the meaning of Sections 73 to 76 of the Actand the relevant rules framed there under.

(vi) Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company in our opinion the Company is generallyregular in depositing the undisputed statutory dues including provident fund employees'state insurance income tax duty of customs goods and services taxes cess and othermaterial statutory dues applicable to it with the appropriate authorities.

According to the information and explanations given to us no undisputed amount payablein respect of aforesaid dues were in arrears as on March 31st 2020 for aperiod more than six months from the date they became payable except Excise Dutyamounting to Rs.158.56 Lakhs which is payable due to reversal of CENVAT Credit on theLost Goods. It has been informed to us that the outstanding amount ofRs. 158.65 Lakhs willbe 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 there are no materialdues of income tax sales tax service tax duty of customs goods and services taxexcise duty entry tax and cess which have not been deposited with the appropriateauthorities on account of any dispute except for the following:

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
62.89 29.87 2010-11 M.P. Commercial Tax Appellate Board
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
18.53 - 2010-11 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 the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingto any financial institution or bank. There is no borrowing from the Government and thereare no debenture holders.

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

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in dia andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by theManagement.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the managerial remuneration has beenpaid/provided in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usall transactions with related parties are in compliance with section 177 and 188 of theAct and the details as required by the applicable accounting standards have beendisclosed in the standalone financial statements.

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

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.

For Anil Kamal Garg & Company
Chartered Accountants
ICAI FirmReg. No. : 004186C
Place : Indore
Dated : July 24th 2020 Devendra Bansal
Partner
Membership No. : 078057
UDIN: 20078057AAAAAT2736

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act 2013 (“the Act”)

Referred to in Paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of the Independent Auditors' Report of even date to the membersof Texmo Pipes and Products Limited on the standalone financial statements as of and forthe year ended March 31st 2020 we report that:

We have audited the internal financial controls over financial reporting of TEXMO PIPESAND PRODUCTS LIMITED (“the Company') as of 31st March 2020 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). 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 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 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 with reference to these standalone financial statements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

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 31st March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Anil Kamal Garg & Company
Chartered Accountants
ICAI Firm Registration No. : 004186C
Place : Indore
Dated : July 24th 2020 Devendra Bansal
Partner
Membership No. : 078057
UDIN: 20078057AAAAAT2736