TO THE MEMBERS OF
CHEMTECH INDUSTRIAL VALVES LIMITED Report on the Ind AS financial statements
Opinion
We have audited the accompanying Ind AS financial statements of CHEMTECH INDUSTRIAL
VALVES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st
March, 2023, the Statement of Profit and Loss, the Cash Flow Statement, the Statement of
Changes in Equity and notes to financial statements including a summary of the significant
accounting policies and other explanatory information for the year then ended.
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid financial statements give the information required by the
Companies Act, 2013("the Act") in the manner so required and give a true and
fair view in conformity with the accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2023, and its Profit, 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) specified
under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards are further described in the Auditors Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Companies Act, 2013 and the Rules
thereunder, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
This section of our auditors report is intended to describe the matters selected from
those communicated with those charged with governance that, in our professional judgment,
were of most significance in our audit of the financial statements.
a) Revenue recognition (IND AS 115)
The application of the new standard on recognition of revenue involves significant
judgement and estimates made by the management which includes identification of
performance obligations contained in contracts, determination of the most appropriate
method for recognition of revenue relating to the identified performance obligations,
assessment of transaction price and allocation of the assessed price to the individual
performance obligations. Audit procedure involved review of the companys IND AS 115
implementation process and key judgments made by management, evaluation of customer
contracts in light of IND AS 115 on sample basis and comparison of the same with
managements evaluation and assessment of design and operating effectiveness of internal
controls relating to revenue recognition. Based on the procedures performed, it is
concluded that managements judgments with respect to recognition and measurement of
revenue in light of IND AS 115 is appropriate.
Emphasis of Matter
Attention is drawn to Contingent Liability shown as a foot note to the Annual Financial
Results, CKP banks license is withdrawn by RBI and RBI has declared that Rs. 500000/-
will be confirm given to depositors, which has been received by the company and adjusted
against the current account balance that was held with the bank, the remaining amount will
be given to deposit holders and shareholders if reserves are available. It is still
recorded as an asset in financials, which will be reversed as and when confirmation comes
from RBI about non-payment to depositors and shareholders.
The company has received a show cause notice from DGGI amounting to Rs. 3,94,48,606/-
along with Interest and Penalties. However, the Management is contesting the same. Also,
the company has already made a Pre-Deposit of Rs. 3,02,72,356/- Under Protest with GST
Department which is shown on asset side under ‘Note no. 12 Other Current Assets of
Notes to accounts of Balance Sheet. Also, the above mentioned fact is shown in Contingent
liability in notes to account in ‘Note no 34 (vi) and 34.3 of Notes to accounts of
Balance Sheet. We do not qualify our opinion for the same.
Responsibility of Management for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these (Standalone) Ind AS financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes maintenance of adequate accounting records
in accordance with the provisions of the Act for safeguarding the assets of the Company
and for preventing and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and presentation of
the Ind AS financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors are also responsible for overseeing the companys financial
reporting process
Auditors Responsibility
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional Skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness managements use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the standalone financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditors report. However, future events or conditions may cause the Company to cease to
continue as a going concern.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order, 2020 ("the Order"), as
amended, 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 the matters specified
in paragraphs 3 and 4 of the Order.
A) As required by Section 143 (3 the Act,) of we report that:
(a) We have sought and obtained all the information and explanations which to the best
of 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 the
Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account.
(d)In our opinion, the aforesaid Ind AS financial statements comply with the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st
March, 2023 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2023 from being appointed as a director in terms of Section
164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure B".
(g)With respect to the other matters to be included in the Auditors 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 the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial
position in its Ind AS financial statements - refer Notes 34.1 and 34.3 to the Ind AS
financial statements.
ii. The Company has long term contract but, does not have any derivative contracts for
which there were any material foreseeable losses.
iii.There were no amounts which were required to be transfer, to the Investor Education
and Protection Fund by the Company during the year ended 31.03.2023
B) With respect to the matter to be included in the Auditors Report under Section
197(16) of the Act:
In our opinion and according to the information and explanations given to us, the
remuneration paid by the Company to its directors during the current year is in accordance
with the provisions of Section 197 of the Act. The remuneration paid to any director is
not in excess of the limit laid down under Section 197 of the Act. The Ministry of
Corporate Affairs has not prescribed other details under Section 197(16) which are
required to be commented upon by us.
For Raju & Prasad Chartered Accountants |
Place: Mumbai |
|
Date: 05.05.2023 |
| FRN No. : 003475S |
|
| Sd/- |
|
| Avinash T Jain |
|
| Partner |
|
| Membership No.:-041689 |
|
| UDIN: 23041689BGVQEJ3896 |
|
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
Referred to in Paragraph 1 under the heading "Report on other legal and regulatory
requirements" of our Independent Auditors Report of even date to the members of CHEMTECH
INDUSTRIAL VALVES LIMITED On the Ind AS financial statements as of and for the year
ended 31.03.2023,
On the basis of such checks as we considered appropriate and according to the
information and explanations given to us during the course of our audit, we report that
(i) (a)The Company has maintained proper records showing full particulars, including
quantitative details and situation of Property, Plant & Equipment.
(b) As explained to us Property, Plant & Equipment have been physically verified by
the management during the year and no material discrepancies were noticed on such
verification.
(c) According to information and explanations given to us and on the basis of our
examination of records the title deeds of immovable properties are held in the name of the
company.
(d)The Company has not revalued any of its PPE (including right-of-use assets) and
intangible assets during the year and hence reporting under clause 3(i)(d) of the Order is
not applicable to the Company.
(e)In our opinion and according to the information and explanations given to us and on
the basis of our examination of the records, neither any proceedings have been initiated
during the year nor are pending as at March 31, 2022 for holding any Benami property under
the Benami Transactions (Prohibition) Act, 1988, as amended, and rules made thereunder and
hence reporting under clause 3(i)(e) of the Order is not applicable to the Company.
(ii) A) The inventories have been physically verified by the management at reasonable
intervals during the year, except for goods in transit and those lying with third parties.
The procedures of physical verification of the inventories followed by the management are
reasonable and adequate in relation to the size of the Company and nature of its
business. As per the information and explanations given to us and on the basis of our
examination of the records, no discrepancies of 10% or more in the aggregate for each
class of inventory were noticed on physical verification of inventories as compared to
book records.
B) According to the information and explanations given to us and on the basis of our
examination of the records, the Company has not been sanctioned Cash Credit Facility on
working capital limit in excess of Rs 5 crores, in aggregate, during the year.
(iii) In respect of Investment in, provided any guarantee or security or granted any
loans or advances in the nature of loans, secured or unsecured, to the companies, firms
Limited Liability Partnership or any other parties:-
A. The Company has not provided any loans or advances in the nature of loans or
guarantee or provided security to any other entity during the year and hence reporting
under clause 3(iii)(a) is not applicable to the Company.
B. According to the information provided to us, investments made are in the Ordinary
Course of Business and in our opinion, prima facie, not prejudicial to the companys
interest.
C. The Company has not granted any Loans or Advances in the nature of loans during the
year and hence reporting under clauses 3(iii) (c), (d), (e) and (f) of the Order is not
applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us and
on the basis of our examination of the records, the Company has complied with the
provisions of section 185 and 186 of the Act, to the extent applicable with respect to the
investments made during the year. The Company has not provided any loans, guarantee and
security during the year.
(v) In our opinion and according to the information and explanations given to us, no
deposits or amounts which are deemed to be deposits within the meaning of Section 73 to 76
or any other relevant provisions of the Act and the Companies (Acceptance of Deposits)
Rules, 2014 have been accepted by the Company and hence reporting under clause 3(v) of the
Order is not applicable to the company.
(vi) We have broadly reviewed the accounts and records maintained by the Company in
respect of products where, pursuant to the rules made by the Central Government of India,
the maintenance of cost records has been prescribed under sub-section (1) of section 148
of the Act, and are of the Opinion, that prima facie, the prescribed accounts and records
have been made and maintained. We have not, however, made a detailed examination of the
same.
(vii) A) According to information and explanations given to us and on the basis of our
examination of the books of account, and records, the Company has been generally regular
in depositing undisputed statutory dues including Provident Fund, Employees State
Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value
added Tax, Goods and Service Tax, Cess and any other statutory dues with the appropriate
authorities. No undisputed amounts payable in respect of the aforesaid statutory dues were
outstanding as at the last day of the financial year for a period of more than six months
from the date they became payable.
(B) According to the information and explanation given to us, there are no dues of
income tax, sales tax, service tax, duty of customs, duty of excise, value added tax
outstanding on account of any dispute except as mentioned below:
Sr. No. Name of Statute |
Nature of Dues |
Forum where Dispute is pending |
Financial Year |
Amount in Rs. |
| 1 Central Sales tax |
CST |
Comm. of sales Tax |
2006-07 |
2,70,979 |
| 2 Central Sales tax |
CST |
Comm. of sales Tax |
2009-10 |
42,59,201 |
| 3 Income tax |
IT |
Income tax officer Directorate General |
2018-19 |
71,732 |
| 4 DGGI |
GST |
of GST Intelligence |
2022-23 |
3,94,48,606 |
(viii) According to the information and explanations given to us and on the basis of
our examination of the records, there were no transactions relating to previously
unrecorded income that have been surrendered or disclosed as income during the year in the
tax assessments under the Income Tax Act, 1961 (43 of 1961) and hence reporting under
clause 3(viii) of the Order is not applicable to the Company.
(ix) A) Based on our audit procedures and on the basis of information and explanations
given to us and on the basis of our examination of the records, we are of the opinion that
the Company has not taken loans or other borrowings and hence reporting under clause 3(ix)
of the Order is not applicable to the Company.
B) The Company has not been declared as willful defaulter by any bank or financial
institution or other lender.
C) In our opinion and according to the information and explanations given to us and on
the basis of our examination of the records, the Company has taken a term loan during the
year and the same is applied for the purpose for which loans were obtained.
D) On an overall examination of the standalone financial statements, in our opinion the
Company has not utilized funds raised on short term basis in the Current Year. Hence,
reporting under clause 3(ix)(c) of the order is not applicable to the company.
E) Based on our audit procedures and on the basis of information and explanations given
to us, the Company has not taken any funds from any entity or person on account of or to
meet the obligations of its subsidiaries, associates or joint venture and hence reporting
under clause 3(ix)(e) of the Order is not applicable to the Company.
F)Based on our audit procedures and on the basis of information and explanations given
to us, during the year the Company has not raised any funds on the pledge of securities
held in its subsidiaries, joint venture and associates and hence reporting under clause
3(ix)(f) of the Order is not applicable to the Company.
(x) (A) In our opinion and according to the information and explanations given to us,
the Company has not raised any money by way of Initial public offer or further public
offer (including debt instrument) during the year and hence reporting under clause 3(x)(a)
of the Order is not applicable to the Company.
(B) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not made any preferential
allotment, private placement of shares or fully or partly convertible debentures during
the year or in the recent past and hence reporting under clause 3(x)(b) of the Order is
not applicable to the Company.
(xi) (A) During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India and
according to the information and explanations given to us, we have neither come across any
instance of fraud by or on the Company by its officers or employees, noticed or reported
during the year, nor have we been informed of such case by the management.
(B) During the year, no report under sub section 12 of Section 143 of the Act has been
filed in Form ADT-4 as prescribed in Rule 13 of Companies (Audit and Auditors) Rules, 2014
with the Central Government.
C) Based on our audit procedure performed and according to the information and
explanations given to us, no whistle blower complaints were received by the Company during
the year and hence reporting under clause 3(xi)(c) of the Order is not applicable to the
Company.
(xii) In our opinion and according to the information and explanations given to us and
on the basis of our examination of the records, the Company is not a Nidhi Company and
hence reporting under clause 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our
examination of the records of the Company, all the transactions with related parties are
in compliance with Section 177 and 188 of the Act and all the details have been disclosed
in the standalone financial statements as required by the applicable Accounting Standard.
(xiv) All the reports of the Internal Auditors for the period under audit were
considered.
(xv) According to the information and explanations given to us, the Company has not
entered into any non-cash transactions prescribed under Section 192 of the Act with
directors or persons connected with them during the year.
(xvi) A) The Company is not required to be registered under Section 45-IA of the
Reserve Bank of India Act, 1934 and hence reporting under clause 3(xvi) (a), (b) and (c)
of the Order is not applicable to the Company.
B) In our opinion, there is no core investment company within the "Companies in
the Group" as defined in the Core Investment Companies (Reserve Bank) Directions,
2016 and hence reporting under clause 3(xvi)(d) of the Order is not applicable to the
Company.
(xvii) The Company has not incurred any cash losses during the financial year covered
by our audit and immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors of the Company during
the year and hence reporting under clause 3(xviii) of the Order is not applicable to the
Company.
(xix) According to the information and explanations given to us and on the basis of the
financial ratios, ageing and expected dates of realisation of financial assets and payment
of financial liabilities, other information accompanying the standalone financial
statements and our knowledge of the Board of Directors and management plans and based on
our examination of the evidence supporting the assumptions, nothing has come to our
attention, which causes us to believe that any material uncertainty exists as on the date
of the audit report indicating that the Company is not capable of meeting its liabilities
existing at the date of balance sheet as and when they fall due within a period of one
year from the balance sheet date. We, however, state that this is not an assurance as to
the future viability of the Company. We further state that our reporting is based on the
facts up to the date of the audit report and we neither give any guarantee nor any
assurance that all liabilities falling due within a period of one year from the balance
sheet date, will get discharged by the Company as and when they fall due.
(X) The second proviso to Sub Section (5) of Section 135 of the Companies Act, 2013 is
not applicable to the company. Hence reporting under clause 3(x) of the Order is not
applicable to the Company.
(XXI)Whether there have been any qualification or adverse remarks by the respective
auditors in the companies (Auditors Reports) order (CARO) reports of the companies
included in the consolidated financial statements Not Applicable
For Raju & Prasad Chartered Accountants |
Place : Mumbai |
|
Date: 05.05.2023 |
| FRN No. : 003475S |
|
| Sd/- |
|
| Avinash T Jain |
|
| Partner |
|
| Membership No.:-041689 |
|
| UDIN: 23041689BGVQEJ3896 |
|
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") of even date on the Standalone Ind AS
financial statements of CHEMTECH INDUSTRIAL VALVES LIMITED
Opinion
We have audited the internal financial controls over financial reporting of CHEMTECH
INDUSTRIAL VALVES LIMITED ("the Company") as of March 31, 2023 in
conjunction with our audit of the standalone Ind AS financial statements of the Company
for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India. These responsibilities include
the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of its business,
including adherence to companys policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under
the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with 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 be prescribed under section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of
India. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of Ind AS financial statements for external purposes in accordance with
generally accepted accounting principles. A companys internal financial control over
financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of Ind AS
financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with
authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the companys assets that could have a material effect on the Ind AS
financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate or for other
reasons.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2023, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
For Raju & Prasad Chartered Accountants |
Place: Mumbai |
|
Date: 05.05.2023 |
| FRN No. : 003475S |
|
| Sd/- |
|
| Avinash T Jain |
|
| Partner |
|
| Membership No.: 041689 |
|
| UDIN : 23041689BGVQEJ3896 |
|
+91-9892691696
