Crimson Metal Engineering Company Ltd Directors Report.

To the Members of M/s CRIMSON METAL ENGINEERING COMPANY LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of M/s CRIMSON METAL ENGINEERING COMPANY LIMITED ("the Company"), which comprise the balance sheet as at March 31st, 2020 and the statement of Profit and Loss (including other comprehensive income ) and the Cash flow statement and the statement of change in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the 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 financial statements that give a true and fair view of the financial position and financial performance including other comprehensive income, cash flows & change in the equity of the Company in accordance with the accounting principles generally accepted in India , including the Indian Accounting Standards prescribed 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 the 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143 (10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31st, 2020; and (b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date. (c) In the case of Cash flow statement for the year ended on that date. And changes in Equity for the year ended as on that day.

Report on Other Legal and Regulatory Requirements

1. As required by the companies (Auditors 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 the matters specified in the paragraph 3 and 4 of the order.

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 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 appears from our examination of those books

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement and statement of change in equity dealt with by this Report are in agreement with the books of account maintained for the purpose of preparations of this financial statement.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with relevant rule issued There under. e) On the basis of written representations received from the directors as on 31 March, 2020, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2020, 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 and

g) With respect to the other matters included in the Auditors 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 according to the explanations given to us.

(i) The Company has disclosed the impact of pending litigation on its financial position in its Ind AS financial statements (ii) The Company has made provision as required under the applicable law of Accounting Standard for material foreseeable losses if any on long term contracts including derivative contracts

(iii) There has been no delay in transferring amount, required to be transferred, to the investors education and protection Fund by the Company.

LAKHOTIA & REDDY
CHARTERED ACCOUNTANT
FIRM REG.No. 009331S
CA.M.M.LAKHOTIA PARTNER
M.No.208704
UDIN No. 20208704AAAABH2849
DATE : 31.07.2020
PLACE : Chennai

Annexure ‘Ato the Auditors Report

The annexure referred to in paragraph 1 of our report of even date to the members of Crimson Metal Engineering company Limited on the accounts of the Company for the year ended 31march 2020

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit we report that

(1) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The company has a regular programme of physical verification of its fixed assets are verified in phased manner over a period of every year. In accordance with this programme, certain fixed assets verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deed & immovable properties are heldin the name of the company.

(2) (a) As explained to us physical Verification of the inventory was carried out by the management at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us the procedure of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business. The company is generally maintaining proper records of its inventories. No material Discrepancy was noticed on physical verification of Stocks by the management of the company as compared to the book recaords

(3) According to the information and explanation given to us the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act.2013

(4))In our opinion and according to the information and explanations given to us , the company has not provided any loans and Investments ,Guarantees and Security during the year as such section 185 and 186 of the Companies Act 2013 is not applicable on the company.

(5) The Company has not accepted any deposits from the public within the meaning of section 73,74, 75 and 76 of the act and the rules framed there under to the extend notified.

(6) We have broadly reviewed the cost records maintained by the Company pursuant to the rules prescribed by the Central Government under Section 148(1) of the Companies Act 2013 and are of the opinion that prima facie the prescribed cost records have been made and maintained . We have however not made a detailed examination of the cost record with a view to determine whether they are accurate or complete.

(7) a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues such Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax ,Cess and any other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities.

b) According to the information and explanation given to us and the records of the company examined by us, the particulars of dues of income tax , Sales tax, Duty of excise duty, value added tax as at ( balance sheet ) which have not been deposited on account of a dispute are as follows:

Name of the Statute Nature of dues Amount (Rs. In Lakhs) Period to which the amount relates Forum where the dispute is pending
Central Excise Act, 1944 Adoption of incorrect Job work Value 9.71 A/Y 2005-06 Hon-ble Madras High Court
Central Excise Act, 1944 Wrong Avaliment of Cenvat 154.69 A/Y 2006-07 Hon-ble Madras High Court
ESI Additional Demand 7.09 A/Y 2009-13 ESI Court, Puducherry

(viii) According to the records of the company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or government as of the balance sheet date.

(ix) The company has not raised money by way of initial public offer, further offer (including debt instruments) and term loans. Accordingly the provisions of clause 3(9) of the order are not applicable to the company.

(x) 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 explanation given to us we have neither come across any instances of material fraud by the company or on the company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management.

(xi) The Company has provided for managerial remuneration in accordance with the provision of section 197 read the section V to the act. The Company has made the payment to managing director in excess of approved amount as per the information and explanation given to us this shall be ratified in forth coming annual general meeting.

(xii) As the Company is not a Nidhi Company and the Nidhi rules, 2014 are not applicable to it, the provision of clause 3(12) of the order are not applicable to the company.

(xiii) In our opinion and according to the information and explanations given to us, all transactions with the related parties are in compliance with sec 177 & 188 of the companies act, 2013, wherever applicable for all transactions with the related parties and the details of related party transactions have been disclosed in the Ind AS Financial statements etc. as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause 3(xiv) of the Order is not applicable to the Company.

(xv) The Company has not entered into any non-cash transaction with its directors or person connected with him. Accordingly, the provisions of clause 3(15) of the order are not applicable to the company.

(xvi) The Company is not required to be registered under Section 45-I of the Reserve Bank of India Act, 1934. Accordingly the provision of clause 3(16) of the order are not applicable to the company.

For Lakhotia& Reddy
Chartered Accountants
Firms Reg .No.009331S
M.M.Lakhotia
Place : Chennai Partner
Date : 31.07.2020 Membership No.: 208704

"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")

We have audited the internal financial controls over financial reporting of M/s CRIMSON METALS ENGINEERING COMPANY LIMITED ("the Company") as of March 31, 2020 in conjunction with our audit of the 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 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 were 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 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 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 financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys 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 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.

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, 2019, 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 Lakhotia& Reddy
Chartered Accountants
Firms Reg .No.009331S
Place :Chennai M.M.Lakhotia
Date : 31.07.2020 Partner
Membership No.: 208704