To the Members of Srikalahasthi Pipes Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the financial statements of Srikalahasthi Pipes Limited ("the
Company"), which comprise the balance sheet as at March 31, 2021, and the statement
of Profit and Loss (including other Comprehensive Income), statement of changes in equity
and statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies and other explanatory
notes for the year ended on that date (hereinafter referred to as "financial
statements").
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, of the state of affairs of the Company as at March
31, 2021, and 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
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current year.
These matters were addressed in the context of our audit of the financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. We have considered the matter described below to be the Key Audit Matters
for incorporation in our Report.
| Key Audit Matter |
Addressing the key audit matter |
| Verification of Inventory and Valuation thereof |
|
| The total inventory of the Company amounting to Rs. 30,571.11 lakhs (as on March 31,
2021) forms about 13.17% of the total assets of the Company. |
Our Audit procedures based on which we arrived at the conclusion regarding
reasonableness of determination of year-end inventory and valuation thereof include the
following: |
| This includes bulk materials such as coal, coke, iron ore etc, which are susceptible
to handling loss, moisture loss/gain, spillage etc. and determination of the same requires
estimation based on experience and technical expertise. |
The company has procedure of physical verification of inventories at regular interval
by an independent professional; |
|
• We have reviewed the credentials, technical and other expertise of the
professional firms verification; carryingoutthe |
|
• We reviewed the report submitted by external agency and obtained
reasons/explanation for variations observed by them with respect to book stock.
Materiality for variations, discrepancies after considering the reasonable allowance for
volumetric measurement were duly adjusted; and |
|
• We examined the valuation process/methodology and checks being performed at
multiple levels to ensure that the valuation is consistent with and as per the policy
followed in this respect. |
Information Other than the Financial Statements and Auditors’ Report Thereon
The Company’s Board of Directors is responsible for the other information. The
other information comprises the information included in the Board’s Report including
Annexures to Board’s Report, Management Discussion and Analysis Report, Corporate
Governance, Business Responsibility Report but does not include the financial statements
and our auditors’ report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained during the
course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of the Management and those charged with governance for the Financial
Statements
The Company’s 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 state of affairs
(financial position), Profit or Loss (financial performance including other comprehensive
income), changes in equity 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.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of 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
financial statement 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
Company’s 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.
Those Board of Directors are also responsible for overseeing the Company’s
financial reporting process.
Auditors’ Responsibility for the Audit of the Financial Statements
• 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;
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on whether
the company has adequate internal financial controls system in place and the operating
effectiveness of such controls;
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management;
• Conclude on the appropriateness of management’s 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 doubt that may on the
Company’s cast significant ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the 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 auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern; and
• Evaluate the overall presentation, structure and content of the financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the financial statements may be influenced. We consider
quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the financial
statements.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and any significant deficiencies in internal control
that identify during our audit. We also provide those charged with governance with a
statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable, related safeguards. From the
matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditors’
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits 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 of the Companies Act, 2013, we give in the "Annexure A" a statement
on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. Further to our comments in the annexure referred to in the paragraph above, 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 it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive
Income), and the Cash Flow Statement dealt with by this Report are in agreement with the
books of account;
d) In our opinion, the aforesaid financial statements comply with the Indian 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 March
31, 2021 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2021 from being appointed as a director in terms of Section 164 (2) of the
Act; and
f) Regarding adequacy of the internal financial controls audit findings, including with
reference to financial statements of the Company and the operating effectiveness of such
controls, refer to our separate Report in "Annexure B". Our report expresses an
unmodified opinion on the adequacy and operating effectiveness of the Company’s
internal control with reference to financial statements.
3. With respect to the other matters to be included in the Auditor’s 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 financial statements Refer Note no. 40 to the financial statements;
ii. The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts – Refer Note no. 39(d) to the financial statements; and
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
4. With respect to the other matters to be included in the Auditors’ Report in
accordance with the requirements of section 197(16) of the Act, as amended, in our opinion
and to the best of our information and according to the explanations given to us, the
remuneration (including sitting fees) paid by the Company to its Directors during the
current year is in accordance with the provisions of section 197 of the Act and is not in
excess of the limit laid down therein.
|
For Lodha & Co, |
|
Chartered Accountants |
|
Firm’s ICAI Registration No.:301051E |
|
R. P. Singh |
| Place: Kolkata |
Partner |
| Date: May 04, 2021 |
Membership No: 052438 |
|
UDIN: 21052438AAAABG1146 |
ANNEXURE "A" TO THE AUDITORS’ REPORT OF EVEN DATE:
(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory
Requirements’ section of our report of even date)
i) a. The Company has maintained proper records showing full particulars, including
quantitative details and situations of fixed assets.
b. The Company has verification to program of cover all the items of fixed
assets in a phased manner which, in our opinion, is reasonable having regard to the size
of the company and the nature of its assets. According to the information and explanation
given to us, no material discrepancies were noticed on such verifications.
c. According to the information and explanations given to us, the records examined by
us and confirmation/representation received from charge holders, we report that, the title
deeds, comprising all the immovable properties of land and building which are freehold,
are held in the name of the Company.
ii) As informed, the inventories of the Company except for materials in transit have
been physically verified at reasonable intervals by the management during the year. In our
opinion and according to the information and explanations given to us, the frequency of
such
. As the Company’s inventory verification of raw materials comprises mostly of
bulk materials such as coal, coke, iron ore, etc. requiring technical expertise for
quantification, the Company has hired an independent agency for the physical verification
of the stock of these materials. The discrepancies noticed were not material and have been
on such verification properly dealt with in the books of the account.
iii) The Company has not granted any loans secured or unsecured to companies, firms or
parties covered in the register maintained under Section 189 of the Act. Accordingly,
clause 3 (iii) of the Order is not applicable to the Company.
iv) In our opinion and according to the information and explanations given to us, the
Company has not granted any loans, made investments or provided any guarantees/securities
to parties covered under Section 185 and 186 of the Act. Accordingly, clause 3 (iv) of the
Order is not applicable to the Company.
v) The Company has not accepted any deposits during the year and does not have any
unclaimed deposits as at March 31, 2021 from public covered under Sections 73 to 76 or any
other relevant provisions of the Act and rules framed thereunder and therefore the
provisions of clause 3(v) of the Order is not applicable to the company
vi) We have broadly reviewed the books of account maintained by the company pursuant to
the Rules made by the Central Government for the maintenance of cost records under Section
148 (1) of the Act in respect of the Company’s products to which the said rules are
made applicable and are of the opinion that prima facie, the prescribed records have been
maintained. We have however not made a detailed examination of the said records with a
view to determine whether they are accurate or complete.
vii) a. According to the information and explanations given to us, the Company has
generally been regular in depositing with appropriate authorities undisputed statutory
dues including Provident Fund, Investor Education Protection fund, Employees’ State
Insurance, Income Tax, Sales Tax, Wealth Tax, Goods and Service Tax, Service tax, Custom
Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues as applicable
to it.
b. According to the information and explanations given to us, the details of disputed
dues of sales tax, income tax, customs duty, wealth tax, excise duty, service tax, and
Cess, if any, as at March 31, 2021, are as follows:
viii) In our opinion and on the basis of information and
| Name of the Statute |
Nature of Dues |
Amount (Rs. in lakhs) |
Period to which the amount relates |
Forum where dispute is pending |
| The Central Excise Act’ 1944 |
Service Tax |
350.68 |
2006-2007 to 2015-2016 |
Commissioner (Appeals) |
| The Central Excise Act’ 1944 |
Excise Duty |
3.76 |
2015-2016 |
Commissioner (Appeals) |
|
|
8.25 |
2007-2008 |
|
| Central Goods and Services Tax Act, 2017 Central Sales Tax |
CGST |
35.97 |
Transitional Credit |
Commissioner (Appeals) |
|
Sales Tax |
151.60 |
2000-2001 |
|
|
|
|
2010-2011 |
High Court |
|
|
2.75 |
2012-2013 |
Appellate Deputy Commissioner |
|
|
399.23 |
2003-2004 |
|
|
|
|
2004-2005 |
|
|
|
|
2005-2006 |
Sales Tax Appellate Tribunal |
| Andhra Pradesh General Sales Tax Act, 1957 |
Sales Tax |
440.98 |
2013-2014 |
|
|
|
|
2014-2015 |
Appellate Deputy Commissioner |
|
|
393.91 |
1999-2000 |
Sales Tax Appellate Tribunal |
|
|
|
2000-2001 |
|
|
|
|
2003-2004 |
|
|
|
10.59 |
2004-2005 |
High Court |
| Andhra Pradesh Value Added Tax Act, 2005 |
Value Added Tax |
- |
2012-2013 |
|
|
|
|
2014-2015 |
Appellate Deputy Commissioner |
|
|
58.14 |
2005-2006 |
Sales Tax Appellate Tribunal |
|
|
|
2007-2008 |
|
|
|
|
2011-2012 |
|
|
|
|
2013-2014 |
|
| Andhra Pradesh Tax on Entry of Goods into Local Area Act 2001 |
Entry Tax |
257.12 |
2014-2015 to 2017-2018 |
Appellate Deputy Commissioner |
explanations given to us by the management, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions and banks.
ix) In our opinion and according to the information and explanations given to us, the
company did not raise any money by way of initial public offer or further public offer
(including debt instruments) or term loans during the year and therefore clause 3(ix) of
the Order is not applicable to the Company.
x) During the course of our examination of books of account carried out during the year
in accordance with generally accepted auditing practices in India, we have neither come
across incidence of any material fraud by the company or on the company by its officer or
employees nor have we been informed of any such case by the management.
xi) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has paid/provided for managerial
remuneration in accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Act.
xii) The Company is not a Nidhi company and hence reporting under paragraph 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, transactions with the related parties are in
compliance with Section 177 and 188 of the Act where applicable and details of such
transactions have been disclosed in the Financial statements as required by the applicable
accounting standards.
xiv) 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 or private placement of shares or fully or partly convertible debentures during
the year. Accordingly, clause 3 (xiv) of the Order is not applicable to the Company.
xv) According to the information and explanations given to us and as represented to us
by the management and based on our examination of the records of the Company, the Company
has not entered into non-cash transactions with directors or persons connected with him.
Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi) The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act 1934.
|
For Lodha & Co, |
|
Chartered Accountants |
|
Firm’s ICAI Registration No.:301051E |
|
R. P. Singh |
|
Partner |
| Place: Kolkata |
Membership No: 052438 |
| Date: May 04, 2021 |
UDIN: 21052438AAAABG1146 |
ANNEXURE "B" TO THE INDEPENDENT AUDITORS’ REPORT
(Referred to in paragraph 2(f) under ‘Report on Other Legal and Regulatory
Requirements’ of our report of even date)
Report on the Internal Financial Controls with reference to financial statements under
Clause (i) of Sub-section 3 Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls with reference to financial statements
of Srikalahasthi Pipes Limited ("the Company") as at March 31, 2021 in
conjunction with our audit of the financial statements of the Company for the year ended
on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s 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 company’s 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 Company’s internal financial
controls with reference to financial statements 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") issued by the Institute of Chartered
Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the
Companies Act, 2013, to the extent applicable to an audit of internal financial controls.
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 with reference to financial statements 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 with reference to financial statements and their
operating effectiveness. Our audit of internal financial controls with reference to
financial statements included obtaining an understanding of internal financial controls
with reference to financial statements, 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’
judgement, 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 Company’s internal financial controls
system with reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A company’s internal financial control with reference to financial statements 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 company’s internal financial control
with reference to financial statements includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect 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 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 company’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 with reference to
financial statements, 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 with
reference to financial statements to future periods are subject to the risk that the
internal financial control with reference to financial statements 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, to the best of our information and according to the explanations given
to us, the Company has, in all material respects, an adequate internal financial controls
system with reference to financial statements and such internal financial controls with
reference to financial statements were operating effectively as at March 31, 2021, based
on the internal control with reference to financial statements 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 Lodha & Co, |
|
Chartered Accountants |
|
Firm’s ICAI Registration No.:301051E |
|
R. P. Singh |
|
Partner |
| Place: Kolkata |
Membership No: 052438 |
| Date: May 04, 2021 |
UDIN: 21052438AAAABG1146 |
+91-9892691696
