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Auditor Report of Chemtech Industrial Valves Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Chemteeh Industrial Valves Ltd ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement, and a summary of the significant accounting policies and other explanatory information for the year then ended.

Management's Responsibility for the Financial Statements

The management and the Company's Board of Directors are responsible for the matters stated in Section 134(o} 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, financial performance and cash Sows of the Company m accordance with the accounting principles genera% accepted in India, including the Accounting Standards specified under Section-33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also iodides maintenance of adequate accounting records in accordance with the preparation of the Act for safeguarding the assets of the Comply and for preventing and detecting frauds and other irregularities; selection and unction of appropriate accounting policies; making judgments and estimates feat tire 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 statements that give a true and fair view and are free from material misstatement, whether due to fortitude or error.

Auditor's' Responsibility

Our responsibility is to express aci opinion on these financial statements based on our audit. We have taken mm account the provisions of the Act, the accounting arid 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 tire 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 auditor's 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 for the Company's preparation of the financial statements, that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has m place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Management and Board of Directors, as well as evaluating the overall presentation of the financial statements, We believe that the audit evidence we have obtained 13 sufficient and appropriate to provide a basis For our audit opinion on the financial statements.

Opinion

In our option and. to the best of our information and according to the explanations given to U3, 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 at the Company as at 31st March, 2015, and its profit/loss and its cash flows for the year ended an that date.

Report an Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of Section 143(11} of the Act, we give in the Annexure a statement on the matters specified in paragraphs 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 fur 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act, read wirier Kate 7 of the Companies (Accounts Rules, 2014.

(e) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Hoard of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) 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 leas disclosed this impact of pending litigations on its financial position in its financial statements-refer Notes 31 to the financial statements

ii. The Company did not have any long term contracts including derivative contracts for which there were material foreseeable kisses.

iii. There were no amounts which were required to be transfer, to the Investor Education and Protection Fund by the Company daring rhe year ended 31.03.2015.

Referred to in Paragraph 1 under the heading "Report on other legal and regulatory requirements" of our Independent Auditor's Report of even dale to the members of Chemteeh Industrial Valves Ltd. On the financial statements as of and for the year ended 31.03.2015,

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

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

(h) A explain to us fixed assets have been physically verified by the management in a phased manner and no material discrepancies were noticed on such verification during the year. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

(P) (a) The management has conducted physical verification of inventory, excluding stocks with third parties, at reasonable intervals during the year. In respect of inventory lying with Third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company, and the nature of its business.

(c) The Company is maintaining proper rewords of inventory and no material discrepancies between physical inventory and book records were noticed on physical verification.

[ii) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 139 of the Act. Accordingly, the provisions of clauses 3(iii] fa) and 3(iii) (b) of the Order are not applicable.

(iv) In our opinion, and according to information's & explanations given to us, tiered is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed nor reported in the internal control System in respect of these areas.

(v) The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act or any other relevant provisions of the Act and rules framed there under.

(vi) We haw 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 The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Duty of Custom, Duty of Excise, Value added tax, Cess and other material statutory dues, as applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of outstanding statutory dues were in arrears as at March 31, 2015 for a period of more than six months from the date they became payable except as below:

STATUTES NATURE OF AMOUNT PERIOD DUE DATE DATE OF DUES (Rs) PAYMENT

Seres-tax Deferment 1,263,966 1999-OOto Annual Installment 2001-02 install- ments

Income tax TDS 2,68,388 2007-08 to Various as per 2013-14 Default notice

With respect to income tax TDS dues, we are being informed that the company is in the process of compiling data / information In respect of default notices from Tax database (TRACES) and accordingly the demands would be either paid or necessary rectification applications would be filed.

b) There are no dues In respect of wealth-tax, duty of excise, duty of customs, sales tax, service tax .value added tax and cess that have not been deposited with the appropriate authority on account of any dispute. The particular of dues outstanding in respect of income tax, on account of any dispute are as follows:

Sr. Name of Statute Nature Forum where Financial Amount No. of Dispute is pending Year in Rs. Dues

1 Central Sales tax CST Comm..of sales Tax 2008-09 1109445

2 Central Sales tax CST Comm..of sales Tax 2006-07 270979

3 Central Sales tax CST Comm.. Sales Tax 2000-10 4259202

4 Income Tax IT Income tax officer 2011-12 3,989,780

C) There were no amounts which were required to be transfer, to the Investor Education and Protection Fund by the Company during the year ended 31.03,2015.

(viii] The Company has accumulated losses of Rs.5,11,20,964/-(P. Y. Rs. 1.34,10,416/-) at the end of the financial year which is not more than the 50% of its Net worth. It has incurred cash loss during the current year is Rs,2,19,39,099/- and Rs.SS,80,222/- in the immediately previous year.

(ix) Based on our audit procedures and according to the information and explanation given to us, we arc of the opinion that the Company has not defaulted m repayment of dues to banks.

x) According to information and explanation given to ua and to the best of knowledge, the Company has not given guarantees for loans taken by others from banks or financial institutions.

(xi) In our opinion and according to intonation and explanation given to ua, a company has not received any Term Lahti during the year.

(xii) During the course of our examination of books and records of the company, carried out in accordance with generally accepted auditing practices in India, we have neither" come across any instance of fraud on or by the Company noticed or reported during the year, nor have we been informed of any such case by the management.

For S. P. JAIN & ASSOCIATES,

CHARTERED ACCOUNTANTS

Firm Reg. No. 103969W



KAPIL K. JAIN

(PARTNER)

Membership No. 108521

Place : Mumbai,

Date : 30 MAY 2015


Mar 31, 2014

Report on Financial Statements

We have audited the accompanying financial statements of Chemtech Industrial Valves Ltd,("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement ofProfit and Loss and Cash Flow Statement for the period then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility For the Financial Statements

Management is responsible for the preparation of these 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control 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,

Auditor''s Responsibility

Our responsibility is to express an. opinion on these financial statements based on our audit, We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 disclosures in the financial statements. The procedures selected depend on the auditor''s 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 control relevant to the Company''s 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 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us,

the 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 31 2014;

(b) in the case of the statement of Profit and Loss, of the profit/ loss for the period ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit,

b. m 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e. on the basis of written representations received from the directors as on March 31 2014, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sab-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of

our report of even date)

1. a) As explained to us, the Company has maintained the records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion, the Company has not disposed of substantial part of fixed assets during the period.

2. a) As explained to us, inventories have been physically verified by the management at regular intervals during the period.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. The company has taken loans from 10 parties (P.Y. taken from 5 parties) listed in the register maintained U/s. 301 of the Companies Act, 1956. The year-end balance of loan taken from such parties was nil (P.Y, Rs. Rs.2.00,00.000/ -j. Maximum balance outstanding during the period is Rs, 4,24,44,990/- (P.Y. Rs. Rs. 2,21,90,640/-) and that the Terms and Conditions are not prejudicial to the interest of the company. The company is regular in repaying as the same is payable on demand. There is no overdue amount

The Company has granted loans to 2 parties (P. Y. 6 parties) Companies, Firms or other parties as listed in the register maintained under section 301 and / or to the Companies under the same management as defined under sub-section (IB) of Section 370 of the Companies Act, 1956. The period-end balance of loan given to such parties was Rs.13,19,166/- (P.Y. Rs. Rs. 13,19,166/-). Maximum balance outstanding during the period is Rs.13,42,166/- (P.Y. Rs.3,65,21,351/-) and that the Terms and Conditions are not prejudicial to the interest of the company. The company is regular in repaying as the same is payable on demand. There is no overdue amount.

4 In our opinion and according to the information and explanations given to us, there are adequate interna] control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in the register maintained under Section 301 of the Companies Act, 1956 have been so entered

b) In cur opinion and according to the information and explanations given to us, the transactions in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding Rs. 5,00,000/- (Rupees Five Lacs only) in respect of any party during the year have been made at price, which are reasonable & having regard to prevailing market price at the relevant time.

6 As explained to us the company has not accepted any deposits from the public with in the meaning of section 58A and 58 A A of the Companies Act, 1956 and the rules framed there under.

7 In our opinion, the internal audit system of the Company is commensurate with its size and nature of its business.

8. 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 clause (d) of sub- section (1.) of section 209 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.

9. a) According to the information and explanation given to us, and records being made available to us, the undisputed statutory dues including Income-tax, Sales Tax, Wealth Tax, and other statutory dues wherever applicable have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2014 for a period of more than six months from the date of becoming payable except for:

STATUTES NATURE OF AMOUNT PERIOD DUE DATE DATE OF DUES (Rs.) PAYMENT

Sales tax Deferment 7,80,089 1999-00 to 2010-11 to Installment 2001-02 2013-14

b) In our opinion and according to the information and explanations given to us, there are no disputed statutory dues pending before any Authority except for.

STATUTES NATURE AMOUNT PERIOD FORUM OF DUES (Rs.)

Central CST 1109445 2008-09 Comm. Sales tax of sales Tax

Central CST 270979 2006-07 Comm. Sales tax of sales Tax

Central CST 4259201 2009-10 Comm. Sales tax of sales Tax

10. The Company does not any accumulated losses during the period Financial Period covered by our audit. The company has incurred cash loss of Rs.55,80,222/- (P.Y. Nil) in the current period covered by the audit.

11. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to banks.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the Company.

14. The Company has maintained proper records of transaction and contracts in respect of trading in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the company in its own name,

15. According to information and explanation given to us and to the best of knowledge, the Company has not given guarantees for loans taken by others from banks or financial institutions,

16. According to information and explanation given to us the company has received new term loans during the period and the same has been utilized and applied for the purpose for which they were obtained other than the amounts temporarily invested pending utilization of the same for intended use.

17. According to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not raised funds from Short Term sources and utilized the same towards Long Term investments.

18. During the year Company has made preferential allotment of 26,69,333 No. of Equity shares (face value Rs. 10/ ) at a premium of Rs. 5/- per share to parties covered under sec.301 of the Companies Act, 1956 and in our opinion such price is not prejudicial to the interest of the company.

19. According to information and explanation given to us, the Company has not issued any secured debentures during the period.

20. During the year Company has raised money by way of public issue offer and the end use of the money raised has been verified and disclosed in the note No. 32 of the financial statement,

21 opinion and according to the information and explanation given to us no fraud by during the period which causes the financial statements to materially misstated.

For S. P. JAIN & ASSOCIATES,

CHARTERED ACCOUNTANTS FRN. 103969W

Place : Mumbai. Date: 30/05/2014 Kapil K. Jain (PARTNER) Membership No. 108521

 
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