Mar 31, 2023
To the Members of Thermax Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Thermax Limited (âthe Companyâ), which comprise the Balance sheet as at March 31 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) 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, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act.
Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with
the âCode of Ethicsâ 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 Act 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 audit opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matter |
How our audit addressed the key audit matter |
A) Accounting for Revenue from Contracts with Customer (as described in Note 21 of the standalone financial statements) |
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The Companyâs revenue comprises of revenue generated from sale of industrial products as well as from Engineering, Procurement and Construction (EPC) contracts. The total revenues for the year amounted to Rs. 5,120.14 crores. Revenues are recognised under Ind AS 115, Revenue from Contracts with Customers basis the nature and type of the contracts. We consider accounting of revenue contracts to be an area posing a significant risk of material misstatement and accordingly a key audit matter as due to the varied nature of the contracts, identification of contractual obligations, point of time for transfer of control, significant judgements involved in determining the contract costs (including costs incurred to date and estimated total cost), rights to receive payments including those for performance completed till date and recognition for loss making contracts/ onerous obligations. Revenue and profits for the year may deviate significantly on account of changes in the above significantly on account of change in judgements and estimates. |
Our audit procedures included the following: ⢠We understood the Companyâs policies and processes, control mechanisms and methods in relation to the revenue recognition for revenue contracts and evaluated the design and operative effectiveness of the financial controls from the above through our test of control procedures. ⢠We obtained and read the terms of sample revenue contracts to evaluate the managementâs process to assess nature of contractual performance obligations, the point of time for transfer of control to customer and other relevant terms necessary for revenue recognition. ⢠We tested revenue, on sample basis, recorded during the period closer to year-end by testing the supporting documentation. ⢠We performed analytical procedures and conducted inquiries with senior management about any unusual trends of revenue recognition. ⢠For EPC contracts, on sample basis, we performed the following procedures among others: ⢠Provision for liquidated damages and claims: Discussed with management and project teams to understand the status of the project and likelihood of customers imposing any contractual penalties through inspection of the relevant documents and correspondences. ⢠Contingency provisions: Understood the managementâs estimate and rationale for the contingency provision movement during the year. We analyzed the movement throughout the life of the contract and discussed progress to date with project teams to determine whether the remaining contingency provision is sufficient coverage for the residual risks identified for those projects ⢠Assessment of costs-to-complete: Performed procedures on balance cost estimation, tested the historical accuracy of previous forecasts and discussed variances with project teams, tested that the costs incurred were accrued at year-end and tested the significant assumptions for balance costs-to-complete. ⢠Performed analytical procedures and checked exceptions for contracts with low or negative margins, loss making contracts/ onerous contracts, contracts with significant changes in cost estimates and significant overdue net receivable positions for contracts with marginal or no movement to determine the level of provisioning required. ⢠We read and tested the presentation and disclosure in the standalone financial statements are in accordance with applicable accounting standards. |
Key audit matter |
How our audit addressed the key audit matter |
B) Impairment of Investments in Subsidiaries (as described in Note 5(a) and 42 of the standalone financial statements) |
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During the year, impairment indicators were identified by the management for investments in certain subsidiaries. Managementâs assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used, including the recoverable value of underlying tangible assets. Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. Changes to assumptions could lead to material changes in the estimated recoverable amount, impacting both potential impairment charges and also potential reversals of impairment taken in prior years. Accordingly, this is considered as a key audit matter. |
Our audit procedures included the following: ⢠We understood the managementâs process of evaluating the triggers for impairment, forecasting the future cash flows, evaluation of assumptions and comparison of estimates to externally available industry, economic and financial data, wherever available and necessary. ⢠We assessed that the methodology used by management to estimate the recoverable value of each investment is consistent with accounting standards. ⢠We assessed the assumptions used by the management to determine the recoverable amount of the investment in subsidiaries. ⢠We compared the carrying values of the Companyâs investment in these subsidiaries to their respective financial statements which were available with their respective net asset values and discussed with management about their performance and future outlook. ⢠We considered the potential impact of reasonably possible downside changes in these key assumptions as part of sensitivity analysis. ⢠We read and assessed the presentation and disclosure of such impairment in the standalone financial statements. |
C) Impairment of trade receivables and contract assets (as described in Note 7 and 9(b) of the standalone financial statements) |
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Impairment of financial assets and contract assets is covered through Expected Credit Losses (ECL) method under Ind AS 109 and is expected is to reflect the general pattern of deterioration or improvement in the credit quality of financial instruments. Impairment of financial assets is a key audit matter as the Company has devised a model to recognise impairment through ECL using individual receivables or for homogeneous group of receivables with similar credit risk characteristics. The calculation of the impairment allowance under expected credit losses is highly judgmental as it requires management to make significant assumptions on customer payment behavior and other relevant / risk characteristics when assessing the Companyâs statistics of historical information and estimating the level and timing of expected future cash flows. As at the March 31, 2023, the Company recorded an impairment provision of Rs. 263.85 crores for its receivables and unbilled revenue. |
Our audit procedures included the following: ⢠We evaluated the managementâs key data sources and assumptions used in the ECL model to determine impairment allowance. ⢠We understood the managementâs basis to consider the associated risks for identifying homogeneous group of receivables. ⢠We evaluated the process followed by the Company for determination of credit risk and the resultant basis for classification of receivables into various stages. ⢠For a sample of receivables, we tested the ageing of the receivables considered for impairment calculations. ⢠We assessed the completeness of financial assets included in the ECL calculations as of the reporting date. ⢠We considered the consistency of various inputs and assumptions used by the Companyâs management to determine impairment provisions. ⢠We read and tested the disclosures in the notes to standalone financial statements are as per the relevant accounting standards. |
We have determined that there are no other key audit matters to communicate in our report. |
Information Other than the Financial Statements and Auditorâs Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the Business Responsibility Report, Sustainability Report and Directorâs Report including annexure to the Directorâs Report of the Annual Report, but does not include the standalone financial statements and our auditorâs report thereon.
Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditorâs report, 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 Management and Those Charged with Governance for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Companyâs 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 Charged with Governance are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs 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 standalone 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 standalone 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 Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements 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 that may cast significant doubt on the Company''s 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.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.
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 standalone financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s 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, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â 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 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, except that back-up of books and records (i.e. employee reimbursement system) maintained in electronic mode has not been maintained on servers physically located in India on a daily basis as mentioned in Note 45 of standalone financial statements;
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph (b) above.
(g) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this Report;
(h) In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid
/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(i) 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, 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 litigations on its financial position in its standalone financial statements -Refer Note 31(A) to the standalone 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 9(b) and 17(b) to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. a) The management has represented
that, to the best of its knowledge and belief, other than as disclosed in the note 32(B) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), with the
understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures
performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. a) The final dividend paid by the Company
during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
b) As stated in note 15(b) to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend; and
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Vaibhav Kumar Gupta
Partner
Membership No.: 213935
UDIN: 23213935BGYWXW7010
Place: Pune
Date: May 17, 2023
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Thermax Limited (âthe Companyâ), which comprise the Balance sheet as at March 31, 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) 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, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act.
Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report.
We are independent of the Company in accordance with the âCode of Ethicsâ 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 Act 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 audit opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
A) Revenue recognition for engineering, procurement and construction contracts |
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(refer Note 21(c) of the standalone financial statements) |
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The Companyâs significant portion of business is undertaken through Engineering, Procurement and Construction (EPC) contracts. Revenue from these contracts is recognized over a period of time in accordance with the requirements of Ind AS 115, Revenue from Contracts with Customers. We consider the accounting for such contracts to be an area posing a significant risk of material misstatement and accordingly a key audit matter, as due to the nature of the contracts, revenue is accounted over a period of time (using input method) which requires identification of contractual obligations, significant judgement with regards to determining contract costs incurred till date compared to estimated total contract costs, the Companyâs rights to receive payments for performance completed till date, changes in scope and consequential revised contract price and recognition of the liability for loss making contracts/ onerous obligations. Revenues and profits for the year under audit, may deviate significantly on account of changes in such judgements and estimates. Revenue from such contracts amounted to Rs. 2,122.42 crores for the year. |
Our audit procedures included the following: ⢠We understood the Companyâs policies and processes, control mechanisms and methods in relation to the revenue recognition for these contracts and evaluated the design and operative effectiveness of the financial controls from the above through our test of control procedures. ⢠We evaluated managementâs estimates and assumptions for a selected (risk-based method) sample contracts and inspected the underlying documents which form the basis of revenue recognition under the input method. We evaluated the managementâs process to recognize revenue over a period of time, determine cost estimates, status of the projects and tested the arithmetical accuracy of the same. ⢠Amongst others, for a sample of contracts, we performed the following procedures: - Provision for liquidated damages: Our procedures involved discussions with management and project teams to understand the status of the project and on-going discussions with the customers in terms of likelihood of imposing any contractual penalties and analyzed the above through inspection of the relevant documents and correspondences. - Contingency provisions: We understood the managementâs estimate and rationale for provision movement during the year. We analyzed the movement throughout the life of the contract and discussed progress to date with individual project teams to determine whether the remaining contingency was sufficient to cover residual risks of those projects. - Assessment of costs-to-complete: We performed procedures on balance cost estimation, tested the historical accuracy of previous forecasts and discussed variances with project teams. We tested that the costs incurred were accrued at year-end and tested the assumptions for balance costs-to-complete. ⢠We performed analytical procedures and checked exceptions for contracts with low or negative margins, loss making contracts/ onerous contracts, contracts with significant changes in cost estimates and significant overdue net receivable positions for contracts with marginal or no movement to determine the level of provisioning required. ⢠We read and tested the presentation and disclosure of such EPC contracts in the standalone financial statements. |
Key audit matters |
How our audit addressed the key audit matter |
B) Impairment of investments in subsidiaries (refer in Note 5(a), 6(a) and 41 of the standalone financial statements) |
|
During the current year, impairment indicators were identified by the management for investments in certain subsidiaries. Managementâs assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used, including the recoverable value of underlying tangible assets. Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. Changes to assumptions could lead to material changes in the estimated recoverable amount, impacting both potential impairment charges and also potential reversals of impairment taken in prior years. Accordingly, this is considered as a key audit matter. |
Our audit procedures included the following: ⢠We understood the managementâs process of evaluating the triggers for impairment, forecasting the future cash flows, evaluation of assumptions and comparison of estimates to externally available industry, economic and financial data, wherever available and necessary. ⢠We assessed that the methodology used by management to estimate the recoverable value of each investment is consistent with accounting standards. ⢠We assessed the assumptions used by the management to determine the recoverable amount of the investment in subsidiaries. ⢠We compared the carrying values of the Companyâs investment in these subsidiaries to their respective financial statements which were available with their respective net asset values and discussed with management about their performance and future outlook. ⢠We considered the potential impact of reasonably possible downside changes in these key assumptions as part of sensitivity analysis. ⢠We read and assessed the presentation and disclosure of such impairment in the standalone financial statements. |
C) Impairment of trade receivables and contract assets (refer Note 7 and 9(b) of the standalone financial statements) |
|
Impairment of financial assets and contract assets is covered through Expected Credit Losses (ECL) method under Ind AS 109 and is expected is to reflect the general pattern of deterioration or improvement in the credit quality of financial instruments. Impairment of financial assets is a key audit matter as the Company has devised a model to recognize impairment through ECL using individual receivables or for homogeneous group of receivables with similar credit risk characteristics. The calculation of the impairment allowance under expected credit losses is highly judgmental as it requires management to make significant assumptions on customer payment behavior and other relevant risk characteristics when assessing the Companyâs statistics of historical information and estimating the level and timing of expected future cash flows. As at the March 31, 2022, the Company recorded an impairment provision of Rs. 266.42 crores for its receivables and unbilled revenue. |
Our audit procedures included the following: ⢠We evaluated the managementâs key data sources and assumptions used in the ECL model to determine impairment allowance. ⢠We understood the managementâs basis to consider the associated risks for identifying homogeneous group of receivables. ⢠We evaluated the process followed by the Company for determination of credit risk and the resultant basis for classification of receivables into various stages. ⢠For a sample of receivables, we tested the ageing of the receivables considered for impairment calculations. ⢠We assessed the completeness of financial assets included in the ECL calculations as of the reporting date. ⢠We considered the consistency of various inputs and assumptions used by the Companyâs management to determine impairment provisions. ⢠We read and tested the disclosures in the notes to standalone financial statements are as per the relevant accounting standards. |
We have determined that there are no other key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditorâs Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the Business Responsibility Report and Directorâs Report including annexure to the Directorâs Report of the Annual Report but does not include the standalone financial statements and our auditorâs report thereon.
Our opinion on the standalone 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 standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditorâs report, 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 Management and Those Charged with Governance for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
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 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 standalone financial statements that give
a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Companyâs 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 Charged with Governance are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs 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 standalone 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 standalone 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 Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements 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 that may cast significant doubt on the Company''s 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.
Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.
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 standalone financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditor''s 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.
(h) 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, 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 litigations on its financial position in its standalone financial statements - Refer Note 31(A) to the standalone 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 9(b) and 17(b) to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. a) The management has represented that, to the
best of its knowledge and belief, other than as disclosed in the note 32(B) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â 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 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement
of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2022 taken
on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 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 with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid/ provided by the Company to its directors in accordance
with the provisions of section 197 read with Schedule V to the Act;
foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. a) The dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
b) As stated in Note 15(b) to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
per Tridevlal Khandelwal
Partner
Membership Number: 501160
UDIN: 22501160AJHQHI3278
Place of Signature: Pune
Date: May 20, 2022
Mar 31, 2019
Report on the Audit of the Standalone Ind AS Financial Statements Opinion
We have audited the accompanying standalone Ind AS financial statements of Thermax Limited (âthe Companyâ), which comprise the Balance sheet as at March 31, 2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, Including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) 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 31,2019, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Standalone Ind AS Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ 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 Act 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 audit opinion on the standalone Ind AS financial statements.
Emphasis of Matter
We draw attention to note 32(A)(a) of the standalone Ind AS financial statements relating to the demand orders/ show cause notice on the Company for Rs. 1,383.51 crores (including penalty of Rs. 325.29 crores and excluding interest not presently quantified) by the Commissioner of Central Excise, Pune. The Company has filed an appeal against the said orders and filed replies to the show cause notice cum demand order. Our opinion is not qualified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31,2019. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
(a) Revenue recopnitlon for Engineering. Procurement and Constructions contracts |
|
(refer note 21 of the standalone Ind AS financial statements) |
|
The Companyâs significant portion of business is undertaken through Engineering, Procurement and Construction (EPC) contracts. Revenue from these contracts is recognized over a period of time in accordance with the requirements of Ind AS 115, Revenue from Contracts with Customers. Due to the nature of the contracts, revenue Is accounted over a period of time (using input method) which requires identification of contractual obligations, significant judgement with regards to determining contract costs incurred to date compared to estimated total contract costs, the Companyâs rights to receive payments for performance completed till date, changes in scope and consequential revised contract price and recognition of the liability for loss making contracts/ onerous obligations. Revenues and profits for the year under audit, may deviate significantly on account of change in such judgements and estimates. Revenue from such contracts amounted to Rs. 3,546.88 crores (including Rs. 1,556.87 pertaining to discontinued operations). |
Our audit procedures included the following - We understood the Companyâs policies and processes, control mechanisms and methods in relation to the revenue recognition for these contracts and evaluated the design and operative effectiveness of the financial controls from the above through our test of control procedures - We evaluated managementâs estimates and assumptions for a selected (risk-based method) sample contracts. We inspected the underlying documents which form the basis of revenue recognition under the input method. We evaluated the managementâs process to recognize revenue over a period of time, total cost estimates, status of the projects and re-calculated the arithmetical accuracy of the same. - Amongst others, for a sample of contracts, we performed the following procedures: - Provision for liquidated damages: Our procedures involved discussions with management and project teams to understand the status of the project and on-going discussions with the customers in terms of likelihood of imposing any contractual penalties and analyzed the above through inspection of the relevant documents and correspondences. - Contingency provisions: We understood the managementâs estimate and rationale for provision movement during the period. We analyzed the movement throughout the life of the contract, and discussed progress to date with Individual project teams to determine whether the remaining contingency was sufficient to cover residual risks on the project. - Assessment of costs-to-complete: We performed analytical procedures on balance cost estimation, tested the historical accuracy of previous forecasts and discussed variances with project teams. We tested that the costs incurred were accrued at year end and also tested the assumptions for balance costs-to-complete. |
Key audit matters |
How our audit addressed the key audit matter |
- We performed analytical procedures and checked exceptions for contracts with low or negative margins, loss making contracts, contracts with significant changes in cost estimates, probable penalties due to delay in contract execution and significant overdue net receivable positions for contracts with marginal or no movement to determine the level of provisioning required. - We read and tested the presentation and disclosure of such EPC contracts In the standalone Ind AS financial statements. |
|
fb) ImDainment of investment in subsidiaries (refer note 5 and note 40 of the standalone Ind AS financial statements) |
|
During the current year, impairment indicators were identified by the management on the investments of Rs 928.89 crores. Managementâs assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used, including the recoverable value of underlying tangible assets. Furthermore, the value in use is highly sensitive to changes In some of the inputs used for forecasting the future cash flows. Changes to assumptions could lead to material changes in the estimated recoverable amount, impacting both potential impairment charges and also potential reversals of impairment taken in prior years. Accordingly, this is considered as a key audit matter. |
Our audit procedures for investment balances included the following: - We understood the managementâs process of forecasting the future cash flows, evaluated the assumptions and compared the estimates to externally available industry, economic and financial data, wherever available & necessary; - We assessed that the methodology used by management to estimate the recoverable value of each investment is consistent with accounting standards; - We engaged experts to assess the assumptions and methodologies used by the management to determine the recoverable amount of the investment in subsidiaries; - We compared the carrying values of the Companyâs investment in these subsidiaries and joint ventures for which audited financial statements were available with their respective net asset values and discussed with management about their performance and future outlook; - We considered the potential impact of reasonably possible downside changes in these key assumptions as part of sensitivity analysis - We read and assessed the presentation and disclosure of such impairment In the standalone Ind AS financial statements. |
Key audit matters |
How our audit addressed the key audit matter |
(c) Impairment of financial and contract assets: (refer note 7 and note 9(b) of the standalone Ind AS Financial Statements) |
|
Impairment of financial assets and contract assets is covered through Expected Credit Losses (ECL) method under Ind AS 109 and is expected is to reflect the general pattern of deterioration or improvement in the credit quality of financial instruments. Impairment of financial assets is a key audit matter as the Company has devised a model to recognize impairment through ECL using individual receivables or for homogeneous group of receivables with similar credit risk characteristics. The calculation of the impairment allowance under expected credit losses is highly Judgmental as it requires management to make significant assumptions on customer payment behaviour and other relevant risk characteristics when assessing the Companyâs statistics of historical information and estimating the level and timing of expected future cash flows. As at the March 31, 2019, the Company recorded an impairment provision of Rs 441.14 crores for its receivables and unbilled revenue. |
Our audit procedures performed included the following: - We evaluated the managementâs key data sources and assumptions used in the Expected Credit Loss (ECL) model to determine impairment provisions; - We understood the managementâs basis to consider the associated risks for identifying homogeneous group of receivables; - we evaluated the process followed by the Companyâs for determination of credit risk and the resultant basis for classification of receivables into various stages. - For a sample of receivables, we tested the ageing of the receivables considered for impairment calculation; - We assessed the completeness of financial assets included in the ECL calculations as of the reporting date; - We considered the consistency of various inputs and assumptions used by the Companyâs management to determine impairment provisions; - we assessed the related disclosures in the notes to financial statements. |
We have determined that there are no other key audit matters to communicate in our report.
Information Other than the Financial Statements and Auditorâs Report Thereon
The Companyâs BoaFd of Directors Is responsible for the other information. The other information comprises the information included in the Chairmanâs statement, managing directorâs statement, business responsibility report and directorâs report including annexure to the directorâs report of the annual report of the company, but does not include the standalone Ind AS financial statements and our auditorâs report thereon.
Our opinion on the standalone Ind AS 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 standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the 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 Management and Those Charged with Governance for the standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of 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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of theAct read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 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 standalone 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 standalone Ind AS financial statements, management is responsible for assessing the Companyâs 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 Charged With Governance are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs 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 standalone Ind AS 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 standalone Ind AS 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 Act, 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 managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.
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 standalone Ind AS financial statements for the financial year ended March 31,2019 and are therefore the key audit matters. We describe these matters in our auditorâs 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 (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â 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 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 the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) The matter described in Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;
(f) On the basis of the written representations received from the directors as on March 31,2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;
(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(h) In our opinion, the managerial remuneration forthe year ended March 31,2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(i) With respect to the other matters to be included in the Auditorâs 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 litigations on its financial position In its standalone Ind AS financial statements - Refer Note 32(A)(a) to the standalone Ind AS 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 18(b) to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
Annexure 1 as referred to in paragraph 1 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date
Re: Thermax Limited (âthe Companyâ)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were identified on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties Included In property, plant and equipment are held In the name of the Company.
(ii) The inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31,2019 and no material discrepancies were noticed in respect of such confirmations.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ). Accordingly, the provisions of clause 3(iii)(a), (b)and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entitles in which they are Interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v)of the Order are not applicable.
(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, related to the manufacture of chemicals, and are of the opinion that prima facie, the specified 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, employeesâ state insurance, income tax, duty of custom, goods and services tax, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income tax, duty of custom, goods and services tax, cess and other statutory dues were outstanding, at the year end, fora period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:
Name of the Statute |
Nature of Dues |
Forum where the dispute is pending |
Period to which amount related |
Disputed dues, not deposited⢠(Rs. in crores) |
Central Excise Act, 1944 |
Excise Duty |
Supreme Court |
1997 - 98 |
[net of deposit Rs 5.31] |
Appellate Tribunal |
200CM)1 to 2015-16 |
1,360.87 [net of deposit Rs 23.72] |
||
Income Tax Act, 1961 |
Income Tax |
High Court |
AY 1993-94, AY 1996-97 and AY 1997-98 |
(net of deposit Rs. 1.99) |
Appellate Tribunal |
AY 2004-05 to AY 2009-10 |
38.70 |
||
Appellate Authority upto Commissioner Level |
AY 2015-16 and AY 2017-18 |
88.71 |
||
Central Sales Tax and Local Sales tax |
Sales Tax and Value Added Tax |
High Court |
2000-01,2001-02, 2010-11, to 2014-15 |
43.58 [net of deposit Rs 0.24] |
Appellate Tribunal |
2003-04,2006-07, 2008-09,2013-14 |
0.44 |
||
Appellate Authority upto Commissioner Level |
2004-05,2006-07 to 2014-15 |
18.55 [net of deposit Rs 0.58] |
||
Finance Act, 1994 |
Service Tax |
Appellate Tribunal |
2012-13 to 2015-16 |
2.66 [net of deposit Rs 0.16] |
Customs Act, 1962 |
Custom duty |
Supreme Court |
2005-06 |
[net of deposit Rs 0.56] |
Appellate Authority upto Commissioner Level |
2005-06 |
0.59 [net of deposit Rs 0.02] |
ânet of deposits paid under protest
Excluding the Interest and penalty thereon
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowings to banks. The Company has no loan/ dues towards any financial institution, debenture holders or from the government.
(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer/ further public offer/ debt Instruments and term loans hence, reporting under clause (ix) Is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and section 188 of the Act where applicable and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable Accounting Standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any noncash transactions with directors or persons connected with him as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IAof the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure 2 as referred to In paragraph 2(g) under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date
Report on the Internal Financial Controls under Clause (I) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Thermax Limited (âthe Companyâ) as of March 31, 2019, in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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 (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India (ICAI). 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 the Companyâs 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 Act.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting with reference to these standalone Ind AS financial statements based on our audit. We conducted our audit In accordance with the Guidance Note and the Standards on Auditing as specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls and, both issued by the ICAI. 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 with reference to these standalone Ind AS 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 over financial reporting with reference to these standalone Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of Internal financial controls over financial reporting with reference to these standalone Ind AS 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 auditorâs 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 internal financial controls over financial reporting with reference to these standalone Ind AS financial statements.
Meaning of Internal Financial Controls Over Financial Reporting with Reference to these financial statements
A companyâs internal financial control over financial reporting with reference to these standalone Ind AS 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 companyâs internal financial control over financial reporting with reference to these standalone financial statements 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 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 companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting with Reference to these Standalone Ind AS Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone 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 over financial reporting with reference to these standalone Ind AS financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone Ind AS 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, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone Ind AS financial statements and such internal financial controls over financial reporting with reference to these standalone Ind AS financial statements 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 issued by the ICAI.
For SRBC & COLLP
Chartered Accountants
ICAI Firm Registration Number; 324982E/E300003
Per Tridevlal Khandelwal
Partner
Membership Number: 501160
Place: Pune
Date: May 22,2019
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Thermax Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the design, implementation and maintenance of adequate internal financial control 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone 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 thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view 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 the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS 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, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to note 32A(a) of the standalone Ind AS financial statements relating to the demand orders/ show cause notice on the Company for Rs. 1,376.92 crores (including penalty of Rs. 325.29 crores and excluding interest not presently quantified) by the Commissioner of Central Excise, Pune. The Company has filed an appeal against the said orders and filed replies to the show cause notice cum demand order. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â 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 for the purpose 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) The matter described in Emphasis of matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;
(f) On the basis of written representations received from the directors as on March 31,2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act;
(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(h) With respect to the other matters to be included in the Auditorâs 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 standalone Ind AS financial statements - Refer Note 32A(a) to the standalone Ind AS 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 18(b) to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; iv. The disclosure with respect to holding of and dealings in Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018 and accordingly have not been reported by us. Refer note 13(c) of the standalone Ind AS financial statements.
Annexure 1 referred to in paragraph 1 under the heading âReport on Other Legal and Regulatory Requirementsâ of our report of even date
Re: Thermax Limited (âthe Companyâ)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31,2018 and no material discrepancies were noticed in respect of such confirmations.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ). Accordingly, the provisions of clause 3(iii)(a), (b)and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(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 Companies Act, 2013, related to the manufacture of chemicals, and are of the opinion that prima facie, the specified 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, employeesâ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:
Name of the Statute |
Nature of Dues |
Forum where the dispute is pending |
Forum where the dispute is pending |
Disputed dues, not deposited* (Rs. in crores) |
Central Excise Act, 1944 |
Excise Duty |
Supreme Court |
1997-98 |
- [net of deposit Rs 5.31] |
Appellate Tribunal |
2000-01 to 2015-16 |
1,360.31 [net of deposit Rs 20.34] |
||
Income Tax Act, 1961 |
Income Tax |
Appellate Tribunal |
AY 2003-04 to 2009-10 |
25.71 |
Appellate Authority upto Commissioner Level |
AY 2014-15 |
0.13 |
||
Central Sales Tax and Local Sales tax |
Sales Tax and Value Added Tax |
High Court |
2000-01,2001-02,2010-11, 2012-13 to 2014-15 |
43.58 [net of deposit Rs 0.24] |
Appellate Tribunal |
2003-04, 2006-07, 2008-09,2013-14 |
0.43 |
||
Appellate Authority upto Commissioner Level |
2004-05, 2006-07 to 2014-15 |
17.51 [net of deposit Rs 0.56] |
||
Finance Act, 1994 |
Service Tax |
Appellate Tribunal |
2012-13 to 2015-16 |
2.62 [net of deposit Rs 0.20] |
Customs Act, 1962 |
Custom duty |
Supreme Court |
2005-06 |
- [net of deposit Rs 0.56] |
Appellate Tribunal |
2005-06 |
0.56 [net of deposit Rs 0.02] |
*net of deposits paid under protest
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a bank. The Company has no loan/dues towards any financial institution, debenture holders orfrom the government.
(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable Accounting Standards.
(xiv) According to the information and explanations given to us and on an overall examination of the Balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting under clause 3(xiv) is not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any noncash transactions with directors or persons connected with them as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
For SRBC & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
Per Tridevlal Khandelwal
Partner
Membership Number: 501160
Place of Signature: Pune
Date: May 18,2018
Mar 31, 2017
INDEPENDENT AUDITORâS REPORT
To the Members of Thermax Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of Thermax Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31,2017, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 including other comprehensive income), cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the design, implementation and maintenance of adequate internal financial control 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Standalone 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 of the Standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Standalone Ind AS financial statements that give a true and fair view 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 the Companyâs Directors, as well as evaluating the overall presentation of the Standalone Ind AS 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 Standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the Standalone Ind AS 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 31,2017, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matter
We draw attention to note 32A(a) of the standalone audited financial statements, relating to the demand orders on the Company for Rs.1,330.64 crores (including a penalty of Rs.325.29 crores and excluding interest not presently quantified) by the Commissioner of Excise, Pune. The Company has filed an appeal against the said orders. Our report is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â, 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 for the purpose 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, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) The matter described in sub-paragraph under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;
(f) On the basis of written representations received from the directors as on March 31,2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2017, from being appointed as a director in terms of section 164 (2) of the Act;
(g) 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 âAnnexure 2â to this report;
(h) With respect to the other matters to be included in the Auditorâs 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 Standalone Ind AS financial statements - Refer note 32 to the Standalone Ind AS 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 19 to the Standalone Ind AS financial statements;
Hi. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
iv. The Company has provided requisite disclosures in Note 13(c) to these Standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8,2016 and December 30,2016 as well as dealings in Specified Bank Notes during the period from November 8,2016 to December 30,2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.
Annexure 1 referred to in paragraph 1 under the heading âReport on other legal and regulatory requirementsâ of our report of even date
Re: Thermax Limited (âthe Companyâ)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31,
2017 and no material discrepancies were noticed in respect of such confirmations.
(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ). Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits to which the provisions of Sections 73,74,75 and 76 or any other relevant provisions of the Act and the Rules framed there under to the extent notified, are applicable. Therefore, the provisions of clause 3(v) of the Order are 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 Companies Act, 2013, related to the manufacture of chemicals, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, custom duty, excise duty, value added tax, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, service tax, sales-tax, custom duty, excise duty, value added tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise value added tax and cess on account of any dispute, are as follows:
(Rs. in Crores)
Name of the Statute |
Nature of Dues |
Forum where the dispute is pending |
Period to which amount related |
Disputed dues, not deposited* |
Central Excise Act, 1944 |
Excise Duty |
CESTAT |
2000-01 to 2015-16 |
1,329.46 |
Central Sales Tax Act and Local Sales tax (including Works Contract) |
Sales Tax |
Appellate Authority up to Commissioner level |
1992-93,1996-97, 2003-04, 2004-05, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11,2011-12, 2012-13, 2014-15 |
3.56 |
High Court |
2000-01,2001-02,2010-11,2013-14, 2014-15 |
43.21 |
||
Tribunal |
2006-07, 2008-09 |
1.25 |
||
Income Tax Act, 1961 |
Income Tax |
Appellate Authority up to Commissioner level |
2006-07 to 2013-14 |
1.60 |
Service Tax (Finance Act, 1994) |
Service Tax |
CESTAT |
2012-13, 2015-16 |
0.91 |
Customs Act, 1962 |
Custom Duty |
CESTAT |
2005-06 |
0.52 |
Grand Total |
1,380.51 |
* Net of amount deposited under product.
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a bank. The Company has no loan/ dues towards any financial institution, debenture holders or from the government.
(ix) According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable Accounting Standards.
(xiv) According to the information and explanations given to us and on an overall examination of the Balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting under clause 3(xiv) is not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
To the Members of Thermax Limited
We have audited the internal financial controls over financial reporting of Thermax Limited (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for internal Financial Controls
The Companyâs 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 (âICAIâ). 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 the Companyâs 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 Act.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the ICAI. 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 auditorâs 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 internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 companyâs 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 companyâs 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, 2017, 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 ICAI.
ForSRBC&COLLP For B. K. Khare & Co
ICAI Firm registration number: 324982E/ E300003 ICAI Firm registration number:105102W
Chartered Accountants Chartered Accountants
perTridevlal Khandelwal per H.P. Mahajani
Partner Partner
Membership No.: 501160 Membership No.: 030168
Place: Pune Place: Pune
Date: May 30,2017 Date: May 30,2017
Mar 31, 2015
1. We have audited the accompanying standalone financial statements of
THERMAX LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2015, and the Statements of Profit and Loss and Cash
Flow for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
2. 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 standalone 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 (as amended). 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 financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
4. 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
thereunder.
5. 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 standalone financial
statements are free from material misstatement.
6. 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
to 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 in place an adequate internal
financial controls 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 Directors, as well
as evaluating the overall presentation of the financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
Opinion
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone 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 31,2015, and its profit and its cash
flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor''s Report) Order, 2015,
issued by the Central Government of India in terms of sub-section (11)
of section 143 of the Act (the "Order"), and on the basis of such
checks of the books and records of the Company as we considered
appropriate and according to the information and explanations given to
us, we give in the Annexure a statement on the matters specified in
paragraphs 3 and 4 of the Order.
10. 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
purpose 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 Cash Flow
dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);
e. On the basis of written representations received from the directors
as on March 31, 2015 taken on record by the Board of Directors, none of
the directors is disqualified as on March 31,2015, 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(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 litigations on its
financial position in its financial statements under Note 29
(Contingent Liabilities) and Note 30 to the financial statements
ii. Company did not have any long-term contracts including derivate
contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Auditor''s Report referred to in Point 9 of Report on
Other Legal and Regulatory Requirements in our report of even date
1 (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of the fixed
assets.
(b) The fixed assets of the Company have been physically verified by
the Management in accordance with a planned program of physical
verification which, in our opinion is reasonable having regard to the
size of the Company and the nature of its assets.The discrepancies
noticed on such verification were not material and have been properly
dealt with in the books of account. In our opinion, the frequency of
verification is reasonable.
2 (a) The Management has conducted physical verification of inventory
at reasonable intervals during the year.
(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 business.
(c) The Company has maintained proper records of inventory and the
discrepancies noticed on physical verification of inventories were not
material and have been properly dealt with in books of account.
3 The Company has not granted any loans, secured or unsecured to any of
the companies, firms nor other parties covered in the register
maintained under Section 189 of the Act. Therefore, the provisions of
Clause 3(iii)(a) and (b) of the said order are not applicable to the
company.
4 In our opinion and according to the information and explanations
given to us, the Company is having 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. On the basis of our examination of the
books and records of the Company and according to the information and
explanations given to us, we have neither come across, nor have we been
informed of, any continuing failure to correct any major weaknesses in
the aforesaid internal control system of the Company in respect of
these areas.
5 The Company has not accepted any deposits within the meaning of
Section 73 of the Act and rules framed there under.
6 We have broadly reviewed the books of accounts maintained by the
Company, pursuant to the rules made by the Central Government for the
maintainance of cost records under sub-section (1) of Section 148 of
the Companies Act, 2013and 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 records maintained as
aforesaid.
7 (a) According to the records of the Company and information and
explanations given to us, the Company is regular in depositing
undisputed statutory dues including Provident fund, Employees'' state
insurance, Income tax, Sales tax, Wealth tax and service tax, duty of
customs, duty of excise, value added tax, cess and other applicable
statutory dues with the appropriate authorities.
(b) According to the information and explanations given to us and
records of the Company examined by us, there are no dues of income tax,
sales tax, wealth tax, service tax, duty of excise, duty of customs,
value added tax and cess which have not been deposited on account of
any dispute except as follows:
Name of Statute Nature of Dues Forum where
(including interest the dispute is
and penalty as appli pending
cable)
Central Excise Act,1944 Excise duty CESTAT
Supreme court
Central Sales Tax Sales tax Appellate
Act and local Sales Authority up to
Tax(lncludingWorks Commissioner
Contract) level
High Court
Tribunal
Customs Act, 1962 Custom duty CESTAT
lncome Tax Act,1961 Income Tax Appellate
Authority up to
Commissioner''s level
Service Tax ( Finance Service tax CESTAT
Act,1994)
Name of Statute Period to which Disputed dues,
amount related not deposited
(Rs in Crore)
Central Excise Act, 1944 2001-02,2003-04, 11.44
2005-06, 2006-07,
2007-08, 2008-09,
2009-10, 2012-13,
2014-15
1997-98,2006-07 5.44
Central Sales Tax 1992-93,2000-01, 5.84
Act and local Sales Tax 2001- 02, 2003-04,
(Including Works Contract) 2004-05, 2006-07,
2007-08, 2008-09,
2009-10, 2010-11,
2011-12, 2012-13
2000- 01,2001-02, 1.36
2002- 03, 2003-04,
2004-05, 2010-11
2001- 02,2006-07, 1.28
2008-09
Customs Act, 1962 2005-06 0.45
Income Tax Act 1961 2003-04, 2007-08 to 23.17
2013-14
Service TAx Finance Act 1994 2012-13 0.13
(c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 1956 and the rules
made thereunder.
8 The Company has no accumulated losses as at the end of the financial
year and it has not incurred any cash losses in the financial year
ended on that date and in the immediately preceding financial year.
9 Based on the records examined by us and according to the information
and explanations given to us, the Company has not defaulted in
repayment of dues to any financial institution or bank or debenture
holders as at the Balance Sheet date.
10 According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions during the year, except as mentioned
below :
Sr. Type of Guarantee Beneficiary Subsidiary Issued In Favour Of
No.
1 Letter of Comfort Thermax Babcock and ICICIBank
wilcox Energy Solutions
Private Limited
2 Corporate Guarantee Rifox - Hans Richter Syd Bank Germany
GmbH
Type of Gurantee To the extent of Amount of Guarantee
Letter of Comfort Rs. 66.30 Crore
Corporate Guarantee Euro 0.45 Million
11 In our opinion, and according to the information and explanations
given to us, during the year, no term loans have been obtained by the
Company.
12 During the course of our examination of the books of accounts
carried out in accordance with generally accepted auditing practices in
India, we have neither come across any significant instance of fraud on
the Company or instance of fraud by the Company, either noticed or
reported during the year, nor have we been informed of such case by the
Management.
For B. K. Khare & Co.
Chartered Accountants
Firm''s Registration Number 105102W
H. P. Mahajani
Partner
Membership Number: 030168
Place: Pune
Date : May 26, 2015
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Thermax
Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year 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, 2013;
(b) in the case of the statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by ''the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004'',
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Act (hereinafter referred to as the "Order"),
and on the basis of such checks of the books and records of the Company
as we considered appropriate and according to the information and
explanations given to us, 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. 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, 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 subsection (3C) of section 211 of the Companies Act, 1956;
e. On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
Annexure referred to in paragraph 1 under the heading "Report on
other legal and regulatory requirements" of our report of even date
(i) (a) The Company has maintained proper records to show full
particulars, including quantitative details and situation, of its fixed
assets.
(b) The Fixed assets of the Company have been physically verified by
the management at reasonable intervals during the year & the
discrepancies noticed have been properly dealt with in the books of
account.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii) (a) The inventory of the Company has been physically verified by
the management during the year. In our opinion the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and the book records were not material.
(iii) The Company has not taken or granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 301 of the Companies Act, 1956. Accordingly,
provisions of the clause 4 (iii) (b), (c), (d), (f) and (g) of the
Companies (Auditor''s Report) Order, 2003 are not applicable and hence
not commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems 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. Further, during the course of our audit, we have neither come
across nor we have been informed of any instance of continuing failure
to correct major weakness in the aforesaid internal control procedures.
(v) (a) On the basis of our examination of the books of account, we are
of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion, the transactions made in pursuance of such
contracts or arrangements have been made at prices which are reasonable
having regard to the market prices prevailing at the relevant time as
evaluated on the basis of quotations obtained from parties / prices
charged by the Company in case of similar transactions during the year
and considering that having regard to certain items purchased / sold
are of a special nature in respect of which suitable alternative
sources do not exist for obtaining comparative quotations in general.
(vi) The Company has not accepted any deposits within the meaning of
section 58A and 58AA of the Act and the rules framed there under.
(vii) In our opinion, the Company''s present internal audit system is
commensurate with the size and nature of its business.
(viii) 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 209(1) (d) of the Companies
Act, 1956, 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 records maintained as
aforesaid.
(ix) (a) According to the information and explanations given to us and
according to the books and records as produced and examined by us ,in
our opinion ,the undisputed statutory dues in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs
Duty, Excise Duty, Cess and other material statutory dues as
applicable, have generally been regularly deposited by the Company
during the year with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) As at 31st March 2013, according to the records of the Company and
the information and explanations given to us, the following are the
particulars of disputed dues on account of Sales-tax, Income-tax,
Custom Duty, Wealth tax, Service tax, Excise Duty and Cess matters that
have not been deposited on account of a dispute:
(x) The Company has neither accumulated losses as at 31st March 2013,
nor has it incurred any cash loss either during the financial year
ended on that date or in the immediately preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanations given by the Management, in our opinion, the Company has
not defaulted in repayment of dues to any financial institution or bank
or to debenture holders as at the balance sheet date.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion and according to the information & explanation
given to us the Company is not a dealer or trader in, securities,
debentures and other investments. However, in respect of transactions
relating to investment in certain securities, the company has
maintained proper records of transactions & contracts during the year
and timely entries have been made there in. Further, such securities
have been held by the company in its own name.
(xv) Based on the information and explanations given to us, in our
opinion, the terms and condition on which the Company has given counter
guarantees/ corporate guarantees on behalf of its subsidiaries to the
banks during the year, are not prima facie prejudicial to the interest
of the Company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company, in our
opinion, funds raised on short term basis have not been used for long
term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xvix) The Company has not issued any debentures during the year.
(xx) The Company has not raised any money through public issue during
the year.
(xxi) During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, we have neither come across any significant instant
of fraud on or by the company, either noticed or reported during the
year, nor have we been informed of such case by the Management.
For B. K. Khare & Co.
Chartered Accountants
Firm registration number: 105102W
H. P. Mahajani
Place: Pune Partner
Date: May 22, 2013 Membership No.: 030168
Mar 31, 2012
1. We have audited the attached Balance Sheet of Thermax Limited as at
31st March 2012, and also the Statement of Profit and Loss and the Cash
Flow Statement for the year ended on that date, which we have signed
under reference to this report. These financial statements are the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis
for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956 of India (the "Act"), and on the basis of such
checks as we considered appropriate and according to the information
and explanations given to us, we give in the Annexure, a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above:
(a) We have 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 have been kept by the
Company as required by law, 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 dealt with by this report comply with the
accounting standards referred to in Section 211(3C) of the Act;
(e) On the basis of written representations received from the
Directors, as on 31st March 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Act; and
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said Accounts, together with the
Notes thereon and attached thereto, give, in the prescribed manner, the
information required by the Act and also give a true and fair view in
conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012;
(ii) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors' Report (Referred to in paragraph 3 of our
report of even date)
1. (a) The Company has maintained proper records to show full
particulars, including quantitative details and situation, of its fixed
assets.
(b) The fixed assets of the Company have been physically verified by
the management at reasonable intervals during the year and the
discrepancies noticed have been properly dealt with in the books of
account.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
2. (a) The inventory of the Company has been physically verified by
the management during the year. In our opinion the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and the book records were not material.
3. The Company has neither granted nor taken loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Act. As the Company has
not granted/taken any loans, secured or unsecured, to/from companies,
firms etc., listed in the register maintained under Section 301 of the
Act, paragraphs 4(iii)(a) to (g) of the Order, are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
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. Further, during the course of our audit we
have neither come across nor have we been informed of any instance of
continuing failure to correct major weaknesses in the aforesaid
internal control procedures.
5. (a) On the basis of our examination of the books of account, we are
of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion, the transactions made in pursuance of such
contracts or arrangements have been made at prices which are reasonable
having regard to the market prices prevailing at the relevant time as
evaluated on the basis of quotations obtained from parties / prices
charged by the Company in case of similar transactions during the year
and considering that having regard to certain items purchased / sold
are of a special nature in respect of which suitable alternative
sources do not exist for obtaining comparative quotations in general.
6. The Company has not accepted any deposits under the provisions of
Sections 58A and 58AA of the Act and the rules framed there under.
7. In our opinion, the Company's present internal audit system is
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
company in respect of product where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under Section 209 (1) (d) of the Companies Act, 1956 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 records maintained as aforesaid.
9. (a) According to the information and explanations given to us and
according to the books and records as produced and examined by us, in
our opinion, the undisputed statutory dues in respect of Provident
Fund, Investor Education and Protection Fund, Employees' State
Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs
Duty, Excise Duty, Cess and other material statutory dues as
applicable, have generally been regularly deposited by the Company
during the year with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employee's
state insurance, income tax, wealth tax, sales tax, service tax,
customs duty, excise duty, cess and other material statutory dues were
outstanding at the year end, for the period exceeding six months from
the date they became payable.
(c) As at 31st March 2012, according to the records of the Company and
the information and explanations given to us, the following are the
particulars of disputed dues on account of Sales-tax, Income-tax,
Custom Duty, Wealth tax, Service tax, Excise Duty and Cess matters that
have not been deposited on account of a dispute:
Name of the Nature of dues Amount
under Period to which Forum where the
statute dispute
not yet the amount
relates Dispute is
pending
deposi
-ted
(Rs.
Crore)
Central Sales
TaxAct and
local sales Sales tax
including
interest and 0.03 1992-93 Appellate
Authority -upto
tax Acts
(Including
works
contract) penalty as
applicable 0.00 2000-01 Commissioner's
level
0.01 2001-02
0.02 2003-04
0.02 2004-05
3.97 2004-05
0.01 2006-07
0.82 2007-08
0.90 2008-09
1.23 2009-10
1.28 2003-04
0.04 2003-04
3.80 2003-04
2.46 2004-05
0.00 2001-02 Tribunal
1.14 2006-07
0.05 2000-01 High Court
0.41 2001-02
0.18 2002-03
0.16 2003-04
0.34 2004-05
The Centra
Excise Act.
1944 Excise dutyl
including interest 0.70 2003-04 Appellate Auth
-ority -upto
and penalty as
applicable 0.03 2009-10 Commissioner's
level
0.20 2001-02 Tribunal
0.34 2003-04
0.85 2005-06
0.07 2006-07
0.22 2008-09
0.15 2007-08
0.02 2001-02
3.84 2006-07 Supreme court
1.60 1997-98
Custom Act.
1962 Custom duty
including interest 0.34 2005-06 Appellate Author
-ity -upto
and penalty as
applicable Commissioner's
level
Service Tax Service tax
including interest 0.43 2003-04 CESTAT, Mum
(Finance Act,
1994) and penalty as
applicable 2.31 2005-06
ESI Act ,
1948 Dues, interest and
penalty as 0.02 1989-91 ESI Court
applicable 0.02 1989-91
0.05 1987-89 High Court
Income Tax
Act,1961 Income Tax inclu
-ding interest and 11.92 2008-09 to Commissioner
(Appeals)
penalty as
applicable 5.37 2012-13 &
2007-08 to
2010-11
Maharashtra
Mathadi,
Hamal,& Work of Mathadi
nature carried 0.24 2008-09 High Court
other Manual
Workers Act
1969 out by unregistered
workers w.r.t.
applicability of
the Mathadi Act.
10. The Company has neither accumulated losses as at 31st March 2012,
nor has it incurred any cash loss either during the financial year
ended on that date or in the immediately preceding financial year.
11. Based on our audit procedures and on the information and
explanations given by the Management, in our opinion, the Company has
not defaulted in repayment of dues to any financial institution or bank
or to debenture holders as at the balance sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not
applicable to the Company.
14. In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in securities.
However, in respect of transactions relating to investment in certain
securities, the Company has maintained proper records of transactions
and contracts during the year and timely entries have been made
therein. Further, such securities have been held by the Company in its
own name.
15. Based on the information and explanations given to us, in our
opinion, the terms and conditions on which the Company has given
counter guarantees / corporate guarantees on behalf of its subsidiaries
to the banks during the year, are not prima facie prejudicial to the
interest of the Company.
16. The Company has not taken any term loan during the year.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company, in our
opinion, funds raised on short term basis have not been used for long
term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. No debentures have been issued by the the company during the year.
20. The Company has not raised any money by public issue during the
year.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, we have neither come across any instance of fraud
on or by the Company, either noticed or reported during the year, nor
have we been informed of such case by the Management.
For B.K. Khare & Company
Chartered Accountants
Firm Regn. No.105102W
H.P. Mahajani
Place : Pune Partner
Date : May 11, 2012 Membership No. 30168
Mar 31, 2011
1. We have audited the attached Balance Sheet of Thermax Limited as at
31st March 2011, and also the Profit and Loss Account and the Cash Flow
Statement for the year ended on that date, which we have signed under
reference to this report. These financial statements are the
responsibility of the Companys Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956 of India (the ÃActÃ), and on the basis of such
checks as we considered appropriate and according to the information
and explanations given to us, we give in the Annexure, a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above:
(a) We have 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 have been kept by the
Company as required by law, so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in Section 211(3C) of the Act;
(e) On the basis of written representations received from the
Directors, as on 31st March 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Act; and
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said Accounts, together with the
Notes thereon and attached thereto, give, in the prescribed manner, the
information required by the Act and also give a true and fair view in
conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2011;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditors Report
(Referred to in paragraph 3 of our report of even date)
1. (a) The Company has maintained proper records to show full
particulars, including quantitative details and situation, of its
fixed assets.
(b) The fixed assets of the Company have been physically verified by
the management at reasonable intervals during the year and the
discrepancies noticed have been properly dealt with in the books of
account.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
2. (a) The inventory of the Company has been physically verified by
the management during the year. In our opinion the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and the book records were not material.
3. The Company has neither granted nor taken loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Act. As the Company has
not granted/taken any loans, secured or unsecured, to/from companies,
firms etc., listed in the register maintained under Section 301 of the
Act, paragraphs 4(iii)(a) to (g) of the Order, are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
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. Further, during the course of our audit we
have neither come across nor have we been informed of any instance of
continuing failure to correct major weaknesses in the aforesaid
internal control procedures.
5. (a) On the basis of our examination of the books of account, we are
of the opinion that the particulars of contracts or arrangements
referred to in section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion, the transactions made in pursuance of such
contracts or arrangements have been made at prices which are reasonable
having regard to the market prices prevailing at the relevant time as
evaluated on the basis of quotations obtained from parties / prices
charged by the Company in case of similar transactions during the year
and considering that having regard to certain items purchased / sold
are of a special nature in respect of which suitable alternative
sources do not exist for obtaining comparative quotations in general.
6. The Company has not accepted any deposits under the provisions of
Sections 58A and 58AA of the Act and the rules framed there under.
7. In our opinion, the Companys present internal audit system is
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
company in respect of product where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under Section 209(1)(d) of the Companies Act, 1956 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 records maintained as aforesaid.
9. (a) According to the information and explanations given to us and
according to the books and records as produced and examined by us, in
our opinion, the undisputed statutory dues in respect of Provident
Fund, Investor Education and Protection Fund,Employees State
Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs
Duty, Excise Duty, Cess and other material statutory dues as
applicable, have generally been regularly deposited by the Company
during the year with the appropriate authorities.
(b) As at 31st March 2011, according to the records of the Company and
the information and explanations given to us, the following are the
particulars of disputed dues on account of Sales-tax, Income-tax,
Custom Duty, Wealth tax, Service tax, Excise Duty and Cess matters that
have not been deposited on account of a dispute:
Name of the Nature of dues Amount under Period to
statute dispute not yet which the
deposited amount
(Rs. Crore) relates
Central Sales Tax
Act Sales tax including 0.025 1992-93
and Local Sales
Tax Acts interest and penalty, 0.001 2000-01
(including works
contract) as applicable 0.010 2001-02
5.117 2003-04
6.484 2004-05
0.004 2007-08
1.157 2006-07
0.053 2000-01
0.038 2001-02
0.043 2003-04
0.372 2001-02
0.184 2002-03
0.158 2003-04
0.336 2004-05
The Central
Excise Act, 1944 Excise duty including
interest 0.657 2003-04
and penalty, as
applicable
0.034 2009-10
0.188 2001-02
0.323 2003-04
0.848 2005-06
0.159 2007-08
0.065 2006-07
4.417 1999-00
0.218 2008-09
3.838 2006-07
1.598 1997-98
Customs Act,
1962 Customs duty including
interest 0.321 2005-06
and penalty, as
applicable
Service Tax Service Tax including
intereset 0.406 2003-04
(Finance Act,
1994) and penalty, as
applicable 2.186 2005-06
ESI Act, 1948 Dues, interest and
penalty as 0.022 1989-91
applicable 0.048 1987-89
Income Tax
Act, 1961 Income Tax including
interest 0.846 2005-06
and penalty as
applicable 0.564 2006-07
1.035 2007-08
0.655 2008-09
Maharashtra
Mathadi, Hamal, Work of Mathadi
Nature carried 0.167 2008-09
& other Mannual
Workers Act out by unregistered
workers w.r.t.
1969 applicability of the
Mathadi Act
Name of the statute Forum where the dispute is pending
Central Sales Tax Act Appellate Authority - upto
and Local Sales Tax Acts Commissioners level
(including works contract)
Tribunal
High Court
The Central Excise Appellate Authority-upto
Act, 1944 Commissioners level
Tribunal
Supreme Court
Customs Act, 1962 Tribunal
Service Tax Tribunal
(Finance Act, 1994)
ESI Act, 1948 ESI Court
High Court
Income Tax Act,1961 Appellate Authority-upto
Commissioners level
Maharashtra Mathadi, Hamal, Advisory Committee under
& other Mannual Workers Act Maharashtra Mathadi, Hamal, & other
1969 Manual Workers Act 1969
10. The Company has neither accumulated losses as at 31st March 2011,
nor has it incurred any cash loss either during the financial year
ended on that date or in the immediately preceding financial year.
11. Based on our audit procedures and on the information and
explanations given by the Management, in our opinion, the Company has
not defaulted in repayment of dues to any financial institution or bank
or to debenture holders as at the balance sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not
applicable to the Company.
14. In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in securities.
However, in respect of transactions relating to investment in certain
securities, the Company has maintained proper records of transactions
and contracts during the year and timely entries have been made
therein. Further, such securities have been held by the Company in its
own name.
15. Based on the information and explanations given to us, in our
opinion, the terms and conditions on which the Company has given
counter guarantees / corporate guarantees on behalf of its subsidiaries
to the banks during the year, are not prima facie prejudicial to the
interest of the Company.
16. The Company has not taken any term loan during the year.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company, in our
opinion, funds raised on short term basis have not been used for long
term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. No debentures have been issued during the year.
20. The Company has not raised any money by public issue during the
year.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, we have neither come across any instance of fraud
on or by the Company, either noticed or reported during the year, nor
have we been informed of such case by the Management.
For B.K. Khare & Company
Chartered Accountants
Firm Reg. No. 105102W
H.P. Mahajani
Partner
(Membership no. 30168)
Place: Pune
Date : May 3, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Thermax Limited as at
31st March 2010, and also the Profit and Loss Account and the Cash Flow
Statement for the year ended on that date, which we have signed under
reference to this report. These financial statements are the
responsibility of the CompanyÃs management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We have conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003, issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956 of India (the ÃActÃ), and on the basis of such
checks as we considered appropriate and according to the information
and explanations given to us, we give in the Annexure, a statement on
the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above:
(a) We have 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 have been kept by the
Company as required by law, so far as appears from our examination of
those books;
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in Section 211(3C) of the Act;
(e) On the basis of written representations received from the
Directors, as on 31st March 2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Act; and
(f) In our opinion and to the best of our information and according to
the explanations given to us, the said Accounts, together with the
Notes thereon and attached thereto, give, in the prescribed manner, the
information required by the Act and also give a true and fair view in
conformity with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2010;
(ii) in the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
(iii) in the case of Cash Flow Statement, of the cash flows for the
year ended on that date.
Annexure to the Auditorsà Report (Referred to in paragraph 3 of our
report of even date)
1. (a) The Company has maintained proper records to show full
particulars, including quantitative details and situation, of its fixed
assets.
(b) The fixed assets of the Company have been physically verified by
the management at reasonable intervals during the year and the
discrepancies noticed have been properly dealt with in the books of
account.
(c) In our opinion, and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
2. (a) The inventory of the Company has been physically verified by
the management during the year. In our opinion the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and the book records were not material.
3. The Company has neither granted nor taken loans, secured or
unsecured to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Act. As the Company has
not granted/taken any loans, secured or unsecured, to/from companies,
firms etc., listed in the register maintained under Section 301 of the
Act, paragraphs 4(iii)(a) to (g) of the Order, are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
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. Further, during the course of our audit we
have neither come across nor have we been informed of any instance of
continuing failure to correct major weaknesses in the aforesaid
internal control procedures.
5. (a) On the basis of our examination of the books of account, we are
of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion, the transactions made in pursuance of such
contracts or arrangements have been made at prices which are reasonable
having regard to the market prices prevailing at the relevant time as
evaluated on the basis of quotations obtained from parties / prices
charged by the Company in case of similar transactions during the year
and considering that having regard to certain items purchased / sold
are of a special nature in respect of which suitable alternative
sources do not exist for obtaining comparative quotations in general.
6. The Company has not accepted any deposits under the provisions of
Sections 58A and 58AA of the Act and the rules framed there under.
7. In our opinion, the CompanyÃs present internal audit system is
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
Company in respect of product where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under Section 209 (1) (d) of the Companies Act, 1956 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 records maintained as aforesaid.
9. (a) According to the information and explanations given to us and
according to the books and records as produced and examined by us, in
our opinion, the undisputed statutory dues in respect of Provident
Fund, Investor Education and Protection Fund, Employeesà State
Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs
Duty, Excise Duty, Cess and other material statutory dues as
applicable, have generally been regularly deposited by the Company
during the year with the appropriate authorities.
(b) As at 31st March 2010, according to the records of the Company and
the information and explanations given to us, the following are the
particulars of disputed dues on account of Sales-tax, Income-tax,
Custom Duty, Wealth tax, Service tax, Excise Duty and Cess matters that
have not been deposited on account of a dispute:
Name of the Nature of dues Amount under
statute dispute not yet
deposited
(Rs. Crore)
Central Sales Tax Act Sales tax including 0.025
and Local Sales
Tax Acts interest and penalty, 0.001
(including works
contract) as applicable 0.010
5.117
6.864
0.004
0.123
0.053
0.037
0.008
0.086
0.336
0.373
0.184
0.158
The Central Excise
Act, 1944 Excise duty including interest 0.066
and penalty, as applicable 0.611
0.190
0.371
0.842
0.144
0.061
4.271
0.218
3.838
5.301
Customs Act, 1962 Customs duty including interest 1.667
and penalty, as applicable
Service Tax Service Tax including intereset and 0.383
(Finance Act,
1994) penalty, as applicable 2.065
ESI Act, 1948 Dues, interest and penalty as 0.022
applicable 0.046
Income Tax Act,
1961 Income Tax including interest 0.055
and penalty as applicable 5.941
Name of the Period to which Forum where the
Statue the amount relates dispute is pending
Central Sales Tax Act
and Local Sales Tax Acts
(including works contract) 1992-93 Appellate Authority - upto
2000-01 CommissionerÃs level
2001-02
2003-04
2004-05
2007-08
2006-07
2000-01 Tribunal
2001-02
2002-03
2003-04
2004-05 High Court
2001-02
2002-03
2003-04
The Central Excise Act, 1944 2009-10 Appellate Authority- upto
2003-04 CommissionerÃs level
2001-02 Tribunal
2003-04
2005-06
2007-08
2006-07
1999-00
2008-09
2006-07 Supreme Court
1997-98 Supreme Court
Customs Act, 1962 2005-06 Tribunal
Service Tax
(Finance Act, 1994) 2003-04 Tribunal
2005-06 Tribunal
ESI Act, 1948 2008-09 ESI Court
2008-09 High Court
Income Tax Act, 1961 2001-02 Appellate Authority- upto
2005-06 CommissionerÃs level
10. The Company has neither accumulated losses as at 31st March 2010,
nor has it incurred any cash loss either during the financial year
ended on that date or in the immediately preceding financial year.
11. Based on our audit procedures and on the information and
explanations given by the management, in our opinion, the Company has
not defaulted in repayment of dues to any financial institution or bank
or to debenture holders as at the balance sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not
applicable to the Company.
14. In our opinion and according to the information and explanations
given to us, the Company is not a dealer or trader in securities.
However, in respect of transactions relating to investment in certain
securities, the Company has maintained proper records of transactions
and contracts during the year and timely entries have been made
therein. Further, such securities have been held by the Company in its
own name.
15. Based on the information and explanations given to us, in our
opinion, the terms and conditions on which the Company has given
counter guarantees / corporate guarantees on behalf of its subsidiaries
to the banks during the year, are not prima facie prejudicial to the
interest of the Company.
16. The Company has not taken any term loan during the year.
17. Based on the information and explanations given to us and on an
overall examination of the balance sheet of the Company, in our
opinion, funds raised on short term basis have not been used for long
term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. No debentures have been issued during the year.
20. The Company has not raised any money by public issue during the
year.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India, we have neither come across any instance of fraud
on or by the Company, either noticed or reported during the year, nor
have we been informed of such case by the management.
For B.K. Khare & Company
Chartered Accountants
H.P. Mahajani
Place :Pune Partner
Date :May 12, 2010 (Membership no. 30168)
Firm Reg. No. 105102W
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