To the Members of Sadhana Nitro Chem Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Sadhana Nitro ChemLimited ("the Company") which comprises the Balance Sheet as at 31" March2017 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companypreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report undertheprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Companys Directors as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Financial Statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 $' March 2017 and its profit and its cash flows for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give inAnnexure 1 a statement on the matters specified inparagraph 3 and 4 of the Order to the extent applicable.
2. Furtherto our comments inAnnexure 1 as required by Section 143(3) of the Act wereportthat:
(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books
(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31 stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2017 from being appointed as a director in terms ofSection 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls referto ourseparate report in Annexure 2 and
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
I. The Company does not have any pending litigation which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the financial statements as toholding as well as dealing in Specified Bank Notes during the period from 8""November 2016 to 30" December 2016. Based on audit procedures and relying onthe management representation we report that the disclosures are in accordance with thebooks of account maintained by the Company and as produced to us by theManagement(Refer Note No. 16.1 of Financial Statements)
| ||For V. Sankar Aiyar & Co |
| ||Chartered Accountants |
| ||Firm Reg No: 109208W |
| ||Arvind Mohan |
|Place: Mumbai ||Partner |
|Date: April 26"' 2017 ||Membership No. 124082 |
ANNEXURE 1 TO TI-IE INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF SADHANA NITROCHEM LIMITED ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2017
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and in our opinion we report that:
I a. The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
b. The Company has a policy of physically verifying its fixed assets in a phased mannerto cover all the assets of the Company in a block of three years which in our opinion isreasonable having regard to the size of the Company and the nature of its business.
c. The title deeds of the immovable properties are held in the name of the company.
II a. The inventory has been physically verified by the Management at reasonableintervals during the year
b. The procedures of physical verification of inventories followed by the management isreasonable and adequate in relation to the size of the company and nature of its business.No material discrepancies were noticed on such physical verification.
c. The company has maintained proper records of inventories. As explained to us therewere no material discrepancies noticed on physical verification of inventory as comparedto the book records.
III The Company has not granted any loans secured or unsecured during the period to theparties covered in the Register maintained under section 189 of the Companies Act 2013.
IV The Company has not granted any loans investments or any guarantees or securitiesaccordingly provision of Section 185 and 186 does not apply.
V The Company has not accepted any deposits from public. Accordingly this clause isnot applicable.
VI The Central Government has not prescribed maintenance of cost records under section148(1) of the Act.
VII a) The company has been irregular in depositing undisputed statutory dues includingprovident fund employees state insurance income-tax sales-tax wealth taxservice tax duty of customs duty of excise value added tax cess and any otherstatutory dues with the appropriate authorities during the year. No undisputed amount inrespect of the aforesaid statutory dues were in arrears as at 31st March 2017 for aperiod of more than six months from the date they become payable except in the followingcases
|Name of the Statute ||Nature of Dues ||Amount (Rs.) ||Period to Which it relates |
|Income Tax Act. 1961 ||Tax Deducted at Source ||6717849 ||April 2015 to September 2016 |
|Provident Fund Act 1952 ||P. F. Contribution ||5784537 ||June 2015 to September 2016 |
|Service Tax ||Reverse Mechanism ||2057631 ||April 2014 to September 2016 |
|Total || ||14560017 || |
b) There are no dues of Income Tax Sales tax Service Tax Customs duty Wealth TaxExcise Duty Excise Duty and Cess which have not been deposited on account of a dispute.
VIII The Company has not defaulted in repayment of dues to any financial institutionsor banks.
IX The Company did not raise any money by way of initial public offer (including debtsinstruments) or further public offer and terms loans during the year. Accordingly thisclause is not applicable.
X No material fraud by the company or on the company by its officers or employees hasbeen noticed or reported during the course of our audit.
XI The company has paid / provided for managerial remuneration in accordance with therequisite approvals as mandated by the provisions of section 197 read with Schedule V ofthe Act.
XII The Company is not a Nidhi Company. Accordingly this clause is not applicable.
XIII All Transaction with related parties are in compliance with Section 177 andsection 188 of the Companies Act2013 where applicable and details of such transactionshave been disclosed in the financial statements as required by the applicable Accountingstandards.
XIV The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Accordingly this clause is notapplicable.
XV The Company has not entered into any non cash transactions with directors or personsconnected with them.
XVI The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE 2 TO THE INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF SADHANA NITROCHEM LIMITED ON STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2017
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SadhanaNitro Chem Limited ("the Company") as of March 312017 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial ontrols thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as requiredunderthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's Judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls systemoverfinancial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control overfinancialreporting includes those policies and procedures that
(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofinternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For V. Sankar Aiyar & Co |
| ||Chartered Accountants |
| ||Firm Reg No: 109208W |
| ||Arvind Mohan |
|Place: Mumbai ||Partner |
|Date: April 26th 2017 ||Membership No. 124082 |