To the Members of Caprolactam Chemicals Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Caprolactam Chemicals Limited(the Company') which comprise the Balance Sheet as at 31 March 2019 the Statementof Profit And Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information. Opinion In our opinionand to the best of our information and according to the explanations given to us theaforesaid financial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2019and its profit and its cash flows for the year ended on that date. Key Audit Matters Keyaudit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Key Audit Matter ||Auditor's Response |
|1 Revenue ||Our audit included but was not limited to the following activities: |
|Revenue from sale of Goods and Job Work is recognized to the extent the Company has delivered goods or rendered services under an agreement the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the Company. Revenue is measured at the fair value of the consideration received; further revenues are accounted net of net of taxes sales returns and ||Mapped and evaluated selected systems and processes for revenue recognition and tested a sample of key controls.Assessed whether the accounting principles comply with the Ind AS.Tested a sample of sales transactions for compliance with theCompany's accounting principles.Performed data analytical procedures to identify and evaluate a sample of manual and automatic journal entries.Traced disclosure information to accounting records and other supporting documentation. |
|2 Property Plant & Equipment Property Plant & Equipment are stated at cost less accumulated depreciation. When parts of an item of plant have different useful lives they are accounted for as separate items of plant and equipment. Refer Notes 9 to the Financial Statements ||Our audit included but was not limited to the following activities: |
| ||Reviewed the key assumptions and estimates used by management in the value in use calculation. |
| ||Reviewed the key assumptions in making additions in the value of assets and its date considered as put to use.Reviewed management assessment on the reasonableness of the useful lives of fixed assets. Assessed whether the accounting principles comply with the Ind AS.Tested a sample of transactions for compliance with theCompany's accounting principles.Performed data analytical procedures to identify and evaluate a sample of manual and automatic journal entries.Traced disclosure information to accounting records and other |
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the 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 Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
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 under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the financial statements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements. Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 4 of the order. As required by Section 143 (3) of the Act we report that: We havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. in our opinion properbooks of account as required by law have been kept by the Company so far as it appearsfrom our examination of those books; the balance sheet the statement of profit and lossand the cash flow statement dealt with by this Report are in agreement with the books ofaccount; in our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014; on the basis of the written representations received from thedirectors as on 31 March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2019 from being appointed as a director in termsof Section 164 (2) of the Act; with respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate report in
"Annexure B"; and with respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the
Companies (Audit and
Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us: the Company has disclosed the impact of pendinglitigations on its financial position in its financial statements; the Company has madeprovision as required under the applicable law or accounting standards for materialforeseeable losses if any on long-term contracts including derivative contracts; Therewere no amounts which were required to be transferred to the Investor Education andProtection Fund by the Company. As per my report of even date attached For L J Kothari& Co. Chartered Accountant FRN: 105313W
CA. Lalit J Kothari
Membership No 030917
Date :- 26/08/2019
Place :- Mahad
Annexure - A to the Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the financial statements for the year ended 31 March 2019 we report that:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Asset.
The Company has a regular programme of physical verification of its fixed assets. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
(a) Inventories have been physically verified by management at reasonable intervalsduring the year. In my opinion the frequency of such verification is reasonable.
(b) In my opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
According to the information and explanation given to us the Company has not grantedany loans secured or unsecured to company firms Limited Liability Partnership or otherparties covered in the register maintained under section 189 of the Act. Accordinglyparagraph (iii) (a) (b) (c) is not applicable.
In our opinion and according to the information and explanations given to us theCompany has not made any loan guarantee or security in favour of its directors or to anyother person in whom the director is interested neither made any loans and investment.Therefore Sec185 and 186 of the Act is not applicable. The Company has not accepted anydeposits from the public and hence the directives issued by the Reserve Bank of India andthe provisions of Sections 73 to 76 or any other relevant provisions of the Act and theCompanies (Acceptance of Deposit) Rules 2015 with regard to the deposits accepted fromthe public are not applicable.
The Central Government has not prescribed the maintenance of cost records under section148(1) of the Act for any of the services rendered by the Company.
(a) According to the information and explanation given to us and the records of thecompany examined by us In my opinion the company is generally regular in depositingundisputed statutory dues including Provident fund Employee State Insurance Income TaxSales Tax Wealth Tax Service Tax Custom Duty Excise Duty Goods and Services Tax (GST)Cess & other statutory dues as applicable with appropriate authorities. According tothe information & explanation given to us no undisputed amounts payable in respect ofthe aforesaid dues were outstanding as at 31st March 2019 for a period of more than sixmonths from the date they becoming payable.
(b) According to the information & explanation given to me there are no disputedamount of statutory dues towards Income Tax Sales Tax Wealth Tax Service Tax CustomDuty Goods and Services Tax (GST) Cess that have not been paid to concerned authorities.
The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable.
The company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the Order is not applicable.
According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
According to the information and explanations give to us and based on our examinationof the records of the Company the Company has paid/provided for managerial remunerationin accordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act
In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
According to the information and explanations given to us and based on our examinationof the records of the Company transactions with the related parties are in compliancewith sections 177 and 188 of the Act where applicable and details of such transactionshave been disclosed in the financial statements as required by the applicable accountingstandards.
According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.
According to the information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable.
The Company is not required to be registered under section 45-IA of the Reserve Bank ofIndia Act 1934.
|CA. Lalit J. Kothari ||As per my report of even date attached |
|[Proprietor] || |
|Membership No 030917 ||For L J Kothari & Co. |
|Date :- 26/08/2019 ||Chartered Accountant |
|Place :- Mahad ||FRN: 105313W |
Annexure - B to the Auditors' Report
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 internalfinancial controls over financial reporting of Caprolactam Chemicals Limited ("theCompany") as of 31 March 2019 in conjunction with our audit of the financialstatements of the Company for the year ended on that date. Management's
Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining 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 (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial 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 over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements. InherentLimitations of Internal Financial Controls Over Financial Reporting Because of theinherent limitations of internal financial controls over financial reporting includingthe possibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting to futureperiods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate. Opinion In our opinion theCompany has in all material respects an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at 31 March 2019 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.
L.J. KOTHARI & CO
Lalit J. Kothari
Membership No 03093
Place : Mahad