Chadha Papers Ltd.
|BSE: 531946||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE669W01018|
|BSE 00:00 | 03 Feb||Chadha Papers Ltd|
|NSE 05:30 | 01 Jan||Chadha Papers Ltd|
|BSE: 531946||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE669W01018|
|BSE 00:00 | 03 Feb||Chadha Papers Ltd|
|NSE 05:30 | 01 Jan||Chadha Papers Ltd|
To the Members of Chadha Papers Limited
Report on the Audit of the Standalone Financial Statements
1. We have audited the standalone financial statements of Chadha Papers Limited("the Company") which comprise the Balance Sheet as at 31st March 2020 theStatement of Profit and Loss (including other comprehensive income) Statement of Changesin Equity and Statement of Cash Flows for the year then ended and notes to the standalonefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "the standalone financialstatements").
2. 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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2020 and profit/loss changes inequity and its cash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of theFinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
4. We draw your attention to the following matters:
A. The company has sold their investment to Adie Broswon Corporation Private Limitedagainst which company received an advance. However the shares can't be transferred inview of the agreement with The president of India acting through the Secretary andCommissioner Department of Transport Government of National Capital Territory of Delhi.
B. The Company is required to identify its suppliers which are registered under MSMEsAct so as to comply with the provisions of the said Act applicable to it.
C. The continuous spreading of COVID-19 across India the Indian Government announced astrict 21-day lockdown on March 24 2020 which was further extended till June 302020across India to contain the spread of the virus. This has resulted in restriction onphysical visit to the clients locations and the need for carrying out alternative auditprocedures as per the Standards on auditing prescribed by the Institute of charteredAccountants of India (ICAI).
As a result of the above the entire audit was carried out based on remote access ofthe data as provided by the Management. This has been carried out based on the advisory on"Specific considerations while conducting distance audit / remote audit / onlineaudit under current COVID-19 situation" issued by the Auditing and AssuranceStandards Board of ICAI. We have been represented by the Management that the data providedfor our audit purposes is correct complete reliable and are directly generated by theaccounting system of the company without any further manual modifications.
We bring to the attention of the users that the audit of the financial statements hasbeen performed in the aforesaid conditions.
Our audit opinion is not modified in respect of the above.
Key Audit matters
5. Key audit matters are those matters that in our professional judgement were ofmost significance in our audit of the standalone Financial statements of the currentperiod. These matters were addressed in the context of our audit of the standaloneFinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.
We have determined the matters described below to be the key audit matters to becommunicated in our report.
Key Audit Matter:
1. Trade receivables:
The company has trade receivables of Rs 492115358 as at 31st March 2020. Refer NoteNo 10 in the Financial Statements. The company has sent letters seeking balanceconfirmation certificates from most material trade receivables during the financial year.Since most of the company's principal customers are individual entities firms &private limited companies written balance confirmations are not received. We had informedthe management that the identification of doubtfulness if any in Trade Receivables issubjective and therefore the period of Good receivables' in some cases extends. Themanagement needs to put more objective criteria & tighter norms for the determinationof the recoverability. We draw the attention to Trade receivables regarding the company'sAccounting Policy on impairment of trade receivables.
Response to Key Audit Matter: Audit procedures carried out by auditors: We checked allsignificant trade receivable accounts for their past history of payments & obtainreasons for the pending cases. We also verified on test basis the evidence of receipt ofmaterial or services by the customers.
Although the company's management & officers are making reasonable efforts toobtain information given the nature of the customers their practices & the manner inwhich they release payments the delay in settlement of trade receivables in few cases isinevitable. Further retention of receivables in certain cases on some pretext is fairlycommon. We consider that insisting on the company to make a provision for bad / doubtfuldebts just because of this. Hence we consider that the time period of up to three yearsfrom bill date to finally determine recoverability is fair & reasonable.
The above mentioned factors have been appropriately considered by us and based on thework performed and the evidence obtained we consider the accounting treatment isappropriate.
2. Property Plant and equipment and intangible assets
There are areas where management judgements impacts the carrying value of propertyplant and equipment intangible assets and their respective depreciation and amortizationamounts. These include the decision to capitalize or expense costs; the annual asset lifereview: the timelines of the capitalization of assets and the use of managementassumptions and estimates for the determination of the measurement and recognitioncriteria for assets retired from active use. Due to the materiality in the context of thebalance sheet of the company and the level of judgements and estimates required weconsider this to be a key audit matter.
Response to Key Audit Matter: We assessed the controls ln place evaluated theappropriateness of capitalisation process performed tests of details on costscapitalized the timeliness of the capitalization of assets and the de recognitioncriteria for assets retired from active use.
In performing these procedures we reviewed the judgements made by management includingthe nature of underlying costs capitalized; determination of realisable value of theassets retired from active use; the appropriateness of asset live applied in thecalculation of depreciation; useful lives of assets as per the technical assessment of themanagement and external technical experts. We have observed that there are no materialchanges.
Information other than the Financial Statements and Auditor's Report thereon
6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone
7. The Company's Management and Board of Directors are responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone Financial statements that give a true and fair view ofthe financial position financial performance (changes in equity) and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
8. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the financial statements
9. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
10. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the Financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
11. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
13. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the Financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
14. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the Annexure "A" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
15. 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 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 standalone financial statements dealt with by this report are in agreement withthe 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 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.
(f) We have also audited the internal financial controls over financial reporting(IFCOFR) of the Company as on 31 March 2020 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport as per Annexure B expressed an unmodified opinion.
(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 has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.
ii. The Company has made provision as required under the applicable law or Indianaccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts.
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2020.
iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.
16. As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act.
"Annexure A" to Independent Auditors' Report
The Annexure referred to in Independent Auditors' Report to the members of ChadhaPapers Limited on the financial statements for the year ended March 31 2020 we reportthat:
i. (a) The Company is under the process of maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) All fixed assets of the Company have not been physically verified by the Managementduring the year. We have informed that the company is in the process of implementing theprogramme of periodical verification of the fixed assets immediately after completion ofthe records.
(c) According to the information & explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.
ii. (a) As per the information furnished the inventories have been physically verifiedduring the year by the management at reasonable intervals.
(b) According to the information and explanations given to us procedures of physicalverification of inventories followed by the management are reasonable and adequate inrelation to the size of the company and the nature of its business.
(c) The company is maintaining proper records of inventory. In our opiniondiscrepancies noticed on physical verification of inventories were not material inrelation to the operations of the Company and the same have been properly dealt with inbooks of account.
iii. (a) The Company has not granted interest free Loans/advances to parties covered inthe register maintained under Section 189 of the Act during the year. The existing loan ofRs. 10.10 lac granted to its subsidiary is outstanding.
(b) In our opinion and according to information and explanation given to us the termsand conditions of interest free loans given to the parties covered in the registermaintained under Section 189 of the Act are not prima facie prejudicial to the interest ofthe Company.
(c) As per our information and explanation given to us Loans given to said party isrepayable on demand.
(d) There is no overdue amount of loan granted to Companies firm or other partieslisted in the register maintained under section 189 of the Companies Act 2013.
iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013in respect of loans investments guarantees and security.
v. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
vi. The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been maintained. We have however not made a detailed examination of suchrecords with a view
to determine whether they are accurate or complete.
vii. (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including provident fund employees stateinsurance income-tax sales tax service tax duty of customs duty of excise valueadded tax GST cess and any other statutory dues with the appropriate authorities.According to the information and explanations given to us no undisputed amounts payablein respect of the above were in arrears as at March 31 2020 for a period of more than sixmonths from the date when they became payable.
(b) According to the information and explanations given to us and records of thecompany examined by us the particulars of dues of central excise service tax sales taxentry tax etc. which have not been deposited on account of any dispute are as follows:
Detail of Disputed Statutory Dues as on 31.03.2020.
(c) The Sales Tax Department has raised the following demands during the financial year201718 against the company for which the company has filed appeals:
viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks.
ix. Based upon the audit procedures performed and the information and explanationsgiven by the management the Company did not raise any money by way of initial publicoffer and further public offer (including debt instrument). To the best of our knowledgeand belief and according to the information and explanations given to us term loansavailed by the Company were applied for the purpose for which the loans were obtained.
x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
xii. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
xiii. In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in thefinancial statements as required by the applicable Indian accounting standards.
xiv. According to the information & explanation given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.
Based upon the audit procedures performed and the information and explanations given by. the management the company has not entered into any non-cash transactions with anydirector or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company.
xvi. In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company.
"Annexure B" to Independent Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
(Referred to in Paragraph 2(f) under the heading "Report on Other Legal &Regulatory Requirement" of our report of even date to the financial statements of theCompany for the year ended March 31 2020.)
We have audited the internal financial controls over financial reporting of M/S ChadhaPapers Limited ("the Company") as of March 31 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
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 2019 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.
Emphasis of Matter Paragraph
Long-term outstanding Balances in some of the personal and impersonal accounts aresubject to confirmation and reconciliation.
The company should implement the programme of periodical verification of the fixedassets. 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 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 a 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 judgement including the assessment of the risks ofmaterial misstatement 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.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
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.
For Khandelia & Sharma
Membership No. 089125
Place: Bilaspur (U.P)