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Chandni Machines Ltd.

BSE: 542627 Sector: Others
NSE: N.A. ISIN Code: INE01GZ01011
BSE 00:00 | 20 Sep 9.27 -0.48
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NSE 05:30 | 01 Jan Chandni Machines Ltd
OPEN 9.27
PREVIOUS CLOSE 9.75
VOLUME 3000
52-Week high 11.37
52-Week low 6.10
P/E 9.76
Mkt Cap.(Rs cr) 3
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 9.27
CLOSE 9.75
VOLUME 3000
52-Week high 11.37
52-Week low 6.10
P/E 9.76
Mkt Cap.(Rs cr) 3
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Chandni Machines Ltd. (CHANDNIMACHINES) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT

To

The Members of

Chandni Machines Limited

(Formerly known as Chandni Machines Private Limited)

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Chandni MachinesLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2020 and the Statement of Profit and Loss (including other comprehensive income)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardprescribed under section 133 of the Act read with the Companies (Indian AccountingStandard)

Rules 2015 as amended ("Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2020 and its profit (including other comprehensive income) changes in equity andits cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial 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 thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters ('KAM') are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.

The key audit matters How our audit addressed the key audit matter
Adoption of Ind AS 116 Leases
As described in Note 2(j) to the standalone financial statements the Company has adopted Ind AS 116 Leases (‘Ind AS 116') the new standard on lease accounting during the current year. Our audit procedures on adoption of Ind AS 116
include the following:
Evaluated the design and implementation of the processes and internal controls relating to implementation of the new lease standard.
Based on our evaluation of the contractual agreements entered into and our knowledge of the business assessed the appropriateness of the leases identified by the Company.
The application of this accounting standard is complex and is an area of focus in our audit as the Company has various number of leases with different contractual terms. Evaluated the reasonableness of the discount rates used in computing the lease liabilities.
Ind AS 116 introduces a new lease accounting model wherein lessees are required to recognize a right-of-use (ROU) asset and a lease liability arising from a lease on its balance sheet. The lease liabilities are initially measured by discounting future lease payments during the lease term as per the contract/ arrangement. For new leases tested the lease accounting and estimates/ judgments used by the Company.
Adoption of the standard involves significant judgements and estimates including determination of the discount rates and the lease term. Evaluated the appropriateness of the accounting policy disclosures provided under the new lease standard and assessed the completeness and mathematical accuracy of the relevant disclosures.
Refer Note nos. 2 4 16 20 and 40 to the standalone financial statements.
External confirmations request perpetrated pursuant to SA 505
COVID-19 has impacted the procedure of external confirmation request to vendors and customers. Postal facilities were not available in the near-end of the financial year. To combat this we had sent positive external confirmation requests through electronic modes. However due to suspension of business activities of many confirming parties there are few confirmations not received till the date of the audit report. We revised our assessed risk and have modified our audit procedures to mitigate these risks. We have obtained a reliable assurance pertaining to transactions with confirming parties in the sense for accurate and complete processing of routine and significant classes of transactions such as revenue and purchases.
In such events in accordance with SA auditors have to revise the assessed risk of material misstatement at the assertion level and modify the planned audit procedures. SA also directs the auditors to perform alternative audit procedures. We selected samples and tested the effectiveness of controls relating to accuracy and completeness of transactions in totality considering the frequency and regularity of transactions.
We performed alternative audit procedures like follow-up confirmation requests verification of subsequent payments and receipts to verify part of the balances appearing in the original confirmation requests.
Allowance for credit losses in respect of advances to foreign vendors
The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company had given advances to foreign vendors against import of engineering goods. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the countries where these foreign vendors are located. In calculating expected credit losses in respect of these advances the Company also considered the relevant credit information for its vendors to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID- 19. Our audit procedures related to the allowance for credit losses for the advances to the foreign vendors and contract assets included the following among others:
We identified allowance for credit losses as a key audit matter because of the significant judgement involved in calculating the expected credit losses. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management's estimate of the expected credit losses. We tested the effectiveness of controls over the (1) development of the methodology for the allowance for credit losses including consideration of the current and estimated future economic conditions (2) completeness and accuracy of information used in the estimation of probability of default and (3) computation of the allowance for credit losses.
For a sample of foreign vendors we tested the input data used in estimating the probability of default by comparing them to external and internal sources of information.
We evaluated the incorporation of the applicable assumptions into the estimate of expected credit losses and tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company.
We evaluated the qualitative adjustment to the historical loss rates including assessing the basis for the adjustments and the reasonableness of the significant assumptions.
Measurement and valuation of inventory
As at 31st March 2020 the Company has inventory amounting to Rs. 5 65 51403/-. (Refer Note no. 8) This was determined a key audit matter as the measurement and valuation of the inventory at the year-end involves significant judgement and estimate. Our audit procedures relating to the measurement of inventory quantities of coal included the following:
The Company uses internal and external experts to perform volumetric assessments basis which the quantity for these inventories is estimated. Understanding and evaluating the design and operating effectiveness of controls over physical count and measurement of such inventory;
Evaluation of competency and capabilities of management's experts;
Physically observing inventory measurement and count procedures carried out by management using experts to ensure its appropriateness and completeness;
Obtaining and inspecting inventory measurement and physical count results for such inventories including assessing and evaluating the results of analysis performed by management in respect of differences between book and physical quantities.
Based on the above procedures performed we did not identify any material exceptions in the measurement of inventory quantities.

Emphasis of Matter paragraph

We draw attention to note no. 44 forming part of the standalonefinancial statements which describes the management's assessment of uncertaintiesrelated to COVID-19 and its consequential financial impact on its assets as at 31st March2020 and operations of the Company. Our opinion is not modified in respect of this matter.

Information Other than the Standalone Financial Statements andAuditor‘s Report thereon

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements and ourauditors' report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information; we are required to report that fact. We have nothing to report inthis regard.

Management's Responsibility for the Standalone Financial Statements

The Company's management and Board of Directors are responsible for thematters stated in Section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairsprofit / loss (including other comprehensive income) changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments 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 of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management and Boardof Directors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment 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 standalone 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 standalone 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 auditors' 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.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016("the Order") issued by the Central Government of India in terms of Section143(11) of the Act we give in "Annexure A" a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.

(A) 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 other comprehensive income) the Statement of Changes in Equity and the Statement of Cash Flows 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 Ind AS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31 March 2020 taken on record by the Board of Directors none of the directors is disqualified as on 31 March 2020 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 financial statements of the Company and the operating effectiveness of such controls refer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations as on its financial position in its standalone financial statements as mentioned in Note no. 43;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
iii. There has been no amount required to be transferred to the Investor Education and Protection Fund by the Company.

(C) With respect to the matter to be included in the Auditors' Reportunder section 197(16) as amended:

According to the information and explanations given to us the Companyhas paid/provided for managerial remuneration in accordance with the provisions of section197 read with Schedule V to the Act.

For Ambavat Jain & Associates LLP
Chartered Accountants
ICAI Firm Registration No: 109681W
Ashish J Jain
Partner
Membership No.111829
Place: Mumbai
Date: 31 July 2020
ICAI UDIN No: 20111829AAAADM1379

Annexure A to the Auditors' Report

(Referred to in paragraph 1 under ‘Report on other Legal &Regulatory Requirements' Section of our report of even date)

[i] (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) These fixed assets have been physically verified by the management at reasonable intervals during the year and no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company the title deeds of immovable properties are held in the name of the Company.

 

[ii] As informed to us the inventory in the company's possession has been physically verified at reasonable intervals during the year by the management. The discrepancies noticed on verification between physical stock and book records were not material.
[iii] The company has not granted any loans secured or unsecured to companies firms limited liability partnership or other parties covered in the register maintained u/s.189 of the Companies Act 2013. Accordingly clause 3(iii) of the Order is not applicable.
[iv] As informed to us the Company has neither given any loans nor made any investment or provided guarantee or security during the year. Accordingly clause 3(iv) of the Order is not applicable.
[v] The company has not accepted any deposits from the public.
[vi] As informed to us maintenance of cost records has not been prescribed by the Central Government under sub-section (1) of section 148 of the Companies Act 2013 for any of the product of the Company.

 

[vii] (a) In our opinion and according to the information and explanations given to us the company has generally been regular in depositing with the appropriate authorities the undisputed statutory dues applicable to it. There were no arrears of outstanding undisputed statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us there are no dues of income tax sales tax custom duty service tax excise duty value added tax which have not been deposited on account of any dispute.

 

[viii] According to the information and explanations given to us the company has not obtained any loans or borrowings from any banks financial institutions government or debenture holders during the year. Accordingly clause 3(viii) of the order is not applicable
[ix] The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly paragraph 3 (ix) of the Order is not applicable.
[x] According to the information and explanations given to us no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit
[xi] According to the information and explanations given to us the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
[xii] In our opinion and according to the information and explanations given to us the Company is not a nidhi company. Accordingly paragraph 3(xii) of the Order is not applicable.
[xiii] According to the information and explanations given to us transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
[xiv] According to the information and explanations give to us the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
[xv] According to the information and explanations given to us the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable.
[xvi] According to the information and explanations given to us the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

 

For Ambavat Jain & Associates LLP
Chartered Accountants
ICAI Firm Registration No: 109681W
Ashish J Jain
Partner
Membership No.111829
Place: Mumbai
Date: 31 July 2020
ICAI UDIN No: 20111829AAAADM1379

Annexure - B to the Auditors' Report

(Referred to in paragraph 2 (f) under ‘Report on other Legal &Regulatory Requirements' Section of our report of even date)

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the

Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Chandni Machines Limited ("the Company") as of 31st March 2020 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls 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 over Financial Reporting issued by the Institute of CharteredAccountants of India (‘ICAI'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of

Internal Financial Controls over Financial Reporting (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

Considering the size of the company and nature of its business in ouropinion the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2020 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 Ambavat Jain & Associates LLP
Chartered Accountants
ICAI Firm Registration No: 109681W
Ashish J Jain
Partner
Membership No.111829
Place: Mumbai
Date: 31 July 2020
ICAI UDIN No: 20111829AAAADM1379

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