The Members of CHD CHEMICALS LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Chd Chemicals Limited("The Company") which comprise the Balance Sheet as at
March 31 2020 the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equities and the Statement of Cash Flows for the yearthen ended and notes to the financial statements including a summary of the significantaccounting policies and other explanatory information (herein after referred to as"the financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Financial Statements give the information required by theCompanies Act 2013 as amended (the Act") in the manner so required and give atrue and fair view in conformity with the Indian Accounting Standards prescribed underSection 133 of the Act read with the Companies (Indian Accounting Standard) Rules 2015as amended (Ind AS) and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 its profit including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the Financial Statements in accordance with the Standards onAuditing (SAs) as specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements' section of our report. We are independent of theCompany in accordance with the Code of Ethics' issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the financial statements under the provisions of the Act and the Rules madethere under 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 audit opinion on theFinancial Statements.
Emphasis of Matter
We draw attention to Note no. 11 of the Financial Statements which describes theuncertainties and the impact of COVID-19 pandemic on the Company's operations and resultsas assessed by the management. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Financial Statements for the financial year ended March31 2020. We have determined that there are no key audit matters to communicate in ourreport.
Information other than the Financial
Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the preparation of otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including annexures Corporate Governance andShareholders' Information but does not include the Financial Statements and our auditor'sreport 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 theFinancial Statements our responsibility is to read the other information and in doingso consider whether such other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
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 preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Indian Accounting Standards (Ind AS) and other generally acceptedaccounting principles in India including the Accounting Standards specified under Section133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the 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.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelating to going concern and using the going concern basis of accounting unlessmanagement either intents to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the
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.
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 Financial Statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 Financial Statementsincluding the disclosures and whether the Financial Statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's
Report) Order 2016(the order) issued by the Central Government in terms ofsub-section (11) of section 143 of the Act we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
2. As required by Section 143 (3) of the Act based on our audit 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 accounts 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 including other comprehensiveincome the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of accounts.
(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended.
(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors are disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.
(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
Our report expresses an unmodified opinion on the adequacy and operating effectivenessof the internal financial control over financial reporting of those companies for reasonsstated therein.
(g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid/provided by the company to its directors in accordance with the provisions ofsection 197 read with Schedule V of the Act.
(h) With respect of the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our knowledge and belief and according to the informationand explanations given to us:
(i) The Company did not have any pending litigation which may have impact on itsfinancial position in its financial statements.
(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the Year.
FOR R K DEEPAK & CO.
Annexure A to Independent Auditor's Report
Referred to in our Independent Auditor's Report of even date to the members of CHDCHEMICALS LIMITED on the financial statements as of and for the year ended March 31 2020we report the following:
i (a) The company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.
(b) The Property Plant and Equipment were physically verified by the Management duringthe year in accordance with a regular verification programme which in our opinionprovides for physical verification of all the Property Plant and Equipment at reasonableinterval. According to information and explanations given to us no material discrepancieshave been noticed on such verification.
(c) In our opinion and according to information and explanations given to us and on thebasis of an examination of the records of the Company the title deeds of immovableproperties included in Property Plant and Equipment are held in the name of the Company.
ii. The physical verification of inventory except stocks in transit has been conductedat reasonable intervals by the Management during the year. The discrepancies noticed onphysical verification of inventory as compared to book records were not material and havebeen dealt with in books of account. However in respect of certain items the inventorieswere verified by the management on a visual estimation which has been relied upon by us.
iii. The company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnership or other parties covered in the register maintained underSection 189 of the Act. Accordingly the provisions of clause 3(iii) (a) (b) and (c) ofthe Order are not applicable to the Company.
iv. No transactions relating to Loans Investment Guarantees and Security has beenmade during the year under the provisions of Section 185 and 186 of the Companies Act2013. Accordingly the provisions of clause 3 (iv) of the said Order are not applicable tothe Company.
v. In our opinion and according to information and explanations given to us the companyhas not accepted any deposit from the public within the meaning of Sections 73 to 76 ofthe Act or any other relevant provisions of the Act and the Rules framed there under.Accordingly paragraph 3(v) of the Order is not applicable to the Company.
vi. Pursuant to the rules by the Central Government of India the Company is notrequired to maintain cost records as specified under Section 148 (1) of the Act in respectof its products.
vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion amounts deducted/accrued in the books ofaccount in respect of the undisputed statutory dues including Provident Fund Employees'State Insurance Income Taxes Goods and Service Tax Duty of Customs and other materialstatutory dues as applicable have been regularly deposited during the year by theCompany with the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income Taxes Goods andService Tax Duty of Customs and other material statutory dues were in arrears as at 31stMarch 2020 for a period of more than 6 months from the date they became payable.
(b) According to the information and explanations given to us the records of theCompany examined by us there are no dues of Income Tax Goods and Service Tax and Duty ofCustom which have not been deposited on account of any dispute.
viii. According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to any financial Institution or bank. The Company does not have any loans andborrowings from Government. Further the Company has not issued any debentures.
ix. The Company has not raised any money by way of initial public offer further publicoffer (including debt instruments) .
x. To the best of our knowledge and according to the information and explanations givento us No material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the course of our audit. xi. In our opinion and according toinformation and explanations given to us the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the order are not applicable to the Company.
xiii. In our opinion and according to information and explanations given to us theCompany has entered into transactions with related parties in compliance with theprovisions of Sections 177 and 188 of the Act wherever applicable. The details of suchrelated party transactions have been disclosed in the financial statements as required bythe applicable accounting standards.
xiv. In our opinion and according to information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year under review. Accordingly the provisions ofClause 3(xiv) of the orders are not applicable to the Company.
xv. In our opinion and according to information and explanations given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected with him. Accordingly the provisions of Clause 3(xv) of the order are notapplicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3 (xvi) of the order arenot applicable to the Company.
FOR R K DEEPAK & CO.
Annexure B to Independent Auditor's Report
Referred to in paragraph 2(f) of the Independent Auditor's Report of even date to themembers of Chd Chemicals Limited on the financial statements for the year ended March 312020 we report the following:
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Act
We have audited the internal financial controls over financial reporting of ChdChemicals Limited ("the Company") as at March 31 2020 in conjunction with ouraudit of the financial statements 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to respective company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Act.
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 Controls Over Financial Reporting ("theGuidance Note") and the Standards on Auditing issued by ICAI deemed to be prescribedunder section 143 (10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial control 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 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 over financialreporting.
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
(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(ii) 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
(iii) 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 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.
In our opinion to the best of our information and according to the explanations givento us the company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on the internal controlsover financial reporting criteria established by the Company considering the essentialcomponents over internal control stated in the Guidance Note on audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
FOR R K DEEPAK