To The Members of CHD CHEMICALS LIMITED
Report on the audit of Financial Statements Opinion
We have audited the accompanying financial statements of CHD CHEMICALSLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2022and the Statement of Profit and Loss and the Statement of Cash Flows for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to theexplanations given to us aforesaid financial statements give the information required byCompanies Act 2013 ('Act') in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2022 its profit and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit in accordance with the standards on auditingspecified under section 143 (10) of the Companies Act 2013. Our responsibilities underthose Standards are further described in the auditor?s responsibilities for the auditof the financial 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 ('ICAI') together with the ethical requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the rules thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the code of ethics.We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Information other than the financial statements and auditors?report thereon
The Company?s board of directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Board?s Report including Annexures to Board?s Report BusinessResponsibility Report but does not include the financial statements and our auditor?sreport thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our 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 are responsible for the mattersstated in section 134 (5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the accounting standards specified under section 133 of theAct. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of 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 statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company?s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The boards of directors are also responsible for overseeing theCompany?s financial reporting process.
Auditor?s responsibilities for the audit of the financialstatements
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor?s report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these 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 thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management?s use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company?s ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor?sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor?s report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
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 matterscommunicated with those charged with governance we determine those matters that were ofmost significance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor?s reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor?s Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act 2013 we give in the Annexure "A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
1. (A) As required by Section 143(3) of the Act based on our audit wereport that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept 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 OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid Standalone Financial Statements complywith the Ind AS specified under Section 133 of the Act read with the Companies (IndianAccounting Standards)Rules 2015 as amended
e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the board of directors none of thedirectors is disqualified as on March 31 2022from being appointed as a director in termsof Section 164 (2) of the Act;
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company?s internalfinancial controls over financial reporting;
(B) 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 as amended in our opinion and to the best of our information and accordingto the explanations given to us:
a) The Company does not have any pending litigations which would impactits financial position.
b) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
c) There are no amounts required to be transferred to theInvestor-Education and Protection Fund by the Company.
d) The Management has represented that to the best of its knowledgeand belief
(i) no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other persons or entities including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall directly or indirectly lend or invest in otherpersons or entities identified in any manner whatsoever ("UltimateBeneficiaries") by or on behalf of the Company or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries;
(ii) no funds have been received by the Company from any persons orentities including foreign entities ("Funding Parties") with theunderstanding whether recorded in writing or otherwise that the Company shall directlyor indirectly lend or invest in other persons or entities identified in any mannerwhatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Parties orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries;
(iii) Based on the audit procedures performed that have been consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e)contain any material misstatement.
e) The company has not declared any dividend during the current year.
(C) With respect to the matter to be included in the Auditors?Report under section 197(16) of the Act:
In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of section 197 of the Act. The remuneration paid to anydirector is not in excess of the limits laid down under section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under section 197(16) ofthe Act which are required to be commented upon by us.
Annexure "A" to the Independent Auditor?s Report
(Referred to in paragraph 1 under the heading Report on OtherLegal & Regulatory Requirement? of our report of even date to the financialstatements of the Company for the year ended March 31 2022)
(A) The Company has maintained proper records showing full particularsincludingquantitative details and situation of property plant and equipment.
(B) The company does not have any intangible assets.
(b) According to the information and explanation given to us and on thebasis of our examination of records of the company the company has a regular programme ofphysical verification of its property plant and equipment by which all property plantand equipment are verified in a phased manner over a period of three years. In accordancewith this programme certain property plant and equipment were verified during the year.In our opinion this periodicity of physical verification is reasonable having regard tothe size of the company and the nature of its assets. No material discrepancies werenoticed on such verification.
(c) According to the information and explanation given to us and on thebasis of our examination of record of the company title deeds of immovable property areheld in name of company.
(d) According to the information and explanation given to us and on thebasis of our examination of the records of the company the company has not revalued itsproperty plant and equipment during the year.
(e) According to the information and explanation given to us and on thebasis of our examination of the records of the company there are no proceeding initiatedor pending against the company for holding any benami property under the Prohibition ofBenami Property Transaction Act 1988 and rule made thereunder.
2. (a) As explained to us the inventories were physically verifiedduring the year by the management at reasonable interval. In our opinion the coverage andprocedure of such verification is appropriate and no discrepancies were found in suchverification.
b) According to the information and explanation given to us and on thebasis of our examination of the records the company is availing working capital limits inexcess of five crore rupees in aggregate from a consortium of banks on the basis of thesecurity of current assets. Based on our verification we state that the quarterly returnsfiled by the company with the bank are in conformity with the books of accounts.
3. According to the information and explanation given to us and on thebasis of our examination ofthe records of the company the company during the year hasnot made any investment in or provided guarantees or security or granted any loan oradvances in
the nature of loan secured or unsecured to companies firm limitedliability partnership. Accordingly clause 3(iii)(a) to (f) of the order are notapplicable.
4. According to the information and explanations given to us and onthe basis of our examination of the records the In our opinion and according to theinformation and explanations given to us the Company has not advanced loans to directors/ to a Company in which the Director is interested to which provisions of section 185 ofthe Act apply. The provisions of section 186 of the Act in our opinion are notapplicable to the Company.
5. The company has not accepted any deposits or amounts which aredeemed deposit from the public. Accordingly clause 3(v) of the order is not applicable.
6. We have broadly reviewed the cost records maintained by the Companypursuant to the Companies (Cost Records and Audit) Rules 2014 as amended prescribed bythe Central Government under sub-section (1) of Section 148 of the Act and are of theopinion that prima facie the prescribed cost records have been made and maintained.However we have not carried out detailed examination for the same.
7. According to information according to information and explanationsgiven to us and based on the audit procedures performed by us the undisputed statutorydues including Goods and Services Tax Provident Fund Employees' State InsuranceIncome-Tax Sales-Tax Service Tax Duty of Customs Duty of Excise Value Added Tax Cessand any other statutory dues have generally been regularly deposited by the company withthe appropriate authorities. According to the information and explanations given to us noundisputed amounts payable in respect of the aforesaid dues were outstanding as at March31 2022 for a period more than six months from the date of becoming payable.
(b) According to the information and explanation given to us andrecords of the company examined by us there are no statutory dues which have not beendeposited on account of any dispute.
8. According to the information and explanation given to us and on thebasis of our examination of the records of the company the company has not surrendered ordisclose any transaction previously unrecorded as income in the books of account in thetax assessment under the Income Tax act 1961 as income during the year. Clause 3(viii)are not applicable to the company hence not commented upon.
9. a) According to the information and explanation given to us and onthe basis of our examination of the records of the company the company has not defaultedin the repayment of loan or borrowing or in the payment of interest thereon to any lender.
b) According to the information and explanation given to us and on thebasis of our examination of the records of the company the company is not declaredwillful defaulter by any bank or financial institution or government or governmentauthority or any other lender.
c) In our opinion and according to the information and explanationsgiven to us by the management the company has utilized the money by way of term loanduring the year for the purposes for which they were obtained.
(d) According to the information and explanation given to us and on thebasis of overall examination of the balance sheet of the company we report that no fundraised on short basis have been used for long term purposes by the company.
(e) According to information and explanation given to us and on overallexamination of financial statement of the company we report that Company has not takenfund from any entity or person on account of or to meet the obligation of itssubsidiaries associate or joint venture. The company does not hold any investment in anyassociate or joint venture (as defined in the act) during the year ended 31 March 2022.
(f) According to information and explanation given to us and procedureperformed by us we report that the company has not raised loans during the Year on pledgeof securities held in its subsidiaries joint ventures or associate company (as definedunder the act).
10. a) The company has not raised money by way of initial public offeror further public offer(including debt instruments) during the year Accordingly Clause3(x)(a) of the order is not applicable to the company .
b) During the year the company has not made any preferential allotmentor private placementof shares convertible debenture (fully partially or optionally)during the year and hence reporting under clause 3(x)(b) of the order is not applicable tothe company.
11. (a) Based on the examination of the books and records of thecompany and according to the Information and explanation given to us considering theprinciple of materiality outline in the standard of auditing we report that no fraud bythe company or on the company hasbeen noticed during the course of the audit.
(b) We have not submitted any report under subsection (12) of section143 of the Companies Act 2013 in Form ADT-4 as prescribed under Rule 13 of Companies(Audit and Auditors) Rules 2014 with the Central Government during the year and up tothe date of this audit report.
(c) The auditor has not received any complaints from whistle -blowerduring the year. Therefore reporting under clause 3(xi)( c) of the order is not applicableto the company.
12. In our opinion the company is not a Nidhi Company. Accordinglyclause 3(xii) of the order is not applicable.
13. According to information and explanation given to us alltransaction with the related party are in compliance with section 177 and 188 of companiesact 2013 and the details have been disclosed in the financial statement as required bythe applicable accounting standards.
14. (a) Based on information and explanation provided to us and ouraudit procedures in our opinion the company has an internal audit system commensuratewith the size and the nature of its business.
(b) There are no internal auditor reports of the company for the periodunder audit.
15. According to information and explanations given to us and based onour examination of therecords of the company the company has not entered into anynon-cash transactions withdirectors or persons connected with him and hence the provisionof section 192 of the companies act 2013 are not applicable.
16. (a) According to information and explanations given to us thecompany is not required to be registered under section 45 IA of the Reserve Bank of IndiaAct 1934.Therefore provision of clause 3(xvi)(a) and (b) of the order are not applicableto company hence not commented upon.
(c) The company is not a Core Investment company (CIC) as defined inthe regulation made byReserve Bank of India. Accordingly clause 3(xvi)(c) of the orderare not applicable.
(d) According to the information and explanation provide to us duringthe course of audit the Group does not have any CICs.
17. Based on the procedure performed and information and explanationgiven by the management the company has not incurred any cash losses in the financial yearand in immediately preceding financial year. Accordingly the provision of clause 3(xvii)of the order are not applicable to the company and hence not commented upon.
18. There has been resignation of statutory auditors during the year.We have considered the issues objections or concerns if any by the outgoing auditors.
19. According to the information and explanation given to us and on thebasis of financial ratio ageing and the expected dates of realization of the financialassets and payment of financial liabilities other information accompanying the financialstatement our knowledge of the board of director and management plans and based on ourexamination of evidence supporting the assumption nothing has come to our attention whichcause us to believe that any material uncertainty exists on the date of audit report andthe company is not capable meeting its liabilities existing at the date of balance sheetas and when they fall due within a period one year from the Balance Sheet date. Wehowever state that this is not assurance as to the future viability of the company. Wefurther state that our reporting is based on facts up to the date of the audit report andwe neither give any guarantee nor any assurance that all liabilities falling due with in aperiod of one year from the balance sheet date will get discharged by the company as andwhen they fall due.
20. In our opinion and according to the information and explanationsgiven to us there is no unspent amount under sub-section (5) of section 135 of the Actpursuant to any project. Accordingly clauses 3(xx)(a) and 3(xx)(b) of the Order are notapplicable.
ANNEXURE "B" TO THE INDEPENDENT AUDITOR?S REPORT
(Referred to in paragraph 2(1)(f) under Report on Other Legal andRegulatory Requirements? section of our report of even date)
Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Subsection 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financialreporting of CHD CHEMICALS LIMITED ("the Company") as of March 31 2022 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Management?s Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishingand maintaining 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 OverFinancial Reporting issued by the Institute of Chartered Accountants ofIndia('ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business 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 Companies Act 2013.
Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and 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 judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
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 isa process 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 controlover financial reporting includes tho se policies and procedures that:
1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company?s assetsthat 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 conditions or that the degree of compliance withthe policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us 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 2022 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.
|Date: 30TH May 2022 |