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Chemcon Speciality Chemicals Ltd.

BSE: 543233 Sector: Industrials
NSE: CHEMCON ISIN Code: INE03YM01018
BSE 10:29 | 07 Dec 363.70 3.10
(0.86%)
OPEN

360.00

HIGH

369.45

LOW

360.00

NSE 10:24 | 07 Dec 363.10 2.60
(0.72%)
OPEN

365.00

HIGH

370.00

LOW

363.00

OPEN 360.00
PREVIOUS CLOSE 360.60
VOLUME 5921
52-Week high 569.05
52-Week low 330.30
P/E 22.22
Mkt Cap.(Rs cr) 1,332
Buy Price 363.30
Buy Qty 34.00
Sell Price 363.70
Sell Qty 9.00
OPEN 360.00
CLOSE 360.60
VOLUME 5921
52-Week high 569.05
52-Week low 330.30
P/E 22.22
Mkt Cap.(Rs cr) 1,332
Buy Price 363.30
Buy Qty 34.00
Sell Price 363.70
Sell Qty 9.00

Chemcon Speciality Chemicals Ltd. (CHEMCON) - Auditors Report

Company auditors report

To the Members of

Chemcon Speciality Chemicals Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Chemcon Speciality ChemicalsLimited ("the Company") which comprise the Balance Sheet as at March 31 2020the Statement of Profit and Loss including Other Comprehensive Income the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter 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 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards specified under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and total comprehensive income(comprising of profit and other comprehensive income) changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditors' Responsibilities for the Audit ofthe 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 together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made 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 audit opinion.

Emphasis of Matter

We draw your attention to Note 44 of the financial Statement which describes theimpact of Coronavirus disease 2019 (COVID19) on the operations and financials of thecompany.

Our opinion is not modified in respect of this matter.

Information Other than the Financial Statements and Auditors' Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report but does not include the financial statementsand our auditors' report thereon. The above-referred information is expected to be madeavailable to us after the date of this audit report.

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 identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the information if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance andtake appropriate actions necessitated by the circumstances & the applicable laws andregulations.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due 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 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.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

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 auditors' 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 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 contra! relevant to the audit in order todesign 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 hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness 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 auditors' 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 auditors'report. 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.

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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matters orwhen 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.

Other Matter

The comparative financial information included in these financial statements are basedon the previously issued financial statements for the year ended March 31 2019 which wereaudited by the predecessor auditors who vide their report dated June 14 2019 expressedan unmodified opinion. Our Opinion is not modified in respect of this matter.

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 of India in terms of sub-section (11) of section 143 ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

a. we have sought and obtained ali 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 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 account;

d. in our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act;

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 is 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";

g. with respect to the other matters to be included in the Auditors' Report inaccordance with the requirements of section 197(16) of the Act as amended;

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act; and

h. with respect to the other matters to be included in the Auditors' 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 financial statements - Refer Note 30 to the financial statements;

ii. the Company did not have any long-term contracts including derivative contracts asat March 31 2020;

iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For K. C. Mehta & Co.

Chartered Accountants Firm's Registration No. 106237W

Vishal P. Doshi Partner

Membership No. 101533

UDIN: 20101533AAAADJ1911

Place; Vadodara

Date: August 19 2020

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

(referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date to the members of Chemcon Speciality Chemicals Limited)

i (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular program of physical verification of fixed assets whichin our opinion is reasonable. The assets which were to be covered as per the said programhave been physically verified by the management during the year. In our opinion andAccording to the information and explanations given to us no material discrepancies werenoticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded under Property plant and equipment are held in the name of the Company.

ii. The Inventories except for goods-in-transit have been physically verified by themanagement during the year and in our opinion the frequency of verification isreasonable. In respect of inventories lying with third parties these have substantiallybeen confirmed by them. As explained to us there were no material discrepancies onphysical verification of inventory as compared to the book records.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013 and therefore reporting under clause (iii) (a) toclause (iii) (c) of the Order is not applicable to the Company.

iv. The Company has not granted any loans made any investments or provided anyguarantees or security to which provisions of section 185 and 186 of the Act apply andtherefore reporting under clause (iv) of the Order is not applicable to the Company.

v. According to the information and explanations given to us the Company has notaccepted any deposits during the year from the public within the meaning of provisions ofsection 73 to 76 of the Act and the rules framed thereunder or under the directivesissued by the Reserve Bank of India and therefore reporting under clause (v) of the Orderis not applicable to the Company

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe order of the Central Government for maintenance of cost records under section 148(1)of the Companies Act 2013 and are of the opinion that prima facie the prescribed recordshave been made and maintained. We have however not made a detailed examination of therecords with a view to determining whether they are accurate or complete.

vii. (a) In our opinion and according to the information and explanations given to usthe Company has been regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employee's state insurance income-tax Goodsand Services tax duty of customs duty of excise cess and any other statutory duesapplicable to it. Further no undisputed amounts payable in respect of provident fundemployee's state insurance income-tax Goods and Services tax duty of customs duty ofexcise cess and any other statutory dues were in arrears as at 31st March 2020 for aperiod of more than six months from the date they become payable.

(b) According to the information and explanations given to us there are no disputeddues in respect of income tax value added tax sales tax duty of customs duty of exciseand Goods and services tax which have not been deposited. The following are theparticulars of as at 31st March 2020 which have not been deposited on account of dispute:

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to banks and financial institutions. Thecompany has not taken any loans from Government and has not issued any debentures.

ix. In our opinion and according to information and explanation given to us the termloans taken by the Company have been applied for the purpose for which they were raisedfor the stated use. The company has not raised any money by way of initial public offer orfurther public offer( including debt instruments) during the year.

x. To the best of our knowledge and according to information and explanations given tous no fraud by the company or on the Company by its officers or employees has beennoticed or reported during the year.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

xii. In our opinion the Company is not a Nidht company and therefore reporting underclause (xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to ustransactions with the related parties are in compliance with sections 177 and 18S of theAct where applicable and the details of such transactions have been disclosed in thefinancial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year andtherefore reporting under clause (xiv) of the Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us theCompany has not entered into non-cash transactions with directors or persons connectedwith him. Accordingly reporting under clause (xv) of the Order are not applicable to theCompany.

xvi. In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934

For K. C. Mehta & Co.

Chartered Accountants

Firm's Registration No. 106237W

Vishal P. Doshi Partner

Membership No. 101533

UDIN: 20101533AAAADJ1911

Place: Vadodara

Date: August 19 2020

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

(referred to in paragraph 2(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date to the members of Chemcon SpecialityChemicals Limited)

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ("the Act").

We have audited the internal financial controls with reference to financial statementsof CHEMCON SPECIALITY CHEMICALS LIMITED ("the Company") as of March 31 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. 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 controls with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

A company's internal financial control with reference to financial statements 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 withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 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 with reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respect an adequate internal financialcontrol system with reference to financial statements and such internal financial controlwith reference to financial statements were operating effectively as at March 31 2020based on the internal control over financial reporting criteria established by the Companyconsidering essential components of Internal control stated in the Guidance Note on auditof Interna! Financial Control over Financial Reporting issued by the Institute ofChartered Accountants of India.

ForK. C. Mehta & Co.

Chartered Accountants Firm's Registration No. 106237W

Vishal P. Doshi Partner

Membership No. 101533

UDIN: 20101533AAAADJ1911

Place: Vadodara

Date: August 19 2020

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