To the Members of Chemfab Alkalis Limited Report
on the Audit of the Standalone Ind AS Financial Statements Opinion
We have audited the accompanying Standalone Ind AS
financial statements of CHEMFAB ALKALIS LIMITED
("the Company") which comprise the Balance Sheet as at 31
March 2021 the Statement of Pro t and Loss (including
Other Comprehensive Income) the Cash Flow Statement and the Statement of Changes inEquity for the year then ended and a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the [Indian Accounting Standards prescribedunder Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of a airs of the Company as at 31 March 2021 its loss totalcomprehensive loss its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Standalone Ind AS Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the Standalone Ind AS financial statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence obtained by us is su cient and appropriateto provide a basis for our audit opinion on the Standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the Standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. we have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter ||Auditor's Response |
|Valuation and classi cation of assets held for sale ||Principal audit procedures performed: |
|The Management had sus- pended the operations of its plant in Ongole since July 2018 and was in the process of evaluating future course of action. The Company has in its Board Meeting held on 31 March 2021 decided to dispose o the Ongole Plant (land building machinery and other assets situated at Ongole) and directed the CEO to assess the market value of the assets and identify prospective buyers to sell the assets of the Ongole Plant. ||We have performed the following procedures: |
|Based on the management's assessment of the assets held for sale the net realisable val- ue is higher than the net carry- ing value of the assets at Ongo- le Plant as at 31 March 2021. (Refer Note 17 of the Stand- alone Financial Statements for the year ended 31 March 2021). ||- Evaluated the design and implementation of the relevant controls and the operating e ectiveness of such internal controls in relation to the assessment of net realisable value of assets held at Ongole plant. |
|Due to the multitude of fac- tors assumptions and signif- icant judgments involved in estimating the net realizable value any adverse changes to these assumptions could result into such net realisable value becoming lower than the car- rying amount. ||- Read minutes of meetings of Board of Directors of the Company. |
| ||- Obtained the valuation report of the management's expert and assessed the appropriateness of valuation methodology adopted by the expert and techniques along with the assumptions adopted by the expert and the management. Also evaluated the independence objectivity and competency of the expert engaged by the management. |
| ||- Corroborated the value of Ongole land considered by the management independently with the publicly available information where applicable. |
| ||- Tested the management assessment whether the carrying values of disposal group are at least equal or lower to their estimated net realisable value; |
| ||- Assessed the management representation regarding the likelihood of disposal i.e. Ongole Plant being available for immediate sale in its current state plans to locate a buyer and whether it is highly probable that the sale will take place; |
| ||- Evaluated the appropriateness and adequacy of the disclosures made in the financial statements in accordance with the applicable accounting standards. |
Information Other than the Standalone Ind AS Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and
Analysis Board's report including the Annexures to the
Board Report and Corporate Governance but does not include the consolidated Ind ASfinancial statements Standalone Ind AS financial statements and our auditor's reportthereon.
Our opinion on the Standalone Ind AS 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 Standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the
Standalone Ind AS financial statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated.
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 Standalone Ind AS Financial Statements
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 Standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding 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 ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibility for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Ind AS 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 Standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is su cient 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 financial control 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 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 the 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 exists we are required to draw attention inour auditor's report to the related disclosures in the Standalone Ind AS financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture 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 Ind ASfinancial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the
Standalone Ind AS financial statements that individually or in aggregate makes itprobable that the economic decisions of a reasonably knowledgeable user of the StandaloneInd
AS financial statements may be in uenced. We consider quantitative materiality andqualitative factors in (i) planning the scope of our audit work and in evaluating theresults of our work; and (ii) to evaluate the effect of any identified misstatements inthe Standalone Ind AS financial statements.
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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 Standalone Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit we report that: a. Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b. In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c. The Balance Sheet the Statement of Pro tand Loss including Other Comprehensive Income the Cash Flow Statement and Statement ofChanges in Equity dealt with by this Report are in agreement with the relevant books ofaccount. d. In our opinion the aforesaid Standalone Ind AS financial statements complywith the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodi ed opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of Section 197 of the Act.
h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended 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 on its financialposition in its Standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivate contracts forwhich there were any material foreseeable losses.
iii. There were no amounts during the current year which were required to betransferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder. For DELOITTE HASKINS & SELLS LLP
Chartered Accountant (Firm's Registration No. 117366W/W-100018)
(Membership No. 206834)
Date: 21 May 2021
Ref No. PS/BS/KS/2021/6
Unique Document Identi cation Number: 21206834AAAAAF3357
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 (f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date) Report on the Internal FinancialControls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of CHEMFABALKALIS LIMITED ("the
Company") as of March 31 2021 in conjunction with our audit of the Standalone IndAS 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and e cient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the
Company based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting (the "GuidanceNote") issued by the Institute of Chartered Accountants of India and the Standards onAuditing prescribed under
Section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal 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 internal
financial 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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is su cient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
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 2021 based on the criteria forinternal financial control over financial reporting established by the
Company considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report of even date) (i) (a) The Company has generallymaintained proper records showing full particulars including quantitative details andsituation of property plant and equipment.
(b) The property plant and equipment were physically veri ed during the year by theManagement in accordance with a programme of veri cation which in our opinion providesfor physical veri cation of all the property plant and equipment at reasonable intervals.According to the information and explanations given to us no material discrepancies werenoticed on such veri cation.
(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed /conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date. Immovable properties of land and buildings whosetitle deeds have been pledged as security for loans etc. are held in the name of theCompany based on the confirmations directly received by us from lenders.
(i) As explained to us the inventories were physically veri ed during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalveri cation.
(iii) The Company has not granted any loans secured or unsecured to companies rmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable
(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year.
(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under subsection (1) of Section 148 of theCompanies Act 2013 and are of the opinion that prima facie the prescribed cost recordshave been made and maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Customs Duty Goods andService Tax cess and other material statutory dues applicable to it to the appropriateauthorities.
(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Customs Duty Goods and Service Tax cess and other materialstatutory dues in arrears as at March 31 2021 for a period of more than six months fromthe date they became payable.
(c) Details of dues of Income-tax Service Tax Customs Duty Excise Duty and otherdues which have not been deposited as on March 31 2021 on account of disputes are givenbelow:
|Name of the Statute ||Nature of Dues (Including interest) ||Forum where Dispute is Pending ||Period to which the Amount Relates ||Amount Involved (Rs. In lakhs) ||Amount Unpaid (Rs. In lakhs) |
|The Finance Act 1994 ||Service Tax ||Commissioner (Appeals) Chennai Commissioner of ||January 2005 to March 2013 ||8.35 ||6.38 |
|The Central Excise Act 1944 || |
|Central Excise Puducherry ||October 2011 to June 2012 ||1.84 ||1.84 |
|The Customs Act 1962 ||Customs Duty ||The Customs Excise and Service Tax Appellate Tribunal ||FY 2013-2014 ||68.46 ||64.66 |
|Income Tax Act 1961 ||Income tax ||The High court of Madras ||FY 2002-03 ||108.02 ||97.98 |
|Employees' State Insurance Act 1948 ||Employ- ees' State Insurance ||ESI Court Puducherry ||April 2010 to June 2010 ||0.71 ||0.71 |
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks. TheCompany has not taken any loans from government or financial institutions and has notissued any debentures.
(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments). The term loans have been applied by the Company forthe purposes for which they were raised.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the
Company and no material fraud on the Company by its o cers or employees has beennoticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with
Section 177 and 188 of the Companies Act 2013 where applicable for all transactionswith the related parties and the details of related party transactions have been disclosedin the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company. (xv) In our opinion andaccording to the information and explanations given to us during the year the Companyhas not entered into any non-cash transactions with its directors directors of itssubsidiary or persons connected with them and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.
(xvi) The Company is not required to be registered under
Section 45-I of the Reserve Bank of India Act 1934.
For DELOITTE HASKINS & SELLS LLP
(Firm's Registration No. 117366W/W-100018)
(Membership No. 206834)
Date: 21 May 2021
Ref No. PS/BS/KS/2021/
Unique Document Identi cation Number: 21206834AAAAAF3357