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Chemfab Alkalis Ltd.

BSE: 541269 Sector: Industrials
NSE: CHEMFAB ISIN Code: INE783X01023
BSE 00:00 | 20 Mar 145.00 4.00
(2.84%)
OPEN

140.15

HIGH

147.00

LOW

140.00

NSE 00:00 | 20 Mar 139.35 -1.25
(-0.89%)
OPEN

140.60

HIGH

140.60

LOW

138.00

OPEN 140.15
PREVIOUS CLOSE 141.00
VOLUME 1541
52-Week high 314.95
52-Week low 122.60
P/E 5.72
Mkt Cap.(Rs cr) 201
Buy Price 138.50
Buy Qty 50.00
Sell Price 144.70
Sell Qty 10.00
OPEN 140.15
CLOSE 141.00
VOLUME 1541
52-Week high 314.95
52-Week low 122.60
P/E 5.72
Mkt Cap.(Rs cr) 201
Buy Price 138.50
Buy Qty 50.00
Sell Price 144.70
Sell Qty 10.00

Chemfab Alkalis Ltd. (CHEMFAB) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

CHEMFAB ALKALIS LIMITED

(formerly known as Teamec Chlorates Limited)

Report on the Financial Statements

We have audited the accompanying Ind AS financial statements of CHEMFAB ALKALIS LIMITED(formerly known as Teamec Chlorates Limited) ("the Company") which comprise theBalance Sheet as at 31 March 2018 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

Management's Responsibility for the Ind AS 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 ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theIndian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended and other accountingprinciples generally accepted in India

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 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 Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderunder section 143 (11) of the Act.

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with the IndAS and other accounting principles generally accepted in India of the state of affairs ofthe Company as at 31 March 2018 and its profit total comprehensive income its cashflows and the changes in the equity for the year ended on that date.

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) 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 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act as applicable.

e) On the basis of the written representations received from the directors of theCompany as on 31 March 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2018 from being appointed as a director in termsof Section 164 (2) of the Act.

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 unmodified 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 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 Ind AS financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. The Company is in the processof transferring the underlying shares relevant to the amounts transferred to theInvestor Education and Protection Fund.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order/CARO2016") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
V Balaji
Partner
Membership No. 203685
Chennai 10 May 2018

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 Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of CHEMFABALKALIS LIMITED (formerly known as Teamec Chlorates Limited) ("the Company") asof 31 March 2018 in conjunction with our audit of the Ind AS financial statements of theCompany 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 efficient 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.

Auditor's Responsibility

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 Financial Controls Over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 obtained by us is sufficient 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.

Opinion

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 31 March 2018 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
V Balaji
Partner
Membership No. 203685
Chennai 10 May 2018

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 generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management inaccordance with a programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. According to the informationand explanations given to us no material discrepancies were noticed on such verification.

(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/conveyancedeed provided to us we report that the title deeds comprising all the immovableproperties of land and buildings which are freehold are held in the name of the Companyas at the balance sheet date except the following:

Particu lars Carrying amount as at 31 March 2018 Rs. In Lakhs Remarks
Freehold land and building located at Kalapet and Ramnad admeasuring 36.57 acres and 694.17 acres respectively. 2125.87 The title deeds are in the name of erstwhile Chemfab Alkalis Limited which was merged with the Company under section 391 to 394 of the Companies Act 1956 and the corresponding section 230 to 232 reading with section 52 of the Companies Act 2013 in terms of the approval of the National Company Law Tribunal (‘NCLT') Chennai. Further for freehold land admeasuring 31.51 acres located at Ramnad the Company is in the process of registering in its name.

Immovable properties of land and buildings whose title deeds have been pledged assecurity for loans etc. are held in the name of the Company based on the confirmationsdirectly received by us from lenders.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification.

(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.

(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 sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribedcost records have been made and maintained.

(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 Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax Goods and Service tax cess and other materialstatutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Labour welfare fund Income-tax Sales Tax Service Tax Customs DutyExcise Duty Value Added Tax Goods and Service taxcess and other material statutory duesin arrears as at 31 March 2018 for a period of more than six months from the date theybecame payable except for Labour welfare fund payable amounting to Rs.0.05 lakhs.

(c) Details of dues of Sales Tax Service Tax Customs Duty and Excise Duty which havenot been deposited as on 31 March 2018 on account of disputes are given below:

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 Central Sales Tax Act 1956 Sales Tax CTO Chengalpet FY 2003 2004 0.58 0.58
The Finance Act 1994 Service Tax Commis sioner (Appeals) Chennai January 2005 to March 2013 7.28 5.32
The Central Excise Act 1944 Cenvat on Excise and Service tax avail- ment Commis sioner (Appeals) Chennai April 2006 to June 2012 68.34 68.34
The Cus toms Act 1962 Cus toms Duty Commis sioner (Appeals) Trichy FY 2013 2014 48.04 48.04
Income Tax Act 1961 Income tax High court of Madras FY 2002-03 84.76 84.76

(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 financial institutions and government 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 duringthe year for the 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 officersor employees has been noticed 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 is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Ind AS financial statements as required by theapplicable 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 and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with them and hence provisions of Section 192 of theCompanies Act 2013 are not applicable. The Company did not have any holding subsidiaryor associate Companies.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
V Balaji
Partner
Membership No. 203685
Chennai 10 May 2018