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Chemiesynth (Vapi) Ltd.

BSE: 539230 Sector: Industrials
NSE: N.A. ISIN Code: INE829R01018
BSE 05:30 | 01 Jan Chemiesynth (Vapi) Ltd
NSE 05:30 | 01 Jan Chemiesynth (Vapi) Ltd

Chemiesynth (Vapi) Ltd. (CHEMIESYNTHVAPI) - Auditors Report

Company auditors report

To The Members of CHEMIESYNTH (VAPI) LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Chemiesynth (Vapi)Limited (the "Company") which comprise the Balance Sheet as at March 31 2020and the Statement of Profit and Loss (including Other Comprehensive Income) the Statementof Changes in Equity and the Statement of Cash Flow for the year then ended and a summaryof significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2020 and its profit totalcomprehensive income the changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards 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 Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI s Code of

Ethics. We believe that the audit evidence obtained by us is sufficient 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 for the financialyear ended March 31 2020. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor s responsibilities for the audit of the standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key Audit Matters How our audit addressed the key audit matter
Revenue recognition on sale of goods (as described in Note 17 of the standalone Ind AS financial statements) Our audit procedures included amongst others:
Revenue is measured based on the transaction price which is the consideration adjusted for volume discounts rebates scheme allowances price concessions incentives and returns if any („variable consideration ) as specified in the contracts with the customers. We read and evaluated the Company s policies for revenue recognition and assessed its compliance with Ind AS 115 „Revenue from contracts with customers ;
We assessed the design and tested the operating effectiveness of internal controls related to sales including variable consideration

Information Other than the Financial Statements and Auditor s Report Thereon

The Company s Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe Standalone Ind AS Financial Statements and our Auditor s Report thereon.

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 suchother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information; we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of the Management and Those Charged with Governance for the StandaloneInd 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 changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind As FinancialStatement that give a true and fair view and are free from material misstatement whetherdue 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.

The 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 judgement andmaintain professional scepticism 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 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 financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section143(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 existswe are required to draw attention in our auditor s report to the related disclosures inthe Financial Statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the 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.

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 Standalone Ind AS FinancialStatements for the financial year ended March 31 2020 and are therefore the key auditmatters. We describe these matters in our auditor s report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

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 Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of 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 Flow dealt with bythis Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid Standalone Ind AS Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended.

e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section164(2) of theAct.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Ind AS Financial Statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure B" to this report. Our report expresses an unmodified opinion on theadequacy 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) read with Schedule V of the Act asamended:

The Company has not paid any managerial remuneration during the year hence provisionsof section 197 read with schedule V to the Companies Act 2013 are not applicable to theCompany.

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 2014as 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 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.

For MILIN J JANI & CO
CHARTERED ACCOUNTANTS
(Firm s Registration No. 106396W)
CA. MILIN J. JANI
PROPRIETOR
(Membership No. 044077)
UDIN:
Ahmedabad August31st 2020.

ANNEXURE "A" TO THE INDEPENDENT AUDITOR S REPORT

(Referred to in paragraph 1 under „Report on Other Legal and RegulatoryRequirements section of our report of even date on the standalone Ind AS financialstatements of Chemiesynth (Vapi) Limited)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipments.

(b) The Company has a program of verification of Property Plant and Equipments tocover all the items in a phased manner over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the program certain Property Plant and Equipments were physicallyverified by the Management during the year. According to the information and explanationsgiven 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 in respect of immovable properties of land that have been taken on lease anddisclosed as Property Plant and Equipments in the Standalone Ind AS Financial Statementsthe lease deed is in the name of the Company.

(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) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loan has not made any investment has not provided anyguarantees or securities hence provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities are not applicable to the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable to the Companyand hence not commented upon.

(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 prescribed costrecords have been made and maintained. We have however not made a detailed examinationof the cost 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 Goods and Service TaxCustoms Duty cess and other material statutory dues applicable to it to the appropriateauthorities.

(b) There were no undisputed amounts payable in respect of Provident Fund EmployeesState Insurance Income-tax Goods and Service Tax Customs Duty cess and other materialstatutory dues in arrears as at March 31 2020 for a period of more than six months fromthe date they became payable.

(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 or borrowings from financial institutions and government.The Company has not issued any debentures.

(ix) According to the information and explanations given by the management the Companyhas not raised any money way of initial public offer / further public offer / debtinstruments and term loans. Accordingly the provisions of clause 3(ix) of the Order arenot applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no material fraud onthe company by the officers and employees of the Company has been noticed or reportedduring the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has not paid any managerial remuneration during the year hence provisions ofsection 197 read with schedule V to the Companies Act 2013 are not applicable to theCompany.

(xii) The Company is not a Nidhi Company and hence the provisions of clause 3(xii) ofthe Order are not applicable to the Company and hence not commented upon.

(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 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andhence reporting under clause (xiv) of CARO 2016 is not applicable to the Company and hencenot commented upon.

(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.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered undersection 45-IA of the Reserve Bank of India Act 1934.

For MILIN J JANI & CO
CHARTERED ACCOUNTANTS
(Firm s Registration No. 106396W)
CA. MILIN J. JANI
PROPRIETOR
(Membership No. 044077)
UDIN:
Ahmedabad August31st 2020.

ANNEXURE "B" TO THE INDEPENDENT AUDITOR S REPORT

(Referred to in paragraph 2(f) under „Report on Other Legal and RegulatoryRequirements section of our report of even date on the standalone Ind AS financialstatements of Chemiesynth (Vapi) 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 over financial reporting of Chemiesynth(Vapi) Limited (the "Company") as of March 31 2020 in conjunction with ouraudit of the Standalone Ind AS Financial Statements of the Company for the year ended onthat 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 with reference to these Standalone Ind AS FinancialStatement sof the Company based on our audit. We conducted our audit in accordance withthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India andthe Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting with reference to these Standalone Ind AS Financial Statementswas established 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 over financial reporting with reference to theseStandalone Ind AS Financial Statements and their operating effectiveness. Our audit ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting with reference to these StandaloneInd AS Financial Statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor s judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 internal financial controls system overfinancial reporting with reference to these Standalone Ind AS Financial Statements.

Meaning of Internal Financial Controls Over Financial Reporting with reference to theseStandalone Ind AS Financial Statements

A company s internal financial control over financial reporting with reference to theseStandalone Ind AS Financial Statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company s internal financial control over financial reportingwith reference to these Standalone Ind AS Financial Statements includes those policies andprocedures 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 as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company s assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting withreference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these Standalone Ind AS Financial Statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these Standalone Ind AS Financial Statements to future periods are subject to the riskthat the internal financial control over financial reporting with reference to theseStandalone Ind AS Financial Statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

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 with reference to these Standalone Ind AS FinancialStatements and such internal financial controls over financial reporting with reference tothese Standalone Ind AS Financial Statements were operating effectively as at March312020 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.

For MILIN J JANI & CO
CHARTERED ACCOUNTANTS
(Firm s Registration No. 106396W)
CA. MILIN J. JANI
PROPRIETOR
(Membership No. 044077)
UDIN:
Ahmedabad August 31st2020