To
The Members of Chemplast Sanmar Limited
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the accompanying Standalone Ind AS Financial Statementsof Chemplast Sanmar Limited ("the Company") which comprise the StandaloneBalance sheet As at March 31 2022 the Standalone Statement of Profit and Loss includingthe Statement of Other Comprehensive Income the Standalone Cash Flow Statement and theStandalone Statement of Changes in Equity for the year then ended and notes to theStandalone Ind AS Financial Statements including a summary of significant accountingpolicies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Ind AS Financial Statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company As at March312022 its profit including other comprehensive income its cash flows and the changesin equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Ind AS Financial Statements inaccordance with the Standards on Auditing (SAs) as specified under Section 143(10) of theAct. Our responsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the
Company in accordance with the 'Code of Ethics' issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theStandalone Ind AS Financial Statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Ind AS Financial Statements forthe financial Year ended March 31 2022. These matters were addressed in the context ofour audit of the Standalone Ind AS Financial Statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters. For eachmatter below our description of how our audit addressed the matter is provided in thatcontext.
We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the Standalone Ind AS FinancialStatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the Standalone Ind AS Financial Statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the 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 (as described in Note 3.8 & Note 4 of the Standalone Financial Statements) | Our audit procedures included the following: |
| The Company recognizes revenues when control of the goods is transferred to the customers at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. Revenue is measured at the fair value of the consideration received or receivable taking into account contractually defined terms of payment. In determining the sales price the Company considers the effects of rebates and discounts (variable consideration). | • We evaluated the Company's order to cash processes including design and implementation of controls and tested the operating effectiveness of such controls in relation to revenue recognition. |
| The terms of arrangements in case of domestic and exports sales including those relating to the timing of transfer of control the nature of discount and rebates arrangements and delivery specifications require judgment in their application for determining revenues. The risk of revenue being recognized without meeting the revenue recognition norms in accordance with Ind AS 115 'Revenue from contracts with customers' is determined to be a key audit matter. | • On a sample basis we tested revenue transactions to contracts with customers purchase orders issued by customers sales invoices raised by the Company and shipping records to determine the timing of transfer of control and the pricing terms and the timing of revenue recognition in respect of such contracts. |
| • We performed substantive analytical procedures over disaggregated data of revenue transactions during the audit period to identify trends / patterns warranting additional audit procedures. |
| • We selected samples of rebates and discounts during the year compared them with the supporting documents and performed re-calculations of those variable considerations on a sample basis. |
| • We read and understood and evaluated the Company's accounting policies pertaining to revenue recognition and assessed compliance thereof with the policies in terms of Ind AS 115 - 'Revenue from Contracts with Customers. |
| • We assessed the disclosures with applicable accounting standards. |
| Revaluation of property plant and equipment (as described in ate 3.4 & Note 14 of the Standalone Ind AS Financial Statements) | |
| The Company has opted for revaluation model for measuring freehold / leasehold land buildings and plant and machineries ('PPE') and these assets are carried in the books at the fair value less accumulated depreciation. | • We read and assessed the Company's accounting policies with respect to PPE . |
| Independent valuations are undertaken at least once in every three years or more frequently if there is an indicator that the fair value has changed significantly. Pursuant to this policy management undertook an independent valuation in the current year and As at March 31 2022 the Company has recognised revaluation surplus of Rs. 1210 Million (net of tax of Rs. 630 Million). | • We evaluated the design and tested the operating effectiveness of internal controls relating to revaluation of PPE including the use of management's expert. |
| Revaluation of PPE is considered to be a key audit matter due to the magnitude of the underlying amounts and judgements involved in the assessment of the fair value of these assets. | • We obtained the management's expert's report on valuation of PPE and evaluated the valuation methodology as well as key assumptions and estimates used in valuation. |
| • We have also involved our internal experts towards validating the key assumptions and estimates used in the aforesaid valuation. |
| • We assessed the competence objectivity and independence of the management's expert. |
| • We assessed the disclosures with the requirements of Ind AS. |
Other Information
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annual reportbut does not include the Standalone Ind AS Financial Statements and our auditor's reportthereon.
Our opinion on the Standalone Ind AS Financial Statements does notcover the other information and we do not express any form of assurance conclusionthereon.
In connection with our audit of the Standalone Ind AS FinancialStatements our responsibility is to read the other information and in doing so considerwhether such other information is materially inconsistent with the financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.
Responsibilities of Management for the Standalone Ind AS FinancialStatements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these Standalone Ind ASFinancial Statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS FinancialStatements 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 isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements
Our objectives are to obtain reasonable assurance about whether theStandalone Ind AS Financial Statements as a whole are free from material misstatementwhether due to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Ind AS FinancialStatements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of theStandalone Ind AS Financial Statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
• Evaluate the overall presentation structure and content of theStandalone Ind AS Financial Statements including the disclosures and whether theStandalone Ind AS Financial Statements represent the underlying transactions and events ina manner that achieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the Standalone IndAS Financial Statements for the financial Year ended March 31 2022 and are therefore thekey audit matters. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;
(b) In our opinion proper books of accounts as required by law havebeen kept by the Company so far as it appears from our examination of those books;
(c) The Standalone Balance Sheet the Standalone Statement of Profitand Loss including the Statement of Other Comprehensive Income the Standalone Cash FlowStatement and Standalone Statement of Changes in Equity dealt with by this Report are inagreement with the books of accounts;
(d) In our opinion the aforesaid Standalone Ind AS FinancialStatements comply with the Accounting Standards specified under Section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended;
(e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors are disqualified as on March 312022 from being appointed as a director in termsof Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controlswith reference to these Standalone Ind AS Financial Statements and the operatingeffectiveness of such controls refer to our separate Report in "Annexure 2" tothis report;
(g) In our opinion the managerial remuneration for the Year endedMarch 31 2022 has been paid by the Company to its directors in accordance with theprovisions of Section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Ind AS Financial Statements - Refer Note 39 to theStandalone Ind AS Financial Statements;
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.
iv. a) The management has represented that to the best of itsknowledge and belief no funds have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other person(s) or entity(ies) including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;
b) The management has represented that to the best of its knowledgeand belief no funds have been received by the Company from any person or entityincluding foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall whether directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever by or onbehalf of the Funding Party ("Ultimate Beneficiaries") or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures that were considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (a) and (b) contain any materialmisstatement.
v. No dividend has been declared or paid during the year by theCompany.
ANNEXURE 1 REFERRED TO IN PARAGRAPRS 1 OF THE SECTION ON REPORT ONOTHER LEGAL AND REGULATORY REQUIREMENTS IN OUR REPORT OF EVEN DATE
Re: Chemplast Sanmar Limited ('the Company')
In terms of the information and explanations sought by us and given bythe Company and the books of accounts and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we state that:
(i) (a) A. The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment.
B. The Company has not capitalized any intangible assets in the booksof the Company and accordingly the requirement to report on Clause 3(i)(a)(B) of theOrder is not applicable to the Company.
(b) Property plant and equipment have been physically verified by themanagement during the year and no material discrepancies were identified on suchverification.
(c) According to the information and explanations given by themanagement the title deeds of immovable properties included in property plant andequipment are held in the name of the Company.
(d) As disclosed in Note 14 to the Standalone Ind AS FinancialStatements the Company has revalued its land building plant and equipment during theYear ended March 31 2022. The revaluation is based on the valuation by Registered Valuersand the amount of change is less than 10% of the aggregate of the net carrying value ofland and buildings as a class of Property Plant and Equipment and the amount of changeis more than 10% of the aggregate of the net carrying value of Plant and equipmentamounting to INR 1197.85 Million as a class of Property Plant and Equipment.
(e) There are no proceedings initiated or are pending against theCompany for holding any benami property under the Prohibition of Benami PropertyTransactions Act 1988 and rules made thereunder.
(ii) (a) The management has conducted physical verification ofinventory at reasonable intervals during the year. In our opinion the coverage and theprocedure of such verification by the management is appropriate. Discrepancy of 10% ormore were not noticed on such physical verification. Inventories lying with third partieshave been confirmed by them as at year-end and no discrepancies were noticed in respect ofsuch confirmations.
(b) As disclosed in Note 26 to the Standalone Ind AS FinancialStatements the Company has been sanctioned working capital limits in excess of Rs. fivecrores in aggregate from banks during the year on the basis of security of current assetsof the Company. The quarterly returns/statements filed by the Company with such banks andfinancial institutions are in agreement with the books of accounts of the Company.
(iii) During the year the Company has not made any investment providedloans advances in the nature of loans stood guarantee or provided security to companiesfirms Limited Liability Partnerships or any other parties. Accordingly the requirementto report on clause 3(iii)(a) to (e) of the Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanationsgiven to us there are no loans and securities granted in respect of which provisions ofSections 185 of the Companies Act 2013 is applicable. In our opinion and according to theinformation and explanations given to us provisions of Section 186 of the Companies Act2013 in respect of investments made and guarantees given have been complied with by theCompany.
(v) The Company has neither accepted any deposits from public noraccepted any amounts which are deemed to be deposits within the meaning of Sections 73 to76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the requirement to report on clause 3(v) of the Order is not applicable tothe Company.
(vi) We have broadly reviewed the books of accounts maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under clause 148(1) of the Act related to the manufacture of the Company'sproducts and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the same.
(vii) (a) The Company is regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income-tax goods and services tax duty of custom cess and other statutorydues applicable to it.
(b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax duty of custom goods and service tax cess and other material statutory dueswere outstanding at the year end for a period of more than six months from the date theybecame payable.
(c) According to the records of the Company the dues of service taxcustoms duty excise duty other statutory dues on account of any dispute are as follows:
| Name of the Statute | Nature of dues | Amount in Million of INR | Period to which the amount relates | Forum where dispute is pending |
| TNVAT Act 2007 | Sales Tax/Penalty | 57.74 | 2010-11 to 2014-15 | Honorable High Court of Madras |
| Central Excise Act 1944 | Excise Duty/Service tax/ Penalty | 0.43 | 1975-76 to 2011-12 | Honorable High Court of Madras |
| Excise Duty/Service tax/ Penalty | 30.02 | 1979-80 to 2015-16 | CESTAT |
| Excise Duty/Service tax/ Penalty | 2.90 | 1991-92 to 2016-17 | Commissioner of Central Excise (Appeals) |
| Customs Act 1962 | Customs Duty | 1.09 | 2012-13 to 2013-14 | Commissioner of Customs (Appeals) |
| CGST Act 2017 | Goods and Service Tax | 8.80 | 2017-18 | GST Appellate Tribunal |
| CGST Act 2017 | Goods and Service Tax | 0.14 | 2017-18 | Assistant Commissioner of GST and Central Tax |
| SGST Act 2017 | Goods and Service Tax | 0.14 | 2017-18 | Assistant Commissioner of GST and Central Tax |
| IGST Act 2017 | Goods and Service Tax | 0.58 | 2017-18 | Assistant Commissioner of GST and Central Tax |
| Electricity Act 2003 | Parallel Operation Charges | 41.65 | 2014-18 | Appellate Tribunal of Electricity |
| Power Generation Tax | 27.55 | 2010-12 | Honorable High Court of Madras |
| Power Generation Tax - Interest | 81.70 | 2003-14 | Supreme Court |
| Power Generation Tax | 110.98 | 2003-14 | Supreme Court |
| Excess Power Drawal Charges | 5.81 | 2008-09 | Honorable High Court of Madras |
| Deemed Demand Charges | 4.04 | 2012-14 | Honorable High Court of Madras |
| Start Up power charges | 26.36 | 2012-14 | Tamilnadu Electricity Regulatory Commission |
| TWAD Act 1970 | Water Tax | 15.41 | 1992-2002 | Honorable High Court of Madras |
| TWAD Act 1970 | Water Tax - Interest | 78.04 | 1992-2002 | Honorable High Court of Madras |
| Employees' Provident Funds & Miscellaneous Provisions Act 1952 | Provident Fund Contribution | 6.01 | 2012-15 | Central Government Industrial Tribunal |
| Income Tax Act 1961 | Income Tax | 4.93 | 1998-99 | Honorable High Court of Madras |
| Income Tax including interest | 0.18 | 2007-08 | Honorable High Court of Madras |
| Income Tax including interest | 52.99 | 2017-18 | Commissioner of I ncome Tax (Appeals) |
| Income Tax including interest | 81.57 | 2018-19 | Commissioner of I ncome Tax (Appeals) |
(viii) The Company has not surrendered or disclosed any transactionpreviously unrecorded in the books of accounts in the tax assessments under the IncomeTax Act 1961 as income during the year. Accordingly the requirement to report on clause3(viii) of the Order is not applicable to the Company.
(ix) (a) The Company has not defaulted in repayment of loans or otherborrowings or in the payment of interest thereon to any lender.
(b) The Company has not been declared wilful defaulter by any bank orfinancial institution or Government or any Government authority.
(c) The Company has not obtained any term loans during the year hencethe requirement to report on clause (ix)(c) of the Order is not applicable to the Company.
(d) On an overall examination of the financial statements of theCompany no funds raised on short-term basis have been used for long-term purposes by theCompany.
(e) On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries associates or joint ventures.
(f) The Company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies. Hence therequirement to report on clause (ix)(f) of the Order is not applicable to the Company.
(x) (a) Monies raised during the year by the Company by way of initialpublic offer was applied for the purpose for which they were raised. The Company has notraised any monies by way of or further public offer (including debt instruments) duringthe year.
(b) The Company has not made any preferential allotment or privateplacement of shares / fully or partially or optionally convertible debentures during theyear under audit and hence the requirement to report on clause 3(x)(b) of the Order isnot applicable to the Company.
(xi) (a) No fraud by the Company or no fraud on the Company has beennoticed or reported during the year.
(b) During the year no report under sub-section (12) of Section 143 ofthe Companies Act 2013 has been filed by cost auditor/ secretarial auditor or by us inForm ADT - 4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government.
(c) As represented to us by the management there are no whistle blowercomplaints received by the Company during the year.
(xii) In our opinion the Company is not a Nidhi company. Thereforethe provisions of clause 3(xii) of the Order are not applicable to the Company and hencenot commented upon.
(xiii) Transactions with the related parties are in compliance withSections 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the notes to the financial statements as required by the applicableaccounting standards.
(xiv) (a) The Company has an internal audit system commensurate withthe size and nature of its business.
(b) The internal audit reports of the Company issued till the date ofthe audit report for the period under audit have been considered by us.
(xv) According to the information and explanations given by themanagement and audit procedures performed by us the Company has not entered into anynon-cash transactions with directors or persons connected with him as referred to inSection 192 of Companies Act 2013.
(xvi) (a) According to the information and explanations given to usthe provisions of Section 45-IA of the Reserve Bank of India Act 1934 are not applicableto the Company.
(b) The Company has not conducted any Non-Banking Financial or HousingFinance activities without obtaining a valid Certificate of Registration (CoR) from theReserve Bank of India as per the Reserve Bank of India Act 1934.
(c) The Company is not a Core Investment Company as defined in theregulations made by Reserve Bank of India.
Accordingly the requirement to report on clause 3(xvi) of the Order isnot applicable to the Company.
(d) The Group has two Core Investment Companies as part of the Group.
(xvii) The Company has not incurred cash losses in the current year andin the immediately preceding financial year respectively.
(xviii) There has been no resignation of the statutory auditors duringthe year and accordingly requirement to report on Clause 3(xviii) of the Order is notapplicable to the Company.
(xix) On the basis of the financial ratios disclosed in Note 49 to theStandalone Ind AS Financial Statements ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements our knowledge of the Board of Directors and management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report that Company is not capable of meeting its liabilities existingat the date of balance sheet as and when they fall due within a period of one year fromthe balance sheet date. We however state that this is not an assurance as to the futureviability of the Company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the Company as and when they fall due.
(xx) (a) In respect of other than ongoing projects there are nounspent amounts that are required to be transferred to a fund specified in Schedule VII ofthe Companies Act (the Act) in compliance with second proviso to sub section 5 of Section135 of the Act. This matter has been disclosed in Note 45 to the Standalone Ind ASFinancial Statements.
(b) There are no ongoing projects as specified in sub section (6) ofSection 135 of Companies Act 2013 and hence reporting under this clause is not applicablefor the Company.
ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE IND AS FINANCIAL STATEMENTS OF CHEMPLAST SANMAR LIMITED
We have audited the internal financial controls over financialreporting of Chemplast Sanmar Limited ("the Company") as of March 312022 inconjunction with our audit of the Standalone Ind AS Financial Statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 the Company's policies the safeguardingof its 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.
Auditor's Responsibility
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting with reference to these Standalone Ind ASFinancial Statements based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing as specified under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting with reference to these Standalone Ind ASFinancial Statements was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls over financial reporting with reference tothese Standalone Ind AS Financial Statements and their operating effectiveness. Our auditof internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting with reference tothese Standalone Ind AS 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 andappropriate to provide a basis for our audit opinion on the internal financial controlsover financial reporting with reference to these Standalone Ind AS Financial Statements.
Meaning of Internal Financial Controls Over Financial Reporting withreference to these Standalone Financial Statements
A company's internal financial control over financial reporting withreference to these 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 Financial Statements includes those policies and procedures that(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation ofFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the FinancialStatements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting With Reference to these Standalone Ind AS Financial Statements
Because of the inherent limitations of internal financial controls overfinancial reporting with reference to these Standalone Ind AS Financial Statementsincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingwith reference to these Standalone Ind AS
Financial Statements to future periods are subject to the risk that theinternal financial control over financial reporting with reference to these Standalone IndAS Financial Statements may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these StandaloneInd AS Financial Statements and such internal financial controls over financial reportingwith reference to these Standalone Ind AS Financial Statements were operating effectivelyAs at March 31 2022 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.
| For S.R. Batliboi & Associates LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 | |
| Place of Signature: Chennai Date: May 10 2022 | per Aravind K Partner Membership Number: 221268 UDIN: 22221268AISVWR4688 |
