TO THE SHAREHOLDERS OF CONTINENTAL CHEMICALS LIMITED
We have audited the accompanying financial statements of gCONTINENTALCHEMICALS LIMITEDh ("the Company") which comprise the Balance Sheetas at March 31 2020 the Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies an d otherexplanatory information (hereafter referred to as Ind AS Financial Statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner 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 March31 2020 and profit /loss changes in equity and its cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the companies Ac t 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the company inaccordance with the code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the cod e of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the financ ial statements of the current period. Key auditmatters are selected from matters communicated with those charge with governance but arenot intended to represent all matters that were discussed with them. The auditors'procedures relating to those matters were designed in the context of the audit of thefinancial statements as a whole.
However there are no Key audit matters to report.
Managementfs Responsibility for the 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 financial statements that givea true and fair view of the financial position financial performance of the company inaccordance with the AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the company and for preventingand detecting frauds and other irregu larities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing thecompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are responsible for overseeing the company's financial reportingprocess.
Auditorfs Responsibilities for the Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material ifindividually or in aggregate they could reasonab ly be expected to influence the economicdecision of users taken on the basis of these financial statements. (Refer Appendix A)
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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and to obtain audit evidence that is sufficient and appropriate to provide a basisfor our opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryinternational omissions misrepresentations or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate
- Internal financial controls system in place and the operating effectiveness of suchcontrols.
- Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosers made by 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 uncertainty existsrelated to events or conditions that may cast significant doubt on the compan y's abilityto continue as a going concern. If we conclude that material uncertainty exists we arerequired to draw attention in our auditor's repor t to the related disclosers in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusion is based on the audit evidences 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statement thatindividually or in aggregate makes it probable that the economic decision of a reasonablyknowledgeable user of the financial statements may be influenced. We consider quantitativemateriality and qualitative factor in (i) planning the scope of our audit work; and (ii)to evaluate the effect of any identified misstatement in the 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 also provide those charge 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 by thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that wer e of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public discloser about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweig h the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
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 the"Annexure-A" statement on the matters specified in paragraphs 3 and 4 of theOrder.
As required by section 143(3) of the Act 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 purpose of our audit.
(b) In our opinion proper books of account as required by the law have been kept bythe Company so far as it appears from our examination of those books.
(c) The Balance Sheet and the Statement of Profit and Loss dealt with by this Reportare in agreement with the relevant books of account.
(d) In our opinion the aforesaid financial statements comply with Ind AS specifiedunder section 133 of the Act read with relevant rules issued there under.
(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 director is disqualifiedas on March 31 2020 from being appointed as a director in terms of section 164(2) of theAct.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure-B". 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 the requirements of section 197 ( 16) of the Act as amended: the companyhas paid / provided for managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with schedule V to 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 t ous :
(i) The Company does not have any pending litigations which would impact its financialposition.
(ii) The company didn't have any long term contracts including derivative contracts forwhich there were any material foreseeable losses. (iii) There were no amounts which wererequired to be transferred to investor Education and Protection Fund by the Company.
For B.K.KAPUR& Co. Chartered Accountants Firm Registration No. 00852C
(M.S. KAPUR) F.C.A.
gANNEXURE Ah TO THE AUDITORS REPORTh
(Referred to in paragraph (1) of our report on other Legal and Regulatory requirementssection of our report of even date)
1. a. The company has maintained proper records to show full particulars includingquantitative details and situation of its fixed assets.
b. The fixed assets of the company have been physically verified during the year by themanagement at reasonable intervals and no ma terial discrepancies between the book recordsand the physical inventory have been noticed on such verification.
c. According to the information and explanation given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.
2. Since the company does not have any inventory information required under Para 3(ii)is not being given.
3. According to information made available to us the company has not granted any loansecured or unsecured to companies firms LLPs or Other parties covered in the registermaintained under section 189 of the Act accordingly Para 3 (iii) (a) & (c) of theorder are not applicable to the company.
4. On the basis of information and explanation given to us the company has not enteredinto transactions mentioned in section 185 and 186 of the Act accordingly paragraph 3(iv)of the Order is not applicable.
5. On the basis of information and explanation given to us and our scrutiny ofcompany's records in our opinion the company has not accepted any public deposits.
6. To the best of our knowledge and belief and according to information given to uscentral government h as not prescribed the maintenance of cost records under sub-section(1) of section 148 of the companies Act 2013 for the products of the company.
7.(a) According to the information and explanation given to us the company is generallyregular in depositing with appropriat e authorities the undisputed statutory duesincluding provident fund employees' state insurance income tax sales-tax service taxcustom duty excise duty value added tax cess and any other statutory dues applicable toit. Further there was no arrears of undisputed statutory dues outstanding as 31stMarch 2020 for a period of more than six month from the date they became payable.
(b) According to the information and explanation given to us there are no tax dues ofincome-tax sales-tax service tax custom duty excise duty Value added tax which has notbeen deposited on account of any dispute.
8. Based on our examination and according to the information and explanation given usthe company has not defaulted in repayment of dues to banks. There are no dues tofinancial institution or debenture holders.
9. The company did not raise money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the order is not applicable.
10. To the best of our knowledge and belief and according to the information andexplanation given to us no fraud on or by the comp any has been noticed or reportedduring the course of our audit for the year ended 31 March 2020.
11. According to the information and explanations given to us and based on ourexamination of the records of the company the company has Paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
12. In our opinion and according to the information and explanations given to us thecompany is not a nidhi company. Accor dingly paragraph 3
(xii) of the order is not applicable.
13. According to the information and explanations given to us and based on ourexamination of the records of the company transactions with th e related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions h ave been disclosed in the financial statements as required by theapplicable accounting standards.
14. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has made preferential allotment ofequity shares during the year and has complied with the provisions of section 42 of theCompanies Act 2013 and the amount raised has been used for the purpose for which thefunds were raised.
15. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3 (xv)of the order is not applicable.
16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For B.K.KAPUR& Co. Chartered Accountants Firm Registration No. 00852C
(M.S. KAPUR) F.C.A.
Annexure - B to Independent Auditorsf Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (gthe Acth)
We have audited the internal financial controls over financial reporting of CONTINENTALCHEMICALS LIMITED ("the Company") as at March 31 2020 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
Managementfs Responsibility for Internal Financial Controls
The Board of Directors of the Company's is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in th e Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(ICAI').
These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevent ion and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") issued by the Institute of chartered Accountantof India and the standards on Auditing prescribed under section 143 (10) of the companiesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial 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 judgment 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 sufficient and appropriate toprovide a basis for our audit opinion on the int ernal financial controls system overfinancial reporting of the company.
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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in acc ordance with generally accepted accountingprinciples and those receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disp osition of the company's assets that could have amaterial 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 proce dures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on A udit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.
For B.K.KAPUR& Co. Chartered Accountants Firm Registration No. 00852C
(M.S. KAPUR) F.C.A. (Partner)