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Deepak Nitrite Ltd.

BSE: 506401 Sector: Industrials
NSE: DEEPAKNTR ISIN Code: INE288B01029
BSE 00:00 | 23 Aug 273.40 13.10
(5.03%)
OPEN

260.00

HIGH

275.00

LOW

256.95

NSE 00:00 | 23 Aug 273.80 13.65
(5.25%)
OPEN

259.00

HIGH

275.00

LOW

257.30

OPEN 260.00
PREVIOUS CLOSE 260.30
VOLUME 35967
52-Week high 337.55
52-Week low 204.60
P/E 16.68
Mkt Cap.(Rs cr) 3,729
Buy Price 273.40
Buy Qty 139.00
Sell Price 274.80
Sell Qty 10.00
OPEN 260.00
CLOSE 260.30
VOLUME 35967
52-Week high 337.55
52-Week low 204.60
P/E 16.68
Mkt Cap.(Rs cr) 3,729
Buy Price 273.40
Buy Qty 139.00
Sell Price 274.80
Sell Qty 10.00

Deepak Nitrite Ltd. (DEEPAKNTR) - Auditors Report

Company auditors report

To The Members of Deepak Nitrite Limited

Report On The Audit Of The Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Deepak NitriteLimited ("the Company") which comprise the Balance Sheet as at 31st March 2019and the Statement of Profit and Loss (including Other Comprehensive Income) the Statementof Cash Flows and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and 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 31 March 2019 and its profit totalcomprehensive income its cash flows and the changes in equity 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. Webelieve that the audit evidence obtained by us is sufficientand appropriate to provide abasis for our audit opinion on the standalone 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 financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matter described below to be thekey audit matters to be communicated in our report.

Revenue recognition

Revenue recognition is significant audit risk across all units within the Company. Riskexists that revenue is recognized without substantial transfer of control and is not inaccordance with Ind AS-115 "Revenue from Contracts with Customers".

Auditor's Response principal Audit procedures

Our audit consisted testing of the design and operating effectiveness of the internalcontrols and substantive testing as follows:

We evaluated the design of internal controls relating to revenue recognition.

We selected sample of Sales transactions and tested the operating effectiveness of theinternal control relating to revenue recognition. We carried out a combination ofprocedures involving enquiry and observation reperformance and inspection.

We have tested sample of Sale transactions to their respective customer contractsunderlying invoices and related documents.

We have performed cut-off procedures for sample of revenue transactions at year-end inorder to conclude on whether they were recognised in accordance with Ind-AS 115.

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 Management Discussion and Analysisreport but does not include the consolidated financial statements standalone financialstatements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

We have nothing to report in this regard.

Management's Responsibility For The Standalone 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 financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind 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 irregularities; selection and application of appropriateaccounting policies; making judgments 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 standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error. In preparing the standalone 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 arealso responsible for overseeing the Company's financial reporting process.

Auditor's Responsibility For The Audit Of The Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 outweigh the public interest benefits of such communication.

Report On Other Legal And Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report: a) We havesought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss including Other Comprehensive Income the Statement of Cash Flows and Statementof Changes in Equity dealt with by this Report are in agreement with the books of account.d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act. e) On the basis of the written representationsreceived from the directors as on 31st March 2019 taken on record by the Board ofDirectors none of the directors is disqualified as on 31st March 2019 from beingappointed as a director in terms of Section 164(2) of the Act. f) With respect to theadequacy of the internal financial controls over financial reporting of the Company andthe operating effectiveness of such controls refer to our separate Report in"Annexure A". Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting. g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended.

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act. h) With respect to the othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 as amended in our opinion and to the best of ourinformation and according to the explanations given to us: i. The Company has disclosedthe impact of pending litigations on its financial position in its standalone financialstatements. ii. The Company has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts; iii. There has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Company.

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

For Deloitte haskins & Sells LLp

Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Place: Ahmedabad (Kartikeya Raval)

Date: 3rd May 2019 (Partner) (Membership No. 106189)

Annexure "A" to Independent Auditor's Report

(Referred To In Paragraph 1 (F) Under ‘Report On Other Legal And RegulatoryRequirements' Section Of Our Report Of Even Date) Report On The Internal FinancialControls Over Financial Reporting Under Clause (I) Of Sub-Section 3 Of Section 143 Of TheCompanies Act 2013 ("The Act")

We have audited the internal financial controls over financial reporting of DeepakNitrite Limited ("the Company") as of March 31 2019 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 businessthe safeguarding of its assets the prevention 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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is 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 March 31 2019 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)

Place: Ahmedabad (Kartikeya Raval)

Date: 3rd May 2019 (Partner) (Membership No. 106189)

Annexure "B" to 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 maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) The Company has a regular programfor verification of property plant and equipment at every 2 years which in our opinionis reasonable having regarding to the size of the Company and nature of its assets. Theproperty plant and equipment were physically verified during the current year inaccordance with this program. According to information and explanations given to us nomaterial 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 /conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings are held in the name of the Company as at thebalance sheet date. Immovable properties of land and buildings whose title deeds have beenpledged as security for loans are held in the name of the Company based on theconfirmations directly received by us from lenders. In respect of immovable properties ofland and buildings that have been taken on lease and disclosed as fixed asset in thefinancial statements the lease agreements are in the name of the Company where theCompany is the lessee in the agreement.

(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) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 as amended with regard to the deposits accepted. According to the information andexplanations given to us no order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.

(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 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 noundisputed amounts payable in respect of Provident Fund Employees' State InsuranceIncome-tax Sales Tax Service Tax Customs Duty Excise Duty Value Added Tax Goods andService Tax cess and other material statutory dues in arrears as at March 31 2019 for aperiod of more than six months from the date they became payable.

(c) Details of dues of Sales Tax Excise Duty Central Sales Tax Value Added Tax andother statutory dues which have not been deposited as on March 31 2019 on account ofdisputes are given below:

Name of Statute Nature of Dues forum where Dispute is pending period to which the Amount Relates Amount involved Amount unpaid
(` in lakhs) (` in lakhs)
Central Excise Act 1944 Excise Duty Central Excise Asst. Commissioner FY 2011 to FY 2017 76.65 71.62
Central Excise Act 1944 Excise Duty Central excise commissioner FY 1998 to FY 2016 54.73 32.35
Central Excise Act 1944 Excise Duty Central excise commissioner Appeals FY 2008 to FY 2014 27.40 16.44
Central Excise Act 1944 Excise Duty Central Excise & Service Tax Appellate Tribunal FY 2004 to FY 2015 127.78 104.89
Central Sales Tax Act Sales Tax Sales Tax commissioner (Appeal) FY 2005 to FY 2014 115.05 109.05
Gujarat Vat Act 2004 VAT Assistant Commissioner Appeals FY 2010 to FY 2013 43.92 43.92
Finance Act 1994 Service Tax Assistant Commissioner GST FY 2015 to FY 2017 5.64 5.64
Hyderabad Metropolitan Water Supply & Sewerage Act 1989 Sewerage Cess High Court of Andhra Pradesh FY 2008 to FY 2013 27.13 27.13
The Gujarat Panchayats Law (Amendment) Act 1963 Property Tax Gram Panchayat FY 2013 to FY 2017 170.00 170.00

There are no dues of Income-tax Service Tax Customs Duty Goods and Service Tax andValue Added Tax that have not been deposited as at 31st March 2019 on account ofdisputes. (viii) In our opinion and according to the information and explanations given tous the Company has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government. The Company has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to us theCompany has not raised money by way of initial public offer/ further public offer(including debt instruments) and 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 andaccording to the information and explanations given to us no material fraud by theCompany and no material fraud on the Company by its officers or employees has been noticedor reported during the year. (xi) In our opinion and according to the information andexplanations given to us the Company has paid / provided managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013. (xii) The Company is not a Nidhi Company andhence reporting under clause (xii) of paragraph 3 of the Order is not applicable. (xiii)In our opinion and according to the information and explanations given to us the Companyis in compliance with Section 188 and 177 of the Companies Act 2013 where applicablefor 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) During the year the Company has not made any preferential allotment or privateplacement of shares and debentures and hence reporting under clause (xiv) of CARO 2016 isnot applicable to the Company. (xv) In our opinion and according to the information andexplanations given to us during the year the Company has not entered into any non-cashtransactions with its directors or persons connected with him and hence provisions ofsection 192 of the Companies Act 2013 are not applicable.

(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)

Place: Ahmedabad (Kartikeya Raval)

Date: 3rd May 2019 (Partner) (Membership No. 106189)