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Dharamsi Morarji Chemicals Co Ltd.

BSE: 506405 Sector: Industrials
NSE: DHARAMSI ISIN Code: INE505A01010
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VOLUME 18491
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P/E 34.24
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OPEN 374.90
CLOSE 369.45
VOLUME 18491
52-Week high 434.35
52-Week low 176.00
P/E 34.24
Mkt Cap.(Rs cr) 911
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dharamsi Morarji Chemicals Co Ltd. (DHARAMSI) - Auditors Report

Company auditors report

To the Members of THE DHARAMSI MORARJI CHEMICAL COMPANY LIMITED

Report on the Audit of the Standalone Ind AS Financial

OPINION

We have audited the accompanying standalone Ind AS financial statements of The DharamsiMorarji Chemical Company Limited ("the Company") which comprise the Balancesheet as at 31 March 2021 the Statement of Profit and Loss including the statement ofOther Comprehensive Income the Cash Flow Statement and the statement of Changes in Equityfor the year then ended and notes to the Ind AS financial statements including 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 Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of a_airs of the Company as at 31 March 2021its profit including other comprehensive income its cash flows and the changes in equityfor the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities 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 Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is su_cient and appropriate to provide a basisfor our audit opinion on the Standalone Ind AS financial statements.

EMPHASIS OF MATTER

We draw your attention to Note 2.2 to the financial results which explain theuncertainties and the management's assessment of the financial impact due to thelock-downs and other restrictions and conditions related to the COVID-19 pandemicsituation for which a definitive assessment of the impact in the subsequent period ishighly dependent upon circumstances as they evolve. Further our attendance at thephysical inventory verification done by the management was impracticable under the currentlock-down restrictions imposed by the government and we have therefore relied on therelated alternative audit procedures to obtain comfort over the existence and condition ofinventory at year end.

Our opinion is not modified in respect of this matter.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the Standalone Ind AS financial statements for the financialyear ended 31 March 2021. 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.

Sr. No. Key audit matters How our audit addressed the key audit matter
1. Litigations and claims Principal Audit Procedures:
(Refer to note 32 to the standalone Ind AS financial statements) • Evaluation of management's judgement of tax risks estimates of tax exposures each claims and contingencies. Third party opinions past and current experience with the tax authority and management's response including on the labour law cases were used to assess the appropriateness of management's best estimate of most likely outcome of each uncertain contingent liability.
These cases are pending with multiple tax authorities like Income Tax Excise Service tax etc. and labour law cases which have not been acknowledge as debt by the company. • Discussing selected matters with the entity's management.
In normal course of business financial exposures may arise from pending proceedings not acknowledged as debt by the company. • Critically assessing the entity's assumptions and estimates in respect of claims included in the contingent liabilities disclosed in the standalone Ind AS financial statements. Assessment of the probability of negative result of litigation and the reliability of estimates of related obligation.
Whether a claim needs to be recognized as liability or disclosed as contingent liability in the standalone Ind AS financial statements is depended on a number of significant assumptions and judgements. Conclusion:
The amount involved are potentially significant and determining the amount if any to be recognized or disclosed in the standalone Ind AS financial statements is inherently subjective. Based on the procedures described above we did not identify any material exceptions to the management's assertions and treatment presentation & disclosure on the subject matter in the standalone Ind AS financial statements.
We have Considered Litigation and claims as Key Audit Matter as it requires significant management judgement including accounting estimation uncertainty.
2. Revenue Recognition Principal Audit Procedures:
(as described in note 2.11 of the standalone Ind AS financial statements) Our audit procedures included the following:
For the year ended March 31 2021 the Company has recognized revenue from contracts with customers amounting to Rs.19634.33 Lakhs. Revenue from contracts with customers is recognised when control of the goods are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. The Company has generally concluded that as principal it typically controls the goods before transferring them to the customer. • Assessed the Company's revenue recognition policy prepared as per Ind AS 115 ‘Revenue from contracts with customers'.
The variety of terms that define when control are transferred to the customer as well as the high value of the transactions give rise to the risk that revenue is not recognized in the correct period. • Assessed the design and tested the operating e_ectiveness of internal controls related to revenue recognition discounts and rebates.
Revenue is measured net of net of returns and allowances cash discounts trade discounts and volume rebates (collectively ‘discount and rebates'). There is a risk that these discount and rebates are incorrectly recorded as it also requires a certain degree of estimation resulting in understatement of the associated expenses and accrual. • P erformed sample tests of individual sales transaction and traced to sales invoices sales orders and other related documents. Further in respect of the samples checked that the revenue has been recognized as per the shipping terms.
Revenue is also an important element of how the Company measures its performance. The Company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the risk and rewards have been transferred. • T o test cut o_ selected sample of sales transactions made pre- and post-year end agreeing the period of revenue recognition to third party support such as transporter invoice and customer confirmation of receipt of goods.
Accordingly due to the significant risk associated with revenue recognition in accordance with terms of Ind AS 115 ‘Revenue from contracts with customers' it was determined to be a key audit matter in our audit of the standalone Ind AS financial statements. • T ested the provision calculations related to management incentives discounts and rebates by agreeing a sample of amounts recognized to underlying arrangements with customers and other supporting documents.
• P erformed monthly analytical procedures of revenue by streams to identify any unusual trends.
• Obtained confirmations from customers on sample basis to support existence assertion of trade receivables and assessed the relevant disclosures made in the financial statements; to ensure revenue from contracts with customers are in accordance with the requirements of relevant accounting standards.

We have determined that there are no other key audit matters to communicate in ourreport.

IMPACT OF COVID19 LOCKDOWN ON THE OPERATIONS OF THE COMPANY AND RESUMPTION OFOPERATIONS POST COVID19 LOCKDOWN

The Operations of the Company during the year ended 31 March 2021 were marginallya_ected due to Lockdown announced by the Central / State Governments in the month of March2020 due to the outbreak of Novel Coronavirus COVID19.

COMMENT ON THE PHYSICAL VISIT TO THE OFFICE

The nationwide Lockdown process started from 22n March 2020 in form of a 14 Hr.‘Janata Curfew'. A formal National Lockdown was announced by the Central Governmentfrom 24 _ March 2020 in successive phases. Subsequent notifications issued by theGovernment have restricted the opening of private o_ces. This has resulted into seriousrestrictions on travel. Hence there have been limitations on physical visits to the o_cesof the Company. In light of the said travel restrictions we have not visited the Company.

The Companies (Auditor's Report) Order 2016 ("the Order") requires StatutoryAuditor to comment on the adequacy of the data received for the purpose of StatutoryAudit from the o_ces not visited by us. We would like to mention that due to the Lockdownsituation as mentioned above we were not able to visit any o_ces of the Company. But wehave received the relevant data from the o_ces not visited by us.

AUDIT USING ONLINE AUDITING METHOD / TECHNIQUES

In light of the restrictions in physical movement and visits to the company o_ces theCompany has given us access to their ERP System to the extent possible. We were able toaccess the relevant data & records for our Audit purpose. Further the company hasprovided all other data / information / records as required by us using e-data sharingmodes. We also had continuous communication with the Audit Team & Management of theCompany using various modes such as Audio / Video Conferencing etc.

ONLINE VERIFICATION OF THE DOCUMENT / RECORDS / STATEMENTS & ASSURANCE ABOUT THEACCURACY AND AUTHENTICITY OF THE SAME

Due to the phase wise Lockdown imposed by State Governments and the resulting travelrestrictions it was not possible to physically visit the

Company and carry out the audit function. We have carried out the Audit Process usingvarious techniques of Online Auditing. We have verified the records received by us throughelectronic media. We have also received Management Representation Letters where evernecessary. Using such techniques we have ensured reasonable assurance that the recordsprovided to us are free from material misstatement and adhere to the relevant standards.

In this respect we have also followed the ‘Advisory on Auditing and Assuranceassignments during the Period of Lockdown and Restrictions on Travelling' issued by TheInstitute of Chartered Accountants of India to the extent relevant and applicable.

EXPRESSION OF OPINION

We have carried out the Audit Process using Online Mode. We have carried out the AuditProcess subject to our disclosures as mentioned above. The audit evidence obtained by usis adequate to express our audit opinion. While expressing our audit opinion we have alsorelied upon certifications by the management or certifications by other independentauditors wherever required.

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 2020-21 but does notinclude the 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 standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT FOR THE STANDALONE IND 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 cash flows and changes in equity 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 of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating e_ectively for ensuring the accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the Standalone Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud 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.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES 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 skepticism 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 su_cient 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 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 e_ectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 Ind AS 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 IndAS financial 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 31 March 2021 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 subsection (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

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

(a) W e have sought and obtained all the information explanations which to the best ofour knowledge and belief were necessary for the purpose 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 Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015 asamended;

(e) On the basis of written representations received directors as on 31 March 2021 andtaken on record by the Board of Directors none of the directors is disqualified as on 31March 2021 from being appointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating e_ectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report;

(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 other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements – Refer Note 32 to thestandalone Ind AS financial statements; ii. The Company did not have any long-termcontracts including derivative contracts for which there were any material foreseeablelosses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

Annexure - 1 To the Independent Auditor's Report

referred to in paragraph under the heading "Report on other legal and regulatoryrequirements" of our report of even date Re: THE DHARAMSI MORARJI CHEMICAL COMPANYLIMITED ("the Company")

(i) ( a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) All fix ed assets been physically verified by the management during the year butthrough a regular program of verification which opinion is reasonable having regard tothe size of the Company and the nature of its assets. No material discrepancies werenoticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at 31 March 2021 and no material discrepancies were noticed inrespect of such confirmations.

(iii) The Company has not granted any secured or unsecured loans to companies firmslimited liability partnership or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Therefore the requirements of sub-clause (a) (b)and (c) of clause (iii) are not applicable to the Company.

(iv) There are no loans given no investments made no guarantees given and nosecurity given by the Company in terms of provisions of section 185 and 186 of theCompanies Act 2013.

(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.

(vi) W e have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government the maintenance of cost records under section148(1) of the Companies Act 2013 and are of the opinion that prima facie the specifiedaccounts and records have been made and maintained. We have not however made a detailedexamination of the same.

(vii) ( a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax cessand other statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax sales-taxservice tax duty of custom duty of excise value added tax cess and other materialstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

(c) According to the records of the Company the dues outstanding of income tax dutyof excise duty of custom sales tax ESI and employees' state insurance on account of anydispute is as follows:

Name of the Statute Nature of Dues Amount (`) in Lakhs Period to which Forum where dispute is pending
Customs Act 1962 Di_erential Duty 1433.00 2004-05 to 2008-09 CESTAT Mumbai
Customs Act 1962 Duty 121.60 2005-06 to 2007-08 CESTAT Mumbai
TOTAL 1554.6

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to afinancial institution bank or Government. The Company did not have any outstandingdebentures during the year.

(ix) In our opinion and according to the information and explanations given by themanagement the Company has utilized the monies raised by term loans for the purpose forwhich they were obtained. The Company has not raised any money way of initial public o_er/ further public o_er / debt instruments during the year.

(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 o_cers and employees of the Company has been noticed or reported duringthe year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv)According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.

(xvi)According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

Annexure - 2 To the Independent Auditor's Report

(Annexure referred to under the heading ‘Report on Other Legal and RegulatoryRequirements' of our report of even date.)

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of TheDharamsi Morarji Chemical Company Limited ("the Company") as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating e_ectively for ensuring the orderly and e_cient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") 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 was established and maintained and if suchcontrols operated e_ectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting their operatinge_ectiveness. 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 e_ectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is su_cient and appropriate toprovide a basis for our audit opinion on the internal financial controls over financialreporting.

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 e_ect 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 the Company has in all material respects adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating e_ectively as at 31 March 2021 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Independent Auditor's Report

On the Audit of the Standalone Financial Results

TO THE BOARD OF DIRECTORS OF THE DHARAMSI MORARJI CHEMICAL COMPANY LIMITED

OPINION

We have audited the accompanying standalone quarterly financial results of THE DHARAMSIMORARJI CHEMICAL COMPANY LIMITED (the company) for the year ended 31 March 2021 attachedherewith being submitted by the company pursuant to the requirement of Regulation 33 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 as amended("Listing Regulations").

In our opinion and to the best of our information and according to the explanationsgiven to us these standalone financial results:

i. are presented in accordance with the requirements of 33 of the Listing Regulationsin this regard; and

ii. give a true and fair view in conformity with the recognition and measurementprinciples laid down in the applicable accounting standards and other accountingprinciples generally accepted in India of the net profit and other comprehensive incomeand other financial information for the year ended 31 March 2021.

BASIS FOR OPINION

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013 (the Act). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Results section of our report. We are independent of the Companyin accordance 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 results under the provisions of the Companies Act 2013 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 su_cient and appropriate to provide a basis for our opinion.

EMPHASIS OF MATTER

We draw your attention to Note 3 to the financial results which explain theuncertainties and the management's assessment of the financial impact due to thelock-downs and other restrictions and conditions related to the COVID-19 pandemicsituation for which a definitive assessment of the impact in the subsequent period ishighly dependent upon circumstances as they evolve. Further our attendance at thephysical inventory verification done by the management was impracticable under the currentlock-down restrictions imposed by the government and we have therefore relied on therelated alternative audit procedures to obtain comfort over the existence and condition ofinventory at year end.

Our opinion is not modified in respect of this matter.

MANAGEMENT'S RESPONSIBILITIES FOR THE STANDALONE FINANCIAL RESULTS

These quarterly financial results as well as the year to date standalone financialresults have been prepared on the basis of the interim financial statements. The Company'sBoard of Directors are responsible for the preparation of these financial results thatgive a true and fair view of the net profit and other comprehensive income and otherfinancial information in accordance with the recognition and measurement principles laiddown in Indian Accounting Standard 34 ‘Interim Financial Reporting' prescribed underSection 133 of the Act read with relevant rules issued thereunder and other accountingprinciples generally accepted in India and in compliance with Regulation 33 of the ListingRegulations. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating e_ectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial results that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial results the Board of Directors are responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL RESULTS

Our objectives are to obtain reasonable assurance about whether the standalonefinancial results as a whole are free from material misstatement whether due to fraud orerror and to issue an auditor's report that includes our opinion. Reasonable assurance isa 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 results.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial results whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is su_cient 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances but not for the purposeof expressing an opinion on the e_ectiveness of the company's internal control.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the Board of Directors.

• Conclude on the appropriateness of the Board of Directors' 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 results 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 the standalonefinancial results including the disclosures and whether the financial results representthe underlying transactions and events in a manner that achieves 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.

OTHER MATTER

The statement includes the results for the quarter ended 31 March 2021 being thebalancing figure between audited figures in respect of the full financial year ended 31March 2021 and unaudited published year to date figures up to the third quarter of thecurrent financial year which were subjected to limited review by us as required under theListing Regulations.

For Rahul Gautam Divan & Associates
ICAI Firm registration number: 120294W
Chartered Accountants
Rahul Divan
Partner
Membership No.: 100733
UDIN: 21100733AAAABC6621
Place: Mumbai
Date: 21st May 2021

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