TO THE BOARD OF
DIRECTORS OF HINDUSTAN ADHESIVES LIMITED
REPORT ON THE AUDIT OF THE STANDALONE ANNUAL FINANCIAL STATEMENTS
We have audited the accompanying Standalone Financial Statements of HINDUSTANADHESIVES LIMITED (hereafter referred to as the "Company") which comprisethe Balance Sheet as at 31st March 2021 and the statement of Profit and Loss (includingOther Comprehensive Income) Statement of Changes in Equity and statement of cash flowsfor the year then ended and notes to the Financial Statements including a summary ofsignificant 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 Financial Statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and its Profit (includingOther Comprehensive Income) 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 Act 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(ICAI) together with the ethical requirements that are relevant to our audit of thefinancial Statements 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 sufficient and appropriate to provide a basis for our opinion.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Board's Report includingAnnexure to Board's Report and Shareholder's Information but does not include theFinancial Statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.
In connection with our audit of the Financial Statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the Financial Statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
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.
Management's Responsibilities for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards specified under Section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant of thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
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. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the 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 fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Financial Statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such 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 Financial Statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the FinancialStatements including the disclosures and whether the Financial Statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of the 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 the key audit matters. We describe these matters in ourauditor's report unless law or Regulation precludes public disclosure about the matter orwhen in extremely rare circumstances were determined that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe accepted 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 we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit. ]
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid Financial Statements comply with the Indian AccountingStandards specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act.
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 A".Our report expresses an unmodified opinionon the adequacy and operating effectiveness of the Company's internal financial controlsover financial 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 in ouropinion and to the best of our information and according to the explanation given to usthe remuneration paid by the company to its directors during the year is in accordancewith 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 pending litigation on its financial positionin its Standalone Financial Statements.
(ii) The Company has made provisions as required under the applicable law or accountingstandards for material foreseeable losses if any on long - term contracts includingderivative contracts
(iii) There were no amount which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure- "B" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.-
ANNEXURE A' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in Paragraph 1 (f) of Report on Other Legal and Regulatory Requirementssection of our Report to members of Hindustan Adhesives Limited of even date) Report onthe Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of theCompanies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting ofHINDUSTAN ADHESIVES LIMITED ("the Company") as of 31st March 2021 inconjunction with our audit of the financial statements of the Company for the year endedon 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 effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 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.
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 31st March2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
ANNEXURE B' TO THE INDEPENDENT AUDITOR'S REPORT
With reference to the Annexure referred paragraph 2 under report on "Other Legaland Regulatory Requirements" section of our Auditors' Report to the members of HINDUSTANADHESIVES LIMITED on the financial statements for the year ended 31st March 2021 wereport that:
i) In respect of fixed assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) As explained to us during the year physical verification of major assets has beenconducted by the management at reasonable intervals and the discrepancies observed areproperly dealt with in the boos of accounts .
c) According to the information and explanation given by the management the title deedsof immovable properties are held in the name of the company except land admeasuring 0.0253hectares part of the existing factory land located at Dadri (Ghaziabad).
ii) In respect of its inventories:
a) The inventory except for goods-in-transit has been physically verified by themanagement at reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable. In respect of goods-in-transit subsequent goods receipts havebeen verified or confirmations have been obtained from the parties. The discrepanciesnoticed on verification between the physical stocks and the book records were not materialand have been properly dealt in the books of accounts.
b) As informed by the management the proper records of inventory are being maintainedand no material discrepancies were noticed during such physical verifications.
iii) According to the information and explanations given to us the Company hadgranted unsecured loans to companies firms Limited Liability Partnerships or otherparties listed in the register maintained under section 189 of the Companies Act 2013. Inour opinion and according to the information given to us the terms and conditions of theloan given by the Company our prima facie not prejudicial to the interest of the Company.The repayments of loan and advances has been as stipulated. There is no overdue amount ason the balance sheet date
iv) According to the information and explanations given to us the Company hascomplied with applicable provisions specified in section 185 and 186 of Company's Act2013 in relation to Loans Investments Guarantees and Security given
v) The Company has not accepted any deposit from public and therefore theprovisions of the clause 3 (v) of the order are not applicable to the company.
vi) We have broadly reviewed the books of account maintained by the Company asspecified under Section 148(1) of the Act for maintenance of cost records in respect ofproducts manufactured by the Company and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
vii) a) According to the information and explanations given to us and on the basisof our examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales-tax Service tax Duty of Customs Duty of Excise Valueadded tax Cess and other material statutory dues have been regularly deposited during theyear by the Company with the appropriate authorities and according to the information andexplanations given to us no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income-tax Sales-tax Service tax Duty of Customs Duty ofExcise Value added tax Cess and other material statutory dues were in arrears as at 31March 2021. b) According to the information and explanations given to us there are nodisputed statutory dues which have to be deposited with the appropriate authorities.
viii) According to the information and explanations given to us The Company hasnot defaulted in the repayment of dues to any financial institution banks Government anddebenture holders during the year.
ix) According to the information and explanations given to us the term loans havebeen applied by the Company during the year for the purposes for which they were obtained.The Company did not raise money by way of initial public offer or further public offer(including debt instruments) during the year.
x) According to the information and explanations given by the management and to thebest of our knowledge and belief no fraud by the Company or on the Company by its officeror employees has been noticed or reported during the course of our audit.
xi) According to the information and explanations give 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.
xii) The Company is not a Nidhi Company and therefore the provisions of Clause 3(xii) of the order are not applicable to the company.
xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with Sections 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the Ind ASfinancial statements etc. as required by the applicable accounting standards.
xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year and hence reporting underClause 3(xiv) of the order is not applicable to the company.
xv) According to information and explanations given to us by the management theCompany has not entered into any non-cash transactions specified under Section 192 of theCompanies Act 2013 with directors or persons connected with him.
xvi) The Company is not required to be registered with RBI under Section 45-IA ofReserve Bank of India Act 1934.
| ||For RAJAN GOEL & ASSOCIATES |
| ||Chartered Accountants |
| ||ICAI FIRM: 004624N |
| ||CA Rajan Kumar Goel |
|Place: New Delhi ||(Proprietor) |
|Date: 25.06.2021 ||Regn. 083829 |
| ||UDIN:- 21083829AAAABC8857 |