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Hindcon Chemicals Ltd.

BSE: 535053 Sector: Industrials
NSE: HINDCON ISIN Code: INE642Y01011
BSE 05:30 | 01 Jan Hindcon Chemicals Ltd
NSE 00:00 | 21 Oct 18.05 0.55
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Hindcon Chemicals Ltd. (HINDCON) - Auditors Report

Company auditors report

TO THE MEMBERS OF

HINDCON CHEMICALS LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of HindconChemicals Limited ("the Company") which comprise the Balance Sheet as at March31 2020 the Statement of Profit and Loss and statement of Cash Flows for the yearthen ended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information. In our opinion and tothe best of our information and according to the explanations given to us the aforesaidstandalone financial statements give the information required by 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 affairs of the Company as at March 31 2020its profit and its cash flows for the year ended on that 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 thestandalone Financial Statements 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 thestandalone financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key Audit Matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole andinforming our opinion thereon and we do not provide a separate opinion on these matters.We have determined that there are no key audit matters to communicate in our report.

Information Other than the Standalone 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 AnalysisBoard's Report including Annexures to Board's Report Business Responsibility ReportCorporate Governance and Shareholder's Information but does not include the standalonefinancial statements 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.If based on the work we have performed we conclude that there is a material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.

Responsibility of Management for 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 and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting standards specified under section 133 of the Act. 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 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. The Board of Directors are also responsible foroverseeing 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 professionalscepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient 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 financial control relevant to the auditin order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

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

Conclude on the appropriateness of management's use of the going concernbasis 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 standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

? Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent 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 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Government of India in terms of subsection 11 of section 143 of the Act wegive in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. As required by section 143(3) of the Act we report that: ? We have soughtand obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit;

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.

The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors aredisqualified as on March 31 2020 from being appointed s a director in terms of Section164(2) of the Act.

With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B";

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(16) of the Act.

With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

(i) The Company does not have any pending litigations which would impact its financialposition subject to note 31 of the Standalone financial statements.

(ii) The Company did not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For R B ROY & CO.
Chartered Accountants
Firm Regn. No.322805E
Sd/-
(CA. N. Krishnan)
Kolkata Partner
June 25 2020. Membership No.062381

ANNEXURE-‘A' TO THE AUDITORS' REPORT

(Referred to in our report of even date to the members of Hindcon Chemicals Limitedon the Accounts for the year ended March 31 2020)

(1) a. The company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets. b. The Fixed Assets have beenphysically verified by the management at reasonable intervals which in our opinion isreasonable having regard to the size of the company and the nature of its Fixed Assets. Nomaterial discrepancies have been noticed on such verification. c. According to theinformation and explanations given to us and on the basis of our examination of therecords of the Company the title deeds of immovable properties are held in the name ofthe company. (2) Physical verification of the finished goods stores spare parts and rawmaterials have been conducted by the management at reasonable intervals except in case ofstocks lying with third parties for which certificates have been obtained. The proceduresof physical verification of stocks followed by the management are reasonable and adequatein relation to the size of the company and the nature of its business. The company hasmaintained proper records of inventory. The discrepancies noticed on physical verificationof stocks as compared to book records were not material and have been properly dealt within the books of accounts.

(3) The company has not granted loan to any party covered in the register maintainedunder section 189 of the Companies Act 2013. (4) According to the records of the companyand the information and explanations provided by the management the company has not givenany guarantee for loans taken by others from bank or financial institutions.

(5) 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.

(6) We have broadly reviewed the accounts and records maintained by the Companypursuant to the rules made by the Central Government for the maintenance of cost recordsunder section 148(1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been maintained. (7) a) According to the books and records ofthe company produced to us the Company is regular in depositing with the appropriateauthorities undisputed statutory dues including provident fund employee's stateinsurance income tax sales-tax wealth tax goods and services tax custom duty valueadded tax excise duty cess and other statutory dues as applicable. b) According to theinformation and explanations given to us and on the basis of the records of the Companyexamined by us there are no dues of Income Tax Sales Tax Service Tax Custom DutyExcise Duty Value Added Tax and Goods and Service Tax which have not been deposited withthe appropriate authorities on account of any dispute except as mentioned below:-

Sl. Name of the Statute No. Nature of Dues Amount (Rs) Period to which the amount relates (F. Y.) Forum where Dispute is pending
1. Income Tax Act 1961 Tax and Interest 2705814/= 2013-14 CIT (A)
2. Income Tax Act 1961 Tax and Interest 37030/= 2017-18 DCIT/CPC

(8) Based on our audit procedures and on the information and explanations given by themanagement we are of the opinion that the company has not defaulted in repayment of duesto a financial institution bank or debenture holders.

(9) a) According to the records of the company the company has not raised any moneysby way of initial public offer or further public offer (including debt instruments). b) Onthe basis of review or utilization of funds pertaining to term loans on overall basis andrelated information as made available to us we are of the opinion that the Company hasapplied the term loans for the purpose for which they were obtained during the year.

(10) Based upon the audit procedures performed and according to the information andexplanations given by the management we report that no material fraud by the Company orno fraud on the company by its officers or employees has been noticed or reported duringthe year.

(11) Based upon the audit procedures performed and information and explanations givenby the management we report that the Company has paid managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the companies Act 2013. (12) In our opinion and to the best of ourinformation and according to the explanations provided by the management we are of theopinion that the company is not a nidhi company. Hence in our opinion the requirementsof clause 3(xii) of the Order is not applicable to the company. (13) According to theinformation and explanations given to us and on the basis of our examination of therecords of the company all transactions with the related parties during the year are incompliance with Section 177 and 188 of the Act where applicable and the details have beendisclosed in the Financial Statements as required by the applicable accounting standard.(14) According to information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

(15) According to the information and explanations given to us and based on ourexamination of the records of the Company the company has not entered into non-cashtransactions with directors or persons connected with them during the year. Accordinglyparagraph 3(xv) of the Order is not applicable to the Company.

(16) According to information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For R B ROY & CO.
Chartered Accountants
Firm Regn. No.322805E
Sd/-
(CA. N. Krishnan)
Kolkata Partner
June 25 2020. Membership No.062381

ANNEXURE-B TO THE AUDITORS' REPORT

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

We have audited the internal financial controls over financial reporting of HindconChemicals Limited ("the Company") as at 31st March 2020in conjunction with our audit of the standalone financial statements of the Company forthe year 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 (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' 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 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 standalone 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 an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For R B ROY & CO.
Chartered Accountants
Firm Regn. No.322805E
Sd/-
(CA. N. Krishnan)
Kolkata Partner
June 25 2020. Membership No.062381
Annual Report 2019-20 l 63

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