TO THE MEMBERS OF
HINDCON CHEMICALS LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying Standalone financial statements of Hindcon ChemicalsLimited ("the Company") which comprise the Balance Sheet as at March 312018the Statement of Profit and Loss and the Cash Flow Statement for the year then ended anda summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 201 3 ("the Act") with respect to the preparationand presentation of these Standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 1 33 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadeguate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgment and estimates that are reasonable and prudent; and design implementation andmaintenance of adeguate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error
Our responsibility is to express an opinion on these Standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are reguired to be included in the audit report under theprovisions of the Act and the Rules made thereunder We have conducted our audit inaccordance with the Standards on Auditing specified under Section 143(1 0) of the Act.Those Standards reguire that we comply with ethical reguirements and plan and perform theaudit to obtain reasonable assurance about whether the Standalone financial statements arefree from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Standalone financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theStandalone financial statements whether due to fraud or error In making those riskassessments the auditor considers internal control relevant to the Company's preparationof the Standalone financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by Company's directors as well as evaluating the overallpresentation of the Standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone financial statements.
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 required by the Act in the mannerso required 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 31 201 8its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order; 201 6 ("the Order")issued by the Government of India Ministry of Corporate Affairs dated 29th March 201 6in terms of sub-section 11 of section 143 of the Act we give in the Annexure A astatement on the matters specified in paragraphs 3 and 4 of the Order
2. As required by section 143(3) of the Act we report that:
We have sought and obtained all the information and explanations which to thebest of our knowledge and belief 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 1 33 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
On the basis of the written representations received from the directors as onMarch 31 201 8 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 201 8 from being appointed as a director in terms of Section1 64(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"; and
With respect to 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 does not have any pending litigations which would impact its financialposition subject to note 32 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 Pawan Gupta & Co.
Firm Regn. No.31 811 5E
CA. R K. Gupta
May 25 2018
ANNEXURE - TV
TO THE AUDITORS' REPORT
(Referred to in our report of even date to the members of Hindcon Chemicals Limited onthe Accounts for the year ended March 31 201 8)
(1) a. The company has maintained proper records showing full particulars includingguantitative details and situation of Fixed Assets.
b. The Fixed Assets have been physically verified by the management at reasonableintervals which in our opinion is reasonable having regard to the size of the company andthe nature of its Fixed Assets. No material discrepancies have been noticed on suchverification.
c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the company.
(2) Physical verification of the finished goods stores spare parts and raw materialshave been conducted by the management at reasonable intervals except in case of stockslying with third parties for which certificates have been obtained. The procedures ofphysical verification of stocks followed by the management are reasonable and adeguate inrelation 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) a. The company has granted loan to one party covered in the register maintainedunder section 1 89 of the
Companies Act 2013.
b. According to the information and explanations given to us in our opinion the rateof interest and other terms and conditions of loan granted by the company to partieslisted in the registers maintained under section 189 of the companies Act 201 3 are notprima facie prejudicial to the interest of the company.
c. According to the information and explanations given to us the parties are regularin repaying the principal amounts as stipulated and are also regular in payment ofinterest as stipulated.
d. There is no overdue amount of loans granted by the company to the parties covered inthe register maintained under section 189 of the Companies Act 2013.
(4) According to the records of the company and the information and explanationsprovided by the management the company has not given any guarantee for loans taken byothers 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 of the company produced to us the Company isregular in depositing with the appropriate authorities undisputed statutory dues includingprovident fund employee's state insurance income tax sales-tax wealth tax customduty value added tax excise duty cess and other statutory dues as applicable.
b. According to the information and explanations given to us and on the basis of therecords of the Company examined by us there are no dues of Income Tax Sales Tax ServiceTax Custom Duty Excise Duty Value Added Tax and Goods and Service Tax which have notbeen deposited with the appropriate authorities on account of any dispute except asmentioned below:
|Name of the Statute ||Nature of Dues ||Amount |
|Period to which the amount relates (F.Y.) ||Forum where Dispute is pending |
|Income Tax Act 1961 ||Tax and Interest ||6960.00 ||2011-12 ||DCIT |
|Income Tax Act 1961 ||Tax and Interest ||2861104.0 ||2013-14 ||CIT (A) |
|Income Tax Act 1 961 ||Tax and Interest ||39680.00 ||2016-17 ||DCIT |
(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. In our opinion and according to the information & explanation given to usthe company has applied a part of monies raised by way of initial public offering and theterm loans for the purpose for which they were raised. The company has not fully utilizedthe monies received by it through Initial Public Offering. Refer Note 37 to financialstatements.
b. On the basis of review or utilization of funds pertaining to term loans on overallbasis and related information as made available to us we are of the opinion that theCompany has applied the term loans for the purpose for which they were obtained during theyear
(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 reguisite approvals mandated by the provisions of section 197 readwith Schedule V to the companies Act 201 3.
(1 2) In our opinion and to the best of our information and according to theexplanations provided by the management we are of the opinion that the company is not anidhi company. Hence in our opinion the reguirements of clause 3(xii) of the Order isnot applicable to the company.
(13) According to the information and explanations given to us and on the basis of ourexamination of the records of the company all transactions with the related partiesduring the year are in compliance with Section 177 and 1 88 of the Act where applicableand the details have been disclosed in the Financial Statements as reguired by theapplicable 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.
(1 5) 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 notreguired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
For Pawan Gupta & Co.
ICAI Firm Regn. No.318115E
CA. P. K. Gupta
May 25 2018
We have audited the internal financial controls over financial reporting of HindconChemicals Limited ("the Company") as of 31st March 2018 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
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'). These responsibilitiesinclude the design implementation and maintenance of adeguate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 asreguired under the 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 reguire that we comply with ethicalreguirements and plan and perform the audit to obtain reasonable assurance about whetheradeguate 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 adeguacy 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 Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 acguisition 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 inadeguate 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 adeguate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 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.
For Pawan Gupta & Co.
Firm Regn. No.31 811 5E
CA. R K. Gupta
May 25 2018