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Ishan Dyes & chemicals Ltd.

BSE: 531109 Sector: Industrials
NSE: N.A. ISIN Code: INE561M01018
BSE 14:01 | 01 Oct 40.85 1.90
(4.88%)
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40.00

HIGH

40.85

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38.25

NSE 05:30 | 01 Jan Ishan Dyes & chemicals Ltd
OPEN 40.00
PREVIOUS CLOSE 38.95
VOLUME 5848
52-Week high 47.80
52-Week low 16.00
P/E 7.51
Mkt Cap.(Rs cr) 65
Buy Price 40.85
Buy Qty 1689.00
Sell Price 40.80
Sell Qty 65.00
OPEN 40.00
CLOSE 38.95
VOLUME 5848
52-Week high 47.80
52-Week low 16.00
P/E 7.51
Mkt Cap.(Rs cr) 65
Buy Price 40.85
Buy Qty 1689.00
Sell Price 40.80
Sell Qty 65.00

Ishan Dyes & chemicals Ltd. (ISHANDYESCH) - Auditors Report

Company auditors report

TO THE MEMBERS OF ISHAN DYES & CHEMICALS LIMITED REPORT ON THE AUDIT OFFINANCIAL STATEMENTS

Opinion

We have audited the accompanying standalone IND AS financial statements of ISHANDYES & CHEMICALS LIMITED ("the Company") which comprise the BalanceSheet as at March 31 2019 the Profit and Loss Statement (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as 'standalone IND AS 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 requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis of for opinion

We conducted our audit in accordance with the standards on auditing specified undersection 143 (10) of the Companies Act 2013. Our responsibilities under those Standardsare further described in the auditor's responsibilities for the audit of the financialstatements section of our report. We are independent of the Company in accordance with thecode of ethics issued by the Institute of Chartered Accountants of India together with theethical requirements 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 sufficient and appropriate to provide a basisfor our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

a) VAT Refund:

The Company has outstanding VAT refund receivable aggregating to Rs. 7192969/- inrelation to the past financial years. This has been considered as Key Audit matter giventhe involvement of the management judgment and estimates since the same was recognized asreceivable in the year in which the right to receive was established and any variation inactual receipt of the same may have an impact on the revenue. As part of audit procedurewe have obtained all the data regarding filing of the claims and made an assessmentregarding the eventual reliability of the present claims.

b) Contingent Tax Liability:

The Company has received order under section 154 of the Income Tax Act 1961 inrelation to the Assessment Year 2007-2008 demanding Rs. 8 64520/- towards the taxinterest and penalty. The same has been disclosed as contingent liability for the yearended 31st March 2019 however in our view the same will be payable which willhave an impact on the profit of the subsequent financial year of the Company to the extentof Rs. 864520/-.

Information Other than the Standalone Financial Statements and Auditor's ReportThereon:

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial 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 materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

1. Management's Responsibility For The Standalone Ind As 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 of thesestandalone Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed undersection 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due 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. Those Board of Directors are responsible foroverseeing the Company's financial reporting process.

2. Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

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 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 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 controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the 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 financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the 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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report On Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act 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 the Statement of Cash Flow and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof 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 effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial 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 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its Ind AS financialposition in its financial statements as referred to in Note No. 35.

ii. The Company did not have any long-term contracts including derivative contractswhich may lead to foreseeable losses although company enters into short term forwardcontracts to hedge against foreign currency movements.

It has been appropriately disclosed in its financial statements as referred to in NoteNo. 32.

iii. There the Company does not have any dues that are required to be transferred tothe Investor Education and Protection Fund.

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

Date: 25th May 2019 For G.S. Mathur & Co.
Place: Ahmedabad Chartered Accountants
CA. Bhargav Vaghela
Partner
M. No: 124619
FRN: 008744N

Annexure "A"

The Independent Auditors' Report on the Standalone Financial Statements of

ISHAN DYES & CHEMICALS LIMITED

(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date) REPORT ON THE INTERNAL FINANCIAL CONTROLS OVERFINANCIAL REPORTING UNDER CLAUSE (i) OF SUBSECTION 3 OF SECTION 143 OF THE COMPANIES ACT2013 ("THE ACT")

We have audited the internal financial controls over financial reporting of ISHAN DYES& CHEMICALS LIMITED ("the Company") as of March 31 2019 in conjunction withour audit 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

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 and the Standards on Auditing prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. 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 whether such controls operated effectively in all material respects. Ouraudit involves performing procedures to obtain audit evidence about the adequacy of theinternal 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 and paymentsof the company are being made only in accordance with authorizations of management anddirectors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

Date: 25th May 2019 For G.S. Mathur & Co.
Place: Ahmedabad Chartered Accountants
CA. Bhargav Vaghela
Partner
M. No: 124619
FRN: 008744N

Annexure "B"

Independent Auditors' Report on the Standalone Financial Statements of

ISHAN DYES & CHEMICALS LIMITED

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our Report of even date)

Annexure to the Independent Auditors' Report of even date to the members of Ishan Dyes& Chemicals Ltd. on the financial statements for the year ended 31st March2019.

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit we report that:

i. In respect of Company's fixed assets:

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

(b) As Explained to us all the fixed assets have been physically verified by themanagement at reasonable intervals. No material discrepancies between book records and thephysical inventories have been noticed on such verification.

In our opinion the frequency of verification of the fixed assets is reasonable havingregard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds / registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.

ii. In respect of inventories:

(a) The inventories have been physically verified at reasonable intervals by themanagement.

(b) The procedures of physical verification of inventories followed by the managementare reasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) The Company has maintained proper records of inventories. As per the informationand explanation given to us no material discrepancies were noticed on physicalverification.

iii. According the information and explanations given to us the Company has grantedinterest free unsecured loan to one of the entity where directors of the company are ableto exercise significant influence (refer note 38) covered in the register maintainedunder section 189 of the Companies Act 2013. The total loan amount outstanding at the endof the year is Rs.249.33 Lacs. According to the information and explanations the terms andconditions of the grant of the loan are not prima facie prejudicial to the interests ofthe company. However as no specific terms and conditions with regard to the repayment havebeen specified we are not able to comment on the compliance with schedule of repaymentand overdue amount.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities.

v. According to the information and explanations given to us the Company has notaccepted any deposit from the public.

Therefore the provisions of Clause (v) of paragraph 3 of the Order is not applicableto the Company.

vi. On the basis of records produced we are of the opinion that prima facie costrecords and accounts prescribed by the Central Government under sub section (1) of section148 of the Companies Act 2013 in respect of products of 'the Company' covered under therules under said section have been made and maintained. However we are neither required tocarry out nor have carried out any detailed examination of such accounts and records.

vii. In respect of statutory dues:

(a) According to the information and explanations give to us the Company in general isregular in depositing undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Sales Tax Wealth Tax Service Tax duty of Customs Duty ofExcise Value Added Tax Goods and Service Tax Cess and other material statutory dueswith the appropriate authorities. According to the information and explanations given tous no undisputed amounts payable in respect of the aforesaid dues were outstanding as atMarch 31 2019 for a period of more than six months from the date of becoming payable

(b) The details of the dues outstanding in respect of Income Tax Sales Tax WealthTax Service Tax duty of Customs Duty of Excise Value Added Tax and Cess which have notbeen deposited as on March 31 2019 on account of disputes in case of Ishan Dyes &Chemicals Limited are given below:

Name of the Statue Nature of dues Amount (In Rs.) Period to which the amount relates Forum where dispute is pending
Income Tax Act Notice for short deduction / payment of TDs and interest thereon 57882/- FY 2018-19 2017-18 AY 2016-17 2015-16 and Prior Years TDS Authority
Income Tax Act Tax liability to be payable in terms of order under section 154 864520/- AY 2007-08 CIT (A)

viii.In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to financialinstitutions banks.

ix. In our opinion and according to the information and explanations given to usmonies raised by way of debt instruments and the term loans during the year have beenapplied by the Company for the purposes for which they were raised.

x. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable to the Company.

xi. In our opinion and according to the information and explanations given to us nomaterial fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the year.

xii. In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

xiii.The Company is not a Nidhi Company and hence reporting under clause (xii) ofParagraph 3 of the Order is not applicable.

xiv. In our opinion and according to the information and explanations given to us theCompany's transactions with its related party are in compliance with Sections 177 and 188of the Companies Act 2013 where applicable and details of related party transactionshave been disclosed in the financial statements etc. as required by the applicableaccounting standards.

xv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of Paragraph 3 of the Order is not applicable to the Company.

xvi. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence reporting under clause (xv) of Paragraph3 of the Order is not applicable to the Company.

xvii. In our opinion and according to information and explanations provided to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

Date: 25th May 2019 For G.S. Mathur & Co.
Place: Ahmedabad Chartered Accountants
CA. Bhargav Vaghela
Partner
M. No: 124619
FRN: 008744N