To The Members of J.B. Chemicals & Pharmaceuticals Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of J. B. Chemicals& Pharmaceuticals Limited ("the Company") which comprise the Balance Sheetas at March 31 2021 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Cash Flows and the Statement of Changes in Equity for the yearthen and other ended and a summary of significant explanatory information.
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 2021 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the AuditorsResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the and theRules made thereunder and we have fulfilled our responsibilities in accordance with theserequirements and the ICAIs Code of Ethics. We believe that the audit evidenceobtained by us is sufficientand appropriate to provide a basis for our audit opinion onthe standalone financial statements.
Key Audit Matter
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.This matter was addressed in the context of our audit of the standalone financialstatements and in forming our opinion thereon and we do not provide a separate opinion onthis matter. We have determined the matter described below to be the key audit matter tobe communicated in our report.
|Key Audit Matter ||Auditors Response |
|Revenue recognition Sale of products [Note 31 to the standalone financial statements] ||Assessed the appropriateness of the Companys revenue recognition policy by mapping them with the applicable accounting standards. |
|Company being a listed entity revenue is one of the critical component of the financial statements considered by the stakeholders. There may be pressures to meet the expectations that may result in recording revenues for sales for which the revenue recognition criteria may not have been met by the year end. We have therefore specifically focused on the said risk and have considered this to be a key audit matter. ||Performed a walkthrough of the revenue business cycle to obtain an understanding of the relevant risks and controls around the timing of revenue recognition. Tested the design implementation and operating effectiveness of the relevant controls. |
| ||From the revenue recorded towards the year end we tested transactions on a sample basis by agreeing the recorded balances with the invoices purchase orders delivery documents / other documents evidencing transfer of control. |
| ||On a test check we reviewed the contracts / purchase orders as applicable to assess the terms of sale and ensured that they were recorded in the accounting period in which the control in the goods was transferred to the customer and other revenue recognition criteria as specified Ind AS 115 Revenue from contracts with customers were met. |
| ||We sought confirmations from customers on a test check basis and performed other alternate procedures where applicable to support the assertion that revenue has been recognised in the correct period. |
| ||We made enquiries of the management and obtained written representations as to whether there exist any side agreements or unusual arrangements which may impact revenue recognition. |
| ||We also test checked subsequent sales returns to determine whether the initial recognition of revenue was appropriate. |
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. Theother information comprises the information included in the Directors reportCorporate Governance report and the Business Responsibility report but does not includethe consolidated financial statements the standalone financial statements and our reportthereon.
Our opinion on the standalone financial statements does not the other information andwe 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. controls system in place and the
Managements Responsibility for the Standalone Financial Statements
The Companys 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 includingother comprehensive income cash flows and changes in equity of the Company in doubt onthe accordance with the Ind AS and other accounting principles generally accepted inIndia. 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 standalonefinancial 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 Companys ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companysfinancial reporting process.
Auditors 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 auditors report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken 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 cover 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 the audit in order to design auditprocedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Actwe are also responsible for expressing our opinion on whether the Company has adequateinternal financial operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of managements use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events Companys or conditions that may castsignificant ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the standalone financial statements modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditorsreport. 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 standalonefinancial statements including the disclosures and whether the standalone financialunderlying 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 areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
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 to communicate with them all relationships and other matters that mayreasonably be thought to bear on our independence and where applicable relatedsafeguards.
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 auditors report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be 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 based on our audit 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 Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.
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 Companys internal financial controlsover financial reporting.
g) With respect to the other matters to be included in the Auditors Report inaccordance with the requirements of Section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of Section 197 of the Act.
h) With respect to the other matters to be included in the Auditors 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 financialposition in its standalone financial statements.
ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order. .
For DELOITTE HASKINS & SELLS LLP
(Firms Registration No. 117366W/W-100018)
Rajesh K. Hiranandani
Place : Mumbai
Date : June 14 2021
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT
[Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements section of our report of even date to the members of J. B. Chemicals& Pharmaceuticals
Limited on the standalone financial reporting is a process statements for theyear ended March 31 2021] statements for
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of J. B.Chemicals & Pharmaceuticals Company Limited ("the Company") as of March 312021 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and based on the internalcontrol over maintaining internal financial 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. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring itsbusiness including adherence the orderly an defficient to companys policies thesafeguarding of its assets the prevention controls over financial reporting to anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theAct to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacyfinancial controls system over of the internal effectiveness. Our audit of financialreporting included obtaining internal financial an understanding of internal financialcontrols over financial reporting assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditors judgementincluding the assessment of the risks of material misstatement of the financialstatements 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 Companys internal financial
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof financial external purposes in accordance with generally accepted accountingprinciples. A companys internal financial control over financial reporting includesthose policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the companys assets that could havea 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 future periods are subjectto the risk that the internal financial control over financial reporting may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
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 2021 based on the criteria forinternal financial control over financial reporting 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 DELOITTE HASKINS & SELLS LLP
(Firms Registration No. 117366W/W-100018)
Rajesh K. Hiranandani
Place : Mumbai
Date : June 14 2021
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements section of our report of even date to the members of J. B. Chemicals& Pharmaceuticals Limited)
(i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. assets to
b. The Company has a program of verification cover all the items in a phased mannerover a period of two years which in our opinion is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the program certain fixed assetswere physically verified Management during the year. According to the information andexplanations given to us the discrepancies noticed on such verification were notmaterial.
c. According to the information and explanations given to us and the records examinedby us and based on the examination of the registered deed of sale / agreement for sale /deed of transfer / deed of confirmation and other documents evidencing title 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. In respect of immovable properties of land and buildings that have been taken onlease and disclosed as Property Plant and Equipment in the Ind AS financial statementsthe certified true copy of the lease deeds and deed of assignment are in the name of theCompany where the Company is the lessee in the agreement.
(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material . discrepancies were noticed onphysical verification
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or covered in the register maintained under Section 189 ofthe Companies Act 2013 ("the Act").
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 186 of the Act in respect of makinginvestments. The Company has not granted any loans covered under Section 185 and Section186 of the Act and has also not provided guarantees and securities covered under Section186 of the Act.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from the public in accordance with the provisions ofSections 73 to 76 or any other relevant provisions of the Act and the rules framedthereunder and hence reporting under clause (v) of paragraph 3 of the Order is notapplicable.
(vi) The maintenance of cost records has been specified by the Central by theGovernment under sub-section (1) of Section 148 of the Act. We have broadly reviewed thecost records maintained by the Company pursuant to the Companies (Cost Records and Audit)Rules 2014 as amended prescribed by the Central Government under sub-section (1) ofSection 148 of the Act and are of the opinion that prima facie the prescribedcost records have been made and maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.
(vii) According to the information and explanations given to us in respect ofstatutory dues:
a. The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income-tax Goods and ServicesTax Customs Duty and other material statutory dues applicable to it with the appropriateauthorities.
b. There were no undisputed amounts payable in respect of Provident FundEmployees State Insurance Income-tax Customs Duty and other material statutorydues in arrears as at March 31 2021 for a period of more than six months from the otherpartiesdate they became payable.
c. Details of dues of Income-tax Sales Tax Service Tax Excise Duty and Value addedTax which have not been deposited as at March 31 2021 on account of disputes are givenbelow:
|Name of Statute ||Nature of Dues ||Forum where dispute is pending ||Period to which the amount relates ||Amount involved (Rs. in lakhs) ||Amount paid / adjusted under protest (Rs. in lakhs) |
|Income Tax Act 1961 ||Income Tax ||Commissioner (Appeals) ||2012-13 ||50.81 ||? |
|The Uttar Pradesh Sales Tax Act ||Sales Tax ||Supreme Court of India ||2006-2009 ||0.25 ||? |
|Tamil Nadu VAT Act 2006 ||Value Added Tax ||Commissioner (Appeals) ||2006-2007 to 2011-2012 ||3.53 ||? |
|Central Excise Act 1944 ||Excise Duty & Penalty ||CESTAT ||2006-2009 ||7.59 ||0.40 |
| || || ||2011-12 to 2014-15 ||50.2 ||3.35 |
| || || ||July 2010 to October 2011 ||2.22 ||1.00 |
| || || ||November 2011 to March 2012 ||0.67 ||? |
| || || ||April 2012 to September 2013 ||3.20 ||1.50 |
|The Finance Act 1994 ||Service Tax & Interest ||CESTAT ||2010-2011 ||28.38 ||8.12 |
|The Finance Act 1994 ||Service Tax & Penalty ||CESTAT ||2010-2011 ||1.46 ||? |
| || || ||April 2017 to June 2017 ||5.75 ||0.58 |
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks. TheCompany has not taken any loans or borrowings from financial institutions and governmentissued any debentures.
(ix) 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 (ix) ofparagraph 3 of the Order is not applicable.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.
(xi) 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 Act.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) ofparagraph 3 of the Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Sections 177 and 188 of the Act where applicable forall transactions with the related parties and the details of related party transactionshave been disclosed in the standalone Ind AS financial statements as required by theapplicable accounting standards.
(xiv) 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 or has not the Order is not applicable to the Company.
(xv) 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 directors of its subsidiary companies or persons connected with them andhence provisions of Section 192 of the Act are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For DELOITTE HASKINS & SELLS LLP
(Firms Registration No. 117366W/W-100018)
Rajesh K. Hiranandani
Place : Mumbai
Date : June 14 2021