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Lords Chemicals Ltd.

BSE: 530039 Sector: Industrials
NSE: N.A. ISIN Code: INE554C01014
BSE 05:30 | 01 Jan Lords Chemicals Ltd
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Lords Chemicals Ltd. (LORDSCHEMICALS) - Auditors Report

Company auditors report

To

THE MEMBERS OF

LORDS CHEMICALS LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of LORDS CHEMICALS LIMITED("the Company") which comprise the balance sheet as at 31stMarch 2021 and thestatement of Profit and Loss and statement of cash flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31stMarch 2021 profit and loss 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 theFinancial 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 together with the ethical requirements thatare relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 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 financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we have provided a separate opinion on these matters.

Basis for Qualified Opinion

I) Attention is drawn to Note No. 4: Valuation of Inventory. In the absence ofnecessary records relating to basis of writing off the inventories & calculation ofthe amount to be written off we are unable to comment on the value of inventory amountingto Rs.9224325.80/-

II) The final dividend declared for FY 2011-12 of Rs. 6265000/- has not yet beentransferred to Investors Education Protection Fund Account as per the requirement ofSection 124(5) of the Companies Act 2013. Further the Company has not yet transferred theinterest to Special Dividend account as per the requirement of section 124(5) of theCompanies Act 1956.

III) Attention is drawn to Note No 3: Non-Current Investment. Irrespective of having anassociate company viz. Mahabir Coke Industries Private Limited the holding company doesnot prepare a consolidated financial statement.

IV) As at 31st March 2021 the following statutory dues were standing in the books ofaccounts which were due for more than one year viz.

Particulars Amount Rs.
Central Excise Duty 9371804.00
Corporate Dividend Tax 2032680.00
Entry Tax 210372.00
Interest on Excise Duty 388760.90
Service Tax 719081.00
Sales Tax 3348611.00

With respect to above no reasonable explanation were given to us as to the non paymentof the dues for more than one year.

Emphasis of Matter

(i) With reference to Note No. 13 &5 For and Trade Payables of Rs. 804317.00& Trade Receivables of Rs. 66981602.00 respective balance confirmation from theparties has not been made available to us.

(ii) Attention is drawn to Note No. 7&14- For Short Term Loans & Advances toOthers of Rs. 30019346.43and Advances from Customers of Rs. 9628000.00 respectivelybalance confirmation from the parties has not been made available to us.

(iii) The Hon'ble Calcutta High Court had vide its order dated 18th May 2012 approvedthe merger of Lords Chemicals Limited (Transferee Company) with Jagati Cokes PrivateLimited (Transferor Company) with effect from 1st April 2010. As per the information& explanation given to us by virtue of the liquidation order still pending by theHonorable High Court all the assets and liabilities and income and expenditure of theTransferor Company exists and continues to be in operation in the name of Jagati CokesPrivate Limited.

(iv) There is a material uncertainty as regard to the going concern of the company dueto the following reasons-

(i) There is no Production during the Year. As informed by the management there istemporary shutdown.

(ii) There is arrear of dividend for the FY 2011-12. Dividend for further years has notbeen declared by the company.

(iii) Non compliance in payment of statutory dues as reported in para v of Basis forQualified Opinion section of our report.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure-A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account

(d) 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.

(e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule

11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best ofour information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 26 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. The Company is not required to transfer any amount to the Investor Education andProtection Fund by the Company

For and on behalf of
S GATTANI AND CO.
Chartered Accountants
Firm Registration No. 326788E
CA SARBANANDA GATTANI
Proprietor
Membership No. 056536
Date : 25th June 2021
Place : Kolkata
UDIN : 21056536AAABT5860

ANNEXURE-A TO THE AUDITOR'S REPORT

Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" of our report of even date on the accounts for the year ended 31stMarch 2021 of LORDS CHEMICALS LIMITED. i.As informed to us and on the basis ofexplanation received we report that

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

b) All the assets have been physically verified by the management during the year basedon a phased programme of verification at reasonable intervals. According to theinformation given to us no material discrepancies were noticed on such verification. c)The title deeds of immovable properties are held in the name of the company.

ii. As explained to us the inventories were physically verified during the year by themanagement at reasonable intervals. In our opinion and according to the information andexplanations given to us having regard to the nature of the inventory the procedures ofphysical verification of inventories followed by the Management are reasonable andadequate in relation to the size of the Company and the nature of its business.

iii. As informed to us the Company has granted loan and advances secured orunsecured to companies firms or other parties covered in the register maintained undersection 189 of the Companies Act 2013. The year end balance of loan given to such partiesis Rs. 836786638.77/- a) The terms & conditions of the grant loan are prejudicialto the company's interest.

b) In our opinion and according to the information and explanations given to us thecompany has granted interest free loans to the parties covered in the register maintainedunder section 189 of the Companies Act 2013 .The schedule of repayment of principal hasnot been stipulated and the repayments or receipts are not regular.

c) There are overdue amounts in the respect of the loans granted the parties listed inthe register maintained under section 189 of the Act. It seems that management had nottaken adequate step for recovery of the same.

iv. The Company has made no loans investments guarantees and security under section185 and 186 of the Companies Act 2013.

v. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

vi. The Company is not required to maintain cost records under section 148 of theCompanies Act 2013.

vii.a) The company has generally been regular in depositing with appropriateauthorities undisputed statutory dues including excise duty sales tax except providentfund employees' state insurance professional tax income tax service tax cess. Paymentto PF & ESI Fund for the

HO employees has not been deducted on a regular basis. The arrears of outstandingstatutory dues as at 31.03.2021 for a period of more than 6 months from the date theybecome payable have been enlisted below:

Name of the Board Nature of Dues Amount Involved(Rs.)
Directorate of Commercial Taxes WB Professional Tax 110/-
Central Board of Direct Taxes Corporate Dividend Tax 2032680/-
Directorate of Commercial Taxes WB Entry Tax 210372/-

b) As at 31st March 2021 according to the records of the Company and the informationand explanations given to us the disputed dues on account of income tax wealth taxsales tax service tax customs duty excise duty and cess outstanding is given below:

Name of the Statute Nature of dues Amount involved Rs. Period to which the amount relates Forum where dispute is pending
W.B. Sales Tax Act 1994 Sales Tax 384510/- 2003-04 Appellate &Revisional Board
The Income Tax Income Tax 132211 2007-08 Assessing Officer
The Income Tax Income Tax 367336 2008-09 Assessing Officer
The Income Tax Act 1961 Income Tax 1045640/- 2009-10 Rectification
The Income Tax Act 1961 Income Tax 81372/- 2011-12 Assessing Officer
The Income Tax Act 1961 Income Tax 9934987/- 2012-13 CIT Appeal Kolkata
The Income Tax Act 1961 Income Tax 9359240/- 2013-14 CIT Appeal Kolkata
The Income Tax Act 1961 Income Tax 3741820/- 2016-17 Assessing Officer
The Central Excise Act 1944 Central Excise 18968132/ 2010-11 Appeals-II Commissionerate Kolkata .

viii. The Company has neither obtained any loans or borrowings from any financialinstitution banks or Government nor it has issued any debentures. Accordingly theprovisions of clause 3 (viii) of the Order are not applicable to the Company and hence notcommented upon.

ix. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and Term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.

x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to us and the records examinedby us managerial remuneration has been paid or provided in accordance with the requisiteapprovals u/s 197 read with Schedule V to the Companies Act. xii. In our opinion theCompany is not a Nidhi Company. Therefore the provisions of clause 3 (xii) of the Orderare not applicable to the Company.

xiii. In our opinion all transactions with the related parties are in compliance withSection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

xiv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.

xv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon. xvi. In ouropinion the company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934 and accordingly the provisions of clause 3 (xvi) of the Order arenot applicable to the Company and hence not commented upon.

For and on behalf of
S GATTANI AND CO.
Chartered Accountants
Firm Registration No. 326788E
( CA SARBANANDA GATTANI )
Proprietor
Membership No. 056536
Date : 25th June 2021
Place : Kolkata
UDIN : 21056536AAABT5860

"ANNEXURE B" to the Independent Auditor's Report of even date on theFinancial Statements of LORDS CHEMICALS LIMITED

Report on the Internal Financial Statements under clause (i) of sub-section 3 ofSection 143 of the Companies Act 2013 ("Act")

We have audited the Internal Financial Controls over financial reporting of LORDSCHEMICALS LIMITED as of 31st March 2021 in conjunction with our audit of theFinancial Statements of the company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining InternalFinancial

Control based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India (‘ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate 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 asrequired 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 deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 operative effectiveness of internal control based on the assessed risk. The proceduresselected depend on the Auditor's Judgment including the assessment of the risks ofmaterial misstatements of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

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 2021 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 and on behalf of
S GATTANI AND CO.
Chartered Accountants
Firm Registration No. 326788E
( CA SARBANANDA GATTANI )
Proprietor
Membership No. 056536
Date : 25th June 2021
Place : Kolkata
UDIN : 21056536AAABT5860

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