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NGL Fine Chem Ltd.

BSE: 524774 Sector: Health care
NSE: N.A. ISIN Code: INE887E01022
BSE 00:00 | 28 Oct 2793.10 -22.90
(-0.81%)
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NSE 05:30 | 01 Jan NGL Fine Chem Ltd
OPEN 2956.80
PREVIOUS CLOSE 2816.00
VOLUME 5119
52-Week high 3789.45
52-Week low 800.00
P/E 26.17
Mkt Cap.(Rs cr) 1,726
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2956.80
CLOSE 2816.00
VOLUME 5119
52-Week high 3789.45
52-Week low 800.00
P/E 26.17
Mkt Cap.(Rs cr) 1,726
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

NGL Fine Chem Ltd. (NGLFINECHEM) - Auditors Report

Company auditors report

To

The Members

NGL FINE-CHEM LIMITED

Report on the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of M/S. NGLFINE-CHEM LIMITED (“the company”) which comprise the Balance Sheet as at31st March 2021 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as “the standalone financial statements”).In our opinion and to the best of our information and according to the explanations givento us the aforesaid standalone financial statements give the information required by theCompanies Act 2013 (“the Act”) in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended (“Ind AS”) and other accounting principles generally accepted inIndia of the state of affairs of the company as at 31st March 2021 the profit and totalcomprehensive income changes in equity and its cash flows 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 Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

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.

Key Audit Report How was the matter addressed in our audit
Revenue Recognition Our audit procedures among other things included the following:
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods. Revenue is measured based on transaction price which is the consideration adjusted for rebates discounts and incentives as also estimated sales returns. Considered the appropriateness of the company's accounting policies regarding revenue recognition.
Revenue is one of the key profit drivers and therefore accounting of revenue is considered as a key audit matter. [Refer Note 2.07 to the financial statements]
Testing controls automated and manual around dispatches/ deliveries/shipments inventory reconciliations and process of confirmation of receivable balances testing for cut-offs and analytical review procedures.
Assessed the disclosures in accordance with the requirements of Ind AS 115 on “Revenue from Contracts with Customers”.
Valuation of inventories Our audit procedures among other things included the following:
The company has complex product manufacturing process and thus the overhead absorption over each process is quite complex and more particularly to have the basis of absorption. Evaluated the appropriateness of the basis applied to arrive at the overhead absorption rate.
The company has worked out the overhead absorption cost rate based on the consumption of electricity of each process and apply the same for all other overheads. Examined the workings of the absorption of over heads to arrive at the cost of inventories.
Due to of arriving at the overhead absorption rate for the valuation of inventories it is considered to be a key audit matter. Our audit methodology involves process adopted to ascertain and evaluate the methods used are reasonable and absorbs overheads in an appropriate & logical manner.
[Refer Note 2.06 to the financial statements] Assessed the disclosures in accordance with the requirements of Ind AS 2 on “Inventories”.
Key Audit Report How was the matter addressed in our audit
Allowance for Expected Credit Loss of Trade Receivables: Our audit procedures included among others the following:
Provision for impairment by way of Allowance for Expected Credit Loss (ECL) of Trade Receivables require the appropriateness of accounting policies for determination of allowance for ECL. Obtained sufficient and appropriate audit evidence about whether policies operational procedures internal control systems and other relative assumptions for estimation and determination of allowance for ECL are reasonable.
operational procedures and systems of internal control in estimation of ECL. Objectively evaluated the estimates made in the broader context of the financial statements as a whole.
estimation of expected losses and appropriate assumptions and significant judgments on the recoverability of receivables. Assessed the estimates and assumptions adopted by the company in determining the need to recognise a provision and where applicable its amount.
the completeness accuracy relevance and reliability of historical information. Evaluated the completeness of disclosures in respect of allowance for expected credit loss.
the company's overall review of the estimate. the clarity and reasonableness of related ECL disclosures. In view of the determination of the basis and quantum of allowance of ECL it is a significant item in the financial statements and hence considered to be a key audit matter. [Refer Note 2.15 to the standalone financial statements]

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

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 otherinformation is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially 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.

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 preparation ofthese standalone 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 Indian Accounting Standards (IndAS) prescribed under Section 133 of the Act read with the Companies (Indian AccountingStandard) Rules 2015 as amended 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accountingunless management either intends to liquidate the company or to cease operations or hasno realistic alternative but to do so. The Board of Directors are responsible foroverseeing the company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit 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 standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate significance in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

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

Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent 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 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 in the audit of the standalone financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the company so far as itappears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account. d) In our opinion theaforesaid standalone financial statements comply with the Ind AS specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. e) Onthe basis of the written representations received from the directors as on 31st March2021 taken on record by the Board of Directors disqualified none of the directors are ason 31st March 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 overfinancial reporting of the company and the operating effectiveness of such controls referto our separate Report in “Annexure A”. Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the company's internalfinancial controls over financial 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 in our opinion and to the best of our information and according to theexplanations given to us:

(i) The company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements- Refer Note 34 to the Standalone FinancialStatements.

(ii) The company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

(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 (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.

For MANEK & ASSOCIATES
Chartered Accountants
Firm's registration number:
0126679W
Sd/-
(SHAILESH MANEK)
Partner
Mumbai Membership number.034925
Dated: 1st June 2021 UDIN: 21034925AAAAFO6862

ANNEXURE - A

TO THE AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of

Sub-section 3 of Section 143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of M/S.NGL FINE-CHEM LIMITED (“the company”) as of 31st March 2021 inconjunction with our audit of the standalone financial statements of the company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act

2013 to the extent applicable to an audit of internal financial controls bothapplicable to an audit of Internal Financial Controls and both issued by the Institute ofChartered

Accountants of India. Those Standards and the Guidance

Note require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects. Our audit involves performing procedures to obtainaudit evidence about the adequacy of the internal financial controls system over financialreporting and their operating effectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the company's internal financialcontrols system over 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 MANEK & ASSOCIATES
Chartered Accountants
Firm's registration number:
0126679W
Sd/-
(SHAILESH MANEK)
Partner
Mumbai Membership number.034925
Dated: 1st June 2021 UDIN: 21034925AAAAFO6862

ANNEXURE - B

TO THE AUDITORS' REPORT

The Annexure referred to in Independent Auditors' Report to the members of the companyon the standalone financial statements for the year ended 31st March 2021 we reportthat: (i) (a) The company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) The company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over three years. In accordance withthis programme certain fixed assets were verified during the year and the materialdiscrepancies which were noticed have been properly dealt with in the books of account. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the company and the nature of its assets.

(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 except the following;

Type of Asset Total No of cases Leasehold / Freehold Gross Block as on 31st March 2021 Net Block as on 31st March 2021 Remarks
Land-FS/5 MIDC Additional Mahad Industrial Area 1 Leasehold 3694875 3192875 Conveyance deed pending to be executed.
The Managing Director of the company is holding power of attorney in respect thereof.

(ii) The inventories have been physically verified by the management at reasonableintervals during the year. (iii) The company has granted unsecured loans to the whollyowned subsidiary company covered in the register maintained under section 189 of theCompanies Act 2013 (‘the Act').

(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the wholly owned subsidiary company listed in the registermaintained under Section 189 of the Act were not prima facie prejudicial to the interestof the company.

(b) In the case of the loans granted to the wholly owned subsidiary company listed inthe register maintained under section 189 of the Act there has been no stipulation ofschedule of repayment of principal and payment of interest and hence we are unable to makespecific comment on the regularity of repayment of principal and payment of interest.

(c) Since the terms of repayment are not stipulated there is no overdue amount of suchloan and its interest.

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made as applicable.

(v) The company has not accepted any deposits from the public and consequently thedirectives issued by the Reserve Bank of India the provisions of sections 73 to 76 or anyother relevant provisions of the Companies Act and the Rules framed there under are notapplicable and also no orders were passed by National company Law Tribunal or Reserve Bankof India or any court or any other Tribunal and therefore clause 3(v) of the order is notapplicable.

(vi) According to information and explanations given to us the company is maintainingthe cost records under clause (d) of sub-section (1) of Section 148 of the Companies Act2013 in respect of the product manufactured by the company .We have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete. (vii) (a) According to the information and explanations given to us and on thebasis of the books and records examined by us the company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund income tax goods and service tax custom duty cess and other material statutorydues applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax duty of customs goods and service taxcess and other material statutory dues were in arrears as at 31st March 2021 for a periodof more than six months from the date they became payable.

(c) According to the information and explanation given to us there are no materialdues of income tax customs duty goods and service tax and cess which have not beendeposited on account of any dispute except the following stated below.

Name of the Statute Nature of Dues Amount (Rs ) Period to which the amount relates From when the amounts not deposited
Provident Fund- Contractor Provident Fund 1775767/- May 2014 to November 2015. Central Government Industrial Tribunal No.1 Mumbai

(viii) In our opinion and according to the information and explanations given to usthe company has not defaulted in repayment of dues to a bank and financial institution.

(ix) During the financial year the company has not raised any money by way of initialpublic offer or further public offer (including debt instruments). During the year thecompany had not raised any amount by way of term loan.

(x) According to information and explanations given to us there were no fraud by thecompany or any fraud on the company by its officers or employees has been noticed orreported during the year and therefore the provision of clause 3 (x) of the Order is notapplicable. (xi) According to the information and explanations give to us and based on ourexamination of the records of the company the company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act. (xii) In our opinion the company is not achit fund or a nidhi company and therefore the provisions of clause 3(xii) of the Orderare not applicable to the company.

(xiii) According to information and explanation given to us all the transactions withrelated parties are in compliance with the provisions of sections 177 and 188 of CompaniesAct 2013 where applicable. The details of related party transactions have been disclosedin the Ind As financial statements as required under the applicable Accounting Standards.

(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review thereforethe provisions of clause 3(xiv) of the Order are not applicable to the company.

(xv) During the financial year the company has not entered into any non-cashtransactions with directors or persons connected with him and therefore the provisions ofclause 3(xv) of the Order are not applicable to the company.

(xvi) In our opinion the company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934 and therefore the provisions of clause 3(xvi) ofthe Order are not applicable to the company.

For MANEK & ASSOCIATES
Chartered Accountants
Firm's registration number:
0126679W
Sd/-
(SHAILESH MANEK)
Partner
Mumbai Membership number.034925
Dated: 1st June 2021 UDIN: 21034925AAAAFO6862

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