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Polychem Ltd.

BSE: 506605 Sector: Industrials
NSE: POLYCHEM ISIN Code: INE752B01024
BSE 00:00 | 08 Apr 273.00 -10.50
(-3.70%)
OPEN

284.10

HIGH

284.10

LOW

273.00

NSE 05:30 | 01 Jan Polychem Ltd
OPEN 284.10
PREVIOUS CLOSE 283.50
VOLUME 50
52-Week high 473.55
52-Week low 256.50
P/E 4.78
Mkt Cap.(Rs cr) 11
Buy Price 275.00
Buy Qty 20.00
Sell Price 297.60
Sell Qty 12.00
OPEN 284.10
CLOSE 283.50
VOLUME 50
52-Week high 473.55
52-Week low 256.50
P/E 4.78
Mkt Cap.(Rs cr) 11
Buy Price 275.00
Buy Qty 20.00
Sell Price 297.60
Sell Qty 12.00

Polychem Ltd. (POLYCHEM) - Auditors Report

Company auditors report

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Polychem Limited(the Company) which comprise the Balance Sheet as at March 31 2019 the Statement ofProfit and Loss (including Other Comprehensive Income) the Statement of Changes in Equityand the Statement of Cash Flow for the year ended on that date and notes to financialstatements including 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 explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (Act) in the manner so required and give a true and fair viewin conformity with the Indian Accounting Standards prescribed under section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended ("IndsAS") and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and its profit and total comprehensive incomechanges in equity and its cash flow 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 ("the Act"). 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 standalone financial statement under theprovisions 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 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 that there are no key audit matters to communicate in our report.

Other Information

The Company's Board of Directors is responsible for the Other Information. The OtherInformation comprises of the Management Discussion and Analysis Board's Report includingAnnexures to Boards's Report Business Responsibility Report Corporate Governance andShareholder's Informartion (but does not include the standalone financial statements andour auditor's report thereon). Our opinion on the standalone financial statements does notcover the Other Information and we do not and will not express any form of assuranceconclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the 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.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing 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 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 also responsible for overseeing the Company's financialreporting 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 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone 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 the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the "Annexure A" a statement on the matter specified in the paragraph 3 and4 of the Order.

2. 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 and 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 books of account;

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASas specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014;

e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 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 express an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial control 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 the pending litigation on it's financialposition in it's standalone financial statements. Refer Note no. 4.02 to the standalonefinancial statements.;

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For Nayan Parikh & Co.

Chartered Accountants Firm Registration No.: 107023W

K. Y. Narayana

Place: Mumbai Partner

Dated: May 11 2019 Membership No.: 060639

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 under "Report on Other Legal & RegulatoryRequirements" of our report on even date to the members of the Company on standalonefinancial statements for the year ended March 31 2019:

(i) (a) The Company is maintaing porper records showing full particulars includingquantitative details and situation of property

plant and equipments;

(b) All Property Plant and Equipment have been physically verified by the managementduring the year according to a phased programme as designed by the management. This inour opinion is reasonable having regard to the size of the Company and nature of itsassets. We have been further informed that there are no material discrepancies between thebook records and the physical verification have been noticed;

(c) The Company does not hold any immovable properties. Accordingly the paragraph3(i)(c) of the Order regarding title deeds of immovable properties is not applicable;

(ii) The inventories have been physically verified by the management during the year.In our opinion and according to the information and explanation given to us thefrequency of verification is reasonable. The procedures of physical verification in ouropinion are reasonable and adequate in relation to size of the Company and nature of itsbusiness. The Company is maintaining proper records of inventories. No discrepancies werenoticed on verification between the physical inventories and the book records;

(iii) The Company has not granted any loans secured or unsecured to Companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act during the year;

(a) Since the company has not given any loan during the year so the provision of sub-clause (a) of clause (iii) of paragraph 3 of the Order is not applicable;

(b) According to the information and explanation given to us no repayment schedule hasbeen specified for the outstanding

balance amount of the loan given by the company in the earlier periods and accordinglythe question of regularity in repayment of principal amount does not arise;

(c) There are no overdue amounts in respect of such loan;

(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 loans and investments made;

(v) In our opinion and according to the information and explanation given to us theCompany has not accepted deposits from the public and therefore the provisions sections73 to 76 or any other relevant provisions of the Act and the rules framed there under arenot applicable to the Company. We have been informed by the management that no order hasbeen passed by the Company Law Board or National Company Law Tribunal or Reserve Bank ofIndia or any court or any other tribunal in this regard;

(vi) The provision of clause (vi) of paragraph 3 of the order relating to maintenanceof cost records are not applicable;

(vii) (a) The Company has generally been regular in depositing with appropriateauthorities undisputed statutory dues such as provident fund employees' state insuranceincome tax goods and service tax cess and other applicable statutory dues. According toinformation and explanations given to us no undisputed statutory dues payable were inarrears as at March 31 2019 for a period of more than six months from the date theybecame payable;

(b) According to the information and explanation given to us there are no outstandingdisputed dues payable by the Company in case of income tax goods and service tax or cessand any other statutory dues as on March 31 2019;

(viii) The Company has neither raised any loan from Banks Financial Instution norissued any debentures therefore provision of paragraph 3(viii) of the Order regardingdefault in repayment of dues to banks financial instutuion and debenture holders are notapplicable to the Company;

(ix) The Company has not raised any money by way of intital public offer or furtherpublic offer (including debt instrument) nor any term loans during period under audit.Acordingly paragraph 3(ix) of the Order is not applicable;

(x) During the course of our examination of the books and records of the Companycarried out in accordance with generally accepted auditing practices in India andaccording to the information and explanations given to us no fraud by the Company or onthe Company by its officers or employees has been noticed or reported during the year;

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided managerialremuneration in accordance with the provisions of section 197 read with schedule V of theCompanies Act 2013;

(xii) In our opinion and according to information and explanation given to us theCompany is not a Nidhi Company. Accordingly paragraph 3 (xii) of the Order is notapplicable to the Company;

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards;

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year;

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly clause (xv) ofparagraph 3 of the Order is not applicable; and

(xvi) The Company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934.

For Nayan Parikh & Co.

Chartered Accountants Firm Registration No.: 107023W

K. Y. Narayana

Place: Mumbai Partner

Dated: May 11 2019 Membership No.: 060639

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under section 143(3)(i) of the Act

We have audited the internal financial controls with reference to financial statementsof the Company as of March 31 2019 in conjunction with our audit of the standalonefinancial 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 controls based on the internal controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting ('Guidance Note') issued by the Institute of Chartered Accountants of India('ICAI'). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding 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 Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by ICAI. Those Standards and the

Guidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk.

The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the standalone financial statements whether due tofraud 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrols with reference to financial statements includes those policies and proceduresthat (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) providereasonable assurance that transactions are recorded as necessary to permit preparation ofstandalone financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the Company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the Company's assets that could have a material effect on thestandalone financial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2019 based on the internal controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrols stated in the Guidance Note.

For Nayan Parikh & Co.

Chartered Accountants Firm Registration No.: 107023W

K. Y. Narayana

Place: Mumbai Partner

Dated: May 11 2019 Membership No.: 060639