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Sadhana Nitro Chem Ltd.

BSE: 506642 Sector: Industrials
NSE: N.A. ISIN Code: INE888C01040
BSE 00:00 | 24 Sep 32.85 -0.15
(-0.45%)
OPEN

33.50

HIGH

33.75

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32.65

NSE 05:30 | 01 Jan Sadhana Nitro Chem Ltd
OPEN 33.50
PREVIOUS CLOSE 33.00
VOLUME 64827
52-Week high 53.39
52-Week low 12.89
P/E 58.66
Mkt Cap.(Rs cr) 643
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 33.50
CLOSE 33.00
VOLUME 64827
52-Week high 53.39
52-Week low 12.89
P/E 58.66
Mkt Cap.(Rs cr) 643
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sadhana Nitro Chem Ltd. (SADHANANITRO) - Auditors Report

Company auditors report

To the Members of Sadhana Nitro Chem Limited Report on the StandaloneFinancial Statements Opinion

We have audited the standalone financial statements of M/s. SadhanaNitro Chem Limited ("the Company") which comprise the balance sheet as at31stMarch 2020 and the statement of Profit and Loss (Including Other ComprehensiveIncome) Statement of changes in Equity and Statement of Cash flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31stMarch 2020 itsprofit changes in equity and its cashflows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

The Key Audit Matter How the matter was addressed in our audit
Adoption of IND-AS 116 "Leases"
As described in note no. 2.05 to the standalone financial statements the Company has adopted IND AS 116 Leases (Ind-AS 116) in the current year. The application & transition to this accounting standard is an area of focus in our audit since the company has a number of leases with different contract terms. Our audit procedures on adoption of Ind AS 116 include:
- Assessed the Group's evaluation on the identification of leases based on the contractual agreements;
- Assessed the reasonableness of the discount rates applied in determining the
Ind-As 116 introduces a new lease accounting
The Key Audit Matter How the matter was addressed in our audit
Adoption of IND-AS 116 "Leases"
model wherein a lessee is required to recognize a right-of-use (RoU) asset and a lease liability arising from a lease on the balance sheet. The lease liabilities are initially measured by discounting future lease payment during the lease term as per the contract/arrangement. Adoption of the standard involves significant judgement & estimates including determination of the discount rates. lease liabilities.
- Upon transition as at 1st April 2019:
• Evaluated the method of transition and related adjustments;
• Tested completeness of the lease data by reconciling the Group's operating lease commitments to data used in computing RoU asset and the lease liabilities.
- Assessed and tested the presentation and disclosures relating to Ind-As 116 i n cl u d i n g d i scl os u re s re l ati n g to transaction.

Emphasis of Matter

We draw attention to Note 39 to the standalone financial statementsregarding the uncertainties arising out of the outbreak of Covid-19 pandemic and theassessment made by the management on its operations and the financial reporting for theyear ended 31st March 2020. Such an assessment and the outcome of the pandemic as madeby the management is dependent on the circumstances as they evolve in the subsequentperiods. Further the COVID-19 outbreak has caused significant disruptions in the businessoperations of companies across India and has caused significant accounting and auditingchallenges. One such challenge being inability of the Company to conduct a physicalverification of inventories for the year-end 31st March 2020 due to Government havingimposed restrictions during the lockdown on account of health travel and safety concerns.

The Company's management however conducted physical verification ofinventories on dates other than the date of financial statements but prior to the date ofthe board meeting to be held for the purpose of adopting the financial results at certainlocations (factories and warehouses) and has made available the documents in confirmationthereof.

Our opinion is not modified in respect of this matter.

Other Information

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements and ourauditors' report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the

other information and in doing so consider whether the otherinformation is materially inconsistent with the standalone financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether thefinancial 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 financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial 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 theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the

Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 Section143(11) of the Act we give in "Annexure A" a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable

2. As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b. In our opinion proper books of account as required by law have beenkept by the Company in so far as it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income

the Cash Flow Statement and Statement of Changes in Equity dealt withby this Report are in agreement with the relevant books of account.

d. In our opinion the aforesaid standalone Ind AS financial statementscomply with the Indian Accounting Standards prescribed under section 133 of the Act readwith relevant rules issued thereunder.

e. On the basis of the written representations received from thedirectors as on 31st March 2020 and taken on record by the Board of Directors none ofthe directors is disqualified as on 31st March 2020 from being appointed as a director interms of Section 164(2) of the Act;

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 B"

g. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the

best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements. Refer note 40 to thestandalone Ind AS financial statements.

(ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

(iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

3. With respect to the matter to be included in the Auditor's Reportunder section 197(16) of the Act:

In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions o f Section 197 of the Act read with Schedule V to theCompanies Act 2013.

For Jayesh Dadia & Associates LLP

Chartered Accountants

Firm's Registration No. 121142W / W100122

Jayesh Dadia Partner

Membership No. 033973

Place of Signature: Mumbai Date: 29thJuly 2020 UDIN:20033973AAAAAX8967

Annexure A to the Auditors' Report

The Annexure referred to in the Independent Auditors' Report to themembers of the Company on the Standalone IND-AS financial statements for the year ended31st March 2020 we report that:

(i) (a) The Company is maintaining proper records showingfullparticulars including quantitative details and situation of fixed assets;

(b) Property plant and equipment have been physically verified by theManagement during the year based on a phased program of verifying all property plant andequipment over three years which in our opinion is reasonable having regard to the sizeof the company and the nature of its Assets. The discrepancies noticed on suchverification were not material and have been properly dealt with in the books of account.

(c) In our opinion and according to the information & explanationgiven to us and based on our examination of the records of the Company the title deeds ofimmovable properties are held in the name of the Company.

(ii) As explained to us the inventories have been physically verifiedduring the year by the

management except for stock in transit. The intervals at which theinventories are physically verified are in our opinion reasonable in relation to thesize of the Company and the nature of i ts

business. The Company is maintaining proper records of inventory and nomaterial discrepancies were noticed on physical verification.

(iii) As informed to us & on the basis of our examination of thebooks of accounts & other relevant records the Company has granted loans to twocompanies covered in the register maintained under section 189 of the Companies Act 2013.

(a) In our opinion the rate of interest and other terms and conditionson which the loans have been granted were not prima facie prejudicial to the interest ofthe Company.

(b) According to the information & explanation given to us andbased on our examination of the records of the Company no repayment schedule forprincipal & interest payments has been stipulated. Therefore we are unable to commentupon the regularity of repayment of principal & payment of interest.

(c) Since the repayment schedule of the loans given has not beenstipulated we are unable to comment as to whether any amount is overdue for period ofmore than ninety days.

(iv) In our opinion & according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theCompanies Act 2013 in respect of loans given & investments made. The Company has notprovided any guarantees / security.

(v) In our opinion & according to the information & explanationgiven to us the Company has not accepted any deposits from the public during the year.Therefore paragraph 3(v) of the Order is not applicable.

(vi) The maintenance of cost records has been specified by the CentralGovernment under section 148(1) of the Companies Act 2013. 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 Companies

SADHANA NITRO CHEM LIMITED

Act 2013 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) (a) According to the information & explanations provided tous & on the basis of our examination of the books of accounts & other relevantrecords the Company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax sales-tax service taxduty of customs duty of excise value added tax cess and any other statutory dues to theappropriate authorities. As explained to us there were no undisputed statutory dues asmentioned above in arrears as at 31st March 2020 for a period of more than 6 months fromthe date they became payable except the following:

Name of Statue Nature of Dues Period to which the amount Amount involved (')
Employees Provident Fund and Miscellaneous Provisions Act 1952 Interest on delayed payment F.Y. ended March 2013 to June 2018 2133270/-
Income Tax Act 1961 Tax Deducted At Source F.Y. 2017-18 207939/-
The Gujarat State Tax on Professions Traders Callings and Employments Act 1976 Profession Tax - F.Y. 2017-18 - Apri'19 16480/- 13400/-
Employee's State Insurance ESIC April'19 44459/-

(b) According to the information and explanations given to us detailsof disputed statutory dues which have not been deposited or partially deposited are asfollows:

Name of the Statute Nature of Dues Amount disputed (') Period to which the amount relates (F.Y.) Forum where dispute is pending
Income Tax Act 1961 Income Tax 55180/- 2013-14 CIT (Appeals)
Employees Provident Fund and Miscellaneous Provisions Act 1952 Demurrage of Provident Fund Dues 5876715/- F.Y. ended March 2013 to June 2018 Employees Provident Fund Appellate Tribunal

(viii) In our opinion and according to the information &explanation given to us and based on our examination of the records of the Company thecompany has not defaulted in repayment of loans or borrowings to banks or financialinstitutions.

(ix) According to the information & explanation given to us andbased on our examination of the records of the company the Company has not raised anymoney by way of initial public offer or further public offer including debt instrumentsduring the year. Further the term loans obtained by the Company have been applied for thepurpose for which they were raised.

(x) To the best of our knowledge and belief and according to theinformation and explanations given to us no material fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the course of ouraudit.

(xi) According to the information and explanations give to us and basedon our examination of the records of the Company the Company has paid / provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information &explanations given to us the Company is not a Nidhi Company and therefore the compliancerequirements relevant to a Nidhi Company are not applicable.

(xiii) In our opinion and according to the information &explanations given to us and based on our examination of the records of the Company alltransactions with related parties are in compliance with section 177 and 188 of theCompanies Act 2013 where applicable and the details have been disclosed in the financialstatements etc. as required by the applicable accounting standards.

(xiv) In our opinion and according to the information & explanationgiven to us and based on our examination of the records of the Company no preferentialallotment or private placement of shares or fully or partly convertible debentures hasbeen made by the Company during the year under review.

(xv) According to the information & explanations given to us andbased on our examination of the records of the Company the Company has not entered intoany non-cash transactions with directors or persons connected with him/her as specifiedunder the provisions of section 192 of the Companies Act 2013.

(xvi) The Company is not required to be registered under section45-1(A) of the Reserve Bank of India Act 1934 and therefore the provisions of paragraph3(xvi) of the Order is not applicable.

For Jayesh Dadia & Associates LLP

Chartered Accountants

Firm's Registration No. 121142W / W100122

JayeshDadia

Partner

Membership No. 033973

Place of Signature: Mumbai Date: 29thJuly 2020 UDIN:20033973AAAAAX8967

Annexure - B to the Independent Auditor's Report

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act") referred toin paragraph 2 (f) on Report on Other Legal and Regulatory Requirements of our report.

Opinion

We have audited the internal financial controls over financialreporting with reference to the standalone financial statements of Sadhana NitroChemLimitedfthe Company") as of 31stMarch 2020 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2020 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including 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 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 aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

For Jayesh Dadia & Associates LLP

Chartered Accountants

Firm's Registration No. 121142W / W100122

JayeshDadia

Partner

Membership No. 033973

Place of Signature: Mumbai Date: 29thJuly 2020 UDIN:20033973AAAAAX8967

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