The Members of
Sanginita Chemicals Ltd.
Report on the audit of the Standalone Ind AS financial statements
We have audited the accompanying Standalone Ind AS financial statements of SanginitaChemicals Ltd. ("the Company") which comprise the Balance Sheet as at March 312021 and the Statement of Profit and Loss including Other Comprehensive Income the CashFlow Statement and the Statement of Changes in Equity for the year ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as the (Standalone Ind AS FinancialStatements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2021 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 Ind AS Financial Statements in accordance withthe standards on auditing (SAs) as specified under section 143 (10) of the Companies Act2013. Our responsibilities under those Standards are further described in the auditor'sresponsibilities for the audit of the Standalone Ind AS financial statements section ofour report. We are independent of the Company in accordance with the code of ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the code of ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion on standalone Ind AS Financial Statements.
Emphasis of Matter
We draw your attention to Note 42 to the Standalone Financial Statements which explainsThe Company has considered the possible effects that may result from the pandemic relatingto COVID-19 in the preparation of these standalone financial statements including therecoverability of carrying amount of financial and non financial assets. In developing theassumption relating to the possible future uncertainties in the global economic conditionbecause of this pandemic the company has at the date of approval of these financialstatements used internal and external sources of information and economic forecast andexpect that the carrying amount of these assets will be recovered. The impact of COVID-19on the company's financial statements may differ from that estimate as at the date ofapproval of these standalone financial statements. Our opinion is not modified in respectof this matter.
Key audit matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matters ||Principal Audit Procedures/ Auditor's Response |
|1 Appropriateness of Current / Non-current classification || |
| ||For the purpose of current/non-current classification of assets and liabilities the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets or inventories for processing and their realization in cash and cash equivalents.The classification of assets and liabilities has been done on the basis of documentary evidences. |
| ||Where conclusive evidences are not available the classification has been done on the basis of management's best estimate of the period in which the assets would be realized or the liabilities would be settled. We have evaluated the reasonability of the management's estimates. |
Information other than the standalone Ind AS financial statements and auditors' reportthereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report but does not include the standalone Ind ASfinancial statements and our auditor's report thereon.
Our opinion on the Standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. If based on the work we have performed we conclude thatthere is a material misstatement of this other information; we are required to report thatfact. We have nothing to report in this regard.
Management Responsibilities for Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the company inaccordance with the accounting principles generally accepted in India including theIndian accounting standards (Ind AS) specified under section 133 of the Act read with thecompanies (Indian Accounting standards Rules 2015 as amended. 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 standalone Ind AS financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone Ind AS 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.
The Board of directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements:
Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 Ind AS 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 Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
- Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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 Ind ASfinancial 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 Ind AS financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified 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 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 Section 143(3) of the Act based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312021 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 with reference to these standalone Ind AS Financial Statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure A".
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 period 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) As explained the Company does not have any pending litigations which would impactits financial position;
ii) As explained the Company did not have any long-term contracts including derivativecontracts for which there were any material foreseeable losses; and
iii) As explained to us no such amount is required to be transferred to the investoreducation and protection fund in accordance with the relevant provisions of the companiesact2013 and the rules made there under.
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.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Sanginita Chemicals Limited ofeven date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SanginitaChemicals Ltd. ("the Company") as of March 31 2021 in conjunction with ouraudit of the standalone financial statements of the Company for the period ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on internal control over financial reporting criteria establishedby the 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 financialcontrols that were operating effectively for ensuring the orderly and efficient conduct ofits business including adherence of the company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and timely preparation of reliable financial information asrequired under the companies act2013.
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 extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote 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 obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting with reference to theseStandalone Ind AS Financial statements and their operating effectiveness. Our audit ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement in 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 control systemover financial reporting with reference to these Standalone Ind AS Financial statements.
Meaning of Internal Financial Controls over Financial Reporting with reference to theseStandalone Ind AS Financial Statements.
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
(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of internal financial controls over financial reporting withreference to these Standalone Ind AS Financial Statements.
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management of 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.
In our opinion and according to the information and explanations given to us theCompany has in all material respects an adequate internal financial control system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2021 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.
"ANNEXURE B" TO INDEPENDENT AUDITORS' REPORT
This is an annexure on the accounts of Sanginita Chemicals Ltd. as referredabove in paragraph 2 under the heading Report on other Legal & RegulatoryRequirement' of our report of even date to the standalone Ind AS financial statement forthe year ended 31st March2021:
1. In respect of Fixed Assets :
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us the company has a regular program of physical verification ofits fixed assets by which fixed assets are verified in a phased manner over a period ofthree years. In accordance with this program certain fixed assets were verified during theyear and no material discrepancies were noticed on such verification. In our opinion thefrequency of verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) On the basis of information and explanation given to us the Title Deeds ofImmovable Properties are held in name of company.
2. In respect of Inventories :
(a) The management has conducted physical verification of inventory at reasonableintervals. In our opinion the procedure followed by the management for such physicalverification is reasonable and adequate in relation to the size of the Company and natureof his business.
(b) In our opinion the Company is maintaining proper records of inventory. No materialdiscrepancy on verification between physical inventories and the book records werenoticed.
3. 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. Accordingly paragraph 3 (iii) (a) to (c) of the Order are notapplicable to the Company.
4. In our opinion and according to the information and explanations given to usthe Company has not advanced loans given guarantees and provided securities to itsdirectors and/or persons or firm or companies in which directors are interested.Accordingly the provisions of clause 4 of the Order are not applicable to the Company.
5. In our opinion and according to the information and explanations given to usthe company has not accepted any deposits and accordingly paragraph 3 (v) of the order isnot applicable.
6. We have broadly reviewed the books of accounts relating to materials labour andother items of cost maintained by the company pursuant to the rules made by the CentralGovernment for the maintenance of cost records u/s. 148 (1) of the Companies Act. We areof the opinion that prima facie the prescribed accounts and records have been made andmaintained.
7. According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company is generally regular indepositing undisputed statutory dues including Provident Fund Employees State InsuranceIncome-Tax Duty of Customs Cess Goods & Service Tax and any other statutory dueswith the appropriate authorities. According to the information and explanations given tous no undisputed amounts payable in respect of the above were in arrears as at March 312021 for a period of more than six months from the date on when they become payable.
8. In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowing to financialinstitutions or banks or Governments or due to debenture holders.
9. 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 during the period concerned.
10. Based upon the audit procedures performed and the information and explanationsgiven by 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 period.
11. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
12. In our opinion and according to the information and explanations given to usthe Company is not a Nidhi Company.
Therefore the clause 4 (xii) of the Order is not applicable.
13. In our opinion all transactions with the related parties are in compliancewith section 177 and 188 of Companies Act 2013 and the details have been disclosed innotes to Standalone Ind AS Financial Statements as required by the applicable accountingstandards.
14. 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 period under review. Accordingly paragraph 3(xiv) of the order is not applicable.
15. 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 paragraph3(xv) of the order is not applicable.
16. The company is not required to be registered under section 45-IA of the ReserveBank Of India Act1934.
| ||For & behalf of |
| ||Devpura Navlakha & Co. |
| ||FRN-121975W |
| ||Chartered Accountants |
| ||Sd/- |
| ||CA Ashwini Devpura |
|Place : Gandhinagar ||(Partner) |
|Date : 13.05.2021 ||Membership No. : 047390 |
| ||UDIN-21047390AAAACE3364 |