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Shaba Chemicals Ltd.

BSE: 524546 Sector: Industrials
NSE: N.A. ISIN Code: INE06DM01015
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Shaba Chemicals Ltd. (SHABACHEMICALS) - Auditors Report

Company auditors report



We have audited the accompanying Ind AS financial statements of SHABA CHEMICALSLIMITED ('the Company') which comprise the Financial Statement Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss the Statement of Cash Flow and Statementof change in equity for the year ended on that date and a summary of the significantaccounting policies and other explanatory information. (Hereinafter refer as IND AsFinancial Statement)

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 and its profit and its cash flows for the year ended on that date.

Basis of Auditor's Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section - 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor s Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance 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 Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

We have discussed with management regarding business activity resulting to that weunderstand that the company is trying to find out suitable business and also companyfacing acute fund problem because capital of the company almost wiped up and becomenegative net worth

Responsibility of those charged with Governance for the Financial Statement

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ('the Act') with respect to the preparation of these IndAS financial statements that give a true an^ain/iew of the financial position financialperformance cash flows and change m equity of the in accordance with the accountingprinciples generally accepted in India including the IndjH^Kunting Standard ("IndAS") as The Indian Acco^ng Standards specified under Section 133 of the Act read withRule 7 of the Companies (Acccwhts) Rules 2014.

The responsibility also includes maintenance of adequate accounting records inaccordance with 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 implemymaHOR arri maintenance of adequate internal financialcontrols that were operating effectiv^y for eh*i ng the accuracy and completenessof the accounting records relevant to the preparation^! fomentationef the financialstatements that give a true and fair view and are free from materiaT^ri^Kemen^ whether dueto fraud or error.

Auditors' Responsibility for the financial statements

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which ane required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from matenal misstatement

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances but not for the purpose of expressing an opinion onwhether the Company has in place an adequate internal financial controls system overfinancial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Date: 28* May 2020 M. no.072497

Annexure to the Independent Auditors' Report

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

I. In respect of its fixed assets:

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets. There is no any fixed asset in the company.
(b) The Company has a program of verification of fixed assets to cover all the items in a phased manner over a period of three years which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme the management is in the process of carrying out the physical verification and reconciling the same with the book records. Material discrepancies if any between the book records and the physical verification would be dealt with on completion of such reconciliation.

ii. In respect of its inventories: No any inventories and operation in the Company.Hence not applicable.

iii. The Company has not granted loans secured or unsecured to companies firms orother parties covered in the Register maintained under Sectionl89 of the Companies Act2013.

iv. In our opinion and according to the information and explanations given to ushaving regard to the explanations that some of the items purchased are of special natureand suitable alternative sources are not readily available for obtaining comparablequotations there is an adequate internal control system commensurate with the size of theCompany and the nature of its business with regard to purchases of inventory and fixedassets and the sale of goods and services. During the course of our audit we have notobserved any major weakness in such internal control system.

v. According to the information and explanations given to us the Company has notaccepted any deposit during the year. In respect of unclaimed deposits the Company hascomplied with the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act 2013.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended and prescribed by the CentralGovernment under sub-section (1) of the Sectionl48 of the Companies Act 2013 and are ofthe opinion that prima facie the prescribed cost records have been maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.

vii. According to the information and explanations given to us in respect of statutorydues:

(a) The Company has been generally regular in depositing undisputed statutory dues including provident fund employees' state insurance income tax sales tax wealth tax service tax custom duty excise duty value added tax cess and other material statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of provident fund employees' state insurance income tax sales tax wealth tax service tax customs duty

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's ReportJOrder 2015 ("the Order")issued by the Central

Government in terms ol Section 143(11) of the Act we give in the Annexure a statementon the mutters specified in paragraphs 3 and 4 of the Order.

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

a) We have sought and obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books.
c) The company does not have any branch other than its registered office.
d) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
e) In our opinion the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
f) There are no comments or observations made by the auditor on the audit report of the company which have adverse effect on the functioning of the company.
g) On the basis of the written representations received from the directors as on March 31 2020 taken on record by the Board of Directors none of the Directors is disqualified as on March 31 2020 from being appointed as director in terms of Section 164(2) of the Act.
h) There is no default in the maintenance of books of accounts and other matters related therewith.

3. With respect to the other matters to be included in the Auditor's Report inaccordance with Rulell of the Companies (Audit and Auditors)Rules 2014 in our opinionand 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 its financialposition in its financial statements - Refer Note 23(A) (i) to the financial statements.

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

i. There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company.

Place: Indore PARTNER
Date: 28th May 2020 FIRM REGISTRATION NO 03439C