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Sudarshan Chemical Industries Ltd.

BSE: 506655 Sector: Industrials
NSE: SUDARSCHEM ISIN Code: INE659A01023
BSE 00:00 | 21 Sep 425.60 -1.15
(-0.27%)
OPEN

429.25

HIGH

432.35

LOW

389.50

NSE 00:00 | 21 Sep 426.15 -2.85
(-0.66%)
OPEN

432.00

HIGH

433.00

LOW

387.95

OPEN 429.25
PREVIOUS CLOSE 426.75
VOLUME 15096
52-Week high 633.80
52-Week low 360.00
P/E 31.41
Mkt Cap.(Rs cr) 2,947
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 429.25
CLOSE 426.75
VOLUME 15096
52-Week high 633.80
52-Week low 360.00
P/E 31.41
Mkt Cap.(Rs cr) 2,947
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sudarshan Chemical Industries Ltd. (SUDARSCHEM) - Auditors Report

Company auditors report

To the Members of Sudarshan Chemical Industries Limited Report on the Audit of theStandalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of SudarshanChemical Industries Limited ("the Company") which comprise the Balance Sheet asat 31 March 2018 the Statement of Profit and Loss the Statement of Changes in Equity andthe Statement of Cash Flows for the year then ended and summary of the significantaccounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS 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 the preparation ofthese standalone Ind AS financial statements that give a true and fair view of the stateof affairs profit/loss and other comprehensive income changes in equity and cash flowsof the Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) prescribed under section 133 of theAct.

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 of theaccounting records relevant to the preparation and presentation of the standalone Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

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.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31 March 2018 its profit and other comprehensive income changes in equityand its cash flows for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended 31 March 2017and the transition date opening balance sheet as at 1 April 2016 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 audited by the predecessor auditor whose report for the year ended 31 March2017 and 31 March 2016 dated 26 May 2017 and 27 May 2016 respectively expressed anunmodified opinion on those standalone financial statements as adjusted for thedifferences in the accounting principles adopted by the Company on transition to the IndAS which have been audited by us.

Our opinion is not modified in respect of this matter.

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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

g) 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 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 standalone Ind AS financial statements - Refer 41(b) to the standalone IndAS financial statements.

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

iii. There was one instance of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company the details ofwhich are as follows:

Amount credited to the fund Date of payment Date by which amount should have been credited to the fund Delay (no. of days)
Rs 6635 26 December 2017 14 September 2017 103

iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified

bank notes during the period from 8 November 2016 to 30 December 2016 have not beenmade since they do not pertain to the financial year ended 31 March 2018.

For B S R & Associates LLP
Chartered Accountants
Firm's Registration No.: 116231/W-100024
Shiraz Vastani
Place: Pune Partner
Date: 24 May 2018 Membership No. 103334

ANNEXURE "A" TO INDEPENDENT AUDITOR'S REPORT

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

(i)

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a physical verification programme whereby items of fixed assets arephysically verified according to a phased programme designed to cover all the items over aperiod of three years. In our opinion the frequency of such physical verificationprogramme is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme no physical verification was carried out by theManagement during the year.

(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of the immovable properties areheld in the name of the Company.

(ii) The physical verification of inventory has been conducted at reasonable intervalsduring the year. In our opinion the frequency of such physical verification isreasonable. Based on the information and explanations given to us no materialdiscrepancies were noticed on such physical verification.

(iii) The Company had granted unsecured loans to two companies covered in the registermaintained under Section 189 of the Act. Out of the above the loan granted to onesubsidiary company was squared off during the year.

(a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prima facie prejudicial to the Company's interest.

(b) In respect of the aforesaid loans the schedule of repayment of principal andpayment of interest has been stipulated and the parties are repaying the principalamounts as stipulated and are also regular in payment of interest as applicable.

(c) In respect of the aforesaid loans there is no amount which is overdue for morethan ninety days.

(iv) According to the information and explanations given to us the Company hascomplied with the provisions of Section 185 and 186 of the Companies Act 2013 withrespect to loans guarantees investments and security as applicable.

(v) According to the information and explanations given to us the Company has compliedwith the provisions of Sections 73 to 76 or any other relevant provisions of the Act andthe Rules framed thereunder to the extent notified with regard to the deposits acceptedfrom the public. According to the information and explanations given to us 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 on the Company in respect of the aforesaiddeposits.

(vi) Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof some of its products. We have broadly reviewed the same and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. We havenot however made a detailed examination of the records with a view to determine whetherthey are accurate or complete.

(vii)

(a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of professional tax and tax deducted at sourcethough there has been a slight delay in few cases and is regular in depositing undisputedstatutory dues including provident fund employees' state insurance income tax salestax service tax value added tax duty of customs duty of excise and other materialstatutory dues with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax sales-taxservice tax duty of customs duty of excise value added tax and any other materialstatutory dues were in arrears as at March 312018 for a period of more than six monthsfrom the date they became payable.

(b) According to information and explanation given to us and the records of the Companyexamined by us there are no dues of income-tax sales-tax service-tax which have notbeen deposited on account of any dispute. The particulars of dues of duty of customs dutyof excise and value added tax which have not been deposited on account of any dispute areas follows:

Name of the Statute Nature of dues Amount (Rs.) Period to which amount relates Forum where dispute is pending
The Central Excise Act 1944 Excise Duty 3835224 2004-05 to 2010-11 and 2014-15 to 2016-17 Assistant Commissioner of Central Excise
The Central Excise Act 1944 Excise Duty 26803331 2008-09 to 2013-14 Custom Excise & Service Tax Appellate Tribunal
The Central Excise Act 1944 Excise Duty 109864 2014-15 2015-16 Commissioner Appeal Central Excise
Maharashtra VAT Act 2002 VAT 18404869 2006-07 to 2008-09 and 2010-11 to 2013-14 Joint Commissioner of Sales Tax (Appeal 01)
Tamil Nadu VAT Act 2006 VAT 623691 2003-04 Assistant Commissioner Commercial Tax Department Coimbatore
Andhra Pradesh VAT Act 2005 VAT 826015 2007-08 Assistant Commissioner Commercial Tax Department (LTU)
Karnataka VAT Act 2003 VAT 76959 2008-09 The Commercial Tax Inspector Commercial Tax Check Post
Customs Act 1962 Custom duty 33035612 2006-07 to 2008-09 2011-12 and 2012-13 Custom Excise & Service Tax Appellate Tribunal

(viii) Based on the records examined by us and according to the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to any financial institution or bank as at the Balance Sheet date. Further theCompany did not have loans or borrowings from the government and has not issued anydebentures as at the Balance Sheet date.

(ix) The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments). Further based on the records examined by usand according to the information and explanations given to us the moneys raised by way ofterm loans were applied for the purpose for which they were obtained.

(x) According to the information and explanations given to us no material fraud by theCompany and on the Company by its officers or employees have been noticed or reportedduring 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 for managerialremuneration for the year ended March 312018 in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V of the Act.

(xii) As the Company is not a Nidhi Company the provisions of Clause 3(xii) of theOrder are not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has entered into transactions withrelated parties in compliance with the provisions of Sections 177 and 188 of the Act. Thedetails of such related party transactions have been disclosed in the standalone Ind ASfinancial statements as required by the applicable 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 under review. Accordingly the provisions of Clause 3(xiv) of the Order are notapplicable to the Company.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with themduring the year. Accordingly the provisions of Clause 3(xv) of the Order are notapplicable to the Company.

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

For B S R & Associates LLP
Chartered Accountants
Firm's Registration No.: 116231/W-100024
Shiraz Vastani
Place: Pune Partner
Date: 24 May 2018 Membership No. 103334

ANNEXURE "B" TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Act

We have audited the internal financial controls with reference to financial statementsof Sudarshan Chemical Industries Limited ("the Company") as of 31 March 2018 inconjunction with our audit of the financial statements of the Company for the year endedon 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 (the ‘Guidance Note') issued by the Institute of Chartered Accountants ofIndia (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 Companies Act 2013.

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 issued by the ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements were established and maintained and if such controls operated effectively inall material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal controls basedon the assessed risk. The procedures selected depend on the auditor's judgment includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 controls withreference to financial statements.

Meaning of Internal Financial Control 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 financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

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 control 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 adequate internal financialcontrols with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at 31 March 2018 based onthe internal controls with reference to financial statements criteria established by theCompany considering the essential components of internal controls stated in the GuidanceNote issued by the ICAI.

For B S R & Associates LLP
Chartered Accountants
Firm's Registration No.: 116231/W-100024
Shiraz Vastani
Place: Pune Partner
Date: 24 May 2018 Membership No. 103334