TO THE MEMBERS OF
SYSCHEM (INDIA) LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of SYSCHEM (INDIA) LIMITED (''theCompany") which comprise the balance sheet as at 31st March 2021 the statement ofprofit and loss including other comprehensive income statement of changes in equity andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information(hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanationgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfaire view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (Ind AS) specified under section 133 of the Act ofthe state of affairs (financial position) of the company as at March 31 2021 its losses(financial performance including other comprehensive income) and its cash flows and thechanges in equity 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. Our responsibilities under thosestandards are further described in the Auditor's Responsibilities for the Audit of thefinancial statement section of our report. We are independent of the company in accordancewith the code of ethics issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provision of the Companies Act 2013 and the Rules there under and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified opinion on the financial statement.
Key Audit Matters
We have determined that there are no key audit matters to communicate in our report.
Emphasis of Matter
1. Interest provisioning on facilities from bank
The company's various credit facilities have been declared NPA (Non-Performing Assets)by the bank. There is usual practice that bank discontinue to account for as Income inrespect to the accrued interest on such assets subsequent to the declaration of these asNPA. The bankers of the company too have not accounted as Income in respect to theinterest subsequent to NPA declaration date. In order to achieve the desired congruency onthis issue and uncertainty of the amount liable to be paid the management of the companyhas not provided for such interest i.e. interest on credit facilities subsequent to thedate of declaration of these credit facilities as NPA. Such interest amounting to Rs.140.00 Lakhs for the current financial year which has resulted in the understatement ofliabilities and expenses to that extent.
Other MatterScope of Limitation due to COVID-19
The UNMODIFIED opinion expressed in the present audit report is based on theinformation facts and inputs made available to us through electronic means by themanagement from time to time. We wish to highlight that due to the COVID-19 inducedrestrictions the audit team could not visit the premises of the company for undertakingthe required audit procedures as prescribed under ICAI issued Standards on Auditingincluding but not limited to:
A) Inspection observation examination detailed discussions and verification of theoriginal documents / files. B) Examination of the Fixed Asset registers physicalverification process / Inventory records.
C) Observations with regard to access controls and data security.
D) Physical verification of cash / inventory including adequate internal controlsthereof.
Information other than the financial statement and Auditor's Report Thereon
The Company's Board of Director is responsible for the preparation of the otherinformation. The other information comprise the information included in the Board's Reportincluding Annexures to Board's Report but does not include the financial statement and ourauditor's report thereon.
Our opinion on the financial statement does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our report of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statement or our knowledge obtained during thecourse of our 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 the fact. We havenothing to report in this regard.
Responsibility of Management for Financial Statements
The company's Board of Directors is responsible for the matter stated in section 134(5)of the Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flow of thecompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standard (Ind AS) specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate implementation and maintenance of accounting policies; making judgment andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial
misstatement whether due to fraud or error.
In preparing the financial statements management in responsible for assessing thecompany's ability to continue as a going concern disclosing as applicable matterrelated 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.
Those Board of directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objective are to obtain reasonable assurance about whether the financial statementas a whole are free from material misstatement whether due to fraud or error and toissue an auditor's report that includes our opinion. Reasonable assurance is a high levelof assurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists. Misstatement can arise from fraud orerror and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and theoperating
effectiveness of such 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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.
Materiality is the magnitude of misstatement in the financial statement thatindividually or in aggregate make it probable that the economic decision of a reasonablyknowledgeable user of the financial statement may be influenced. We consider quantitativemateriality and qualitative factor in (i) planning the scope of our audit work and inevaluating the results of our work; and (ii) to evaluate the effect of any identifiedmisstatements in the financial statement.
Report on Other Legal and Regulatory Requirements
1. 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 accounts as required by law have been kept by the
company so far as it appears from our examination of those books.
c) 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.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards 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 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of section164(2) of the Act.
f) with respect to adequacy of the internal financial controls over financial reportingof the company and the operating effectiveness of such control refer to our separatereport in "Annexure A". Our report expresses an unmodified opinion on theadequacy and operative 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 requirement of the 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 in our opinionand to the best of our information and according to the explanations given to us: i) TheCompany has disclosed the impact of pending litigations on its financial position in itsInd AS Financial Statements. (Refer Note No. 28 to the Standalone Ind AS FinancialStatements)
ii) The company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii) There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
2. As required by the companies (Auditor's Report) Order 2016 ("the Order")issued by the
Central Government of India in terms of sub- section (11) of section 143 of the Act wegive in the Annexure "B" a statement on the matters specified in paragraphs 3and 4 of the order to the extent applicable.
| ||for S T A V & CO. |
| ||Chartered Accountants |
| ||(Firm Registration No. 024510C) |
| ||(CA VARINDER SINGH) |
|DATED : 29.06.2021 ||PARTNER |
|PLACE : CHANDIGARH ||M. No. 542573 |
| ||UDIN : 21 542573 AAAAA R9081 |
ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred in paragraph 1(f) under "Report on other Legal and Regulatoryrequirements' section
of our report to the members of SYSCHEM (INDIA) LIMITED of even date;
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ('the Act")
We have audited the internal financial controls over financial reporting of SYSCHEM(INDIA) LIMITED ("the Company") as of March 31 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The board of directors of the Company is responsible for establishing and maintaininginternal financial controls based on "the internal control over financial reporting("IFCOFR") criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India". These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to respective company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.
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 the Audit of Internal financial control over financial reporting("the Guidance Note") issued by Institute of Chartered Accountants of India andthe standard on Auditing prescribed under section 143(10) of the Act to the extentapplicable to an audit of Internal Financial
Controls. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting were established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of IFCOFR included obtaining an understanding of IFCOFRassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of 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 IFCOFR.
Meaning of Internal Financial Controls Over Financial Reporting
A company's IFCOFR is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCOFR includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 Financial Reporting
Because of the inherent limitations of IFCOFR including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the IFCOFR to futureperiods are subject to the risk that IFCOFR may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate
In our opinion to the best of our information and according to the explanation givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India". for S T A V & CO. Chartered Accountants
(Firm Registration No. 024510C)
(CA VARINDER SINGH) DATED : 29.06.2021 PARTNER PLACE : CHANDIGARH M. No. 542573
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in paragraph 2 under "Report on Other Legal and RegulatoryRequirements" section
of our Report of even date on the accounts for the year ended on 31st March 2021 of
SYSCHEM (INDIA) LIMITED.
On the basis of such checks of the books and records of the company as we consideredappropriate and according to the information and explanation given to us during the courseof audit we state that : -
(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) The fixed assets of the company have been physically verified by the management
at reasonable intervals and no discrepancies were noticed on such verification.
(c) Title deeds of immovable properties are held in the name of erstwhile name of thecompany i.e. Anil Pesticides Limited. The name of company was changed from Anil PesticidesLimited to Syschem (India) Limited w.e.f. 26.12.2001. However name in the revenue recordshave not been updated.
(ii) As explained to us the physical verification of the inventory has been conductedby the management at reasonable intervals during the year. No material discrepancies havebeen noticed on physical verification. The balances of stock as established on physicalverification as at the year-end have been incorporated in the books of accounts.Consequently the shortage / excess if any have been adjusted in the consumption ofmaterials.
(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. Accordingly paragraph 3 (iii) of the Order is not applicable.
(iv) The company has not granted any loans made investment or given any guaranteesand security in terms of section 185 & section 186. Accordingly paragraph 3 (iv) ofthe Order is not applicable.
(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits with the meaning of section 73 of the Companies Act2013. Accordingly paragraph 3(v) of the Order is not applicable.
(vi) We have broadly reviewed the cost records maintained by the company pursuant tothe Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government under section 148 (1) of the Companies Act 2013 and are of the opinionthat prima facie the prescribed cost records have been made and maintained. As informed tous cost audit will be conducted in due course of time. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis ofrecords produced before us the Company is not regular in depositing undisputed statutorydues including provident fund income tax sales tax service tax with appropriateauthorities applicable to the Company. The arrears of outstanding statutory dues as at thelast day of financial year for a period of more than six months from the date they becamepayable is as under : -
|S.NO. Nature of Dues ||Statutory ||Amount (In Lacs) |
|1. Service Tax || ||0.94 |
(b) According to the information and explanations given to us there are no materialdues of income tax sales tax wealth tax service tax custom duty excise duty valueadded tax or any other cess applicable to the Company which have not been deposited withthe appropriate authorities on account of any dispute.
(viii) In our opinion and according to the information and explanations given to usthe Company has defaulted in repayment of dues to Banks & Financial Institutions. Theamount of default is Rs.1217.43 Lakhs since the account is NPA. Details of lender is asunder:
|S.NO. NAME OF THE LENDER ||AMOUNT (In Lakhs) |
|1. Punjab National Bank Sector 22-D Chandigarh ||1217.43 |
The company does not have any loans or borrowings from any financial institution
Government or Debenture holder during the year.
(ix) The company did not raise money by way of initial public offer or further offer(including debt instruments) and term loans during the year. Accordingly paragraph 3(ix)of the Order is not applicable.
(x) According to information given to us no fraud by or on the company by its officersor
employees has been noticed or reported during the course of our audit.
(xi) In our opinion and according to the information and explanation given to usmanagerial remuneration has been provided in accordance with the provisions of section 197read with Schedule V to the Companies Act.
(xiI) The company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is
(xiii) According to the information and explanation given to us and based onexamination of the record of the company transactions with the related parties are incompliance with Section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations given to us the Company has madePreferential allotment of shares during the year under review. In respect of the aboveissue we further report that: a) the requirement of Section 42 of the Companies Act2013 as applicable have been complied with; and b) the amounts raised have been appliedby the Company during the year for the purposes for which the funds were raised.
(xv) The company has not entered into any non-cash transactions with directors orperson connected with them. Accordingly paragraph 3(xv) of the Order is not applicable.
(xvi) The company is not required to be registered under section 45-IA of Reserve Bankof India act 1934.
| ||for S T A V & CO. |
| ||Chartered Accountants |
| ||(Firm Registration No. 024510C) |
| ||(CA VARINDER SINGH) |
|DATED : 29.06.2021 ||PARTNER |
|PLACE : CHANDIGARH ||M. No. 542573 |