To the Members of
Vinyl Chemicals (India) Limited
Report on the Standalone Ind AS Financial Statements Opinion
We have audited the accompanying Standalone Ind AS Financial Statements of VinylChemicals (India) Limited ("the Company") which comprise the Balance Sheetas at 31st March 2022 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in the Equityfor the year then ended and a summary of the significant accounting policies and otherexplanatory information.
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 Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder Section 133 of the Act read together with the Companies (Indian Accounting Standard)Rules 2015 (Ind AS) and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2022 and its Profit TotalComprehensive Income its Cash Flows and Changes in the Equity for the year ended on thatdate.
Basis for Opinion
We have conducted our audit of the Standalone Ind AS Financial Statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act (SAs). Ourresponsibilities 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 issuedby the Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the Standalone Ind AS Financial Statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Standalone Ind AS FinancialStatements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. We havedetermined that there are no key audit matters to communicate in our report.
Information Other than the Standalone Ind AS Financial Statements and Auditor's Reportthereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises of the information included in the ManagementDiscussion and Analysis Report Directors' Report including Annexures to the Directors'Report Corporate Governance Report and Information for Shareholders but does not includethe Standalone Ind AS Financial Statements and 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 or conclusions 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 that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
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 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 Ind AS.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of 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 implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofaccounting 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 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 is responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibility for the Audit of 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 judgmentand maintain professional skepticism throughout the audit. We also: Identify and assessthe risks of material misstatement of the standalone Ind AS Financial Statements whetherdue to fraud or error design and perform audit procedures responsive to those risks andobtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error as fraud may involve collusion forgery intentionalomissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit inorder to 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 control system in place and the operatingeffectiveness 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 Standalone Ind AS 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 the Standalone IndAS Financial Statements including the disclosures and whether the Standalone Ind ASFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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 them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Government of India in terms of Section 143(11) of the Act we give in theAnnexure "A" a statement on the matters specified in paragraphs 3 and 4 of theOrder 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 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 Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of accounts.
(d) In our opinion the aforesaid Standalone Ind AS Financial Statements comply withthe Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the Directors as on 31stMarch 2022 and taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2022 from being appointed as a Director in termsof Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating 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 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 year are 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. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS Financial Statements - Refer Note 32 to the StandaloneInd AS Financial Statements;
ii. The Company did not have any long-term contracts including derivative contracts; assuch the question of commenting on any material foreseeable losses thereon does not arise;
iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund.
iv. (a) The Management has represented that to the best of its knowledge and beliefno funds have been advanced or loaned or invested (either from borrowed funds or sharepremium or any other sources or kind of funds) by the Company to or in any other person orentity including foreign entity ("Intermediaries") with the understandingwhether recorded in writing or otherwise that the Intermediary shall whether directlyor indirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provideany guarantee security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented that to the best of its knowledge and belief nofunds have been received by the Company from any person or entity including foreignentity ("Funding Parties") with the understanding whether recorded in writingor otherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b) above contain any material misstatement.
v. (a) The Dividend proposed in the previous year declared and paid by the Companyduring the year is in accordance with section 123 of the Companies Act 2013.
(b) The Board of Directors have proposed Dividend for the year which is subject to theapproval of the members at the ensuing Annual General Meeting. The amount of Dividendproposed is in accordance with section 123 of the Companies Act.
Annexure "A" to the Independent Auditors' Report
(Referred to in Paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date)
(i) In respect of the Company's Property Plant and Equipment and Intangible Assets:
(a) (A) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.
(B) The Company has no intangible assets. Accordingly Clause 3(i)(a)(B) of the Orderis not applicable and hence not commented upon.
(b) The Company has a phased program of physical verification of Property Plant andEquipment so to cover all the assets which in our opinion is reasonable having regard tothe size of the Company and the nature of its assets. According to the information andexplanations given to us no material discrepancies were noticed on such verification.
(c) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to information and explanations givenby the Management the title deeds of immovable properties are held in the name of theCompany.
(d) The Company has not revalued any of its Property Plant and Equipment during theyear.
(e) No proceedings have been initiated during the year or are pending against theCompany as at March 312022 for holding any benami property under the Benami Transactions(Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.
(ii) (a) The physical verification of inventory has been conducted at reasonableintervals by the Management during the year and in our opinion the coverage andprocedure of such verification by Management is appropriate. The discrepancies noticed onphysical verification of inventory as compared to book records were not 10% or more inaggregate for each class of inventory.
(b) During the year the Company has been sanctioned working capital limits in excessof ' 5 crores in aggregate from banks or financial institutions on the basis of securityof current assets and the quarterly returns or statements filed by the Company with suchbanks or financial institutions are in agreement with the books of account of the Company.
(iii) According to the information and explanations given to us during the year theCompany has neither made any investments in companies firms Limited LiabilityPartnerships nor granted unsecured loans to other parties. Further the Company has notprovided any guarantee or security or granted any advances in the nature of loans securedor unsecured to companies firms Limited Liability Partnerships or any other parties.Hence reporting under clause 3(iii) (iii)(a) (iii)(b) (iii)(c) (iii)(d) (iii)(e) and(iii)(f) of the Order is not applicable.
(iv) According to the information and explanations given to us the Company has notgranted any loans made investment or provided guarantee which are covered by theprovisions of Sections 185 and 186 of the Companies Act 2013. Hence reporting underClause 3(iv) of the Order is not applicable.
(v) The Company has not accepted any deposits or amounts which are deemed to bedeposits from the public. Accordingly Clause 3(v) of the Order is not applicable.
(vi) The Cost records prescribed under Section 148(1) of the Act are not applicable tothe Company and hence Clause 3(vi) of the Order is not applicable.
(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company has generally been regular indepositing undisputed statutory dues including Goods and Services Tax Provident FundEmployees' State Insurance Income Tax Sales Tax Custom duty Excise duty Value AddedTax Cess and other statutory dues as applicable with the appropriate authorities. Therewere no undisputed amounts payable in respect of Goods and Services Tax Provident FundEmployees' State Insurance Income tax Sales Tax Customs Duty Excise Duty Value AddedTax Cess and other statutory dues in arrears as at March 312022 for a period of morethan six months from the date they became payable.
(b) According to information and explanations given to us and the records of theCompany examined by us in our opinion there were no dues which have not been depositedin respect of statutory dues referred to in sub-clause (a) above on account of any disputeexcept as mentioned below:
|Name of Statute ||Nature of Dues ||Amount (Rs) ||Period to which the amount relates ||Forum where dispute is pending |
|Sales Tax Act ||Sales Tax in Various States ||67754627 ||2005-06 to 2007-08 2009-10 2010-11 2017-18 ||Joint Commissioner (Appeals) Maharashtra Sales Tax Tribunal and JC Appeal Mumbai |
(viii) There were no transactions relating to previously unrecorded income that havebeen surrendered or disclosed as income during the year in the tax assessments under theIncome Tax Act 1961 (43 of 1961).
(ix) (a) The Company has not defaulted in repayment of loans or other borrowings or inthe payment of interest thereon to any lender.
(b) The Company has not been declared wilful defaulter by any bank or financialinstitution or government or any government authority.
(c) The Company has not taken any term loan during the year and there are nooutstanding term loans at the beginning of the year and hence reporting under clause3(ix)(c) of the Order is not applicable.
(d) On an overall examination of the financial statements of the Company funds raisedon short-term basis have prima facie not been used during the year for long-termpurposes by the Company.
(e) On an overall examination of the financial statements of the Company the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiaries.
(f) According to the information and explanations given to us and procedures performedby us we report that the Company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies.
(x) (a) In our opinion and according to information and explanations given to us theCompany has not raised any moneys by way of initial Public Offer or further Public Offer(including debt instruments) during the year. Accordingly Clause 3(x)(a) of the Order isnot applicable.
(b) During the year the Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully or partly or optionally) and hencereporting under clause 3(x)(b) of the Order is not applicable.
(xi) (a) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company noticed or reported duringthe year nor have we been informed of any such case by the Management.
(b) No report under sub-section (12) of Section 143 of the Companies Act has been filedin Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government during the year.
(c) According to information and explanations given to us there were no whistle blowercomplaints received by the Company during the year.
(xii) As the Company is not Nidhi Company the reporting under Clause 3(xii) of theOrder is not applicable.
(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Sections 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.
(xiv) (a) In our opinion and according to the information and explanations given to usthe Company has an internal audit system commensurate with the size and nature of itsbusiness.
(b) The reports of the Internal Auditor for the period under audit have been consideredby us.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected with them and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.
(xvi) (a) The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.
Accordingly the reporting under Clause 3(xvi)(a) of the Order is not applicable to theCompany.
(b) The Company has not conducted non-banking financial / housing finance activitiesduring the year. Accordingly the reporting under Clause 3(xvi)(b) of the Order is notapplicable to the Company.
(c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly the reporting under Clause 3(xvi)(c) ofthe Order is not applicable to the Company.
(d) In our opinion there is no Core Investment Company within the Group (as defined inthe Core Investment Companies (Reserve Bank) Directions 2016) and accordingly reportingunder clause 3(xvi)(d) of the Order is not applicable.
(xvii) The Company has not incurred cash loss during the current financial year or inthe immediately preceding financial year.
(xviii) There has been no resignation of the Statutory Auditors of the Company duringthe year.
(xix) On the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the Board of Directors and Management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.
(xx) (a) There is no unspent amount towards Corporate Social Responsibility (CSR)requiring a transfer to a fund specified in Schedule VII to the Companies Act 2013 incompliance with second proviso to Sub-section (5) of Section 135 of the Companies Act2013. Accordingly reporting under Clause 3(xx)(a) of the Order is not applicable.
(b) There is no unspent amount in respect of ongoing projects of CSR under Sub-section(5) of Section 135 of the Companies Act 2013 requiring a transfer to a special account incompliance with second proviso to Sub-section (6) of Section 135 of the Companies Act2013. Accordingly reporting under Clause 3(xx)(b) of the Order is not applicable.
Annexure "B" to the Independent Auditors' Report
(Referred to in Paragraph 2 (f) under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even 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 VinylChemicals (India) Limited ("the Company") as of March 312022 in conjunctionwith our audit of the financial statements of the Company for the year ended on 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 control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to 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 Companies Act 2013.
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 to the extent applicable toan audit of internal financial controls both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 control system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing 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 judgement 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 internal financial control systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
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 (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 authorisations ofManagement and Directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 internal financial controls over financialreporting including the possibility of collusion or improper Management 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 to the best of information and explanations given to us the Companyhas in all material respects an adequate internal financial control system overfinancial reporting and such financial controls over financial reporting are operatingeffectively as at March 312022 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.
| ||For Khanna & Panchmia |
| ||Chartered Accountants |
| ||Firm Reg. No. 136041W |
| ||Devendra Khanna |
| ||Partner |
|Place : Mumbai ||Membership No. 038987 |
|Date : 16th May 2022 ||UDIN #22038987AJBADN7189 |