To
The Board of Directors CHD Chemicals Limited Plot No. 331,
Industrial Area, Phase II Panchkula.
Report on Financial Statements Opinion
We have audited the accompanying Standalone Financial Statement of CHD Chemicals
Limited("the Company") which comprises the Balance Sheet as at March 31, 2023,
the Statement of Profit and Loss, the cash flows for the year ended on that date, and
notes to the financial statements, including a summary of significant accounting policies
and other explanatory information (hereinafter referred to as "the financial
statements")., being submitted by the company pursuant to the requirement of
Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, as amended ("Listing Regulations").
In our opinion and to the best of our information and according to the explanations
given to us the aforesaid financial statements:
i. are presented in accordance with the requirements of Regulation 33 of the Listing
Regulations in this regard; and
ii. give a true and fair view in conformity with the recognition and measurement
principles laid down in the applicable accounting standards and other accounting
principles generally accepted in India of the state of the affairs of the Company as at
March 31, 2023, its profit and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013 (the Act). Our responsibilities under
those Standards are further described in the Auditor’s Responsibilities for the Audit
of the Standalone Financial Statements section of our 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 ethical requirements that are relevant to our audit
of the financial results under the provisions of the Companies Act, 2013 and the Rules
there under, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
Without qualifying our opinion, we draw attention that:
1. The Company has slow moving trade receivables, details to which has been mentioned
in notes to accounts point 2.3(d), management is of opinion that the same are recoverable.
2. The Company has provided interest free loans & advances to some employees and
parties. Following are the parties/employees:
i. Ajay Kapoor
ii. Buta Singh
iii. Barnala Godown Constuction
iv. Neeraj Jindal & Associates
v. Pankaj Narula
vi. Satyaveer Singh Kothari
vii. Satyaveer Kothari & sons huf
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have nothing to report in this regard.
Information other than the financial statements and auditors’ report thereon
The Company’s board of directors is responsible for the preparation of the other
information. The other information comprises the information included in the Board’s
Report including Annexure to Board’s Report, Business Responsibility Report but does
not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the standalone financial statements or our knowledge obtained
during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report
in this regard.
Management’s Responsibilities for the Standalone Financial Statements
The Company’s Board of Directors are responsible for the preparation of these
financial results that give a true and fair view of the net profit/loss and other
comprehensive income and other financial information in accordance with the recognition
and measurement principles laid down in Indian Accounting Standard 34, ‘Interim
Financial Reporting’ prescribed under Section 133 of the Act read with relevant rules
issued there under and other accounting principles generally accepted in India and in
compliance with Regulation 33 of the Listing Regulations. This responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the standalone financial results that give a true
and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Standalone Financial Statements, the Board of Directors are
responsible for assessing the Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the Company
or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company’s financial
reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Results
Our objectives are to obtain reasonable assurance about whether the Standalone
Financial Statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Standalone
Financial Statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the Board of Directors.
• Conclude on the appropriateness of the Board of Directors’ use of the going
concern basis of accounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial results 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’s report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone
financial results, including the disclosures, and whether the financial results represent
the underlying transactions and events in a manner that achieves fair presentation.
• Materiality is the magnitude of the misstatements in the financial statements
that individually or in aggregate makes it probable that the economic decisions of a
reasonably knowledgeable user of the financial statements may be influenced. We consider
quantitative materiality factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the effect of any identified
misstatements in the financial statements.
• We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our
audit.
• We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards. From the matters communicated
with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Annexure A to Independent Auditor’s Report
Referred to in our Independent Auditors Report of even date to the members of CHD
Chemicals Limited on the financial statements as of and for the year ended March 31, 2023,
we report the following:
i (a) The company has maintained proper records showing full particulars, including
quantitative details and situation, of Property Plant and Equipment.
(b) The Property Plant and Equipment were physically verified by the Management during
the year in accordance with a regular verification programme which, in our opinion
provides for physical verification of all the Property Plant and Equipment at reasonable
interval. According to information and explanations given to us, no material discrepancies
have been noticed on such verification.
(c) In our opinion and according to information and explanations given to us and on the
basis of an examination of the records of the Company, the title deeds of immovable
properties included in Property Plant and Equipment are held in the name of the Company.
ii. The physical verification of inventory except stocks in transit has been conducted
at reasonable intervals by the Management during the year. The discrepancies noticed on
physical verification of inventory as compared to book records were not material and have
been dealt with in books of account. However in respect of certain items, the inventories
were verified by the management on a visual estimation which has been relied upon by us.
iii. The company has not granted any loans, secured or unsecured, to companies, firms,
Limited Liability Partnership or other parties covered in the register maintained under
Section 189 of the Act. Accordingly the provisions of clause 3(iii) (a), (b) and (c) of
the Order are not applicable to the Company.
iv. The company has given a Guarantee of 2.5 crore to Axis Bank Limited on behalf of
Huntsman International (India) Private Limited, Light hall and has been made during the
year under the provisions of Section 185 and 186 of the Companies Act, 2013. Accordingly
the provisions of clause 3 (IV) of the said Order are applicable to the Company.
v. In our opinion and according to information and explanations given to us the company
has not accepted any deposit from the public within the meaning of Sections 73 to 76 of
the Act or any other relevant provisions of the Act and the Rules framed thereunder.
Accordingly paragraph 3(v) of the Order is not applicable to the Company.
vi. Pursuant to the rules by the Central Government of India, the Company is not
required to maintain cost records as specified under Section 148 (1) of the Act in respect
of its products.
vii. (a) According to the information and explanations given to us and the records of
the Company examined by us, in our opinion, amounts deducted/accrued in the books of
account in respect of the undisputed statutory dues, including Provident Fund,
Employees’ State Insurance, Income Taxes, Goods and Service Tax, Duty of Customs and
other material statutory dues, as applicable, have been regularly deposited during the
year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts
payable in respect of Provident Fund, Employees’ State Insurance, Income Taxes, Goods
and Service Tax, Duty of Customs and other material statutory dues, were in arrears as at
31st March 2023 for a period of more than 6 months from the date they became payable.
(b) According to the information and explanations given to us the records of the
Company examined by us, there are no dues of Income Tax, Goods and Service Tax and Duty of
Custom which have not been deposited on account of any dispute.
viii. According to the records of the Company examined by us and the information and
explanations given to us, the Company has not defaulted in repayment of loans or
borrowings to any financial Institution or bank. The Company does not have any loans and
borrowings from Government. Further, the Company has not issued any debentures.
ix. The Company has not raised any money by way of initial public offer, further public
offer (including debt instruments).
x. To the best of our knowledge and according to the information and explanations given
to us, No material fraud by the Company or on the Company by its officers or employees,
noticed or reported during the course of our audit.
xi. In our opinion and according to information and explanations given to us, the
Company has paid/provided for managerial remuneration in accordance with the requisite
approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable
to it, the provisions of Clause 3(xii) of the order are not applicable to the Company.
xiii. In our opinion and according to information and explanations given to us, the
Company has entered into transactions with related parties in compliance with the
provisions of Sections 177 and 188 of the Act, wherever applicable. The details of such
related party transactions have been disclosed in the financial statements as required by
the applicable accounting standards.
xiv. In our opinion and according to information and explanations given to us, the
Company has not made any preferential allotment or private placement of shares or fully or
partly convertible debentures during the year under review. Accordingly, the provisions of
Clause 3(xiv) of the orders are not applicable to the Company.
xv. In our opinion and according to information and explanations given to us, the
Company has not entered into any non-cash transactions with its directors or persons
connected with him. Accordingly, the provisions of Clause 3(xv) of the order are not
applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve
Bank of India Act, 1934. Accordingly, the provisions of Clause 3 (xvi) of the order are
not applicable to the Company.
Annexure B to Independent Auditor’s Report
Referred to in paragraph 2(f) of the Independent Auditors Report of even date to the
members of CHD Chemicals Limited on the financial statements for the year ended March 31,
2023, we report the following:
Report on the Internal Financial Controls over Financial Reporting under Clause (i) of
Subsection 3 of Section 143 of the Act
We have audited the internal financial controls over financial reporting of CHD
Chemicals Limited ("the Company") as at March 31, 2023 in conjunction with our
audit of the financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities
include the design, implementation and maintenance of adequate internal financial controls
that were operating effectively for ensuring the orderly and efficient conduct of its
business, including adherence to respective companys policies, the safeguarding of its
assets, the prevention and detection of frauds and errors, the accuracy and completeness
of the accounting records, and the timely preparation of reliable financial information,
as required under the Act.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Controls Over Financial Reporting ("the
Guidance Note") and the Standards on Auditing, issued by ICAI deemed to be prescribed
under section 143 (10) of the Act, to the extent applicable to an audit of internal
financial controls, both applicable to an audit of internal financial controls and, both
issued by the ICAI. Those standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial control over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls over
financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and
(iii) Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the companys 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 financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, Projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given
to us, the company has, in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2023, based on the internal controls
over financial reporting criteria established by the Company considering the essential
components over internal control stated in the Guidance Note on audit of Internal
Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
| Date: 29thth May, 2023 |
For D S P & ASSOCIATES |
| Place: Ludhiana |
Chartered Accountants |
|
Firm Reg No. - 006791N |
|
Sidharth Gupta |
|
M. No. 541066 |
|
Partner |
+91-9892691696
