To the Members of Kilburn Chemicals Limited Report on the Audit of the Financial
Statements Opinion
We have audited the accompanying Financial Statements of Kilburn Chemicals Limited
("the Company"), which comprise of the Balance Sheet as at 31st
March, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the
Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that
date and notes to the financial statements, including a summary of the significant
accounting policies and other explanatory information (hereinafter referred to as
"Financial Statements").
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Financial Statements give the information required by the
Companies Act, 2013 ("the Act") in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards prescribed under Section 133
of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;
(IND AS) and other accounting principles generally accepted in India, of the state of
affairs of the Company as at 31st March, 2022, its profit (including Other
Comprehensive Income), changes in equity 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 Auditors
Responsibilities for the Audit of the 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 ("ICAI") together with the ethical
requirements that are relevant to our audit of the Financial Statements under the
provisions of the Act and the Rules made thereunder 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 on the financial statements.,
Emphasis of Matter
A.We draw attention to Note No. 33 of the financial statements, with regard to the
approved Resolution Plan vide Order of Honble National Law Company Tribunal (NCLT) dated
16th December, 2021, in accordance with which the management is required to
take necessary steps to resume operations of the Company.
B.We draw attention to Note No. 33(e) of the financial statements, regarding the
exceptional items which includes Rs. 3,059.23 Lakhs for impairment and adjustments of
Property, Plant and Equipments, Intangible Assets, Capital Work in progress, Inventories,
Financial and other Current and Non-Current Assets on the basis of managements internal
assessments upon which reliance has been placed by us.
Our Opinion is not modified in respect of the above matter,
Information Other than the Financial Statements and Auditors Report Thereon
The Companys management is responsible for the preparation of the other information.
The other information comprises the information included in the Management Discussion and
analysis; Managements Report including Annexure to Managements Report, Corporate
Governance and Shareholders Information but does not include the Financial Statements and
our Auditors Report thereon.
Our opinion on the Financial Statements does not cover the other information and we do
not express any form of assurance or 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 Financial Statements or our knowledge obtained during the
course of our audit, or otherwise appears to be materially misstated. After going through
the other information identified as such, if we conclude that there is a material
misstatement, we are required to communicate the matter to those charged with governance.
Responsibilities of Management and those charged with governance for the Financial
Statements
The Corporate Insolvency Resolution Process (CIRP) initiated on 10th August, 2020 under
Insolvency and Bankruptcy Code, 2016 by Honble National Company Law Board Tribunal (NCLT)
has been completed and order for approving the Resolution Plan (ARP) submitted by Meghmani
Organics Limited (MOL) was passed on 16th December, 2021 by NCLT (NCLT Order). Till the
date of the Order, the management of the Company was vested with the Resolution
Professional (RP) and thereafter with the Monitoring Committee till 23rd
December, 2021. The Board of the Company was reconstituted on 23rd December,
2021.
The Company management as stated above and the Board of Directors are responsible for
the matters stated in Section 134(5) of the Act with respect to the preparation of these
Financial Statements that give a true and fair view of the financial position, financial
performance, total comprehensive income, changes in equity and cash flows and of the
Company in accordance with the Indian Accounting Standards specified under Section 133 of
the Act and other accounting principles generally accepted in India. This responsibility
also includes maintenance of adequate accounting records in accordance with the provisions
of the Act for safeguarding 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 financial statements that give a true and fair
view and are free from material misstatement, whether due to fraud or error.
In preparing the Financial Statements, the Board of Directors and Management are
responsible for assessing the Companys 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 management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
The Board of directors is also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the Financial
Statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an Auditors 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 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 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. Under section 143(3)(i)
of the Act, we are also responsible for expressing our opinion on whether the Company has
adequate internal financial controls with reference to financial statements in place and
the operating effectiveness of such controls.
•Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
•Conclude on the appropriateness of managements 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 Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our Auditors Report to the related disclosures in
the 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 Auditors
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 Financial
Statements, including the disclosures, and whether the Financial Statements represent the
underlying transactions and events in a manner that achieves fair presentation.
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
Auditors
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.
Report on Other Legal and Regulatory Requirements
1.As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3
and 4 of the Order 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 best of
our knowledge and belief were necessary for the purposes of our audit;
b.in our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books;
c.the Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive
Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by
this Report are in agreement with the books of account;
d.in our opinion, the aforesaid Financial Statements comply with the IND AS specified
under Section 133 of the Act;
e.On the basis of the written representations received from the directors appointed as
on 31st March, 2021 and taken on record by the Board of Directors, none of the
directors were disqualified as on 31st March, 2021, from being appointed as a
director in terms of Section 164(2) of the Act. On the basis of the written
representations received from the directors appointed subsequent to the Corporate
Insolvency Resolution Process (CIRP), as on 31st March, 2022 and taken on
record by the Board of Directors, none of the directors is disqualified as on 31st
March, 2022 from being appointed as a director in terms of Section 164(2) of the Act. No
further representations were received during the year till their retirement regarding any
disqualification from being appointed as a director in terms of Section 164(2) of the Act.
f.with respect to the adequacy of the internal financial controls with reference to
financial
statements of the Company and the operating effectiveness of such controls, refer to
our separate report in "Annexure B"; and
g.with respect to the other matters to be included in the Auditors Report in
accordance with the requirements of section 197 (16) of the Act, the Company has not paid
any managerial remuneration as per Section 197 read with Schedule V to the Act.
h.with respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion
and 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 financial position
in its Financial Statements;
ii.the Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses; and
iii.there is no amount which is required to be transferred to the Investor Education
and Protection Fund by the Company in accordance with the relevant provisions of the Act
and the Rules made there under.
For V. SINGHI & ASSOCIATES Chartered Accountants Firm Registration
/Vo.:311017E
|
(V.K. SINGHI) |
| Place: Kolkata |
Partner |
| Date:29th April, 2022 |
Membership No. 050051 |
|
UDIN No. 22050051AIDJOI2973 |
Annexure A to the Independent Auditors Report
(Referred to in Paragraph-1 on Other Legal and Regulatory Requirements of our Report of
even date to the members of Kilburn Chemicals Limited on the financial statements for the
year ended 31st March, 2022)
i.a) The Company is maintaining proper records showing full particulars including
quantitative details and situation of its Property, Plant and Equipment.
b)As explained to us, Property, Plant and Equipment have been physically verified by
the Management at regular intervals and as informed to us, discrepancies noticed in
Property, Plant and Equipment for Rs. 83.75 lakhs and Intangible Assets for Rs. 9.52 lakhs
have been adjusted during the year.
c) According to the information and explanations given to us and based on the
examination of books and records, we report that the title deeds of immovable property and
lease agreement in respect of leasehold land disclosed in the financial statements are
held in the name of the Company.
d)As informed to us the company has not revalued its Property, Plant and Equipment
(including Right of Use assets) or intangible assets or both during the year.
e)As informed to us, the Company does not hold any Benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
ii.a) According to the information and explanations given to us, physical verification
of inventory has been conducted at reasonable intervals by the management and, in our
opinion and to the best of our knowledge, the coverage and procedure of such verification
by the management is appropriate. As explained to us, the discrepancies of Rs. 471.28
lakhs noticed on verification between the physical inventories and book records have been
properly dealt with in the books of account.
b)The Company was under Corporate Insolvency Resolution Process (CIRP) and vide Order
of Honble National Company Law Board Tribunal (NCLT) dated 16th December,
2021, the working capital limits from the banks have since been settled. Hence, no
quarterly returns or statements have been filed by the company with such banks or
financial institutions.
iii.According to the information and explanations given to us, the Company has not made
investments in, not provided any guarantee or security or granted any loan, secured or
unsecured, during the year, to companies, firms, Limited Liability Partnerships or any
other parties covered in the register maintained under Section 189 of the Act, except
unsecured loan of Rs. 276.57 Lakhs given to a Company in earlier years, which has been
settled in the Corporate Insolvency Resolution Process.
iv.According to the information and explanations given to us and on the basis of the
books and records examined by us, we report that the Company has complied with the
provisions of sections 185 and 186 of the Act with respect to the loans given, investments
made and security provided.
v.According to the information and explanations given to us, the Company has not
accepted any deposits from the public during the year within the meaning of sections 73 to
76 of the Act and the rules framed thereunder to the extent notified.
vi.According to the information and explanations given to us, the Central Government
has not prescribed the maintenance of cost records under section 148(1) of the Act in
respect of services carried out by the Company. Accordingly, clause 3(vi) of the Order is
not applicable.
vii.According to the information and explanations given to us in respect of statutory
dues :
a)The Company was regular in depositing undisputed statutory dues including Goods and
Services Tax, Provident Fund, Tax Deducted at Source (Income Tax) & Professional Tax
and any other statutory dues with the appropriate authorities except for the following:
| Name of Statute |
Nature of Dues |
Amount (Rs.) |
Period to which the amount Relates |
Remarks |
| The Employees Provident Funds And Miscellaneous Provisions Act, 1952 |
Provident Fund |
75,000 |
F.Y 2021 - 22 |
As per NCLT Order dated 16th December, 2021 |
b)There were no arrears in undisputed amounts payable in respect of Tax Deducted at
Source (Income Tax) and other statutory dues as at 31st March, 2022 for a period of more
than six months from the date the same became payable except for the following:
| Name of Statute |
Nature of Dues |
Amount (Rs.) |
Period to which the amount pertains |
| Income Tax Act, 1961 |
Income Tax as per NCLT Order dated 16th December, 2021 |
5,25,000 |
A.Y. 2012-13 A.Y. 2013-14 A.Y. 2014-15 |
viii.In our opinion, there are no transactions recorded in the books of account that
have been surrendered or disclosed as income during the year in the tax assessments under
the Income Tax Act, 1961 (43 of 1961).
ix.a) In our opinion and according to the information and explanations given to us, the
Company has settled its liabilities for repayment of loans or other borrowings or in the
payment of interest thereon to its lender under CIRP vide order of the NCLT dated 16th
December, 2021.
| Particulars |
Amount of Default (Rs. Lakhs) |
Period |
Closing balance |
| Bank Of Baroda |
10,503.75 |
From October, 2018 to March, 2021 |
Nil |
| State Bank of India |
10,455.08 |
From October, 2018 to March, 2021 |
Nil |
b)According to the information and explanations given to us, the company is not
declared as wilful defaulter by any bank or financial institution or other Lender.
c)According to the information and explanations given to us and based on our
examination of the books and records, we report that the Company had not availed any loans
during the year. Accordingly, clause 3(ix)(c) of the Order is not applicable.
d)According to the information and explanations given to us and based on our
examination of the
books and records, we report that the Company had not availed any loans during the
year. Accordingly, clause 3(ix)(d) of the Order is not applicable.
e)According to the information and explanations given to us, the company has not taken
any funds from any entity or person on account of or to meet the obligations of its
subsidiaries, associates or joint ventures.
f)According to the information and explanations given to us, the company has not raised
loans during the year on the pledge of securities held in its subsidiaries, joint ventures
or associate companies.
x.a) According to the information and explanations given to us and based on our
examination of the books and records, the Company has not raised money by way of initial
public offer or further public offer (Including debt instruments) during the year.
Accordingly, clause 3(x)(a) of the Order is not applicable.
b) According to the information and explanations given to us, the company was under
Corporate Insolvency Resolution Process (CIRP) and as per the resolution plan approved
vide NCLT Order dated 16th December, 2021, it has issued 1,21,50,000 Equity
shares amounting to Rs. 12,15,00,000 to the successful resolution applicant, Meghmani
Organics Limited, and its nominees on preferential basis. Further, Unsecured Perpetual
Security, in the nature of equity, of Rs. 1,23,26,00,000 has been issued to Meghmani
Organics Limited for the amounts received from them during the year.
xi.a) According to the information and explanations given to us, no fraud by the
company or any fraud on the company has been noticed or reported during the course of our
audit.
b)According to tire information and explanations given to us and based on our
examination of the books and records, we are in the opinion that no report under
sub-section (12) of section 143 of the Companies Act need to be filed by us in Form ADT-4
as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central
Government.
c)According to the information and explanations given to us, no whistle- blower
complaints were received by the Company during the year.
xii.According to the information and explanations given to us, the Company is not a
Nidhi Company.
Accordingly, clause 3 (xii) of the Order is not applicable.
xiii.According to the information and explanations given to us and based on our
examination of the books and records, we report that there has been no transaction with
the related parties as per sections 177 and sections 188 of the Act.
xiv.According to the information and explanations given to us and based on our
examination of the books and records, the company has an internal audit system that
commensurate with the size and nature of its business. The Internal Auditors report were
considered by the Statutory Auditors.
xv.According to the information and explanations given to us and based on our
examination of the books and records, we report that the Company has not entered into any
non-cash transactions with directors or persons connected with him during the year.
Accordingly, Clause 3 (xv) of the Order is not applicable.
xvi.In our opinion, considering the financial statements, the Company is not required
to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly,
clause 3(xvi) of the Order is not applicable.
xvii.According to the information and explanations given to us, the company had
incurred cash losses in the financial year ended on 31st March, 2022 of Rs.
1,597.13 lakhs (31st March, 2021 - Rs. 441.43 lakhs.)
xviii.There has been no resignation of the statutory auditors during the year.
Accordingly, Clause 3 (xviii) of the Order is not applicable.
xix.According to the information and explanations given to us and based on our
examination of the
books and records, financial ratios, ageing and expected dates of realisation of
financial assets and payments of financial liabilities, our knowledge of Board of
Directors and management plans, we are of the opinion that no material uncertainty exists
on the date of audit report on the Companys ability of meetings its liabilities existing
at the Balance Sheet as and when they fall due within a period of one year from the
Balance Sheet date.
xx.According to the information and explanations given to us and based on our
examination of the books and records, section 135 of the Companies Act, 2013 is not
applicable to the company. Accordingly, Clause 3 (xx) of the Order is not applicable.
xxi.According to the information and explanations given to us and based on our
examination of the books and records, clause 3(xxi) of the Order is not applicable to the
Company.
For V.SINGHI & ASSOCIATES Chartered Accountants Firm Registration
No.: 311017E
|
(V. K. SINGHI) |
| Place: Kolkata |
Partner |
| Date: 29th April, 2022 |
Membership No. 050051 |
|
UDIN No. 22050051AIDJ012973 |
Annexure - B to the Independent Auditors Report
(Referred to in paragraph-2(g) on Other Legal and Regulatory Requirements of our Report
of even date to the members of Kilburn Chemicals Limited on the Financial Statements for
the year ended 31st March, 2022)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls with reference to financial statements
of Kilburn Chemicals Limited ("the Company") as of 31st March, 2022
in conjunction with our audit of the Financial Statements of the Company for the year
ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal financial controls with reference to financial
statements 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 (TCAI).
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 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.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls with reference to financial statements based on our audit. We conducted our audit
in accordance with the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued
by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent
applicable to an audit of internal financial controls with reference to financial
statements both applicable to an audit of Internal Financial Controls and, issued by the
Institute of Chartered Accountants of India. 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 controls with reference to
financial statements
were established and maintained and whether 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 with reference to financial statements and their operating
effectiveness. Our audit of internal financial controls with reference to financial
statements included obtaining an understanding of such internal financial controls,
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 with
reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A companys internal financial control with reference to financial statements 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 controls
with reference to financial statements includes those policies and procedures that (1)
pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) 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 (3) 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 with reference to Financial
Statements
Because of the inherent limitations of internal financial controls with reference to
financial statements 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 with
reference to
financial statements to future periods are subject to the risk that the internal
financial control with reference to financial statements 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, the Company has, in all material respects, an adequate internal
financial controls system with reference to financial statements and such internal
financial controls were operating effectively as at 31st March, 2022, based on
the internal financial controls with reference to financial statements criteria
established by the Company considering the essential components of internal controls
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting issued by the Institute of Chartered Accountants of India.
Other Matter
Reliance has been placed on the managements contention and procedures followed for
testing the controls and forming an opinion on the matters for the discrepancies noticed
on physical verification of fixed assets and inventories and adjustments made in Financial
and other Non-Current and Current Assets as stated in Note No. 33(e) of the financial
statements.
For V. SINGHI & ASSOCIATES Chartered Accountants Firm Registration No.:311017E
|
(V. K. SINGHI) |
| Place: Kolkata |
Partner |
| Date: 29th April, 2022 |
Membership No.050051 |
|
UDIN No. 22050051AIDJOI2973 |
+91-9892691696
