To
The Members of
Shree Hari Chemicals Export Ltd.
Report on Ind AS Financial Statements Opinion
We have audited the accompanying Ind AS financial statements of Shree Hari Chemicals
Exports Ltd. (the "Company"), which comprise of the Balance Sheet as at
March 31, 2023, the Statement of Profit and Loss, the Statement of Changes in Equity and
Statement of Cash Flows for the year then ended, and a summary of significant accounting
policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Ind AS financial statements give the information required by
the Act in the manner so required and give a true and fair view in conformity with the
Indian Accounting Standards prescribed under the 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 March 31, 2023, the loss and total comprehensive income, changes in equity
and its cash flows for the year ended on that date.
Basis of Opinion
We conducted our audit of the financial statements in accordance with the Standards on
Auditing ("SA"s) specified under section 143(10) of 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 ICAIs Code of
Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.
Key Audit Matters
Inventory Valuation
H-acid and chemical based inventory forms a significant part of the Companys inventory
of which prices are fluctuating in nature and also depends on prices, decisions and
conditions of other countries.
Inventories are valued at lower of cost and net realisable value except raw materials,
work-in progress&stores.
Auditors response
Our audit procedures over inventory valuation included the following:
Testing the design, implementation and operating effectiveness of key internal
financial controls, including controls overvaluation of inventory.
• Testing on a sample basis the accuracy of cost for inventory by verifying the
actual purchase cost. Testing the net realizable value by comparing actual cost with most
recent selling price.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual Report, but does not include
the financial statements and our auditors report thereon. The Annual Report is expected
to be made available to us after the date of this auditors report.
Our opinion on the financial statements does not cover the other information and we
will 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 identified above when it becomes available and, in doing so,
consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated
If based on the work we have performed, we conclude that there is material misstatement
of this other information, we are required to report that fact. We have nothing to report
in this regard.
Responsibility of Management for the Ind AS Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these Ind AS Financial Statements that give a true and fair view of the financial
position, profit/loss (including other comprehensive income), changes in equity and cash
flows of the Company in accordance with the accounting principles generally accepted in
India, including the Indian Accounting Standards (Ind AS)
FINANCIAL
STATEMENTS
61
specified under Section 133 of the Act, read with Rule 4 of the Companies (Ind AS)
Rules, 2015. 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 Ind AS 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, management is 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 management
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 companys financial
reporting process.
Auditors Responsibilities for the Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS 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 Ind AS 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 Ind AS 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, orthe 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)(l) ?f
the Companies Act, 2013, we are also responsible for expressing our opinion on whether the
company has 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 Ind AS 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. Flowever, 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 Ind AS financial
statements, including the disclosures, and whether the Ind AS financial statements
represent the underlying transactions and events in a mannerthat achieves fair
presentation.
Materiality is the magnitude of 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 and qualitative 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
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
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
Companies Act, 2013, we give in the Annexure- A, a statement on the matters specified in
paragraphs 3 and 4 of the Order to the extent applicable.
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 forthe 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 appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, the Statement of Cash Flow and the Statement of Changes in Equity dealt with by
this Report are in agreement with the books of account;
d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014;
e) On the Basis of written representations received from the Directors as on 31st
March, 2023 and taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2023, from being appointed as a Directors in terms of
sectionl 64(2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial
reporting of the company and the operating effectiveness of such controls, refer to our
separate report in Annexure "B.
g) With respect to the other matters to be included in the Auditors Report and to our
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 Ind AS financial statements in Note No. 33.15
ii. The Company did not have any long-term contracts including derivatives contracts
for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
iv. a) The Company has represented that no funds have been advanced or loaned or
invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the company to or in any other persons or entities, including foreign entities
("Intermediaries”), with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
Company ("Ultimate Beneficiaries") or provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries other than those disclosed in the notes to
accounts.
b) The Company has represented that no funds have been received by the company from any
persons or entities, including foreign entities ("Funding Parties"), with the
understanding, whether recorded in writing or otherwise, that the Company shall, whether,
directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries other than those disclosed in the notes to accounts.
c) Based on audit procedures considered reasonable and appropriate in the
circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub clause (a) and (b) above contain any material misstatement.
v. The company has not declared and paid any dividend during the financial year
accordingly the provisions of section 123 is not applicable.
For Kailash Chand Jain & Company Chartered Accountants
FRN: 112318W
Yash Singhal
Partner
M. No. 157392
UDIN: 23159392BGWVQA5365
Date: May 25,2023
Place: Mumbai
ANNEXURE -A
Annexure-A to the Independent Auditors Report "Annexure A" to the
Independent Auditors Report to the members of the company on the Ind AS financial
statements for the year ended March 31,2023 we report that:
i. (a) The Company has maintained proper records showing full particulars,
including quantitative details and
situation of its Property, Plant & Equipment and Intangible Assets;
(b) The Company has regular programme of physical verification of its PPE. As per
information and explanation given to us no material discrepancies were noticed on such
verification.
(c) The title deeds of Immovable properties are held in the name of the company.
(d) The Company has not revalued its Property, Plant & Equipment and Intangible
Assets during theyear.
(e) According to information provided by the management no proceedings have been
initiated or are pending against the company for holding any Benami property underthe
Benami Transactions (Prohibition) Act, 1988.
ii. (a) According to information and explanation provided by the management,
physical verification of inventory has
been conducted at reasonable intervals by the management and no material discrepancies
were noticed on such verification which in our opinion is reasonable having regards to
size of the Company and nature of its assets.
(b) The company has been sanctioned working capital limits in excess of five
crores, in aggregate, from banks or financial institutions on the basis of security of
current assets and the quarterly/monthly returns or statements filed by the company with
such banks or financial institutions are in agreement with the books of account of the
company.
iii. According to the information and explanations given to us, the Company has not
granted any loans and advances in the nature of loans secured or unsecured, to companies,
firms, Limited Liability Partnerships or any other parties accordingly this clause is not
applicable to the company.
iv. In our opinion and according to the information and explanations given to us,
the company has complied with the provisions of section 185 and 186 of the Companies Act,
2013 in respect of loans, investments, guarantees, and security.
v. The Company has not accepted any deposits, hence the directives issued by the
Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant
provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to
the deposits accepted from the public are not applicable.
vi. We have broadly reviewed the books of account and records maintained by the
Company pursuant to the rules prescribed by the Central Government of India, the company
is required to maintain cost records as specified under section 148(1) of the Companies
Act, 2013 in respect of its products. We have broadly reviewed the same and are of the
opinion that prima facie, the prescribed accounts and records have been made and
maintained. The contents of these accounts and records have not been examined by us.
vii. (a) According to the information and explanations given to us and the records
of the Company examined by us, in our opinion, the company is generally regular in
depositing the undisputed statutory dues including provident funds, goods and service tax
and other material statutory dues applicable with the appropriate authorities. According
to the Information and explanation given to us, no undisputed amounts payable in respect
of the aforesaid dues were outstanding as at March 31,2023, for the period of more than
six months from the date becoming payable except the following.
Particulars |
Amount (Rs.) |
TDSas per Traces |
1,84,594 |
36lh Annual Report 2022-23
(b) According to the information and explanations given to us, the details of statutory
dues of income tax, sales tax, service tax or custom duty, excise duty or value added tax,
which have not been deposited on account of appeal are given as under.
Name of the Statue |
Nature Dues |
Amount (Rs.) |
Period to which it pertains |
Forum in which Dispute is Pending |
Central Excise Act,1944 |
Excise |
2,18,539 |
2005-06 |
Assistant Commissioner of Central Excise |
Customs Act,1962 |
Excise |
7,40,817 |
2004-05 |
Assistant Commissioner of Customs |
Central Excise Act,1944 |
Excise |
3,08,147 |
2010-11 |
Assistant Commissioner of Central Excise |
viii. As per the information and explanations given to us, the company has not
disclosed or surrendered any undisclosed income during the year, therefore this clause is
not applicabletothe company.
ix. (a) According to the records of the company examined by us, and information and
explanations given to us the
company has not defaulted in repayment of dues to any Financial Institution as at the
balance sheet date.
(b) Company has not been declared a wilful defaulter by any bank or financial
institution or any other lender.
(c) According to the records of the company examined by us, company has utilised the
term loan towards the purpose for which it was obtained.
(d) According to the records of the company examined by us, the company has not
utilised any short term borrowing for long term purpose.
(e) The company has not raised any money from any person or entity for the account of
or to pay the obligations of its associates, subsidiaries or joint ventures, therefore
this clause is not applicable to company.
(f) The company has not raised any loans during the year by pledging securities held in
their subsidiaries, joint ventures or associate companies. Therefore this clause is not
applicable to company.
x. (a) The company has not raised moneys by way of initial public offer or further
public offer including debt
instruments. Accordingly, the provisions of clause 3 (x) of the Order are not
applicable to the Company.
(b) The company has not made any preferential allotment or private placement of shares
or convertible debentures (fully, partially or optionally convertible) during the year and
hence this clause is not applicable to the company.
xi. (a) According to information and explanations given to us there were no frauds on
the Company by its officers or
employees noticed or reported by the management fortheyear under review.
(b) No auditors of the company have filed a report in Form ADT-4 with the Central
Government as prescribed under the Companies (Audit and Auditors) Rules, 2014. Therefore
this clause is not applicable to company.
(c) There are no whistle-blower complaints; therefore this clause is not applicable to
the company.
xii. According to the information and explanations given to us the Company is not a
Nidhi Company hence clause 3(xii) of the order is not applicable.
xiii. According to the explanations and information given to us, all the transactions
of the related parties at the Company, for the year under review are in compliance with
Section 177 and 188 of the Companies Act, 2013 and the details of the same have been
disclosed in the Ind AS financial statements as required by the applicable Indian
accounting standards.
xiv. According to the explanations and information given to us, company have an
internal audit system which is commensurate with its size and business activities and
report of the internal auditor has been taken into consideration.
xv. According to the information and explanation given to us the Company has not
entered into any non cash transaction with directors or persons connected with him as per
provisions of Section 192 of the Companies Act, 2013.
xvi. The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act, 1934 and hence clause 3(xvi) of the order is not applicable.
xvii. According to the explanations and information given to us, company has not
incurred any cash losses in the financial year and in the immediately preceding financial
year.
xviii. There has been no resignation of statutory auditor during the year, and hence
this clause is not applicable to the company.
xix. According to the explanations, information given to us and on evaluation of ageing
reports, financial ratios and expected dates of realisation of financial assets and
payment of financial liabilities, other information accompanying the financial statements,
the auditors knowledge of the Board of Directors and management plans, we are of the
opinion that no material uncertainty exists as on the date of the audit report that
company is capable of meeting its liabilities existing at the date of balance sheet as and
when they fall due within a period of one year from the balance sheet date.
xx. According to the explanations, information given to us there is no unspent amount
of CSR to be transfer to Fund specified in Schedule VII to the Companies Act. Therefore
this clause is not applicabletothe company.
xxi. According to the explanations, information given to us, the company does not
prepare consolidated financials since it does not have any subsidiary, associate or joint
venture and therefore this clause is not applicabletothe company.
For Kailash Chand Jain & Company Chartered Accountants
FRN: 112318W
Yash Singhal
Partner
M. No.157392
UDIN: 23159392BGWVQA5365
Date: May 25,2023
Place: Mumbai
Annexure -B
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON FINANCIAL STATEMENTS OF
SHREE HARI CHEMICALS EXPORT LIMITED
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 over financial reporting of SHREE HARI
CHEMICALS EXPORT LIMITED ("the Company") as of March 31,2023 in conjunction with
our audit of the Ind AS 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 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".
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 Companies Act, 2013.
Auditors 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 Financial Controls Over Financial Reporting
(the "Guidance Note") and the Standards on Auditing, issued by ICAI 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 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 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 judgement, 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 system
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 (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 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, the Company, has in all other material respects has, 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 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.
For Kailash Chand Jain & Company
Chartered Accountants
FRN:112318W
Yash Singhal
Partner M.No. 159392
UDIN: 23159392BGWVQA5365
Date: May 25,2023
Place: Mumbai
+91-9892691696
