To
The Members of
VADIVARHE SPECIALITY CHEMICALS LIMITED
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of VADIVARHE SPECIALITY CHEMICALS
LIMITED which comprise the standalone balance sheet as at March 31, 2023 and the
standalone statement of profit and loss (including other comprehensive income)standalone
statement of changes in equity and standalone statement of cash flows for the year then
ended and notes to the standalone financial statements including a summary of the
significant accounting policies and other explanatory information (herein referred to as
"standalone financial statements").
In our opinion and to the best of our information and according to the explanations
given to us the aforesaid standalone financial statements give the information required by
the Companies Act 2013 ("Act") in the manner so required and give a true and
fair view in conformity with the accounting principles generally accepted in India of the
state of affairs of the Company as at March 31 2023 and profit and 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 Act. Our responsibilities under those SAs are further
described in the Auditors 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 standalone financial statements
under the provisions of the Act 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.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most
significance in our audit of the standalone financial statements of the current period.
These matters were addressed in the context of our audit of the standalone financial
statements as a whole and in forming our opinion thereon and we do not provide a separate
opinion on these matters.
Description of Key Audit Matter
Revenue recognition (refer note 3)
| The Key Audit Matter |
How the matter is addressed in our audit |
|
Our audit procedures included: |
| Revenue is recognised when the control over the underlying products has been
transferred to the customer. |
- Focusing on the Companys revenue recognition for compliance with AS; |
|
- operating effectiveness of the Companys Testing the design, implementation and
manual and automated (Information Technology - IT) controls on recording revenue. We
focused on controls around the timely and accurate recording of sales transactions. |
INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITORS REPORT THEREON
The companys management and board of directors are responsible for the other
information. The other information comprises the information included in the companys
annual report but does not include the financial statements and our auditors report
thereon.
Our opinion on the standalone financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
MANAGEMENTS AND BOARD OF DIRECTORS RESPONSIBILITY FOR THE STANDALONE FINANCIAL
STATEMENTS in connection with our audit of the standalone 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 in the audit or otherwise appears to be the companys management and
board of directors are responsible for the matters stated in section 134(5) of the act
with respect to the preparation of these standalone financial statements that give a true
and fair view of the state of affairs profit and 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) specified
under section 133 of the act.
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 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 and Board of Directors 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 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 Standalone 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 skepticism 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. 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 exist, we are required to draw
attention in our auditors report to the related disclosures in the standalone 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 standalone financial
statements including the disclosures and whether the standalone 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 the mall
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 standalone 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 2020 ("the Order")
issued by the Central Government in terms of Section 143 (11) 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.
(A) 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 standalone balance sheet, the standalone statement of profit and loss (including
other comprehensive income), the standalone statement of changes in equity and the
standalone statement of cash flows dealt with by this Report are in agreement with the
books of account.
d) In our opinion the aforesaid standalone 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 as on April
1 2023 taken on record by the Board of Directors none of the directors is disqualified as
on March 31 2023 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".
(B) 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 as at March 31 2023 on
its financial position in its standalone financial statements;
ii. The Company has made provision as required under the applicable law or accounting
standards for material foreseeable losses if any on long-term contracts including
derivative contracts;
iii. There were no amounts to be transferred to the Investor Education and Protection
Fund by the Company.
IV. The reporting on disclosures relating to Specified Bank Notes Is not applicable to
the company for the year ended on March 31, 2023.
V. (i) In our opinion, according to the information, explanations given to us, no funds
have been advanced or loaned or invested (either from borrowed funds or share premium or
any other foreignsources or entitieskind of ("Intermediaries"),funds) by the
company with theto or understanding,any other person(s)whether recordedntity(ies), in
writingincluding or otherwise, that the Intermediary shall, whether,
(a) 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")
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
Parties"), with the understanding, whether recorded in writing or otherwise, that the
Company received by the company from any person(s) or entity (ies), including foreign
entities. ("Funding (ii) In our opinion, according to the information, explanations
given to us, no funds have been shall, whether,
(a) 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")
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures that have been 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 (i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any material misstatement.
VI. The company has not declared/proposed any interim and final dividend for the year
and previous financial year.
VII. the company has used accounting software for maintaining its books of account
which has a feature of recording audit trail (edit log) facility and the same has been
operated throughout the year for all transactions recorded in the software and the audit
trail feature has not been tampered with and the audit trail has been preserved by the
company as per the statutory requirements for record retention.
(C) With respect to the matter to be included in the Auditors Report under
Section197(16) of the Act: In our opinion and according to the information and
explanations given to us the remuneration paid by the Company to its directors during the
current year is in accordance with the provisions of Section 197 of the Act. The
remuneration paid to any director is not in excess of the limit laid down under Section
197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under
Section 197(16) of the Act which are required to be commented upon by us.
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT MARCH 31ST 2023
With reference to the Annexure A referred to in the Independent Auditors Report to the
members of the
VADIVARHE SPECIALITY CHEMICALS LIMITED on the Standalone Financial Statements for the
year ended March 31, 2023, we report the following:
(I) In respect of companys Property, Plant and Equipment, right-of-use assets and
intangible Assets:
(a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of property, plant and equipment and investment
properties and relevant details of right-of-use assets.
(b) The Company has a programme of physical verification of its property, plant and
equipment and investment properties by which the property, plant and equipment and
investment properties are verified by the management according to a phased programme
designed to cover all the items over a period of three years. In our opinion, this
periodicity of physical verification is reasonable having regard to the size of the
Company and the nature of its assets. In accordance with the policy, the Company has
physically verified certain property, plant and equipment and investment properties during
the year and we are informed that the discrepancies were not material and have been
properly dealt with in the books of account.
(c) According to the information and explanations given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties of land
and buildings as disclosed in Note 4 to the Standalone Financial Statements, are held in
the name of the Company
(d) The company has not revalued any of its Property, Plant and Equipment (include
right-of-use assets) and intangible assets during the year.
(e) No proceedings have been initiated during the year or are pending against the
company as at March 31st, 2023 for holding any Benami property under the Benami
Transactions(Prohibition) Act, 1988(As amended in 2016) and Rules thereunder.
(II) (a) The inventory, except for goods-in-transit and stocks lying with third
parties, has been physically verified by the management during the year. In our opinion,
the frequency of such verification is reasonable. The discrepancies noticed on
verification between the physical stocks and the book records were not material and have
been properly dealt with in the books of account.
(b) As explain to us, during any point of time of the year, the company has not been
sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks
or financial institutions on the basis of security of current assets, and hence our
comments on quarterly returns on value of current assets given as security as filed with
the bank are not required.
(III) (a) As per the information and explanation given to us, during the year the
company has not made investments in, provided any guarantee or security or granted any
loans or advances in the nature of loans, secured or unsecured, to companies, firms,
Limited Liability Partnerships or any other parties.
(b) As per the information and explanation given to us, The investments made,
guarantees provided, the nature of loans and guarantees provided are not prejudicial to
the companys interest. security given and the terms and conditions of the grant of all
loans and advances in
(c) For Loans and Advances in the nature of loans, the schedule of repayment of
principal and payment of interest has been stipulated and in such cases the borrowers have
been regular in repayment of principal and interest.
(d) No amounts are overdue is respect of above loans, for more than ninety days.
Reasonable steps have been taken by the company for recovery of the principal and interest
overdue.
(e) According to the information and explanations given to us and on the basis of our
examination of the records, the company has not renewed or extended or granted fresh loans
to settle the over dues of existing loans or advances in the nature of loans given to the
same party.
(f) According to the information and explanations given to us and on the basis of our
examination of the records, the Company has not granted loans repayable on demand or
without specifying any terms or period of repayment to the Promoters, Related parties as
defined in clause (76) of section 2 of the Companies Act,2013.
(IV) The company has complied with provisions of section 185 & 186 in respect of
loans investments, guarantees, and securities provided as applicable.
(V) The company has not accepted any deposits or amounts which are deemed to be
deposits covered under sections 73 to 76 of the Companies Act, 2013 or rules made
thereunder hence this clause is not applicable. (VI) As per information & explanation
given by the management, maintenance of cost records has not been specified by the Central
Government under sub-section (1) of section 148 of the Companies Act, 2013.
(VII) (a) ServicesAccordingTax, to the records of the company, undisputed statutory
dues including Goods and
providentfund,employeesstateinsurance,income-tax,sales-tax,service tax, duty of customs,
duty of excise, value added tax, cess have generally been regularly deposited with the
appropriate authorities. According to the information and explanations given to us there
were no outstanding statutory dues as on 31st March ,2023 for a period of more than six
months from the date they became payable.
(b) According to the information and explanations given to us no undisputed amounts
payable in respect of provident fund employees state insurance, income-tax, goods and
services tax, duty of customs, cess and other material statutory dues were in arrears as
at 31 March 2023 for a period of more than six months from the date they became payable
(VIII) According to the records of the company, there is no surrendered or disclosure of
income during the year in the income tax assessment under the Income Tax Act, 1961 (43 of
1961), (IX) (a) According to the information and explanations given to us the company has
not defaulted in repayment of loans or other borrowings or in the payment of interest
thereon to the lender. (b) According to the information and explanations given to us and
on the basis of our audit procedures, we report that the company has not been declared
willful defaulter by any bank or financial institution or government or any government
authority.
(c) In our opinion and according to the information and explanations given to us the
company has utilised the money obtained by way of term loans during the year for the
purpose for which they were obtained.
(d) According to the information and explanations given to us, and the procedures
performed by us, and on overall examination of the financial statements of the company, we
report that no funds raised on short-term basis have been used for long term purposes by
the company.
(e) According to the information and explanations given to us, and the procedures
performed by us, and on overall examination of the financial statements of the company, we
report that the company has not taken any funds from any entities and persons 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, and the procedures
performed by us, and on overall examination of the financial statements of the company, we
report that the company has not raised the loans during the year on the pledge of
securities held in its subsidiaries, associates or joint ventures. The company has not
defaulted in repayment of such loans.
(X) (a) In our opinion and according to the information and explanations given to us
the company has not raised by way of initial public offer or further public offer
(including debt instruments). The term loans have been applied for the purpose for which
they were raised.
(b) The company has not raised by way of preferential allotment or private placement of
shares or convertible debentures (fully, partially or optionally convertible) during the
year.
(XI) (a) According to the information and explanations given to us, and the procedures
performed by us, and on overall examination of the financial statements of the company,
there is no any fraud by the company or any fraud on the company has been noticed or
reported during the year.
(b) According to the information and explanations given to us report under sub-section
(12) of section 143 of the Companies Act is not required to be filed by the auditors in
Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with
the Central Government as no fraud or suspected fraud has been noticed during audit and
upto the date of this report.
(c) As represented to us by the management, there are no whistle-blower complaints
received by the company during the year.
(XII) The Company is not a Nidhi Company and hence reporting under clause (xii) of the
Order is not applicable.
(XIII) According to the information and explanations given to us, all transactions with
the related parties are in compliance with sections 177 and 188 of Companies Act, 2013
where applicable and the details have been disclosed in the Financial Statements etc. as
required by the applicable accounting standards.
(XIV) (a) In our opinion the company has an adequate internal audit system commensurate
with the size and nature of its business. (b) we have considered the internal audit
reports for the year under audit, issued to the company during the year and till date, in
determining the nature, timing and extent of our audit procedures.
(XV) According to the information and explanations given to us, the company has not
entered into non-cash transactions with directors or persons connected with the director
during the year by the acquisition of assets and / or by assuming directly related
liabilities, which in our opinion is covered under the provision of section 192 of the
Act.
(XVI) The company is not required to be registered under section 45-IA of the Reserve
Bank of India Act, 1934 (2 of 1934)
In our opinion, there is no core investment company within the Group (as defined in the
Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly reporting under
clause 3(xvi)(d) of the Order is not applicable.
(XVII) The company has not incurred cash losses in the financial year covered by our
audit and incurred cash losses in the immediately preceding financial year.
(XVIII) There has been no resignation of the statutory auditors during the year and
accordingly, this clause is not applicable. (XIX) According to the information and
explanations given to us and on the basis of the financial ratios, ageing and expected
dates of realization of financial assets and payment off in financial liabilities, other
information accompanying the financial statements, our knowledge of the Board of Directors
and management plans and based on our examination of the evidence supporting the
assumptions, nothing has come to our attention, which causes us to believe that any
material uncertainty exists as on the date of the audit report that company is not 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. We, however, state that this is
not an assurance as to the future viability of the company. We further state that our
reporting is based on the facts up to the date of the audit report and we neither give any
guarantee nor any assurance that all liabilities falling due within a period of one year
from the balance sheet date, will get discharged by the company as and when they fall due.
(XX) (a) According to the information and explanations given to us and based on our
examination of the records of the company, there are no unspent amount pertaining to the
year under report required to be transferred to a Fund specified in schedule VII to the
Companies Act in compliance with second proviso to sub section 5 of section 135 of the
said Act. (b) According to the information and explanations given to us and based on our
examination of the records of the company there is no amount which is remaining unspent
under the sub section 5 of section 135 of the Act pursuant to any ongoing CSR Project.
Annexure - B to the Auditors Report
Refer to Para 6 (2)(f) of the Independent Auditors Report of the even date to the
members of VadivarheSpecialty Chemicals Limited on financial statements for the year ended
31st March 2023
Report on 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 M/s
Vadivarhe Speciality Chemicals Limited as of 31 March 2023 in conjunction with our audit
of the financial statements of the Company for the year ended on that date.
The Companys management is responsible for establishing and maintaining internal
financial controls based Managements Responsibility forInternalFinancialControls on the
internal control over financial reporting criteria established by the Company considering
the essential Financial Reporting issued by the Institute of Chartered Accountants of
India (‘ICAI). These responsibilities components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls over include the design,
implementation and maintenance of adequate internal financial controls that were operating
companys policies, the safeguarding of its assets, the prevention and detection of frauds
and errors, the effectively for ensuring the orderly and efficient conduct of its
business, including adherence to 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 Internal Financial Controls over Financial Reporting
(the "Guidance Note") and the Standards on Auditing, based on our audit. We
conducted our audit in accordance with the Guidance Note of issued by ICAI and deemed to
be prescribed under section 143(10) of the Companies Act, 2013, 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
depend on the auditors judgment, including the assessment of the risks of material
misstatement of the and operating effectiveness of internal control based on assessed
risk. The procedures selected financial statements, whether due to fraud or error. We
believe that the audit evidence s internal financial controls system over financial
reporting. we have obtained is sufficient and appropriate to provide a basis for our audit
opinion on the company
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 authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised 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 material respects, an adequate internal
financial controls systems over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31st March 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 Bhalchandra D Karve& Associates |
| Chartered Accountants |
| Firm Registration Number 135281W |
| Sd/- |
| CA Bhalchandra D Karve |
| Proprietor |
| Membership Number 105965 |
| Date :30/05/2023 |
| Place: Nashik |
| UDIN: 23105965BGVNZS5593 |
+91-9892691696
