Mar 31, 2023
Report on the audit of the financial statements
Opinion
1. We have audited the accompanying financial statements of BASF India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31,2023, 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 then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
2. I n 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 (âthe Actâ) 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 total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Financial Statementsâ section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules 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.
Key audit matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter |
How our audit addressed the key audit matter |
Assessment of Contingent liabilities and Provisions against litigations (Refer Note 17, 39 and 45 to the financial statements) The company undergoes assessment proceedings from time to time with direct and indirect tax authorities and litigations with certain other parties. As at March 31, 2023, in respect of certain direct and indirect tax and other litigations (comprising various claims filed by other parties not acknowledged as debt), the company carries provisions of Rs. 472.8 million and has disclosed contingent liability of Rs. 2,014.0 million. There is a significant level of management judgement involved in estimating the possible outflow of economic resources and the level of provisioning and/ or the disclosures required in the financial statements. The managementâs assessment is supported by advice from independent tax and legal consultants, where considered necessary by the management. Any unexpected adverse outcomes could significantly impact the Companyâs reported profit and financial position. We considered the above area as a key audit matter due to associated uncertainty related to the outcome of these tax and litigation matters and application of judgement in the interpretation of related laws. |
Our audit procedure included the following: ⢠Understanding and evaluating the process and controls designed and implemented by the management around assessment of tax and other litigations including testing of operating effectiveness of the relevant controls; ⢠Enquired with the relevant company personnel including the Companyâs tax and regulatory department heads to obtain a complete list of matters under litigation; ⢠Obtaining details of the litigation matters, inspecting the supporting evidence and critically assessing managementâs evaluation through enquiry with management on both the likelihood of outcome and the magnitude of potential outflow of economic resources; ⢠Understanding the current status of the tax assessments and other litigations; ⢠Reading recent orders and/or communication received from the tax authorities and with certain other parties, and managementâs responses to such communication; ⢠Where relevant, reading the independent tax/legal advice obtained by management and evaluating the grounds presented therein; ⢠Evaluating independence, objectivity and competence of the managementâs tax/legal consultants; ⢠Obtaining direct written confirmations from the Companyâs legal/ tax consultants to confirm the facts and circumstances and assessment of the likely outcome; ⢠Together with the auditorâs tax experts, assessing the managementâs evaluation of the likelihood of the outcomes of the litigations and potential financial exposure; and ⢠Evaluating the appropriateness of the presentation and adequacy of disclosures in the financial statements. Based on the above procedures performed, we did not identify any material exceptions to managementâs assessment of provisions and contingent liabilities. |
Other Information
5. The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Directorâs report, Business responsibility and sustainability reporting format, report on corporate governance and management discussion and analysis report, but does not include the financial statements and our auditorâs report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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 a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the financial statements
6. The Companyâs Board of Directors is 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, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
7. âIn preparing the financial statements, management is responsible for assessing the Companyâs 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. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs responsibilities for the audit of the financial statements
8. 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 auditorâs 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.
9. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠I dentify 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 managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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.
10. 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.
11. 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.
12. 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 auditorâs 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
13. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
14. 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) I n 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) I n our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31, 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 âAnnexure Aâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), 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 - Refer Note 17, 39 and 45 to the financial statements;
ii. The Company has long-term contracts as at March 31, 2023 for which there were no material foreseeable losses and did not have any long-term derivative contract as at March 31, 2023
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.
iv. (a) The management has represented that, to the best of its knowledge and belief, 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 person(s) or entity(ies), including foreign entities (âIntermediariesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures that we 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) contain any material misstatement.
v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for books of account to have the feature of audit trail, edit log and related matters in the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 1, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.
15. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP Firm Registration Number: 012754N/N500016 Chartered Accountants
Jeetendra Mirchandani Partner
Membership Number 048125 UDIN: 23048125BGWQTK8897
Place : Mumbai Date : May 10, 2023
Mar 31, 2022
Report on the audit of the financial statements
1. We have audited the accompanying financial statements of BASF India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 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 then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
2. 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 (âthe Actâ) 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 31,2022, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules 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.
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter |
How our audit addressed the key audit matter |
Assessment of Contingent liabilities and Provisions against litigations (Refer Notes 17, 40 and 46 to the financial statements) The Company undergoes assessment proceedings from time to time with direct and indirect tax authorities and litigations with certain other parties. As at March 31, 2022, in respect of certain direct and indirect tax and other litigations (comprising various claims filed by other parties not acknowledged as debt), the Company carries provisions of Rs. 429.6 million and disclosed contingent liabilities of Rs. 5,208.0 million. Further, as described in Note 40(i) to the financial statements, the Company has received demand notices aggregating to Rs. 7,560.6 million (including interest and penalty) from the Commercial Taxes Department, Karnataka for sales tax claimed on inter-state stock transfers, in respect of which, the litigation is pending resolution at Karnataka Appellate Tribunal and Hon''ble Karnataka High Court against the order passed by Hon''ble Central Sales Tax Appellate Authority (CSTAA). The Company''s management has made an assessment of the likely outcome of the matter and based on legal advice obtained by the Company, no provision is considered necessary against this matter. There is a significant level of management judgement involved in estimating the possible outflow of economic resources and the level of provisioning and/or the disclosures required in the financial statements. The management''s assessment is supported by advice from independent tax and legal consultants, where considered necessary by the management. Any unexpected adverse outcomes could significantly impact the Company''s reported profit and financial position. We considered the above area as a key audit matter due to associated uncertainty related to the outcome of these tax and litigation matters and application of judgement in interpretation of related laws. |
Our audit procedures included the following: ⢠Understanding and evaluating the process and controls designed and implemented by the management around assessment of tax and other litigations including testing of operating effectiveness of the relevant controls; ⢠Enquired with the relevant company personnel including the Company''s tax and regulatory department heads to obtain a complete list of matters under litigations; ⢠Obtaining details of the litigation matters, inspecting the supporting evidences and critically assessing management''s evaluation through enquiry with management on both the likelihood of outcome and the magnitude of potential outflow of economic resources; ⢠Understanding the current status of the tax assessments and other litigations; ⢠Reading recent orders and/ or communication received from the tax authorities and with certain other parties, and management''s responses to such communication; ⢠Where relevant, reading the independent tax/ legal advice obtained by management and evaluating the grounds presented therein; ⢠Evaluating independence, objectivity and competence of the management''s tax / legal consultants; ⢠Obtaining direct written confirmations from the Company''s legal / tax consultants to confirm the facts and circumstances and assessment of the likely outcome; ⢠Together with auditors'' tax experts, assessing the management''s evaluation of the likelihood of the outcomes of the litigations and potential financial exposure; and ⢠Evaluating the appropriateness of presentation and adequacy of disclosures in the financial statements. Based on the above procedures performed, we did not identify any material exceptions to management''s assessment of provisions and contingent liabilities. |
5. The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Directors'' report, Business responsibility and sustainability reporting format, report on corporate governance and management discussion and analysis report, but does not include the financial statements and our auditor''s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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 a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
6. The Company''s Board of Directors is 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, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
7. In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
8. 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 auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
9. 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 management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial 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 auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
10. 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.
11. 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.
12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
13. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
14. 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 Accounting Standards specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 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 âAnnexure Aâ.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), 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 - Refer Note 17, 40 and 46 to the financial statements;
ii. The Company has long-term contracts as at March 31,2022 for which there were no material foreseeable losses and did not have any long-term derivative contracts as at March 31, 2022.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.
iv. (a) The management has represented that, to the best of its knowledge and belief, 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 person(s) or entity(ies), including foreign entities (âIntermediariesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (âFunding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures that we 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) contain any material misstatement.
v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.
15. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP
Mar 31, 2019
Report on the audit of the Financial Statements
Opinion
1. We have audited the accompanying financial statements of BASF India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
2. I n 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 (âthe Actâ) 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, 2019, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditorsâ 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 together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules 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.
Key Audit Matters
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter |
How our audit addressed the key audit matter |
Assessment of Provisions and Contingent liabilities At March 31, 2019, in respect of certain direct and indirect tax and other litigations (comprising various claims filed by other parties not acknowledged as debt), the Company held provisions of Rs. 469.8 million and disclosed contingent liabilities (to the extent not provided for) of Rs. 1,146.2 million. Refer to Notes 17, 35 and 41 to the financial statements. The Company undergoes assessment proceedings from time to time with direct and indirect tax authorities and with certain other parties. There is a high level of judgement required in estimating the level of provisioning and/or the disclosures required. The managementâs assessment is supported by advice from independent tax consultants and legal consultants, where considered necessary by the management. Accordingly, unexpected adverse outcomes could significantly impact the Companyâs reported profit and Balance Sheet position. |
Our audit procedures included the following: - Understanding and evaluating process and controls designed and implemented by the management including testing of relevant controls; - Obtaining details of the related matters, inspecting the supporting evidences and critically assessing managementâs evaluation through discussions with management on both the likelihood of outcome and the magnitude of potential loss; - Reading recent orders and/ or communication received from the tax authorities and with certain other parties, and management replies to such communication; - Where relevant, reading most recent available independent tax/ legal advice obtained by management and evaluating the grounds presented therein; - Evaluating independence, objectivity and competence of the managementâs tax / legal consultants; - Understanding the current status of the tax assessments / litigations; - Obtaining direct written confirmations from the Companyâs legal / tax consultants (internal / external) to confirm the facts and circumstances and assessment of the likely outcome; |
Key audit matter |
How our audit addressed the key audit matter |
We considered the above area as a key audit matter due to associated uncertainty related to the outcome of these matters and application of material judgement in interpretation of law. |
- Together with auditor tax experts, assessed the likelihood of the potential financial exposure; We did not identify any material exceptions as a result of above procedures relating to managementâs assessment of provisions and contingent liabilities. |
Other Information
5. The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the directorsâ report, report on corporate governance and management discussion and analysis report but does not include the financial statements and our auditorsâ report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the 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 a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the financial statements
6. The Companyâs Board of Directors is 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, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
7. I n preparing the financial statements, management is responsible for assessing the Companyâs 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. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorsâ responsibilities for the audit of the financial statements
8. 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 auditorsâ 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.
9. 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 managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorsâ 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 auditorsâ 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.
10. 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.
11. 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.
12. 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 auditorsâ 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
13. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
14. 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) I n 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 Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) I n our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
(g) With respect to the other matters to be included in the Auditorsâ 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 - Refer Notes 17, 35 and 41 to the financial statements;
ii. The Company has long-term contracts including derivative contracts as at March 31, 2019 for which there were no 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. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2019.
Annexure A to the Independent Auditorsâ Report
Referred to in paragraph 14(f) of the Independent Auditorsâ Report of even date to the members of BASF India Limited on the financial statements for the year ended March 31, 2019 Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls with reference to financial statements of BASF India Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companyâs 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.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system 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 internal financial controls with reference to financial statements, 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 auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
6. A Companyâs internal financial controls 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 companyâs 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 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 companyâs assets that could have a material effect on the financial statements.
Annexure A to the Independent Auditorsâ Report
Inherent Limitations of Internal Financial Controls with reference to financial statements
7. 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
8. I n 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 with reference to financial statements were operating effectively as at March 31, 2019, 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.
Annexure B to the Independent Auditorsâ Report
Referred to in paragraph 13 of the Independent Auditorsâ Report of even date to the members of BASF India Limited on the financial statements for the year ended March 31, 2019
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 1 on fixed assets to the financial statements, are held in the name of the Company, except in respect of leasehold land held at one of the Companyâs manufacturing locations (having Gross Block - Rs. 21.4 million and Net Block - Rs. Nil). The Company is in the process of complying with terms of the lease cum sale agreement and basis completion thereof, would execute the final sale agreement to obtain right of ownership thereon.
ii. The physical verification of inventory (excluding stocks with third parties) have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act 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. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
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 undisputed statutory dues in respect of income tax and profession tax though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, employeesâ state insurance, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax and other material statutory dues, as applicable, with the appropriate authorities. Also refer Note 35(ii) to the financial statements regarding managementâs assessment on certain matters relating to provident fund.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods and service tax which have not been deposited on account of any dispute. Refer Appendix I for particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise and value added tax as at March 31, 2019 which have not been deposited on account of a dispute.
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any bank as at the Balance Sheet date. The Company neither has any loans or borrowings from financial institutions or Government, nor has it issued any debentures as at the Balance Sheet date, therefore the provisions of Clause 3(viii) of the Order, to that extent, are not applicable to the Company.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans during the year ended March 31, 2019. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
Appendix I
Referred to in paragraph vii(b) of our Annexure B to the Independent Auditorsâ Report of even date to the members of BASF India Limited on the financial statements for the year ended March 31, 2019
Sr. No. |
Name of the Statute |
Nature of Dues |
Amounts (Rs. in million) |
Period to which the amount relates |
Forum where dispute is pending |
1. |
The Income Tax Act, 1961 |
Income Tax Liability (including interest and penalty, as applicable) |
383.4 |
Assessments Years 2002-03, 2004-05, 2005-06, 2007-08, 2013-14 and 2014-15 |
Appellate Authority - up to Commissioner''s level |
312.5 |
Assessment Years 2007-08 to 2012-13 |
Income Tax Appellate Tribunal |
|||
2.5 |
Assessment Years 2000-01, 2002-03 and 2006-07 |
High Court |
|||
Sub Total |
698.4 |
||||
2. |
The Central Sales Tax Act, 1956 and Local Sales Tax Acts |
Sales Tax and Value Added Tax Liability (including interest and penalty, as applicable) |
393.1 |
Financial Years 2002-03, 2005-06, 2006-07 to 2016-17 |
Appellate Authority - up to Commissioner''s level |
11.8 |
Financial Years 1993-94, 1994-95, 2004-05, 2006-07, 2009-10 to 2011-12, 2013-14 |
Sales Tax Appellate Tribunal |
|||
Sub Total |
404.9 |
||||
3. |
The Finance Act, 1994 |
Service Tax Liability (including interest and penalty, as applicable) |
3.5 |
Financial Years 2006-07 to 2010-11 |
Appellate Authority - up to Commissioner''s level |
930.7 |
Financial Years 2004-05 to 2012-13 to 2015-16 |
Custom, Excise and Service Tax Appellate Tribunal |
|||
Sub Total |
934.2 |
||||
4. |
The Customs Tariff Act, 1975 |
Customs Duty (including interest and penalty, as applicable) |
43.6 |
Financial Years 2003-04 to 2005-06 |
Supreme Court |
1.2 |
Financial Year 2012-13 |
Custom, Excise and Service Tax Appellate Tribunal |
|||
Sub Total |
44.8 |
||||
5. |
The Central Excise Act, 1944 |
Excise Duty Liability (including interest and penalty, as applicable) |
20.4 |
Financial Years 1997-98, 2007-08, 2009-10, 2011-12 to 2014-15 |
Appellate Authority - up to Commissioner''s level |
9.1 |
Financial Years 1981-82, 2011-12 to 2012-13 |
Custom, Excise and Service Tax Appellate Tribunal |
|||
Sub Total |
29.5 |
||||
Total |
2,111.8 |
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Jeetendra Mirchandani
Place : Mumbai Partner
Date : April 30, 2019 Membership Number: 048125
Mar 31, 2018
Report on the Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying financial statements of BASF India Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Ind AS Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
8. 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 accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other Matter
9. The Ind AS financial statements of the Company for the year ended March 31, 2017, were audited by another firm of chartered accountants under the Companies Act, 2013, who, vide their report dated May 4, 2017, expressed an unmodified opinion on those financial statements. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
11. 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 Cash Flow Statement 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.
(e) On the basis of the written representations received from the directors as on March 31, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 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 A.
(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its Ind AS financial statements - Refer Notes 34 and 40.
ii. The Company has long-term contracts including derivative contracts as at March 31, 2018 for which there were no 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 during the year ended March 31, 2018.
iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.
Annexure B to the Independent Auditorsâ Report
Referred to in paragraph 10 of the Independent Auditorsâ Report of even date to the members of BASF India Limited on the Ind AS financial statements for the year ended March 31, 2018
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of two years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, as disclosed in Note 1A on fixed assets to the financial statements, are held in the name of the Company, except in respect of leasehold land held at one of the Companyâs manufacturing locations (having Gross Block: Rs. 21.4 Million and Net Block: Rs. Nil). The Company is in the process of complying with terms of the lease cum sale agreement and basis completion thereof, would execute the final sale agreement to obtain right of ownership thereon.
ii. The physical verification of inventory (excluding stocks with third parties) have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory by Management as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 (âthe Actâ). Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act 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. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
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 undisputed statutory dues in respect of sales tax, income tax, service tax, value added tax and profession tax, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including provident fund, employeesâ state insurance, duty of customs, duty of excise, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods and service tax which have not been deposited on account of any dispute. Refer Appendix I for the particulars of dues of income tax, sales tax, service tax, duty of customs and duty of excise, value added tax as at March 31, 2018 which have not been deposited on account of a dispute.
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government. As the Company has not issued any debentures as at Balance Sheet date, the provisions of Clause 3(viii) of the Order, to that extent, are not applicable to the Company.
ix. In our opinion, and according to the information and explanations given to us, the money raised by way of term loans have been applied for the purposes for which they were obtained. As the Company has not raised any moneys by way of initial public offer and further public offer (including debt instruments), the provisions of Clause 3(ix) of the Order, to that extent, are not applicable to the Company.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the Ind AS financial statements as required under Indian Accounting Standard (AS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
Appendix 1
Referred to in paragraph vii(b) of our Annexure B to the Independent Auditorsâ Report of even date to the members of BASF India Limited on the Ind AS financial statements for the year ended March 31, 2018
Sr. No. |
Name of the Statute |
Nature of Dues |
Amounts (Rs. in million) |
Period to which the amount relates |
Forum where dispute is pending |
1. |
The Income Tax Act, 1961 |
Income Tax liability (including interest and penalty, as applicable) |
424.0 |
Assessment Years 2000-01, 2002-03, 2004-05, 2007-2008, 2013-14 and 2014-15 |
Appellate Authority â up to Commissionerâs level |
290.3 |
Assessment Years 2007-08 to 2012-13 |
Income Tax Appellate Tribunal |
|||
1.5 |
Assessment Years 2002-03 and 2006-07 |
High Court |
|||
Sub Total |
715.8 |
||||
2. |
The Central Sales Tax Act, 1956 and Local Sales Tax Acts |
Sales Tax and Value Added Tax Liability (including interest and penalty, as applicable) |
453.8 |
Financial Years 2002-2003, 2005-2006 to 2015-2016 |
Appellate Authority â up to Commissionerâs level |
15.1 |
Financial Years 1993-94 to 1994-95, 2004-05, 2006-07, 2009-10 to 2014-15 |
Custom, Excise and Service Tax Appellate Tribunal |
|||
Sub Total |
468.9 |
||||
3. |
The Finance Act, 1994 |
Service Tax Liability (including interest and penalty, as applicable) |
67.3 |
Financial Years 2005-06 to 2010-11 |
Appellate Authority â up to Commissionerâs level |
383.9 |
Financial Years 2004-05 to 2012-13 |
Custom, Excise and Service Tax Appellate Tribunal |
|||
Sub Total |
451.2 |
||||
4. |
The Customs Tariff Act, 1975 |
Customs Duty (including interest and penalty, as applicable) |
41.4 |
Financial Years 2003-04 to 2005-06 |
Supreme Court of India |
50.0 |
Financial Years 2014-15, 2015-16 to 2016-17 |
Additional Director General of Foreign Trade |
|||
1.8 |
Financial Years 2012-13 |
Custom, Excise and Service Tax Appellate Tribunal |
|||
Sub Total |
93.2 |
||||
5. |
The Central Excise Act, 1944 |
Excise Duty Liability (including interest and penalty, as applicable) |
20.4 |
Financial Years 1997-1998, 2007-08, 2009-10, 2011-12 to 2014-15 |
Appellate Authority â up to Commissionerâs level |
9.1 |
Financial Years 1981-82, 2011-12 to 2012-13 |
Custom, Excise and Service Tax Appellate Tribunal |
|||
Sub Total |
29.5 |
||||
Total |
1,758.6 |
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N 500016
Chartered Accountants
Jeetendra Mirchandani
Place : Mumbai Partner
Date : May 4, 2018 Membership Number: 048125
Mar 31, 2017
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of BASF India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âInd AS financial statementsâ).
Managementâs Responsibility for the Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, the financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with the relevant rules issued thereunder.
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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
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 accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31 March 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) 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.
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 Cash Flows and 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 prescribed under Section 133 of the Act, read with the relevant rules issued thereunder.
(e) On the basis of the written representations received from the directors as on 31 March 2017, taken on record by the Board of Directors, none of the directors are disqualified as on 31 March 2017, 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ; and
(g) With respect to the other matters to be included in the Auditorâs 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 Ind AS financial statements - Refer Note 34 or 40 to the Ind AS financial statements.
ii. The Company has made provision, as required under the applicable law or accounting standard for material foreseeable losses, if any, on long term contracts including derivative contracts. Refer Note 16 to the Ind AS financial statements.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company did not have any holdings or dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 - Refer Note 9 to the Ind AS financial statements.
Annexure A to the Independent Auditorsâ Report - 31 March 2017
(Referred to in our report of even date)
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two years. In accordance with this programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.
(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 are held in the name of the Company except in respect of the lease cum sale agreement for one of the Companyâs manufacturing locations (gross block: Rs. 16.4 million and net block Rs. Nil included under leasehold land), the Company is in the process of complying with the terms of the lease cum sale agreement so as to execute the final sale agreement and obtain the right to ownership.
ii. The inventory, except 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. For stocks lying with third parties at the year-end, written confirmations have been obtained. The discrepancies noticed on verification between the physical stocks and the book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 (âthe Actâ). Accordingly, paragraphs 3(iii)(a), (b) and (c) of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, the Company has not given any loan, made any investment, given any guarantee, or provided any security under Section 185 and 186 of the Act. Accordingly, paragraph 3(iv) of the Order is not applicable to the Company.
v. I n our opinion, and according to the information and explanations given to us, the Company has not accepted deposits as per the directives issued by the Reserve Bank of India under the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.
vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.
vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Professional tax, Income-tax, Sales-tax, Service tax, Duty of Customs, Duty of Excise, Value added tax, and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Professional tax, Income-tax, Sales-tax, Service-tax, Duty of Customs, Duty of Excise, Value added tax and other material statutory dues were in arrears as at 31 March 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of Income-tax, Sales-tax, Service tax, Duty of Customs, Duty of Excise and Value added tax which have not been deposited with the appropriate authorities on account of any dispute other than those mentioned in the Appendix to this report.
viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions or banks. The Company does not have any loans or borrowings from government or dues to debenture holders during the year.
ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they are raised.
x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
xvi. According to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.
Appendix to the Independent Auditorsâ Report - 31 March 2017
Name of the Statute |
Nature of the dues |
Amounts (in million) |
Amount paid in dispute (in million) |
Period |
Forum where the dispute is pending |
Central Excise Act, |
Duty interest |
0.85 |
2014-2015 |
Additional Commissioner |
|
1944 |
and penalty |
1.83 |
1982-1983 2008-2009 2011-2012 |
Assistant Commissioner of Central Excise |
|
0.66 |
â |
2007-2008 |
Central Excise & Service Tax Appellate Tribunal |
||
3.31 |
â |
2007-2008 |
Commissioner of Central Excise |
||
2.04 |
â |
2008-2009 |
Commissioner (Appeals) |
||
0.51 |
â |
2009-2010 2010-2011 |
Deputy Commissioner of Central Excise |
||
3.13 |
â |
1992-1993 2000-2001 |
High Court |
||
12.33 |
â |
Total |
|||
The Customs Act, |
Duty interest |
0.89 |
â |
2012-2013 |
Assistant Commissioner of Central Excise |
1962 |
and penalty |
12.10 |
â |
1992-1993 |
Central Excise & Service Tax Appellate Tribunal |
95.00 |
â |
2005-2006 |
Supreme Court |
||
107.99 |
â |
Total |
|||
The Service Tax Act, |
Tax, Interest |
0.04 |
â |
2008-2010 |
Assistant Commissioner - Central Excise |
1975 |
and Penalty |
2010-2011 |
|||
5.08 |
2005-2010 Apr. 2008 to Jan. 2013 Jan. 2005 to Mar. 2008 |
Central Excise & Service Tax Appellate Tribunal |
|||
1.56 |
â |
Dec. 2007 to Sep. 2009 |
Commissioner (Appeals) |
||
21.80 |
â |
2005-2006 to 2009-2010 |
Commissioner of Central Excise |
||
13.87 |
â |
2006-2010 2008-2009 to 2012-2013 2009-2010 |
Commissioner of Service Tax |
||
0.12 |
Jan. 2012 to Aug. 2014 |
Assistant Commissioner - Central Excise |
|||
42.47 |
â |
Total |
|||
State and Central |
Non-Submission |
0.38 |
â |
2006-2007 |
Additional Commissioner of Sales Tax |
Sales Tax Act, 1956 |
of forms |
11.23 |
2009-2010 2012-2013 2013-2014 |
Appellate Deputy Commissioner |
|
4.02 |
â |
2002-2003 2007-2008 |
Commissioner of Sales Tax |
||
46.09 |
39.82 |
2013-2014 2014-2015 2011-2012 2010-2011 |
Deputy Commissioner of Sales Tax |
||
43.86 |
37.70 |
2011-2012 2012-2013 2010-2011 2008-2009 2009-2010 |
Deputy Commissioner of Sales Tax (Appeals) |
||
174.78 |
22.36 |
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2013-2014 2014-2015 |
Joint Commissioner of Sales Tax (Appeals) |
||
3.22 |
â |
2005-2006 2008-2009 |
Joint Commissioner of Sales Tax |
||
283.58 |
99.88 |
Total |
State and Central |
Tax interest and |
1.67 |
â |
2006-2007 |
Additional Commissioner of Sales Tax |
Sales Tax Act, 1956 |
penalty |
0.14 |
â |
2011-2012 |
Assistant Commissioner of Sales Tax |
14.75 |
2009-2010 2012-2013 2013-2014 |
Appellate Deputy Commissioner |
|||
69.39 |
2007-2008 2008-2009 2009-2010 2011-2012 2010-2011 2012-2013 |
Deputy Commissioner of Sales Tax (Appeals) |
|||
12.48 |
11.67 |
2009-2010 2010-2011 2013-2014 2014-2015 |
Deputy Commissioner of Sales Tax |
||
360.78 |
38.97 |
2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 |
Joint Commissioner of Sales Tax (Appeals) |
||
1.61 |
0.07 |
2006-2007 2007-2008 1993-1994 1994-1995 2004-2005 |
Tribunal |
||
22.12 |
0.74 |
2013-2014 2006-2007 2005-2006 |
Joint Commissioner of Sales Tax |
||
7.71 |
â |
2002-2003 |
Commissioner of Sales Tax |
||
490.64 |
51.45 |
Total |
|||
The Income Tax Act, |
Tax interest and |
0.02 |
â |
2010-2011 |
Assistant Commissioner of Income Tax |
1961 |
demand |
186.19 |
67.50 |
2006-2007 2008-2009 2009-2010 2010-2011 2013-2014 |
Commissioner of Income Tax (Appeals) |
54.48 |
7.60 |
2009-2010 |
Deputy Commissioner of Income Tax |
||
2.70 |
2.70 |
2000-2001 2003-2004 2006-2007 |
High Court |
||
594.91 |
253.67 |
2000-2001 2002-2003 2003-2004 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 |
Income Tax Appellate Tribunal |
||
838.30 |
331.47 |
Total |
For B S R & Co. LLP
Chartered Accountants
Firmâs Registration No: 101248W/W-100022
Yezdi Nagporewalla
Partner
Membership No: 049265
Mumbai 4th May, 2017
Mar 31, 2016
We have audited the accompanying financial statements of BASF India
Limited ("the Company"), which comprise the Balance Sheet as at 31
March 2016, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s 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 and presentation of these financial statements that
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with the
accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
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 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 31 March 2016, and its profit and its cash flows for the year ended
on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s 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.
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 and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31 March 2016, taken on record by the Board of
Directors, none of the directors are disqualified as on 31 March 2016,
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
over financial reporting 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 Auditor''s
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  Refer Note 25 (10) and
Note 25 (20) to the financial statements.
ii. The Company did not have any long-term contracts including
derivative 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.
Annexure A to the Independent Auditors'' Report  31 March 2016
(Referred to in our report of even date)
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of two 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. No material discrepancies were
noticed on such verification.
(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 are held in the name of the Company,
except in respect of the lease cum sale agreement for one of the
Company''s manufacturing locations (gross block : Rs. 16.4 million and
net block Rs. 11.6 million included under leasehold land), where the
Company is in the process of complying with the terms of the lease cum
sale agreement so as to execute the final sale agreement and obtain the
right to ownership.
ii. The inventory, except 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.
For stocks lying with third parties at the year-end, written
confirmations have been obtained. The discrepancies noticed on
verification between the physical stocks and the book records were not
material.
iii. The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the register maintained under Section 189 of the Companies
Act, 2013 ("the Act"). Accordingly, paragraphs 3 (iii) (a), (b) and (c)
of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, the Company has not given any loan, made any investment,
given any guarantee, or provided any security under Section 185 and 186
of the Act. Accordingly, paragraph 3 (iv) of the Order is not
applicable to the Company.
v. In our opinion, and according to the information and explanations
given to us, the Company has not accepted deposits as per the
directives issued by the Reserve Bank of India under the provisions of
Sections 73 to 76 or any other relevant provisions of the Act and the
rules framed there under. Accordingly, paragraph 3(v) of the Order is
not applicable to the Company.
vi. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under Section 148 (1) of the Act and are of
the opinion that prima facie, the prescribed accounts and records have
been made and maintained. However, we have not made a detailed
examination of the records.
vii. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income-tax, Sales-tax, Service tax, Duty of Customs, Duty of Excise,
Value added tax, and other material statutory dues have been generally
regularly deposited during the year by the Company with the appropriate
authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Income-tax, Sales-tax, Service tax, Duty of Customs,
Duty of Excise, Value added tax and other material statutory dues were
in arrears as at 31 March 2016 for a period of more than six months
from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Income-tax, Sales-tax, Service tax, Duty of Customs,
Duty of Excise and Value added tax which have not been deposited with
the appropriate authorities on account of any dispute other than those
mentioned in the Appendix to this report.
viii. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institutions or banks. The Company does not have any loans or
borrowings from government or dues to debenture holders during the
year.
ix. The Company did not raise any money by way of initial public offer
or further public offer (including debt instruments). In our opinion
and according to the information and explanations given to us, the term
loans taken by the Company have been applied for the purpose for which
they are raised.
x. According to the information and explanations given to us, no fraud
by the Company or on the Company by its officers or employees has been
noticed or reported during the course of our audit.
xi. According to the information and explanations give to us and based
on our examination of the records of the Company, the Company has
paid/provided for managerial remuneration in accordance with the
requisite approvals mandated by the provisions of Section 197 read with
Schedule V to the Act.
xii. In our opinion and according to the information and explanations
given to us, the Company is not a Nidhi Company. Accordingly, paragraph
3(xii) of the Order is not applicable to the Company.
xiii. According to the information and explanations given to us and
based on our examination of the records of the Company, transactions
with the related parties are in compliance with Sections 177 and 188 of
the Act where applicable and details of such transactions have been
disclosed in the financial statements as required by the applicable
accounting standards.
xiv. According to the information and explanations give to us and based
on our examination of the records of the Company, the Company has not
made any preferential allotment or private placement of shares or fully
or partly convertible debentures during the year. Accordingly,
paragraph 3 (xiv) of the Order is not applicable to the Company.
xv. According to the information and explanations given to us and based
on our examination of the records of the Company, the Company has not
entered into any non-cash transactions with directors or persons
connected with him. Accordingly, paragraph 3(xv) of the Order is not
applicable to the Company.
xvi. According to the information and explanations given to us, the
Company is not required to be registered under Section 45-IA of the
Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the
Order is not applicable to the Company.
Appendix to the Independent Auditors'' Report  31 March 2016
Name of the Statute Nature of the Amounts Amount
dues (in million) paid in
dispute
(in million)
Central Excise Act, Duty interest 0.85 -
1944 and penalty
1.83 -
0.66 -
3.31 -
2.04 -
0.51 -
3.13 -
12.33 -
The Customs Act, 1962 Duty interest 0.89 -
and penalty
12.10 -
95.00 -
107.99 -
The Service Tax Act, Tax, Interest 0.04 -
1975 and Penalty
8.16 -
1.56 -
21.80 -
13.87 -
0.12 -
45.55 -
State and Central
Sales Non 0.38 -
Tax Act Submission of
0.33 -
forms
26.51 -
4.02 -
8.09 0.20
19.77 8.10
3.22 -
169.01 21.90
231.33 30.20
Tax interest and 1.67 -
penalty
0.14 -
1.56 1.07
56.86 -
20.72 0.74
364.16 38.97
1.61 0.07
7.71 -
454.43 40.85
The Income Tax Act, Tax interest and 0.02 -
1961 penalty
50.73 37.50
54.50 7.60
122.70 -
2.70 2.70
476.41 233.67
707.06 281.47
Name of the Statute Period Forum where the dispute is
pending for CARO
Central Excise
Act, 1944 2014-2015 Additional Commissioner
1982-1983 Assistant Commissioner of Central
2008-2009 Excise
2011-2012
2007-2008 Central Excise & Service Tax
Appellate Tribunal
2007-2008 Commissioner of Central Excise
2008-2009 Commissioner (Appeals)
2009-2010 Deputy Commissioner of Central
2010-2011 Excise
1992-1993 High Court
2000-2001
The Customs Act,
1962 2012-2013 Assistant Commissioner of
Central Excise
1992-1993 Central Excise & Service Tax
Appellate Tribunal
2005-2006 Supreme Court
The Service Tax
Act, 1975 2008-2010 Asst. Commissioner-Central Excise
2010-2011
2005-2010 Central Excise & Service Tax
2009-2010 Appellate Tribunal
Apr. 2008 to
Jan. 2013
Jan. 2005 to
Mar. 2008
Dec. 2007 - Commissioner (Appeals)
Sep. 2009
2005-2006 to Commissioner of Central Excise
2009-2010
2006-2010 Commissioner of Service Tax
2008-2009 to
2012-2013
2009-2010
Jan. 2012 to Asst. Commissioner-Central Excise
Aug. 2014
State and Central
Sales Tax Act 2006-2007 Additional Commissioner of
Sales Tax
2012-2013 Assessing Officer
2013-2014 Assistant Commissioner of
Commercial Tax
2002-2003 Commissioner of Sales Tax
2007-2008
2012-2013 Deputy Commissioner of
Sales Tax
2011-2012
2010-2011
2011-2012 Deputy Commissioner of Sales Tax
2010-2011 (Appeals)
2008-2009
2009-2010
2005-2006 Joint Commissioner of Sales Tax
2008-2009
2006-2007 Joint Commissioner of Sales Tax
2007-2008 (Appeals)
2008-2009
2009-2010
2010-2011
2011-2012
2006-2007 Additional Commissioner of
Sales Tax
2011-2012 Assistant Commissioner of
Sales Tax
2009-2010 Deputy Commissioner of Sales Tax
2010-2011
2007-2008 Deputy Commissioner of Sales Tax
2008-2009 (Appeals)
2009-2010
2011-2012
2010-2011
2013-2014 Joint Commissioner of Sales Tax
2006-2007
2005-2006
2006-2007 Joint Commissioner of Sales Tax
2007-2008 (Appeals)
2008-2009
2009-2010
2010-2011
2011-2012
2006-2007 Tribunal
2007-2008
1993-1994
1994-1995
2004-2005
2002-2003 Commissioner of Sales Tax
The Income Tax
Act, 1961 2010-2011 Assistant Commissioner of
Income Tax
2006-2007 Commissioner of Income Tax
2008-2009 (Appeals)
2009-2010
2010-2011
2009-2010 Deputy Commissioner of Income Tax
2012-2013 Dispute Resolution Panel
2000-2001 High Court
2003-2004
2006-2007
2000-2001 Income Tax Appellate Tribunal
2002-2003
2003-2004
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
For B S R & Co. LLP
Chartered Accountants
Firm''s Registration No: 101248W / W-100022
Vijay Mathur
Partner
Membership No: 046476
Mumbai
3rd May, 2016
Mar 31, 2015
We have audited the accompanying financial statements of BASF India
Limited ("the Company"), which comprise the Balance Sheet as at 31
March, 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's 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 financial statements that give
a true and fair view of the financial position, financial performance
and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Accounting
Standards specified under Section 133 of the Act, read with Rule 7 of
the Companies (Accounts) Rules, 2014.
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.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
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 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 31 March 2015, and its loss and its cash flows for the year ended on
that date.
Emphasis of matter
We draw attention to Note 26(17) of the financial statements which more
fully explains that in respect of managerial remuneration amounting to
Rs. 19.8 million for the year ended 31 March 2015 the Company has made
an application to the Central Government pursuant to the provisions of
Section 197 read with Schedule V of the Act, which is pending approval.
Our audit opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015
('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
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, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of the written representations received from the
directors as on 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section 164(2) of the
Act; and
(f) With respect to the other matters to be included in the Auditor's
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 - Refer Note 26 (10) to
the financial statements.
ii. The Company did not have any long-term contracts including
derivative 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.
Annexure to Independent Auditors' Report - 31 March 2015 (Referred to
in our report of even date)
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of two 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. No material discrepancies were
noticed on such verification.
ii. (a) The inventory, except 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. For stocks lying with third parties at the
year-end, written confirmations have been obtained.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Act. Accordingly, paragraphs (iii) (a) and (b)
of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories and fixed assets are for the Company's
specialised requirements and similarly certain goods sold and services
rendered are for the specialised requirements of the buyers and
suitable alternative sources are not available to obtain comparable
quotations, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventories and fixed assets and with regard to the sale
of goods and services. We have not observed any major weakness in the
internal control system during the course of the audit.
v. I n our opinion, and according to the information and explanations
given to us, the Company has not accepted deposits as per the
directives issued by the Reserve Bank of India under the provisions of
Sections 73 to 76 or any other relevant provisions of the Act and the
rules framed thereunder. Accordingly, paragraph 3(v) of the Order is
not applicable to the Company.
vi. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under Section 148(1) of the Act and are of
the opinion that prima facie, the prescribed accounts and records have
been made and maintained. However, we have not made a detailed
examination of the records.
vii. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees' State Insurance,
Income-tax, Sales-tax, Wealth tax, Service tax, Duty of Customs, Duty
of Excise, Value added tax, and other material statutory dues have
been generally regularly deposited during the year by the Company with
the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees'
State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Duty
of Customs, Duty of Excise, Value added tax and other material
statutory dues were in arrears as at 31 March 2015 for a period of more
than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Income tax, Sales tax, Wealth tax, Service tax, Duty of
Customs, Duty of Excise and Value added tax which have not been
deposited with the appropriate authorities on account of any dispute
other than those mentioned in the Appendix to this report.
(c) According to the information and explanations given to us, the
amount required to be transferred to Investor Education and Protection
Fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made thereunder has been transferred to such
fund within time.
viii. The Company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses in the financial
year and in the immediately preceding financial year.
ix. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a
financial institution or banks. The Company did not have any
outstanding debentures.
x. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xi. In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were obtained.
xii. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Vijay Mathur
Partner
Membership No: 046476
Mumbai 7 May 2015
Mar 31, 2014
We have audited the accompanying financial statements of BASF India
Limited (''the Company''), which comprise the Balance Sheet as at 31
March 2014 and the Statement of Profit and Loss and Cash Flow Statement
for the year ended 31 March 2014 and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 (''the Act'').
This responsibility includes the design, implementation and maintenance
of internal control 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the said 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 accounting principles
generally accepted in India:
i. in case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2014;
ii. in case of the Statement of Profit and Loss, of the profit of the
Company for the year ended on that date; and
iii. in case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (''the
Order'') issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we enclose in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by Section 227(3) of the Act, we report that:
a. we have 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 appears from our examination of
those books;
c. the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Act; and
e. on the basis of written representations received from the directors
of the Company, as on 31 March 2014, and taken on record by the Board
of Directors, none of the directors is disqualified as on 31 March
2014, from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
Annexure to Independent Auditors'' Report - 31 March 2014 (Continued)
(Referred to in our report of even date)
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation
of fixed assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of two 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. No material discrepancies were
noticed on such verification.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
2. (a) The inventory, except 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. For stocks lying with third parties at the year-end,
written confirmations have been obtained.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. The Company has neither granted nor taken any loans, secured or
unsecured, to or from Companies, firms or other parties covered in the
register maintained under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories and fixed assets are for the Company''s
specialised requirements and similarly certain goods sold and services
rendered are for the specialised requirements of the buyers and
suitable alternative sources are not available to obtain comparable
quotations, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventories and fixed assets and with regard to the sale
of goods and services. We have not observed any major weakness in the
internal control system during the course of the audit.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs 5
lakh with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time, except for purchases of certain items of inventories and
fixed assets which are for the Company''s specialised requirements and
similarly for sale of certain goods and services rendered which are for
the specialised requirements of the buyers and for which suitable
alternative sources are not available to obtain comparable quotations.
However, on the basis of information and explanations provided, the
same appear reasonable.
6. The Company has not accepted any deposits from the public.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under Section 209(1 )(d) of the Act in
respect of all manufactured products and are of the opinion that prima
facie, the prescribed accounts and records have been made and
maintained. However, we have not made a detailed examination of the
records.
9. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise
duty, Investor Education and Protection Fund and other material
statutory dues have been generally regularly deposited during the year
by the Company with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Income tax, Sales tax, Wealth tax, Service tax,
Customs duty, Excise duty, Investor Education and Protection Fund and
other material statutory dues were in arrears as at 31 March 2014 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Income tax, Sales tax, Wealth tax, Service tax, Customs
duty and Excise duty which have not been deposited with the appropriate
authorities on account of any dispute other than those mentioned in the
Appendix to this report.
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers. The Company did not have any outstanding debentures or dues to
financial institutions during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi / mutual benefit
fund / society.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment.
18. The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under
Section 301 of the Act.
19. The Company did not have any outstanding debentures during the
year.
20. The Company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Name of the Statute Nature of the Amounts Amount
Dues (Rs million) paid in
dispute
(Rs million)
Central Excise Act, Duty interest 5.64 -
1944 and penalty
3.12 -
0.66 -
2.04 -
1.82 -
0.09 -
13.37 -
The Customs Act, 1962 Duty interest 95.00 -
and penalty
12.11 -
107.11 -
The Service Tax Act, Tax, Interest 0.05 -
1975 and Penalty
7.21 -
1.56 -
21.86 -
12.11 -
42.79 -
State and
Central Sales Non 0.38 -
Tax Act Submission of
Forms 6.17 4.76
21.60 -
0.07 -
29.81 4.76
Name of the statute Period Forum where the dispute is
pending for CARO
Central Excise Act, 1944 2007-08 Commissioner of Central
Excise
1992-94 High Court
2000-01
2007-08 Central Excise &
Service Tax
Appellate Tribunal
2008-09 Commissioner (Appeals)
1982-83 Assistant Commissioner
of Central
2008-09 Excise
2011-12
2009-10 Deputy Commissioner of
Central Excise
The Customs Act, 1962 2005-06 Supreme Court
1992-93 Central Excise &
Service Tax
2000-01 Appellate Tribunal
The Service Tax Act 2008-10 Assistant Commissioner
of Central
2010-11 Excise
2005-10 Central Excise &
Service Tax
2009-10 Appellate Tribunal
Jan 2005 to
March 2008
Dec. 2007 - Commissioner (Appeals)
Sep. 2009
2005-06 to Commissioner of Central
Excise
2009-10
2008-09 Commissioner of
Service Tax
2006-10
2006-07 Additional Commissioner
of Sales Tax
2002-03 Commissioner of Sales Tax
2006-07
2004-05 Deputy Commissioner of
Sales Tax
2008-09
2009-10
2010-11
2005-06 Joint Commissioner of
Sales Tax
2006-07
2007-08
2008-09
2009-10
2005-06 Tribunal
Name of the Statute Nature of the Amounts Amount
Dues (Rs million) paid in
dispute
(Rs million)
Tax Interest and 1.67 -
Penalty
99.61 -
30.10 6.87
326.49 0.24
0.62
3.34 0.07
461.83 7.18
The Income Tax Act, Tax, Interest 0.02 -
1961 and Penalty
50.73 37.50
70.22 23.67
73.92 -
2.70 2.70
238.86 214.47
5.03 4.88
441.48 283.22
Name of the statue Period Forum where the dispute is
pending for CARO
2006-07 Additional Commissioner of
Sales Tax
2002-03 Commissioner (Appeals)
2006-07
2006-07 Deputy Commissioner of
Sales Tax
2007-08
2009-10
2010-11
April 2013
May 2013
2004-05 Joint Commissioner of
Sales Tax
2005-06
2006-07
2007-08
2008-09
2009-10
2013-14
2007-08 Sales Tax Officer
1993-94 Tribunal
1994-95
2005-06
2006-07
2007-08
The Income Tax Act 2010-11 Assistant Commissioner
1961 of Income Tax
2006-07 Commissioner of Income Tax
2008-09 (Appeals)
2009-10
2010-11
2009-10 Deputy Commissioner
Income Tax
2010-11 Dispute Resolution Panel
2000-01 High Court
2003-04
2006-07
2000-01 Income Tax Appellate
Tribunal
2002-03
2003-04
2006-07
2007-08
2008-09
2009-10
2006-07 Transfer Pricing Officer
For B S R & Co. LLP
Chartered Accountants
Firm''s Registration No: 101248W
Vijay Mathur
Partner
Membership No: 046476
29 April 2014
Mumbai
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of BASF India
Limited (''the Company''), which comprise the Balance Sheet as at 31
March 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 (''the Act''). This responsibility includes
the design, implementation and maintenance of internal control 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the 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 accounting principles generally accepted in
India:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2013;
ii. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (''the
Order'') issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the the
Order.
2. As required by Section 227 (3) of the Act, we report that:
a. we have 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 appears from our examination of
those books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the Act; and
e. on the basis of written representations received from the directors
of the Company, as on 31 March 2013, and taken on record by the Board
of Directors, none of the directors is disqualified as on 31 March 2013
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act.
With reference to the Annexure referred to in our report of even date,
we report that:
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of two 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. No material discrepancies were
noticed on such verification.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
2. (a) The inventory, except 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. For stocks lying with third parties at the year-end,
written confirmations have been obtained.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. The Company has neither granted nor taken any loans, secured or
unsecured, to or from Companies, firms or other parties covered in the
register maintained under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories and fixed assets are for the Company''s
specialised requirements and similarly certain goods sold and services
rendered are for the specialised requirements of the buyers and
suitable alternative sources are not available to obtain comparable
quotations, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventories and fixed assets and with regard to the sale
of goods and services. We have not observed any major weakness in the
internal control system during the course of the audit.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs 5
lakh with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time, except for purchases of certain items of inventories and
fixed assets which are for the Company''s specialised requirements and
similarly for sale of certain goods and services rendered which are for
the specialised requirements of the buyers and for which suitable
alternative sources are not available to obtain comparable quotations.
However, on the basis of information and explanations provided, the
same appear reasonable.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A, Section 58AA or other relevant provisions of the Act, and the
rules framed thereunder with regard to deposits accepted from the
public. Accordingly, there have been no proceedings before the Company
Law Board or National Company Law Tribunal (as applicable) or Reserve
Bank of India or any Court or any other Tribunal in this matter and no
order has been passed by any of the aforesaid authorities.
7. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under Section 209(1)(d) of the Act in
respect of all manufactured products and are of the opinion that prima
facie, the prescribed accounts and records have been made and
maintained. However, we have not made a detailed examination of the
records.
9. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise
duty, Investor Education and Protection Fund and other material
statutory dues have been generally regularly deposited during the year
by the Company with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Income tax, Sales tax, Wealth tax, Service tax,
Customs duty, Excise duty, Investor Education and Protection Fund and
other material statutory dues were in arrears as at 31 March 2013 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Income tax, Sales tax, Wealth tax, Service tax, Customs
duty and Excise duty which have not been deposited with the appropriate
authorities on account of any dispute other than those mentioned in the
Appendix to this report.
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers. The Company did not have any outstanding debentures or dues to
financial institutions during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi / mutual benefit
fund / society.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. In our opinion and according to the information and explanations
given to us, the term loans taken by the Company have been applied for
the purpose for which they were raised.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment.
18. The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under
Section 301 of the Act.
19. The Company did not have any outstanding debentures during the
year.
20. The Company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For B S R & Co.
Chartered Accountants
Firm''s Registration No: 101248W
Vijay Mathur
Partner
Membership No: 046476
30 April 2013
Mumbai
Mar 31, 2012
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
1. As required by the Companies (Auditor's Report) Order, 2003 ('the
Order') issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956 ('the Act'),
we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to above, we
report that:
(a) we have 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 appears from our examination of
those books;
(c) the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and
Loss and the Cash Flow Statement dealt with by this report comply with
the Accounting Standards referred to in sub-section (3C) of Section 211
of the Act;
(e) on the basis of written representations received from the directors
of the Company, as on 31 March 2012, and taken on record by the Board
of Directors, we report that none of the directors is disqualified as
on 31 March 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Act; and
(f) in our opinion, and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Act, in the manner so required, and give a true and
fair view in conformity with the accounting principles generally
accepted in India:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2012;
ii. in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Annexure to Auditors' Report - 31 March 2012
With reference to the Annexure referred to in our report of even date,
we report that:
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of two 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. No material discrepancies were
noticed on such verification.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
2. (a) The inventory, except 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. For stocks lying with third parties at the year-end,
written confirmations have been obtained.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, firms or other parties covered in the
register maintained under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories and fixed assets are for the Company's
specialised requirements and similarly certain goods sold and services
rendered are for the specialised requirements of the buyers and
suitable alternative sources are not available to obtain comparable
quotations, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventories and fixed assets and with regard to the sale
of goods and services. We have not observed any major weakness in the
internal control system during the course of the audit.
5. (a) i n our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs. 5
lakh with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time, except for purchases of certain items of inventories and
fixed assets which are for the Company's specialised requirements and
similarly sale of certain goods and services rendered which are for the
specialised requirements of the buyers and suitable alternative sources
are not available to obtain comparable quotations. However, on the
basis of information and explanations provided, the same appear
reasonable.
6. i n our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A, Section 58AA or other relevant provisions of the Act, and the
rules framed there under with regard to deposits accepted from the
public. Accordingly, there have been no proceedings before the Company
Law Board or National Company Law Tribunal (as applicable) or Reserve
Bank of India or any Court or any other Tribunal in this matter and no
order has been passed by any of the aforesaid authorities.
7. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under Section 209(1)(d) of the Act in
respect of manufacture of insecticides, dyes and paints and varnishes
are of the opinion that prima facie, the prescribed accounts and
records have been made and maintained. However, we have not made a
detailed examination of the records.
9. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees' State Insurance,
Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise
duty, Investor Education and Protection Fund and other material
statutory dues have been generally regularly deposited during the year
by the Company with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees'
State Insurance, Income-tax, Sales tax, Wealth tax, Service tax,
Customs duty, Excise duty, Investor Education and Protection Fund and
other material statutory dues were in arrears as at 31 March 2012 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Income-tax, Sales tax, Wealth tax, Service tax, Customs
duty and Excise duty which have not been deposited with the appropriate
authorities on account of any dispute other than those mentioned in the
appendix to this report.
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
11. i n our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers. The Company did not have any outstanding debentures or dues to
financial institutions during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. in our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi / mutual benefit
fund / society.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. According to the information and explanations given to us, the
Company has applied the term loans for the purpose for which it was
obtained.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment.
18. The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under
Section 301 of the Act.
19. The Company did not have any outstanding debentures during the
year.
20. The Company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Appendix
Name of the
Statute Nature of
the Dues Amounts Period Forum where the
(Rs.
million) dispute is
pending
Central Excise
Act, 1944 Duty interest
and 3.12 1992-1993 High Court
penalty 2.04 2007-2008 Central Excise
& Service
Tax Appellate
Tribunal
6.30 2006-2008 Commissioner
of Central
Excise
11.12 2005-2006 Supreme Court
The Customs
Act, 1962 Duty interest
and 41.40 2005-2006 Supreme Court
penalty
The Service
Tax Act, 1975 Tax, interest
and penalty 0.05 2008-2010 Asst.
Commissioner of
2010-2011 Central Excise
16.18 2005-2009, Central Excise
& Service
2005-2010 Tax Appellate
Tribunal
2007-2009
2009-2010
2.3 2007-2009 Commissioner
(Appeals)
2009-2010
100.57 1998-2004, Commissioner
of Central
2003-2004, Excise
2005-2010
The Income Tax
Act, 1961 Tax, interest
and penalty 2.70 AY 2000-
2001, High Court
2003-2004,
2006-2007
220.17 AY 2000-
2001, Income Tax
Appellate
2002-2003, Tribunal
2003-2004,
2004-2005,
2006-2007,
2007-2008
228.64 AY 2006-
2007, Commissioner
of Income
2007-2008, Tax (Appeals)
2008-2009
State and
Central Sales Non
Submission of 59.26 2004-2005, Joint
Commissioner of
Tax Act forms 2005-2006, Sales Tax
2006-2007
3.24 1999-2000, Deputy
Commissi
oner of
2002-2003, Sales Tax
2004-2005,
2005-2006,
2006-2007,
2007-2008
Tax, interest
and penalty 0.1 1993-1994, Tribunal
1994-1995
7.8 2004-2005 Joint
Commissioner of
Sales Tax
38.93 2002-2003, Deputy
Commissioner of
2005-2006, Sales Tax
2007-2008,
2010-2011
For B S R & Co.
Chartered Accountants
Firm's Registration No.: 101248W
Vijay Mathur
Partner
Membership No.: 046476
Mumbai,
Date: 25 April 2012
Mar 31, 2011
We have audited the attached Balance Sheet of BASF India Limited ('the
Company') as at 31 March 2011, and the related Profit and Loss Account
and Cash Flow Statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
1. As required by the Companies (Auditor's Report) Order, 2003 ('the
Order') issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956 ('the Act'),
we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to above, we
report that:
(a) we have 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 appears from our examination of
those books;
(c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the Act;
(e) on the basis of written representations received from the directors
of the Company, as on 31 March 2011, and taken on record by the Board
of Directors, we report that none of the directors is disqualified as
on 31 March 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Act; and
(f) in our opinion, and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Act, in the manner so required, and give a true and
fair view in conformity with the accounting principles generally
accepted in India:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2011;
ii. in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Annexure to Auditors' Report - 31 March 2011 With reference to the
Annexure referred to in our report of even date, we report that:
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of two 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. No material discrepancies were
noticed on such verification.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
2. (a) The inventory, except 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. For stocks lying with third parties at the year-end,
written confirmations have been obtained.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act. Accordingly, paragraphs 4(iii) (b), (c)
and (d) are not applicable to the Company.
(e) The Company has taken loans from 3 companies covered in the
register maintained under Section 301 of the Act. The maximum amount
outstanding during the year was Rs. 3,376 million and the year-end
balance of such loans was Rs. Nil.
(f) In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from companies listed in the register
maintained under Section 301 of the Act are not, prima facie,
prejudicial to the interest of the Company.
(g) In the case of loans taken from companies listed in the register
maintained under Section 301 of the Act, the Company has been regular
in repaying the principal amounts as stipulated and in the payment of
interest.
4. In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories and fixed assets are for the Company's
specialised requirements and similarly certain goods sold and services
rendered are for the specialised requirements of the buyers and
suitable alternative sources are not available to obtain comparable
quotations, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventories and fixed assets and with regard to the sale
of goods and services. We have not observed any major weakness in the
internal control system during the course of the audit.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts and
arrangements referred to in (a) above and exceeding the value of Rs. 5
lakh with any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time, except for purchases of certain items of inventories and
fixed assets which are for the Company's specialised requirements and
similarly sale of certain goods and services rendered which are for the
specialised requirements of the buyers and suitable alternative sources
are not available to obtain comparable quotations. However, on the
basis of information and explanations provided, the same appear
reasonable.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A, Section 58AA or other relevant provisions of the Act, and the
rules framed thereunder with regard to deposits accepted from the
public. Accordingly, there have been no proceedings before the Company
Law Board or National Company Law Tribunal (as applicable) or Reserve
Bank of India or any Court or any other Tribunal in this matter and no
order has been passed by any of the aforesaid authorities.
7. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under Section 209(1 )(d) of the Act in
respect of manufacture of insecticides and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. However, we have not made a detailed examination of the
records.
9. (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees' State Insurance,
Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise
duty, Investor Education and Protection Fund and other material
statutory dues have been generally regularly deposited during the year
by the Company with the appropriate authorities.
According to the information and explanations given to us, there were
no dues on account of Cess under Section 441A of the Act since the date
from which the aforesaid section comes into force has not been notified
by the Central Government.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees'
State Insurance, Income tax, Sales tax, Wealth tax, Service tax,
Customs duty, Excise duty, Investor Education and Protection Fund and
other material statutory dues were in arrears as at 31 March 2011 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there
are no dues of Income tax, Sales tax, Wealth tax, Service tax, Customs
duty and Excise duty which have not been deposited with the appropriate
authorities on account of any dispute other than those mentioned in the
appendix to this report.
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers. The Company did not have any outstanding debentures or dues to
financial institutions during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi/mutual benefit
fund/society.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. According to the information and explanations given to us, the
Company has applied the term loans for the purpose for which it was
obtained.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment.
18. The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under
Section 301 of the Act.
19. The Company did not have any outstanding debentures during the
year.
20. The Company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Name of the Statute Nature of
the Dues Amounts Period
(Rs. million)
Central Excise Act,
1944 Duty interest and 11.12 2005-2006
penalty
3.01 1992-1993
2.06 2005-2008
2.04 2007-2008
The Customs Act,
1962 Duty interest and 11.38 2006-2007
penalty
The Service Tax
Act, 1975 Tax, interest and
penalty 0.06 2005-2010
8.41 2007-2009,
2009-2010
The Income Tax
Act, 1961 Tax, interest and
penalty 1.13 AY 2000-2001,
2003-2004
6.66 AY 2002-2003,
2003-2004,
2006-2007
23.65 AY 2002-2003,
2004-2005,
2006-2007,
2007-2008,
2008-2009
0.96 AY 2004-2005
State and Non Submission of 8.86 1993-1994,
Central Sales
Tax Act forms 1994-1995,
2002-2003
0.46 1999-2000,
2004-2005
25.99 2004-2005,
2006-2007
1.36 2007-2008
Tax, interest and penalty 0.02 2000-2001
Non Submission of 10.36 2004-2005
forms and various
disallowances
0.51 2005-2006
4.10 2005-2006,
2007-2008
Name of the Statue Forum where the
dispute is pending
Central Excise Act, 1944 Supreme Court
High Court
Central Excise & Service
Tax Appellate Tribunal
Additional Commissioner
of Central Excise
The Customs Act, 1962 Central Excise & Service
Tax Appellate Tribunal
The Service Tax Act, 1975 Asst. Commissioner of
Central Excise
Additional Commissioner
of Central Excise
The Income Tax Act, 1961 High Court
Income Tax Appellate
Tribunal
Commissioner of Income
Tax (appeals)
Assessing Officer
State and
Central Sales Tax Act Sales Tax Tribunal
Asstt. Commissioner of
Sales Tax
Joint Commissioner of
Sales Tax
Deputy Commissioner of
Commercial Tax
Assessing Officer
Deputy Commissioner of
Sales Tax
Additional Commissioner,
Commercial Taxes
Asstt. Commissioner of
Commercial Tax
For B S R & Co.
Chartered Accountants
Firm's Registration No.: 101248W
Vijay Mathur
Partner
Membership No.: 046476
28 April 2011
Mar 31, 2010
We have audited the attached Balance Sheet of BASF India Limited (the
Company) as at 31 March 2010, and the related Profit and Loss Account
and Cash Flow Statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
1. As required by the Companies (Auditors Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956 (the Act)
we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to above, we
report that:
(a) we have obtained all 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 appears from our examination of
those books;
(c) the Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) in our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the Act;
(e) on the basis of written representations received from the directors
of the Company, as on 31 March 2010, and taken on record by the Board
of Directors, we report that none of the directors is disqualified as
on 31 March 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Act; and
(f) in our opinion, and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Act, in the manner so required, and give a true and
fair view in conformity with the accounting principles generally
accepted in India:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2010;
ii. in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date;
and
iii. in the case of the Cash Flow Statement, of the cash flows of
the Company for the year ended on that date
Annexure to Auditors Report - 31 March 2010
With reference to the Annexure referred to in our report of even date,
we report that:
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation
of fixed assets.
(b) The Company has a regular programme of physical verification of its
fixed assets by which all fixed assets are verified in a phased manner
over a period of two 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. No material discrepancies were
noticed on such verification.
(c) Fixed assets disposed off during the year were not substantial, and
therefore, do not affect the going concern assumption.
2. (a) The inventory, except 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. For stocks lying with third parties at the
year-end, written confirmations have been obtained.
(b) The procedures for the physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
3. The Company has neither granted nor taken any loans, secured or
unsecured, to or from companies, firms or other parties covered in the
register maintained under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, and having regard to the explanation that purchases of
certain items of inventories and fixed assets are for the Companys
specialised requirements and similarly certain goods sold and services
rendered are for the specialised requirements of the buyers and
suitable alternative sources are not available to obtain comparable
quotations, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventories and fixed assets and with regard to the sale
of goods and services. We have not observed any major weakness in the
internal control system during the course of the audit.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or
arrangements referred to in Section 301 of the Act have been entered in
the register required to be maintained under that section. (b) In our
opinion and according to the information and explanations given to us,
the transactions made in pursuance of contracts and arrangements
referred to in (a) above and exceeding the value of Rs. 5 lakh with any
party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time,
except for purchases of certain items of inventories and fixed assets
which are for the Companys specialised requirements and similarly sale
of certain goods and services rendered which are for the specialised
requirements of the buyers and suitable alternative sources are not
available to obtain comparable quotations. However, on the basis of
information and explanations provided, the same appear reasonable.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
58A, Section 58AA or other relevant provisions of the Act, and the
rules framed thereunder with regard to deposits accepted from the
public. Accordingly, there have been no proceedings before the Company
Law Board or National Company Law Tribunal (as applicable) or Reserve
Bank of India or any Court or any other Tribunal in this matter and no
order has been passed by any of the aforesaid authorities.
7. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under Section 209(1 )(d) of the Act in
respect of manufacture of insecticides and are of the opinion that
prima facie, the prescribed accounts and records have been made and
maintained. However, we have not made a detailed examination of the
records.
9. (a) According to the information and explanations given to us and
on the basis of our examination of the records
of the Company, amounts deducted/accrued in the books of account in
respect of undisputed statutory dues including Provident Fund,
Employees State Insurance, Income-tax, Sales-tax, Wealth tax, Service
tax, Customs duty, Excise duty, Investor Education and Protection Fund
and other material statutory dues have been generally regularly
deposited during the year by the Company with the appropriate
authorities.
According to the information and explanations given to us, there were
no dues on account of Cess under Section 441A of the Act since the date
from which the aforesaid section comes into force has not been notified
by the Central Government.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees
State Insurance, Income tax, Sales tax, Wealth tax, Service tax,
Customs duty, Excise duty, Investor Education and Protection Fund and
other material statutory dues were in arrears as at 31 March 2010 for a
period of more than six months from the date they became payable. (b)
According to the information and explanations given to us, there are no
dues of Income tax, Sales tax, Wealth tax, Service tax, Customs duty
and Excise duty which have not been deposited with the appropriate
authorities on account of any dispute other than those mentioned in the
appendix to this report.
10. The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to its
bankers. The Company did not have any outstanding debentures or dues to
financial institutions during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. In our opinion and according to the information and explanations
given to us, the Company is not a chit fund or a nidhi / mutual benefit
fund / society.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. The Company did not have any term loans outstanding during the
year.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we are of
the opinion that the funds raised on short-term basis have not been
used for long-term investment.
18. The Company has not made any preferential allotment of shares to
companies/firms/parties covered in the register maintained under
Section 301 of the Act.
19. The Company did not have any outstanding debentures during the
year.
20. The Company has not raised any money by public issues during the
year.
21. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For B S R & Co.
Chartered Accountants
Firm Registration Number: 101248W
Vijay Mathur
Partner
Membership No.: 046476
Mumbai
Date: 29 April 2010