Mar 31, 2022
Report on the Audit of the Standalone FinancialStatement
Opinion
We have audited the standalone financial statements of Punjab Chemicals and Crop Protection Limited (the "Companyâ), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("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 31 March 2022, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone 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 obtained by us, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matter |
|
Revenue recognition See note 2 (j) and 27 to the standalone financial statements |
|
The key audit matter |
How the matter was addressed in our audit |
The Company recognises revenue from the sales of products and services when control over goods is transferred to the customer/ services are rendered based on the specific terms and conditions of the sale/service contracts entered into with respective customers. We have identified recognition of revenue as a key |
In view of the significance of the matter we applied the following audit procedures in this area, among others to obtain sufficient appropriate audit evidence: ⢠We assessed the compliance of the revenue recognition accounting policies against the requirement of Ind AS 115 i.e. Revenue from contracts with customers. |
audit matter as- ⢠revenue is a key performance indicator; and ⢠there is a presumed fraud risk of revenue being overstated through manipulation of the timing and amount of revenue recognized due to pressures to achieve performance targets as well as meeting external expectations. |
⢠We evaluated the design, implementation and operating effectiveness of key financial controls with respect to revenue recognition on selected transactions (using random sampling). ⢠We performed substantive testing by using statistical sampling for revenue transactions recorded during the financial year. For such samples, verified the underlying documents, including invoices, good dispatch notes, customer acceptances, shipping documents (as applicable) and subsequent receipts in the bank statements to assess whether these are recognized in the appropriate period in which control is transferred or services are provided. ⢠We carried out analytical procedures on revenue recognized during the year to identify unusual variances. |
Revenue recognition See note 2 (j) and 27 to the standalone financial statements |
|
The key audit matter |
How the matter was addressed in our audit |
⢠We tested specific item on manual journals posted to revenue ledger selected based on specified risk-based criteria to identify unusual items. ⢠We selected revenue transactions on a sample basis recorded during specified period around the year end date and checked whether revenue has been recognised in the correct reporting period by examining the underlying documents. ⢠We assessed the adequacy of disclosures in the financial statements against the requirement of Ind AS 115. |
The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be 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.
The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements 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 standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
⢠Obtain sufficient appropriate audit evidence regarding the financial statements of the Company to express an opinion on the standalone financial
statements. We are responsible for the direction, supervision and performance of the audit of financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone 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.
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ) issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the "Annexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by Section 143(3) of the Act, we
report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) 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 standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income),
the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d) I n our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 1 April 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 ''Annexure Bâ.
(B) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 41 to the standalone financial statements.
b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
d) (i) The management has represented
that, to the best of its knowledge and belief, as disclosed in Note 52 to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediariesâ), with the understanding, whether
recorded in writing or otherwise, that the Intermediary shall:
⢠directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiariesâ) by or on behalf of the Company or
⢠provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The management has represented, that, to the best of its knowledge and belief, as disclosed in Note no. 52 to the financial statements, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall:
⢠directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiariesâ) by or on behalf of the Funding Party or
⢠provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
(iii) Based on such audit procedures as 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 (d) (i) and (d) (ii) contain any material mis-statement.
e) The final dividend paid by the Company during the year in respect of the dividend declared for the previous year is in accordance with section 123 of the Companies Act 2013 to the extent it applies to payment of dividend. As stated in Note 39(ii) to the financial statements, the Board of Directors of the Company have proposed final divided for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
(C) With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
Chartered Accountants Firm''s Registration No. 101248W/W-100022
Partner
Membership No. 507857 ICAI UDIN: 22507857AILAUW7696
Place: Mumbai Date: 5th May, 2022
Mar 31, 2018
1. Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Punjab Chemicals and Crop Protection Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Cash Flows Statement for the year then ended, and summary of the significant accounting policies and other explanatory information, (hereinafter referred to as âthe standalone Ind AS financial statementsâ).
2. Managementâs Responsibility for the Standalone 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 standalone Ind AS financial statements that give a true and fair view of the state of affairs, profit or loss and including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS 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.
3. Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone 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 standalone 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 standalone 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 standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone 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 standalone Ind AS financial statements.
We are also responsible to 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 entityâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditorâs report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditorâs report. However, future events or conditions may cause an entity to cease to continue as a going concern. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
4. Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31 March 2018, its profit and including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
5. Other matter
The comparative financial information of the Company for the year ended 31 March 2017 and the transition date opening Balance Sheet as at 1 April 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31 March 2017 and 31 March 2016 dated 25 May 2017 and 30 May 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of the above matter.
6. Report on Other Legal and Regulatory Requirements
(i) As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(ii) 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, the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 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 the standalone Ind AS financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
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 standalone Ind AS financial statements; - Refer Note 42(i) to the standalone Ind AS 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the standalone Ind AS financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made since they do not pertain to the financial year ended 31 March 2018.
However amounts as appearing in the audited standalone financial statements for the year ended 31 March 2017 have been disclosed. Also, refer note 50 to the standalone Ind AS financials Statements.
i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets (including investment property).
(b) According to the information and explanations given to us, the Company has a regular programme of physical verification of its fixed assets (including investment property) by which all fixed assets (including investment property) are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets being plant and equipment were verified during the year. The discrepancies noticed on such verification were not material and have been properly adjusted in the books of account.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii) According to the information and explanation given to us, the inventories, except goods-in-transit, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. As informed to us, the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly adjusted in the books of account.
iii) The Company has not granted any loans, secured or unsecured, to companies, limited liability partnerships and other parties covered in the register maintained under section 189 of the Act.
Further, there are no firms covered in the register required under section 189 of the Act.
iv) According to information and explanations given to us, in respect of loans and investments made by the Company, the provision of section 185 and 186 of the Act has been complied with as applicable. As informed to us, the Company has not provided any guarantee or security as specified under section 185 or 186 of the Act.
v) According to the information and explanations given to us, the Company has not accepted any deposits covered under section 73 to 76 or other provisions of the Act and rules framed thereunder. Thus, paragraph 3(v) of the Order is not applicable.
vi) We have broadly reviewed the books of account maintained by the Company, pursuant to the Rules made by the Central Government for the 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 with a view to ensuring whether they are accurate or complete.
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 duty of excise, Provident fund, Employeesâ State Insurance, Income-tax, Sales tax, Value added tax, Service tax, Duty of Customs, Cess and other statutory dues have generally been regularly deposited with the appropriate authorities though there have been slight delays in few cases of Employeesâ State Insurance, Sales Tax, Value added tax, Service tax and other statutory dues.
According to the information and explanations given to us, no undisputed amounts payable in respect of duty of excise, Provident fund, Employeesâ State Insurance, Income-tax, Sales tax, Value added tax, Service tax, duty of Customs, Cess and Goods and services tax and other material statutory dues were in arrears as at 31 March 2018 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 Sales tax, Value added tax, Income tax, service tax, cess, duty of excise and duty of Customs which have not been deposited with the appropriate authorities on account of any dispute, except as mentioned below:
Name of the statute |
Nature of Dues |
Amount disputed# (Rs. in lakhs) |
Amount deposited (Rs. in lakhs)* |
Period to which the amount relates |
Forum where the dispute is pending |
Income Tax Act, 1961 |
Income tax |
1 |
- |
Assessment Year 2004-2005 |
High Court |
Income Tax Act, 1961 |
Income tax |
879 |
455 |
Assessment Year 2008-09 to 2010-2011 |
Income tax Appellate Tribunal |
Income Tax Act, 1961 |
Income tax |
53 |
53 |
Assessment Year 2007-2008, 2011-12 to 2014-2015 |
Commissioner of Income tax (Appeals) |
Central Excise Act, 1944 |
Service tax |
1 |
- |
1999-2000 |
High Court |
The Punjab Sales Tax Act, 2005 |
Sale tax |
11 |
- |
2004-2005 |
High Court |
Central Excise Act, 1944 |
Excise duty |
38 |
7 |
2006-2007 to 2009-2010 |
Customs, Excise and Service Tax Appellate Tribunal (CESTAT) |
Central Excise Act, 1944 |
Service tax |
2 |
2009-2010 to 2010-2011 |
Customs, Excise and Service Tax Appellate Tribunal (CESTAT) |
|
Central Excise Act, 1944 |
Excise duty |
15 |
13 |
2012-2013 to 2014-2015 |
Commissioner (Appeals) |
Central Excise Act, 1944 |
Service tax |
11 |
1 |
2009-2010 to 2015-2016 |
Commissioner (Appeals) |
Central Excise Act, 1944** |
Excise duty |
332 |
- |
2005-2006, 2006-2007, 2014-2015 and 2015-2016 |
Commissioner and Assistant Commissioner |
Central Excise Act, 1944** |
Service tax |
4 |
- |
2010-2011, 2015-2016 and 2016-2017 |
Assistant Commissioner |
#Amounts as per demand order including interest and penalty, whichever indicated in the order
* Paid under protest by utilising the balance in CENVAT credit.
**relates to show cause notice received
viii) According to the information and explanations given to us, the Company has delayed in repayment of loans or borrowings to its bankers to the extent of Rs 3,293 lakhs (delay from 1 day to 2,009 days) and Rs 339 lakhs of such dues were in arrears as on the balance sheet date. The lender wise details are tabulated as under.
Particulars |
Amount of default as at the Balance sheet (in lakhs) |
Period of default* |
Union Bank of India |
69 |
30 September 2012 till date |
Allahabad Bank |
196 |
31 December 2017 till date |
EXIM Bank |
63 |
31 March 2018 till date |
Bank Baroda |
11 |
31 March 2018 till date |
* represents the earliest default date. Further, the Company has paid subsequently an amount of Rs.60 lakhs, Rs. 196 lakhs and Rs. 63 lakhs to Union Bank of India, Allahabad Bank and EXIM Bank respectively.
The Company has not defaulted in repayment of dues to financial institutions and Company did not have any outstanding dues in respect of debenture holders during the year.
ix) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not raised any money by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, paragraph 3 (ix) of the Order is not applicable.
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 for the year.
xi) According to the information and explanations given to us and based on our examination of the records of the Company, the managerial remuneration has been paid or provided by the Company in accordance with the provision of section 197 read with Schedule V of the Act.
xii) 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.
xiii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the 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.
xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with the directors or persons connected with him during the year. Accordingly, paragraph 3(xv) of the Order is not applicable.
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.
ANNEXURE B REFERRED TO IN PARAGRAPH 6 (II)(F) OF THE INDEPENDENT AUDITORâS REPORT TO THE MEMBERS OF PUNJAB CHEMICALS AND CROP PROTECTION LIMITED BEING REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (âTHE ACTâ)
We have audited the internal financial controls with reference to the standalone Ind AS financial statements of Punjab Chemicals and Crop Protection Limited (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to the standalone Ind AS financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of internal financial controls over Financial Reporting issued by the Institute of Chartered Accountants of India. 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to the standalone Ind AS 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, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to the standalone Ind AS financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to the standalone Ind AS 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 standalone Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to the standalone Ind AS financial statements.
Meaning of Internal Financial Controls with reference to the Standalone Ind AS Financial Statements
A companyâs internal financial control with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial statements and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control 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.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to the standalone Ind AS Financial Statements to future periods are subject to the risk that the internal financial control with reference to the standalone Ind AS financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to the standalone Ind AS financial statements and such internal financial controls with reference to the standalone IndAS financial statements were operating effectively as at 31 March 2018, based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of internal financial controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For B S R & Co. LLP
Chartered Accountants
Registration No.: 101248W/W-100022
Pravin Tulsyan
Place: Mumbai Partner
Date: 29 May 2018 Membership No: 108044
Mar 31, 2015
We have audited the accompanying standalone financial statements of
Punjab Chemicals and Crop Protection Limited ("the Company"), which
comprise the Balance Sheet as at March 31, 2015, 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 Standalone 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 standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with 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 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 standalone
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 issued by the
Institute of Chartered Accountants of India, as 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 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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the 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, 2015,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, 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.
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
purpose 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, 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 standalone 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 written representations received from the directors
as on March 31,2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164 (2) of the Act;
(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 33 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; and
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 the Auditor's Report
Annexure referred to in paragraph 1 under the heading "Report on Other
legal and Regulatory Requirement of our report of even date
(I) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets except for furniture, fixture and equipments for certain location
where item wise particulars in fixed asset register and tagging of fixed
assets are in the process of updation.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. Accordingly a portion
of the fixed assets were verified during the year and no material
discrepancies were noticed on such verification.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory 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 and no
material discrepancies were noticed on physical verification.
(iii) (a) According to the information and explanations given to us, 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 Companies Act, 2013. Accordingly, the provisions of clause
3(iii)(a) and (b) of the Order are not applicable to the Company and
hence not commented upon.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the Company in respect of these areas.
(v) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of section73 to 76 or any
other relevant provisions of the Companies Act, 2013, and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 148(1) of the Companies Act,
2013, and are of the opinion that prima facie, the specified accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the same.
(vii) (a) Undisputed statutory dues including provident fund, employees'
state insurance, income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise duty, value added tax, cess and other material statutory
dues have not been regularly deposited with the appropriate authorities
and there have been serious delays in large number of cases.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income-tax, wealth-tax, service tax, sales-tax,
customs duty, excise duty, value added tax, cess and other material
statutory dues were outstanding, at the year end, for a period of more
than six months from the date they became payable.
(b) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty, value added tax and cess on account of any dispute, are as
follows:
Name Nature of Amount Period Forum
of Dues (Rs. in to where
Statute Lacs) which dispute
(net of amount is
advances relates pending
paid)
The Excise Duty/ 572 2005-06 Deputy
Central Service Tax to Commissioner
Excise demands 2012-13 Central Excise,
Act Commissioner
and CESTAT
Income Tax / Interest 616 2007-08 Income Tax
Tax Act, and Appellate
1961 2008-09 Tribunal.
The Penalty 11 2004-05 Entry Tax
Punjab Officer,
Sales Tax Shambhu
Act Barrier
(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's accumulated losses at the end of the financial
year are more than fifty percent of its net worth. The Company has not
incurred cash loss in the current year and immediately preceding
financial year.
(ix) Based on our audit procedures and as per the information and
explanations given by the management, the Company had delayed in certain
repayments of dues (including interest) to banks. The delayed principal
amount and the interest aggregate to Rs. 4,692 lacs and Rs. 942 lacs
respectively (delays ranging from 1 day to 913 days). Of the above, Rs.
4,074 lacs sheet date and is pertaining to period post Corporate Debt
Restructuring Scheme (CDR) which is effective and as approved by
Corporate Debt Restructuring Empowered Group (CDR EG). Out of the
outstanding balance as at March 31,2015, Rs. 236 lacs have been repaid
subsequently, Rs. 1,588 lacs pertains to amounts due to State Bank of
India for which the State Bank of India has sanctioned the One Time
Settlement to the Company (as referred in Note 46 of the attached
financial statements). The Company has not defaulted in repayment of
dues to financial institutions and the Company did not have any
outstanding dues in respect of debenture holders during the year.
(x) According to information and explanations given to us, the Company
has given guarantee for loans taken by others from banks and financial
institutions, the terms and conditions whereof, in our opinion are not
prima-facie prejudicial to the interest of the Company.
(xi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xii) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the year.
For S R B C & CO LLP
ICAI Firm registration number: 324982E
Chartered Accountants
per Ravi Bansal
Partner
Membership No.: 49365
Place of signature: Mumbai
Date: May 28, 2015
Mar 31, 2014
We have audited the accompanying financial statements of Punjab
Chemicals and Crop Protection Limited ("the Company"), which comprise
the Balance Sheet as at March 31, 2014, 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
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 ("the
Act"), read with General Circular 8/2014 dated 4 April 2014 issued by
the Ministry of Corporate Affairs. 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 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 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to Note 33 to the financial statements regarding
managerial remuneration amounting to Rs. 48.48 lacs which was
paid/provided during the period from November 14, 2012 to March 31,
2014 for which the Company has applied for the Central Government''s
approval for regularization of conditions specified in Schedule XIII to
Companies Act, 1956, in respect of default in repayment of debts and
interest thereon for continuous period of thirty days in the preceding
financial period. Pending receipt of approval, no adjustments has been
considered necessary in these financial statements. Our 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, 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 paragraphs4 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 purpose 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, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Companies Act, 1956, read with General Circular
8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs;
(e) On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure to the Auditor''s Report
The Annexure referred to in our report to the members of Punjab
Chemicals and Crop Protection Limited (''the Company'') for the year
ended March 31, 2014. We report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets except for furniture, fixture and equipments for certain
location where item wise particulars in fixed asset register and
tagging of fixed assets are in the process of updation.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, 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) There was no disposal of a substantial part of fixed assets during
the period.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory 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 and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted unsecured loan to one party
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount involved during the year is Rs. 30 lacs
and the year-end balance of loan/advances granted to such party is Rs.
NIL.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loan are not prima facie prejudicial to the interest of the
Company.
(c) The loan granted and the interest is re-payable on demand. As
informed, the company has not demanded repayment of any such loan and
interest during the year, thus, there has been no default on the part
of the parties to whom the money has been lent.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956.
(e) The Company had taken loans from one company covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year and the year-end balance of
loans taken from such party is Rs. 787 lacs. Further, the Company has
taken fixed deposits from parties covered in the register maintained
under Section 301 of the Companies Act, 1956. The maximum amount
involved during the period is Rs. 7.15 lacs and the year-end balance of
the said fixed deposits is Rs. Nil.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans and fixed deposits are not prima facie prejudicial to the
interest of the Company.
(g) In respect of loans and fixed deposits taken, repayment of the
principal amount is as stipulated and payments of interest have been
regular.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the company in respect of these areas.
(v) (a) According to the information and explanations provided by
the management, we are of the opinion that the particulars of contracts
or arrangements referred to in section 301 of the Companies Act, 1956
that need to be entered into the register maintained under section 301
have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time except in
respect of certain transactions of sale of goods and services, where
because of the unique and specialized nature of the items involved and
absence of any comparable prices, we are unable to comment whether the
transactions were made at the prevailing market prices at the relevant
time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, profession
tax, investor education and protection fund, or employees'' state
insurance, income-tax, sales-tax, wealth- tax, service tax, customs
duty, excise duty have not been regularly deposited with the
appropriate authorities and there have been delays in large number of
cases.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales- tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of Nature Amount
statue Dispute (Rs.in
Lacs)
(net of
advances
paid)
The Modvat taken on 599
Central sale in transit,
Excise recovery of
Act cenvat
credit/cess,
Excise duty on
job-work, Tax on
product
registration
expenses
Income Disallowance 616
Tax Act under Transfer
Pricing and sec.
14A
The Improper 11
Punjab Documents
Sales Tax
Act
Name Period Forum
of to Where
statue Which disput
amount is
relates pending
The 2005-06 Deputy to Commissioner
Central to Central Excise,
Excise 2012-13 Commissioner
Act and CESTAT
Income 2007-08 Income Tax
Tax Act and Appellate
2008-09 Tribunal.
The 2004-05 Entry Tax
Punjab Officer,
Sales Tax Shambhu
Act Barrier
(x) The Company''s accumulated losses at the end of the financial year
are more than fifty percent of its net worth. The Company has not
incurred cash loss in the current and immediately preceding financial
period.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, the Company had delayed in
certain repayments of dues (including interest) to financial
institutions and banks. The delayed principal amount and the interest
aggregate to Rs. 3,743 lacs and Rs. 1,485 lacs respectively (delays
ranging from 1 day to 548 days). Of the above, Rs. 4,246 lacs is
outstanding at the balance sheet date. The above amount includes
principal and interest amount of Rs. 3,373 lacs and Rs. 874 lacs
respectively pertaining to period post Corporate Debt Restructuring
Scheme (CDR) which is effective and as approved by the Corporate Debt
Restructuring Empowered Group (CDR EG).
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/
mutual benefit fund/society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiary companies
from bank and financial institutions, the terms and conditions whereof,
in our opinion are not prima-facie prejudicial to the interest of the
Company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
overall examination of the balance sheet and cash flow statement of the
Company, we report that the Company has used funds raised on short-term
basis amounting Rs. 2,765 lacs for long-term purposes. The Company has
utilised such short- term loans from banks towards purchase of fixed
assets and funding of operating losses.
(xviii)The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
period.
(xx) The Company has not raised any money through public issue during
the period.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S. R. Batliboi& Co. LLP
ICAI Firm registration number: 301003E
Chartered Accountants
per Ravi Bansal
Partner
Membership No.: 49365
Place: Mumbai
Date: May 29, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Punjab
Chemicals and Crop Protection Limited (Âthe Company''), which comprise
the Balance Sheet as at March 31, 2013, the Statement of Profit and
Loss and Cash Flow Statement for the period from October 1, 2012 to
March 31, 2013 (''the period'') 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
accounting principles generally accepted in India, including 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 :
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the loss for
the period ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
period ended on that date.
Emphasis of Matter
We draw attention to Note 35 to the financial statements regarding
managerial remuneration amounting to Rs. 13.29 lacs which was
paid/provided during the period from November 14, 2012 to March 31,
2013 for which the Company has applied for the Central Government''s
approval for regularization of conditions specified in Schedule XIII to
Companies Act, 1956, in respect of default in repayment of debts and
interest thereon for continuous period of thirty days in the preceding
financial period. Pending receipt of approval, no adjustments has been
considered necessary in these financial statements. Our 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, 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 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 purpose 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 i subsection (3C) of section 211 of the Companies Act, 1956; and
(e) on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS'' REPORT
The Annexure referred to in our report to the members of Punjab
Chemicals and Crop Protection Limited (''the Company'') for the period
ended March 31, 2013. We report that :
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets except for furniture, fixture and equipments for certain
location where item wise particulars in fixed asset register and
tagging of fixed assets are in the process of updation.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, 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) There was no disposal of a substantial part of fixed assets during
the period.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory 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 and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted unsecured loan to one party covered
in the register maintained under section 301 of the Companies Act,
1956. The maximum amount involved during the year and the year-end
balance of loan/advances granted to such party is Rs. 30 lacs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loan are not prima facie prejudicial to the interest of the
Company.
(c) The loan granted and the interest is re-payable on demand. As
informed, the company has not demanded repayment of any such loan and
interest during the year, thus, there has been no default on the part
of the parties to whom the money has been lent.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956.
(e) The Company had taken loans from one company covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 787 lacs and the
year-end balance of loans taken from such party was Rs. 787 lacs.
Further, the Company has taken fixed deposits from parties covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount
l involved during the year was Rs. 8.35 lacs and the year-end balance
of the said fixed deposits was Rs. 7.15 lacs.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans and fixed deposits are not prima facie prejudicial to the
interest of the Company.
(g) In respect of loans and fixed deposits taken, repayment of the
principal amount is as stipulated and payments of interest have been
regular.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct any major weakness in
the internal control system of the company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time except in
respect of certain transactions of purchases and sale of goods and
services, where because of the unique and specialized nature of the
items involved and absence of any comparable prices, we are unable to
comment whether the transactions were made at the prevailing market
prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, profession
tax, investor education and protection fund, or employees'' state
insurance, income-tax, sales-tax, wealth-tax, service tax, customs
duty, excise duty have not been regularly deposited with the
appropriate authorities and there have been delays in large number of
cases.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of Statute Nature of Dispute Amount
(Rs. in Lacs)
The Central
Excise Act Modvat taken on sale
in transit, 606
recovery of cenvat
credit/cess, Excise
duty on job-work,
Tax on product
registration expenses
Income Tax Act Disallowance under
Transfer Pricing 993
and Sector 14-A.
The Punjab
Sales Tax Act Improper Documents 11
NAME Period to which Forum where dispute
amount relates is pending
Income Tax Act 2005-06 to Deputy Commissioner Central
2011-12 Excise, Commissioner and
CESTAT
Income Tax Act 2007-08 and Dispute Resolution Panel
2008-09
2004-05 Entry Tax Officer,
Shambhu Barrier
(x) The Company''s accumulated losses at the end of the financial period
are more than fifty percent of its net worth. The Company has not
incurred cash loss in the current and immediately preceding financial
period.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, the Company had delayed in
certain repayments of dues (including interest) to financial
institutions and banks. The delayed principal amount and the interest
aggregate to Rs. 5,018 lacs and Rs. 269 lacs respectively (delays
ranging from 1 day to 183 days). Of the above, Rs. 3,103 lacs is
outstanding at the balance sheet date. above amount includes principal
and interest amount of Rs. 2,970 lacs and Rs. 133 lacs respectively
pertaining to period post Corporate Debt Restructuring Scheme (CDR)
which is effective and as approved by the Corporate Debt Restructuring
Empowered Group (CDR EG) and as more fully explained in Note 36 of the
attached financial statements.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiary companies
from bank and financial institutions, the terms and conditions whereof,
in our opinion are not prima-facie prejudicial to the interest of the
Company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
overall examination of the balance sheet and cash flow statement of the
Company, we report that the Company has used funds raised on short-term
basis amounting Rs. 3,025 lacs for long-term purposes. The Company has
utilised such short-term loans from banks towards purchase of fixed
assets and funding of operating losses.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
period.
(xx) The Company has not raised any money through public issue during
the period.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration
Number : 301003E
per Ravi Bansal
Partner
Membership Number : 49365
Place : Mumbai
Date : May 29, 2013
Mar 31, 2011
1. We have audited the attached Balance Sheet of Punjab Chemicals and
Crop Protection Limited as at March 31, 2011 and also the Profit and
Loss account and the 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.
2. 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.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that :
i. 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;
ii. 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;
iii. The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. We are of the opinion that the balance sheet, the profit and loss
account 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 Companies Act, 1956, read with para vi below;
v. On the basis of the written representations received from the
directors, as on March 31, 2011, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956;
vi. Without qualifying our audit report, we draw attention to Note 19
of Schedule T to the financial statement. As per Scheme of Arrangement
u/s 391 to 394 of the Companies Act, 1956 approved by the Hon'ble High
Courts of Punjab & Haryana at Chandigarh and High Courts of Gujarat at
Ahmedabad vide orders dated March 11, 2011 and March 23, 2011
respectively, the company has been allowed to create Business
Reconstruction Reserve by revaluation of Fixed Assets for adjusting
certain expenses as defined in the scheme. Accordingly, expenses
amounting to Rs. 9,534 lacs have been adjusted against the Business
Reconstruction Reserve;
vii. 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 Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31, 2011;
b) in the case of the profit and loss account, of the loss for the year
ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(Annexure referred to in paragraph 3 of our report of even date)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets except for furniture, fixture & equipment for certain location
where item wise particulars in the fixed asset register and tagging of
fixed assets are in the process of updation.
(b) All fixed assets have not been physically verified by the
management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed, material
discrepancies were identified on such verification. These have been
properly dealt with in the books of accounts.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The procedures of physical verification of inventory 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 and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted unsecured loan/advance to one party
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount involved during the year and the
year-end balance of loan/advances granted to such party is Rs. 40 lacs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loan/advance are not prima facie prejudicial to the interest of
the Company.
(c) The loan/advance granted and the interest is re-payable on demand.
As informed, the company has not demanded repayment of any such
loan/advance and interest during the year, thus, there has been no
default on the part of the parties to whom the money has been lent.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956.
(e) The Company had taken loans from one company covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 557 lacs and the
year-end balance of loans taken from such party was Rs. 557 lacs.
Further, the Company has taken fixed deposits from parties covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year and the year-end balance of
the said fixed deposits was Rs. 29 lacs.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans and fixed deposits are not prima facie prejudicial to the
interest of the Company.
(g) In respect of loans and fixed deposits taken, repayment of the
principal amount is as stipulated and payments of interest have been
regular.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of these areas.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system of the
Company.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be
entered into the register maintained under section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time except in
respect of certain transactions of purchases and sale of goods and
services, where because of the unique and specialized nature of the
items involved and in absence of any comparable prices, we are unable
to comment whether the transactions were made at the prevailing market
prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, or employees' state insurance,
income-tax, sales tax, wealth-tax, service tax, customs duty, excise
duty have not been regularly deposited with the appropriate authorities
and there have been serious
delays in large number of cases. Further, since the Central Government
has till date not prescribed the amount of cess payable under section
441A of the Companies Act, 1956, we are not in a position to comment
upon the regularity or otherwise of the company in depositing the same.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other undisputed statutory dues were outstanding, at the year end, for
a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
Income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of Statute Nature of Dispute Amount
(Rs.in
Lacs)
The Central Excise Modvat taken on sale in transit, 328
Act recovery of cenvat credit/cess,
Excise duty on job-work.
The Punjab Sales Improper Documents 11
Tax Act
Name of Statute Period to which Forum where dispute is
amount relates pending
The Central Excise 2005 -06 Deputy Commissioner
Act Central Excise,
Commissioner and CESTAT
The Punjab Sales 2004-05 Entry Tax Officer, Shambhu
Tax Act Barrier
(x) The Company's accumulated losses at the end of the financial year
are less than fifty percent of its net worth and it has incurred cash
losses in the current year and in the immediately preceding financial
year.
(xi) On the basis of audit procedures performed by us, and according to
the information, explanation and representations given to us by the
management, the Company had delayed in certain repayments of dues
(including interest) to financial institutions and banks. The delayed
principal amount and the interest excluding dues covered by
restructured agreement aggregates to Rs. 1,231 lacs and Rs. 2,416 lacs
respectively and delays range from 1 day to 243 days. Further, during
the year, the company has restructured loan arrangement with financial
institutions and bank whereby dues have been rescheduled.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003 (as amended) are not
applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiary companies
from bank or financial institutions, the terms and conditions whereof
in our opinion are not prima-facie prejudicial to the interest of the
Company.
(xvi) Based on information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
overall examination of the balance sheet and cash flow statement of the
Company, we report that the Company has used funds raised on short-term
basis amounting, Rs. 8,241 lacs for long-term purposes. The Company has
utilised such short-term loans from banks towards purchase of fixed
assets and funding of operating losses.
(xviii)The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section
301 of the Companies Act, 1956.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through public issue during
the year.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S. R. Batliboi & Co.
Firm registration number: 301003E
Chartered Accountants
Per Ravi Bansal
Partner
Membership No.: 49365
Place: Mumbai
Date: May 30, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Punjab Chemicals and
Crop Protection Limited as at March 31,2010 and also the Profit and
Loss account and the 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.
2. 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.
3. As required by the Companies (Auditors Report) Order, 2003 (as
amended) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. The Company has not provided for diminution other than temporary,
in value of certain long term investment amounting to Rs.98lacs as
required by AS- 13 "Accounting for Investments" issued by the Institute
of Chartered Accountants of India. Had the impact of our observation
been considered, then net loss before tax for the year would have been
higher and reserves and surplus as at March 31,2010 would have been
lower by Rs.98 lacs. Similar qualification was made in the audit report
for the year ended March 31,2009.
5. Furtherto our comments in the Annexure referred to above, we
reportthat:
i. 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;
ii. In ouropinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. We are of the opinion that the balance sheet, the profit and loss
account 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 Companies Act, 1956, except for the effect of matter
specified in paragraph 4 above.
v. On the basis of the written representations received from the
directors, as on March 31,2010, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31,2010 from being appointed as a director in terms of clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956.
vi. Except for our comment in paragraph 4 above, 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 Companies
Act, 1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India;
a) in the case of the balance sheet, of the state of affairs of the
Company as at March 31,2010;
b) in the case of the profit and loss account, of the loss for the year
ended on that and
c) in the case of cash flow statement, of the cash flows f orthe year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Annexure referred to in paragraph 3 of our report of even date)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets except in case of certain assets where item wise particulars and
tagging of fixed assets are in the process ofupdationin the fixed asset
register.
(b) Physical verification of the fixed assets is done by the management
as per regular programme of verification, which in our opinion needs to
be strengthened having regard to the size of company and nature of
assets. As informed, no material discrepancies were noticed on such
verification. However, in absence of complete information in fixed
asset register as stated in clause (a) above, we are unable to comment
on the discrepancies, if any.
(c) There was no substantial disposal of fixed assets during the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year
(b) The procedures of physical verification of inventory 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 and no
material discrepancies were noticed on physical verification.
(iii) (a) The Company has granted unsecured loan / advance to parties
covered in the register maintained under section 301 of the Companies
Act, 1956 The maximum amount involved during the year and the year- end
balance of loan/advances granted to such party is Rs 34 lacs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loan / advance are not prima facie prejudicial to the interest of
the Company.
(c) The loan / advance granted and the interest is re-payable on
demand. As informed, the company has not demanded repayment of any such
loan / advance and interest during the year, thus, there has been no
default on the part of the parties to whom the money has been lent.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956.
(e) The Company has taken loans from companies covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs.1,017 lacs and the year-end
balance of loans taken from such parties was Rs.422 lacs. Further, the
Company has taken fixed deposits from parties covered in the register
maintained under section 301 of the Companies Act, 1956. The maximum
amount involved during the year and the year end balance of the said
fixed deposits was Rs.20 lacs.
(f) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions for
such loans and fixed deposits are not prima facie prejudicial to the
interest of the Company.
(g) In respect of loans and fixed deposits taken, repayment of the
principal amount is as stipulated and payments of interest have been
regular.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, no major weakness has been
noticed in the internal control system in respect of these areas.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system of the
company.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 oftheAct that need to be
entered into the register maintained under section 301 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements exceeding value of Rupees five lakhs have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time except in
respect of certain transactions of purchases and sale of goods and
services, where because of the unique and specialized nature of the
items involved and absence of any comparable prices, we are unable to
comment whether the trarjsactions were made at the prevailing market
prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to
the information and explanations given to us, directives issued by the
Reserve Bank of India and the provisions of sections 58A, 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under, to the extent applicable, have been complied with.
We are informed by the management that no order has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956, and are of the opinion that prima facie, the prescribed
accounts and records have been made and maintained.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protectioh fund, or employees state insurance,
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty have not been regularly deposited with the appropriate authorities
and there have been serious delays in large number of cases. Further,
since the Central Government has till date not prescribed the amount of
cess payable under section 441 A of the Companies Act,1956, we are not
in a position to comment upon the regularity or otherwise of the
company in depositing the same.
(b) According to the information and explanations given to us,
undisputed dues in respect of provident fund, investor education and
protection fund, employees state insurance, income-tax, wealth-tax,
service tax, sales-tax, customs duty, excise duty and other statutory
dues which were outstanding, at the year end for a period of more than
six months from the date they became payable are as follows:
Name of the
statute Nature of Amount (Rs in Period to which Due Date
Date of
the dues Lacs) the amount relates Payment
Value Added
Tax & Sales
tax Sales Tax 3 FY 2008-09 Various Not yet paid
Sales Tax 21 FY 2009-10 Various April 2010
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax. service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of Statute Nature of Dispute Amount Period to
which Forum where
dispute is
(Rs. in Lacs) amount
relates pending
The Central Modvat taken on sale
in transit, 328 2005-06 Deputy
Commissioner
Excise Act recovery
of cenvat credit/cess, Central Excise.
Excise duty on job-work Commissioner and
CESTAT
Modvat taken on sale in
transit, 4 1995-96 Additional
Commissioner.
duplicate copy issue
and other Central Excise
matters.
Erroneous Availment of
Cenvat 1 2005-06 CESTAT Credit
Availment of Credit on
Capital 1 2008-09 CESTAT Goods
as MS Angle, Channel
plates, etc.
Cenvat taken on input
used for 4 2004-05 Additional
Commissioner.
intermediate goods in
Pharma Centrai Excise
Division damaged in Flood
The Punjab Improper Documents 11 2004-05 Entry Tax Officer,
Sales Tax Act Shambhu Barrier
(x) The Companys accumulated losses at the end of the financial year
are less than fifty per cent of its net worth and it has incurred cash
iosses in the current year and not incurred cash loss in the
immediately preceding financial year.
(xi) On the basis of audit procedures performed by us, and according to
the information, explanation and representations given to us by the
management, the Company had delayed in certain repayments of dues
(including interest) to domestic financial institutions and banks. The
delayed principal amount and the interest aggregates to Rs 4,531 lacs
and Rs 721 lacs respectively, and delays range from 1 day to 199 days.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us. the Comoany has not
granted ioans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii)ln our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended)
are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order.
2003 (as amended) are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiary companies
from bank or financial institutions, the terms and conditions whereof
in our opinion are not prima-facie prejudicial to the interest of the
Company.
(xvi) Based on information and explanations given to us bythe
management, term loans were applied torthe purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
overall examination of the balance sheet and cashflow statement of the
Company, we report that the Company has used funds raised on short-term
basis amounting Rs 4,229 lacs for long-term purposes. The Company has
utilised short- term loans from banks aggregating to Rs. 4,229 lacs
towards purchase of fixed assets, investments and funding of operating
losses.
(xviii) The Company has made preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Act. In our opinion the price at which shares have been
issued is not prejudicial to the interest of the Company.
(xix) The Company did not have any outstanding debentures duringthe
year.
(xx) The Company has not raised any money through public issue during
the year.
(xxi) Based upon the audit procedures performed forthe purpose of
reporting the true and fair view of the financial statements and as
perthe information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For S. R. Batliboi & Co.
Firm registration number: 301003E
Chartered Accountants
Per Ravi Bansal Partner
Membership No.: 49365
Place: Mumbai
Date: May 26, 2010
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