Mar 31, 2022
Report on the Audit of the Standalone Financial
Statements
1. We have audited the accompanying standalone financial statements of Thirumalai Chemicals Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2022, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information,.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (âInd ASâ) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its profits including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditorâs 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 (âICAIâ) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in
the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
5. We have determined the matter described below to be the key audit matters to be communicated in our report.
Capital work in progress/Property, Plant & Equipment (Refer note 2.6 & note 3 to the accompanying standalone financial statements)
Key audit matter |
How our audit addressed the key audit matter |
The Company is in the process of constructing new plants / augmenting existing assets (âprojectsâ) for expanding/ improving its business operations. During the year, the Company has capitalised Rs. 11,950 Lakhs based on completion of various projects as per recognition criteria given under Ind AS 16, Property, plant and equipment (âInd AS 16â). There are a number of areas where management judgement impacts the carrying value of property, plant and equipment & Capital work in progress. These include the decision to capitalise or expense costs, the unit of measure to be used for capitalization, determining what constitutes an item of PPE and the timeliness of capitalization based on when the assets are ready to put to use. The estimates and assumptions used to determine the carrying amounts, including whether and when to capitalise or expense certain direct & indirect costs, and the determination of depreciation charges are material to the Companyâs financial position and performance. Inappropriate timing of capitalization of the project and/or identification of significant parts of PPE could result in material misstatement of Capital work-in-progress/ PPE with a consequent impact on depreciation charge and results for the year. |
Our audit work included, but was not limited to, the following procedures: ⢠Obtained an understanding of the business process and assessed the appropriateness of the accounting policy adopted by the Company in accordance with Ind AS 16. ⢠Performed walk-through of the capitalisation process and tested the design and operating effectiveness of the controls in the process. ⢠Tested the additions made to property, plant and equipment and capital work-in-progress on a sample basis by checking underlying supporting documents to ensure such items are recorded accurately in the correct account and period, in accordance with the requirements of Ind AS 16. ⢠On a test check basis, we have physically verified existence of capital work in progress/PPE during our site visits. ⢠Assessed that the borrowing cost capitalised during the year is in accordance with the accounting policy of the Company and Ind AS 23, Borrowing cost. ⢠For projects completed during the year, reviewed the project completion/handover certificate provided by the management to determine whether the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management. ⢠For such projects, assessed the appropriateness of timing of capitalization, identification of significant parts of property, plant and equipment that are depreciated separately and useful lives considered for calculation of depreciation charge. |
Given the significance of capital expenditure during the year, the nature and volume of transactions, complexity and judgement involved in determination of eligible costs for capitalization the aforesaid matter was determined to be a key audit matter for the current year. |
⢠Evaluated the appropriateness and adequacy of the disclosures made in the financial statements in accordance with the applicable accounting standards. Based on audit procedures performed, we determined the identification and timing of capitalisation of PPE and Capital-work-in-progress to be appropriate in the context of the financial statements taken as a whole. |
Information other than the Financial Statements and Auditorâs Report thereon
6. The Companyâs Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the standalone financial statements and our auditorâs report thereon. The Annual Report is expected to be made available to us after the date of this auditor''s report.
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.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
7. The accompanying standalone financial statements have been approved by the Companyâs Board of Directors. The Companyâs Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds
and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the financial statements, the Board of Directors are 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 the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
9. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
10. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under
section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;
⢠Conclude on the appropriateness of Board of Directorsâ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern;
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation;
12. 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.
13. 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.
14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
15. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Act we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
17. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, 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 of the accompanying standalone financial statements;
b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c. The standalone financial statements dealt with by this report are in agreement with the books of account;
d. in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;
e. On the basis of the written representations received from the directors and 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 as on 31 March 2022 and the operating effectiveness of such controls, refer to our separate Report in Annexure B wherein we have expressed an unmodified opinion; and
g. With respect to the other matters to be included in the Auditorâs Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. the Company, as detailed in note 34 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2022
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2022.;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2022
iv. a. The management has represented that, to the best of its knowledge and belief, other than as disclosed in note 4 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person or entities, including foreign entities (âthe intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âthe Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;
b. The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entities, including foreign entities (âthe Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under subclauses (a) and (b) above contain any material misstatement.
v. The final dividend paid by the Company during the year ended 31 March 2022 in respect of such dividend declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
As stated in note 12(g) to the accompanying standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year ended 31 March 2022 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.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm Registration No. 001076N/N500013
Sumesh E S
Partner
Membership No.: 206931
UDIN: 22206931AKMJTP7209
Place : Chennai
Date : 26 May 2022
Mar 31, 2019
Independent Auditor''s Report
Independent Auditor''s Report
To the Members of Thirumalai Chemicals Limited
Report on the Audit of the Standalone Financial Statements
Opinion
1. We have audited the accompanying standalone financial statements of Thirumalai Chemicals Limited (''the Company''), which comprise the Balance Sheet as at 31 March 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (''Act'') in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Indian Accounting Standards (''Ind AS'') specified under section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2019, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor''s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (''ICAI'') together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
4. 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
5. We have determined the matter described below to be the key audit matters to be communicated in our report.
Key audit matter |
How the matter was addressed in the audit |
Revenue recognition - Cut off |
|
Revenue for the Company consists primarily of sale of manufactured goods recognized as per the accounting policy described in Note 2.7 to the accompanying standalone financial statements. Refer Note 21 for details of revenue recognized during the year. The Company recognizes revenue from sale of goods when it satisfies its performance obligation, in accordance with the principles of Ind AS 115, Revenue from Contracts with Customers, adopted by the Company from the current year, by transferring the control of goods to its customers through delivery evidenced by acknowledgement of receipt of goods by such customers. Considering the large volume of revenue transactions near period-end, there may be a risk of revenue recognition occurring before the satisfaction of the performance obligations by the company in accordance with the applicable Incoterms. Under Standards on Auditing 240 ''The auditor''s responsibilities relating to fraud in an audit of financial statements'', there is a presumed risk that revenue may be misstated owing to the improper recognition of revenue. Considering the above factors, revenue recognition (cut-off) was identified as a key audit matter for the current year audit. |
Our audit work included, but was not limited to, the following procedures: - Obtainedanunder standing of the revenue and receivable business process, and assessed the appropriateness of the accounting policy adopted by the company for revenue recognition. - Evaluated design and implementation of the key controls around revenue recognition including controls around contract approvals, invoice verification, transporter confirmations and customer acknowledgements. - Tested operating effectiveness of the above identified key controls over revenue recognition near period end. - For samples selected from revenue recorded during specific period, before and after year end: - verified the customer contracts for delivery terms - verified the customer acknowledgements to evidence proof of delivery for domestic sales at or near period end and - tracked shipments through bill of lading for export sales - Tested the appropriateness of the disclosures made in the financial statements for revenue recorded during the year. Key observations - Based on our audit work, we did not identify any evidence of material misstatement in the revenue recognized in the year 31 March 2019 |
Information other than the Financial Statements and Auditor''s
Report thereon
6. The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditor''s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance/conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with
Governance for the Standalone Financial Statements
7. The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
9. Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Financial Statements
10. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
11. As part of an audit in accordance with Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
12. 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.
13. 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.
14. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
15. As required by section 197(16) of the Act, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditor''s Report) Order, 2016 (''the Order'') issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.
17. Further to our comments in Annexure 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 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 standalone financial statements dealt with by this report are in agreement with the books of account;
d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;
e) on the basis of the written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 06 May 2019 as per Annexure B expressed unmodified opinion;
g) with respect to the other matters to be included in the Auditor''s Report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. the Company, as detailed in note 33 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2019;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at
31 March 2019;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31 March 2019;
iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016, which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing
full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year, however, there is a regular program of verification once in 3 years, 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) The title deeds of all the immovable properties (which are included under the head ''Property, plant and equipment'') are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. No material discrepancies were noticed on the aforesaid verification.
(iii) The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Act; and with respect to the same:
(a) in our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the company''s interest.
(b) the schedule of repayment of principal and payment of interest has been stipulated and the repayment/ receipts of the principal amount and the interest are regular;
(c) there is no overdue amount in respect of loans granted to such companies.
(iv) In our opinion, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees and security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are 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 sub-section (1) of Section 148 of the Act in respect of
Company''s products/services 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 cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, goods and service tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Statement of Disputed Dues
Name of the statute |
Nature of dues |
Amount (Rs,) |
Amount paid under Protest ('') |
Period to which the amount relates |
Forum where dispute is pending |
Central Sales Tax Act, 1956 |
Tax dues |
8,448,007 |
Nil |
2000-01 to 200506 |
High Court, Chennai |
Tamil Nadu General Sales Tax Act, 1959 |
Tax dues |
1,673,318 |
418,329 |
2006-07 |
Appellate Deputy Commissioner of (CT), Vellore |
Tamil Nadu Value Added Tax, 2006 |
Tax dues |
3,572,318 |
488,068 |
2006-07 to 200809; 201112; 201314 to 2014-15 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Tax dues |
3,871,996 |
967,999 |
2006-07; 2011-12 |
Appellate Deputy Commissioner of (CT), Vellore |
Income Tax Act, 1961 |
Tax dues |
56,478,595 |
45,373,035 |
2012-13 to 201415; 201617 |
CIT(A), Mumbai |
(viii)The Company has not defaulted in repayment of loans or borrowings to any bank or financial institution or government during the year. The Company did not have any outstanding debentures during the year.
(ix) In our opinion, the Company has applied moneys raised by way of term loans for the purpose for which they were raised. The Company did not raise moneys by way of initial public offer/ further public offer (including debt instruments) during the year.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
(xv) In our opinion, the Company has not entered into any noncash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Independent Auditor''s Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (''the Act'')
1. In conjunction with our audit of the standalone financial statements of Thirumalai Chemicals Limited (''the Company'') as at and for the year ended 31 March 2019, we have audited the internal financial controls over financial reporting (''IFCoFR'') of the Company as at that date.
Management''s Responsibility for Internal Financial Controls
2. The Company''s Board of Directors is responsible for establishing and maintaining internal financial controls based on IFCoFR criteria established by the company considering the essential components of internal financial controls stated in the Guidance Note on Audit of IFCoFR 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 the Company''s business, including adherence to the Company''s 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.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on the Company''s IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (''ICAI'') and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (''the Guidance Note'') issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company''s IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s IFCoFR include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial
Reporting
7. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that the IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2019, based on the IFCoFR criteria established by the Company considering the essential components of internal financial controls stated in Guidance Note issued by the ICAI.
For Walker Chandiok & Co LLP
Chartered Accountants
Firm''s Registration No.: 001076N / N500013
Sumesh E S
Partner
Membership No.: 206931
Place: Chennai
Date: 06 May 2019
Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Thirumalai Chemicals Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone 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 financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) 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 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.
Auditorâs 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 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 these standalone 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 auditorâs 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 controls relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 these 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 including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other Matter
The comparative financial information for the transition date opening balance sheet as at 1 April 2016 prepared in accordance with Ind AS included in these standalone financial statements, is based on the previously issued statutory financial statements for the year ended 31 March 2016 prepared in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) which were audited by the predecessor auditor, CNK & Associates LLP, whose report dated 14 May 2016 expressed an unmodified opinion on those standalone financial statements, and have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have been audited by us. Further, the Company had prepared a separate set of statutory financial statements for the year ended 31 March 2017 in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) on which we issued auditorâs report to the shareholders of the Company dated 20 May 2017. These financial statements have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have also been audited by us. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
Further to our comments in Annexure 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 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 standalone financial statements dealt with by this report are in agreement with the books of account;
d) in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under Section 133 of the Act;
e) on the basis of the written representations received from the directors and 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) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 03 May 2018 as per Annexure B expressed unmodified opinion.
g) with respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. the Company, as detailed in Note 40 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. the disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 08 November 2016 to 30 December 2016 which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.
Annexure âAâ to the Independent Auditorâs Report
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year, however, there is a regular program of verification once in 3 years, 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) The title deeds of all the immovable properties which are included under the head âProperty, plant and equipmentâ are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. No material discrepancies were noticed on the aforesaid verification.
(iii) The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Act; and with respect to the same:
(a) in our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the Companyâs interest.
(b) the schedule of repayment of principal and payment of interest has been stipulated and repayment/receipts of the principal amount and interest are regular;
(c) there is no overdue amount in respect of loans granted to such companies.
(iv) In our opinion, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees and security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are 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 sub-section (1) of Section 148 of the Act in respect of Companyâs products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii)(a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, goods and service tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service-tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs.) |
Amount paid under Protest (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
Central Sales Tax Act, 1956 |
Deferral tax payable |
8,448,007 |
Nil |
2000-01 to 200506 |
High Court, Chennai |
Tamil Nadu General Sales Tax Act, 1959 |
Advance tax - adjustment against Chemidye Manufacturing Company Pvt. Ltd. merger |
1,673,318 |
418,329 |
2006-07 |
Appellate Deputy Commissioner of (CT), Vellore |
Tamil Nadu Value Added Tax, 2006 |
Advance tax - adjustment against Chemidye Manufacturing Company Pvt. Ltd. Merger |
598,887 |
149,722 |
2006-07 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Non-filing of C forms |
601,481 |
150,370 |
2006-07 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Input tax credit reversal of export sales |
783,001 |
195,750 |
2006-07 |
Appellate Deputy Commissioner of (CT), Vellore |
Tamil Nadu Value Added Tax, 2006 |
Input tax credit reversal on SEZ sales |
6,459 |
1,615 |
2011-12 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Difference in tax rate and Form H not filed |
125,177 |
31,294 |
2011-12 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Input tax credit reversal on sales without Forms |
24,422 |
6,106 |
2011-12 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Input tax credit reversal on export sales |
2,337,915 |
584,479 |
2011-12 |
Appellate Deputy Commissioner of (CT), Vellore |
Tamil Nadu Value Added Tax, 2006 |
Advance tax - adjustment against Chemidye Manufacturing Company Pvt. Ltd. |
537,299 |
134,325 |
2007-08 |
Appellate Deputy Commissioner of (CT), Vellore |
Tamil Nadu Value Added Tax, 2006 |
Wrong availment of input tax credit |
809,624 |
202,406 |
2008-09 |
Appellate Deputy Commissioner of (CT), Vellore |
Income Tax Act, 1961 |
Regular tax demand |
46,165,467 |
28,136,277 |
Various years |
CIT(A), ITAT |
(viii)The Company has not defaulted in repayment of loans or borrowings to any financial institution or a bank or government during the year. The Company did not have any outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) and did not have any term loans outstanding during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
(xv) In our opinion, the Company has not entered into any noncash transactions with the directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Independent Auditorâs Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
In conjunction with our audit of the standalone financial statements of Thirumalai Chemicals Limited (âthe Companyâ) as at and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (âIFCoFRâ) of the Company as at that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs Board of Directors is responsible for establishing and maintaining internal financial controls based on IFCoFR criteria established by the Company considering the essential components of internal financial controls stated in the Guidance Note on Audit of IFCoFR 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 the Companyâs business, including adherence to the 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 IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (âICAIâ) and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (âthe Guidance Noteâ) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were 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 IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
A Companyâs IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs IFCoFR include 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. Because of the inherent limitations of IFCoFR, 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 IFCoFR to future periods are subject to the risk that the IFCoFR 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, adequate internal financial controls over financial reporting and such controls were operating effectively as at 31 March 2018, based on the IFCoFR criteria established by the Company considering the essential components of internal financial controls stated in Guidance Note issued by the ICAI.
For Walker Chandiok & Co LLP
Chartered Accountants
Firmâs Registration No.: 001076N/N500013
per Sumesh E S
Partner
Membership No.: 206931
Place: Chennai
Date : 03 May 2018
Mar 31, 2017
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Thirumalai Chemicals Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information. Managementâs Responsibility for the Standalone 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditorâs Responsibility
Our responsibility is to express an opinion on these 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 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 these standalone 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 auditorâs 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 controls relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 these 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 31st March 2017, and its profit and its cash flows for the year ended on that date.
Other Matter
The financial statements of the Company as at and for the year ended 31 March 2016 were audited by the Companyâs previous auditors CNK & Associates LLP, whose report dated 14 May 2016, expressed an unqualified opinion on those financial statements. The balances as at 31st March 2016 as per the audited financial statements, regrouped and/or reclassified wherever necessary, have been considered as opening balances for the purpose of these financial statements.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.
Further to our comments in Annexure 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 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 standalone financial statements 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 prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);
e. on the basis of the written representations received from the Directors and taken on record by the Board of Directors, none of the Directors is disqualified as on 31 March 2017 from being appointed as a Director in terms of Section 164(2) of the Act;
f. we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as on 31 March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 20 May 2017 as per Annexure B expressed an unqualified opinion.
g. with respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. the Company, as detailed in Note 39 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. the Company, as detailed in Note 34 to the standalone financial statements, has made requisite disclosures in these standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016. Based on the audit procedures performed and taking into consideration the information and explanations given to us, in our opinion, these are in accordance with the books of account maintained by the Company.
Annexure âAâ to the Independent Auditorâs Report
Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner over a period of 3 years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties (which are included under the head âfixed assetsâ) are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed on physical verification.
(iii) The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Act; and with respect to the same:
(a) in our opinion the terms and conditions of grant of such loans are not, prima facie, prejudicial to the Companyâs interest.
(b) the schedule of repayment of principal and payment of interest has been stipulated and the repayment/ receipts of the principal amount and the interest are regular;
(c) there is no overdue amount in respect of loans granted to such companies.
(iv) In our opinion, the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees and security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are 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 sub-section (1) of Section 148 of the Act in respect of Companyâs products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) Undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited to the appropriate authorities, though there has been a slight delay in a few cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.
(b) The dues outstanding in respect of income-tax, sales-tax, service tax, duty of customs, duty of excise and value added tax on account of any dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs.) |
Amount paid under Protest (Rs.) |
Period to which the amount relates |
Forum where dispute is pending |
Central Sales Tax Act, 1956 |
Deferral tax payable |
8,448,007 |
Nil |
2000-01 to 200506 |
High Court, Chennai |
Tamil Nadu General Sales Tax Act, 1959 |
Advance tax - adjustment against Chemidye Manufacturing Company Pvt. Ltd. merger |
1,673,318 |
418,329 |
2006-07 |
Appellate Deputy Commissioner of (CT), Vellore |
Tamil Nadu Value Added Tax, 2006 |
Advance tax - adjustment against Chemidye Manufacturing Company Pvt. Ltd. Merger |
598,887 |
149,722 |
2006-07 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Non-filing of C forms |
1,111,205 |
150,370 |
2006-07 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Input tax credit reversal of export sales |
783,001 |
195,750 |
2006-07 |
Appellate Deputy Commissioner of (CT), Vellore |
Tamil Nadu Value Added Tax, 2006 |
Input tax credit reversal on SEZ sales |
6,459 |
1,615 |
2011-12 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Difference in tax rate and Form H not filed |
136,905 |
31,294 |
2011-12 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Input tax credit reversal on sales without Forms |
27,074 |
6,106 |
2011-12 |
Appellate Deputy Commissioner of (CT), Vellore |
Central Sales Tax Act, 1956 |
Input tax credit reversal on export sales |
2,337,915 |
621,879 |
2011-12 |
Appellate Deputy Commissioner of (CT), Vellore |
Tamil Nadu Value Added Tax, 2006 |
Advance tax - adjustment against Chemidye Manufacturing Company Pvt. Ltd. |
537,299 |
133,325 |
2007-08 |
Appellate Deputy Commissioner of (CT), Vellore |
Tamil Nadu Value Added Tax, 2006 |
Wrong availment of input tax credit |
809,624 |
202,406 |
2008-09 |
Appellate Deputy Commissioner of (CT), Vellore |
Income Tax Act |
Regular tax demand |
46,165,467 |
28,135,277 |
Various years |
CIT(A), ITAT |
(viii)The Company has not defaulted in repayment of loans or borrowings to any bank or financial institution or government during the year. The Company did not have any outstanding debentures during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments) and did not obtain any term loans during the year. Accordingly, the provisions of clause 3(ix) of the Order are not applicable.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable accounting standards.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.
(xv) In our opinion, the Company has not entered into any noncash transactions with the Directors or persons connected with them covered under Section 192 of the Act.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Walker Chandiok & Co LLP
Chartered Accountants
Firmâs Registration No.: 001076N/N500013
per Sumesh E S
Partner
Membership No.: 206931
Place: Chennai
Date: 20 May 2017
Mar 31, 2016
TO THE MEMBERS OF THIRUMALAI CHEMICALS LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Thirumalai Chemicals Limited (âthe Companyâ), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss, the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs 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 (âthe Actâ) 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 the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these 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 there under.
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 standalone 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 financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone 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 31 March 2016 and its profit and its cash flows for the year ended on that date.
Emphasis of Matter:
We refer to Note E.9 to the standalone financial statements regarding appointment of and remuneration of Rs.22,78,994 paid to a whole time director during the year as approved by the Board of Directors. The same is subject to ratification and approval by members in ensuing annual general meeting.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in Annexure ''A'' a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
As required by Section 143 (3) of the Act, we report that:
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;
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;
The balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;
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; the basis of the written representations received from the directors as on 31 March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section 164 (2) of the Act; and With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure ''B''.
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:
The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note
C.32 (B) to the standalone financial statements;
The Company did not have any long term contracts, including derivative contracts for which there were any material foreseeable losses.
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
The Annexure referred to in paragraph 1 under ''Report on the Other Legal and Regulatory Requirements'' in the Independent Auditors''
Report of even date to the members of the Company on the standalone financial statements for the year ended 31 March 2016:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) As per the information and explanations given to us, the fixed assets have been physically verified by the management during the year in accordance with the phased programme of verification adopted by the Company and discrepancies noticed on such verification have been properly dealt with in the books of account;
(c) As per the information and explanations given to us, the title deeds of immovable properties are held in the name of the company;
(ii) As per the information and explanations given to us, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable;
In our opinion, the Company is maintaining proper records of inventory and the discrepancies noticed on physical verification of the same were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account;
(iii) As informed, during the year, the Company has not granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Hence, clause 3(iii) (a),3(iii)(b) and 3(iii)(c) of the order are not applicable;
(iv) In our opinion and as explained to us, in respect of loans, investments, guarantees, and security, the Company has complied with provisions of section 185 and 186 of the Act;
(v) In our opinion and as explained to us, the Company has not accepted any deposits with in the provisions of Section 73 to 76 of the Act read with The Companies (Acceptance of Deposits) Rules, 2014 and other relevant provisions of the Act;
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where maintenance of cost records has been specified by the Central Government under Section 148(1) of the Act and we are of the opinion that prima-facie, the prescribed accounts and cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determining whether they are accurate or complete;
(vii) (a) According to the information and explanations given to us and the records examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues and there are no undisputed statutory dues outstanding as at 31st March 2016, for a period of more than six months from the date they became payable;
(b) Disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under:
Name of the Statute |
Nature of the dues |
Amount (Rs.) |
Financial year/s to which the amount relates |
Forum where dispute is pending |
Tamilnadu General Sales Tax Act |
Sales tax and Interest on belated payments of tax |
84,48,007 |
2000-01 to 2005-06 |
Madras High Court |
Income Tax Act |
Penalty |
400,000 |
2003-04 |
Income Tax Appellate Tribunal |
Income Tax Act |
Regular Tax |
2,00,24,980 |
2013-14 |
Commission of Income Tax, Appeals |
Amounts paid under protest and not charged to Statement of Profit and Loss have not been included above. [Refer Note C.32(B) to the standalone financial statements]
(viii) According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to a financial institution, bank or government or dues to debenture holders;
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year. According to information and explanations given to us, during the year the Company has not raised any term loans and term loans raised in past were applied for the purpose for which those are raised;
(x) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit;
(xi) According to the information and explanations given to us, The Managerial remuneration has been paid or provided in accordance with requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Companies Act, except in case of remuneration paid / payable of Rs.22,78,994 to executive director which is subject to approval by shareholders at ensuing general meeting. (refer note E.9 of standalone financial statements);
(xii) According to the information and explanations given to us, the Company is not a nidhi company. Accordingly, para 3 (xii) of the order is not applicable.
(xiii) According to the information and explanations given to us, all transactions with the related parties are in compliance with Section 177 and 188 of The Companies Act, 2013 where applicable and the details have been disclosed in the financial statements as required by the applicable accounting standard;
(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review;
(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him;
(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.
The Annexure referred to in paragraph 3(f) under ''Report on Other Legal and Regulatory Requirements'' our Independent Auditors'' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2016.
Report on the Internal Financial Control u/s.143 (3)(i) of The Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Thirumalai Chemicals Limited (''the Company'') as of March 31, 2016 in conjunction with our audit of the standalone 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 control based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the guidance note on audit of internal financial controls over financial reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s 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 the reliable financial information, as required under the Companies Act, 2013;
Auditorâs Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the guidance note on audit of internal financial controls over financial reporting (''the Guidance Note'') and the Standards on auditing, to the extent applicable to an audit of internal financial control, 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 control over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial control over financial reporting included obtaining and understanding of internal financial control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatements of the financial statement, 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 Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that:
1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on, the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
For and on behalf of CNK & Associates LLP
Chartered Accountants
Firm Registration No.: 101961W
H. V. Kishnadwala
Partner
Membership No.: 037391
Place: Mumbai
Date: 14th May, 2016
Mar 31, 2014
We have audited the accompanying financial statements of Thirumalai
Chemicals 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
the Accounting Standards referred to in sub- section (3C) of section
211 of the Companies Act, 1956("the Act") read with the General
Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of the Companies Act, 2013. 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 entity''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 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 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, 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
section 227 of the Act, we give in the Annexure 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
sub-section (3C) of section 211 of the Companies Act, 1956 read with
the General Circular 15/2013 dated September 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013;
and
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.
Referred in Paragraph 1 under the heading of "Report on Other Legal and
Regulatory Requirements" of our report of even date.
On the basis of such checks as considered appropriate and in terms of
the information and explanations given to us, we state as under:
1 (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of the fixed
assets;
(b) As per the information and explanations given to us, the fixed
assets have been physically verified by the management during the year
in accordance with the phased programme of verification adopted by the
Company and no material discrepancies were noticed on such verification;
(c) During the year, the company has discontinued its Maleic Anhydride
plant and has disposed off part of the plant. However, the fixed assets
disposed off by the company were not substantial and therefore does not
affect the going concern assumption;
2 (a) As explained to us, the inventories have been
physically verified during the year by the management. In our opinion,
having regard to the nature and location of stocks, the frequency of
the physical verification is reasonable;
(b) In our opinion and according to the information and explanations
given to us, 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) In our opinion, the Company is maintaining proper records of
inventory and the discrepancies noticed on physical verification of the
same were not material in relation to the operations of the Company and
the same have been properly dealt with in the books of account;
3 (a) As per the information and explanations given to us, the Company
has not granted any loans, secured or unsecured to any company, form or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Hence, clause 3(b), 3(c) and 3(d) of the Order
are not applicable for the year;
(b) As per the information and explanations given to us, the Company
has not taken any unsecured loans from parties covered in the register
maintained under section 301 of the Companies Act, 1956. Hence, clause
3(f) and 3(g) of the Order are not applicable for the year;
4 In our opinion and as explained to us, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to purchase of inventory and fxed
assets and for the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal controls and
there is no continuing failure for the same;
5 (a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the transactions that need to be entered into the register
maintained under Section 301 have been so entered;
(b) In our opinion and as explained to us, the terms and conditions of
the transactions made in pursuance of contracts or arrangements entered
in the register maintained under Section 301 are reasonable having
regard to the prevailing market prices at the relevant time;
6 In our opinion and according to the explanations given to us, the
Company has generally complied with the provisions of Section 58A and
58AA or any other relevant provision of the Companies Act, 1956 and
rules made there under for the deposits accepted from the public;
7 In our opinion, the Company has an internal audit system commensurate
with the size of the Company and the nature of its business;
8 We have broadly reviewed the books of account maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima-facie, the
prescribed accounts and cost records have been made and maintained. We
have not, however, made a detailed examination of the cost records with
a view to determining whether they are accurate or complete;
9 (a) According to the information and explanations given
to us and the records examined by us, the Company is regular in
depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund,
employees'' state insurance, income-tax, sales-tax, wealth-tax, service
tax, custom duty, excise-duty, cess and other statutory dues and there
are no undisputed statutory dues outstanding as at 31st March 2014, for
a period of more than six months from the date they became payable;
(b) Disputed statutory dues that have not been deposited on account of
disputed matters pending before appropriate authorities are as under:
Name of the Nature of Amount Financial Forum where
Statute the dues
(Rs.) year/s to dispute is
which the pending
amount
relates
Tamilnadu Interest 7,537,505 2000-01 Madras High
General on
belated to 2005-06 Court
Sales Tax
Act payments
of tax
Foreign Penalty 99,363,453 1995-96 Appellate
Exchange Tribunal
Management constituted
Act under Foreign
Exchange
Management Act
Income Tax Penalty 10,566,447 2009-10
Commissioner
Act of Income Tax,
Appeals
Amounts paid under protest and not charged to Statement of Proft and
Loss have not been included above. [Refer Note C.32(B) to the financial
statements]
10 The company does not have any accumulated losses as on 31st March
2014. The company has not incurred any cash losses during the financial
year and in the immediately preceding financial year;
11 Based on the information and explanations given to us, the Company
has not defaulted in repayment of any dues to financial institutions and
banks;
12 Based on our examination of the records and as explained to us, the
Company has not granted any loans and/ or advances on the basis of
security by way of pledge of shares, debentures and other securities;
13 The Company is not a chit fund, nidhi, mutual benefit fund or a
society;
14 During the year, the Company has not made any dealing and trading in
shares, securities, debentures and other investments. The Company holds
all shares, debentures and other investments held by the company in own
name;
15 According to the information and explanations given to us, the
Company has given corporate guarantee to bank for and on behalf of
step-down subsidiary amounting to Rs. 587,047,000 the terms and
conditions whereof in our opinion are not prima facie prejudicial to
the interest of the Company;
16 In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
they were obtained;
17 As explained to us and on an overall examination of the balance
sheet of the Company, in our opinion there are no funds raised on
short-term basis, which have been used for long term investments by the
Company;
18 During the year the Company has not made any preferential allotment
of shares to the parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956;
19 During the year the Company has not issued any debentures
accordingly, the clause (xix) of the paragraph 4 of the Order is not
applicable to the Company;
20 The Company has not raised any money by way of public issues during
the year. Therefore, the provisions of clause (xx) of the paragraph 4
of the Order are not applicable to the Company;
21 As per the information and explanations given to us, no fraud on or
by the Company has been noticed or reported during the year.
For and on behalf of
CNK & Associates LLP,
Chartered Accountants
Firm Registration No.: 101961W
H. V. Kishnadwala
Place: Mumbai Partner
Date : 12th May, 2014 Membership No.: 037391
Mar 31, 2013
We have audited the accompanying financial statements of Thirumalai
Chemicals Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub- section (3C) of section
211 of the Companies Act, 1956("the Act"). This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. 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 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, 2013;
(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 E.5 to the financial statements regarding
exposure of Rs. 411,879,337 in Optimistic Organic Sdn Bhd on account of
transfer of advances and other amounts due to the company from
erstwhile TCL Industries (Malaysia) Sdn Bhd. As detailed in the said
note, the Company expects that the same would be recovered in the
foreseeable future.
We further draw attention to Note E.7 to financial statements regarding
provision made for commission payable to non- executive directors
amounting to Rs. 5,302,414. The same is subject to approval by the
members at next general meeting. Our opinion is not qualified in
respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government of India in terms of sub- section (4A) of
section 227 of the Act, we give in the Annexure 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
sub-section (3C) of section 211 of the Companies Act, 1956;
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 Independent Auditors'' Report
Referred in Paragraph 1 under the heading of "Report on Other Legal and
Regulatory Requirements" of our report of even date.
On the basis of such checks as considered appropriate and in terms of
the information and explanations given to us, we state as under:
1 (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of the fixed
assets;
1 (b) As explained to us, an independent chartered engineer, valuer and
appraiser appointed by the company had carried physical verification of
the fixed assets in December 2011. As informed to us, the company has
also initiated a phased physical verification of fixed assets over a
period of 3 years. Discrepancies noticed on such verification, which
were not material, have been appropriately dealt with in the accounts;
1 (c) The fixed assets disposed off by the company were not substantial
and therefore does not affect the going concern assumption;
2 (a) As explained to us, the inventories have been physically verified
during the year by the management. In our opinion, having regard to the
nature and location of stocks, the frequency of the physical
verification is reasonable;
2 (b) In our opinion and according to the information and explanations
given to us, 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;
2 (c) In our opinion, the Company is maintaining proper records of
inventory and the discrepancies noticed on physical verification of the
same were not material in relation to the operations of the Company and
the same have been properly dealt with in the books of account;
3 (a) As per the information and explanations given to us, the Company
has not granted any loans, secured or unsecured to any company, firm or
other parties covered in the register maintained under section 301 of
the Companies Act, 1956. Hence, clause 3(b), 3(c) and 3(d) of the Order
are not applicable for the year;
3 (e) As per the information and explanations given to us, the Company
has taken unsecured loans from a company covered in the register
maintained under section 301 of the Companies Act, 1956. The details of
such unsecured loan taken is as under:
Name of Balance as Maximum
Party on 31 March balance
2013 (Rs.) outstanding
during the year (Rs.)
Ultramarine & Nil 13,642,774
Pigments Ltd
3 (f) In case of the aforesaid unsecured loan taken, the rate of
interest and the other terms and conditions are not prima-facie
prejudicial to the interests of the Company;
3 (g) In case of the aforesaid unsecured loan, the repayment of
principal amount and interest is regular;
4 In our opinion and as explained to us, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to 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 controls and
there is no continuing failure for the same;
5 (a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the transactions that need to be entered into the register
maintained under Section 301 have been so entered;
5 (b) In our opinion and as explained to us, the terms and conditions
of the transactions made in pursuance of contracts or arrangements
entered in the register maintained under Section 301 are reasonable
having regard to the prevailing market prices at the relevant time;
6 In our opinion and according to the explanations given to us, the
Company has generally complied with the provisions of Section 58A and
58AA or any other relevant provision of the Companies Act, 1956 and
rules made there under for the deposits accepted from the public;
7 In our opinion, the Company has an internal audit system commensurate
with the size of the Company and the nature of its business;
8 We have broadly reviewed the books of account maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima-facie, the
prescribed accounts and cost records have been made and maintained. We
have not, however, made a detailed examination of the cost records with
a view to determining whether they are accurate or complete;
9 (a) According to the information and explanations given to us and the
records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees'' state
insurance, income- tax, sales-tax, wealth-tax, service tax, custom
duty, excise- duty, cess and other statutory dues and there are no
undisputed statutory dues outstanding as at 31st March, 2013, for a
period of more than six months from the date they became payable;
9 (b) Disputed statutory dues that have not been deposited on account
of disputed matters pending before appropriate authorities are as
under:
Name of Nature of Amount Financial Forum where
the the dues (Rs.) Year/s to dispute is
Statute which the pending
amount
relates
Central Excise 99,945 2005-06 Assistant
Excise Duty Commissioner
Act of Central
Excise
Income Penalty 18,169,912 1995-96 Income Tax
Tax Act Appellate
Tribunal
Foreign Penalty 99,363,453 1995-96 Appellate
Exchange Tribunal
Management constituted
Act under Foreign
Exchange
Management Act
Tamlinadu Interest on 7,537,505 2000-01 to Madras
General belated 2005-06 High Court
Sales payments
Tax Act of tax
Amounts paid under protest and not charged to Statement of Profit and
Loss Account have not been included above. [Refer Note C.32(B) to the
financial statements]
10 The company does not have any accumulated losses as on 31st March
2013. The company has not incurred any cash losses during the financial
year and in the immediately preceding financial year;
11 Based on the information and explanations given to us, the Company
has not defaulted in repayment of any dues to financial institutions
and banks;
12 Based on our examination of the records and as explained to us, the
Company has not granted any loans and/or advances on the basis of
security by way of pledge of shares, debentures and other securities;
13 The Company is not a chit fund, nidhi, mutual benefit fund or a
society;
14 During the year, the Company has not made any dealing and trading in
shares, securities, debentures and other investments. The Company holds
all shares, debentures and other investments held by the company in own
name;
15 According to the information and explanations given to us, the
Company has not given any guarantees for loans taken by another company
from banks where it has substantial interest;
16 In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
they were obtained;
17 As explained to us and on an overall examination of the balance
sheet of the Company, in our opinion there are no funds raised on
short-term basis, which have been used for long term investments by the
Company;
18 During the year the Company has not made any preferential allotment
of shares to the parties or companies covered in the register
maintained under section 301 of the Companies Act, 1956;
19 During the year the Company has not issued any debentures
accordingly, the clause (xix) of the paragraph 4 of the Order is not
applicable to the Company;
20 The Company has not raised any money by way of public issues during
the year. Therefore, the provisions of clause (xx) of the paragraph 4
of the Order are not applicable to the Company;
21 As per the information and explanations given to us, no fraud on or
by the Company has been noticed or reported during the year.
For and on behalf of
Contractor Nayak & Kishnadwala
Chartered Accountants
Firm Registration No. : 101961W
H. V. Kishnadwala
Partner
Membership No. : 37391
Place : Mumbai
Date : 29th May, 2013
Mar 31, 2010
1. We have audited the attached Balance Sheet of THIRUMALAI CHEMICALS
LIMITED as at 31s1 March 2010, the related Profit and Loss Account and
the Cash Flow Statement of the Company 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. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in 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, issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, and on the basis of such checks as considered appropriate
and according to the information and explanations given to us during
the course of the audit, we enclose in the Annexure hereto a statement
on the matters specified in Paragraphs 4 and 5 of the said Order.
4. Attention is drawn to the following:
a) As disclosed in Note 27 of Schedule 19, the Company has pursuant to
the order of the Honble High Court of Bombay adjusted the value of
investment in shares of TCL Industries (Malaysia) Sdn Bhd Rs.
182,769,550 against the balance in Securities Premium Account and other
capital Reserves;
b) As disclosed in Note 15(b) of Schedule 19, part of the remuneration
paid to the managerial personnel amounting to Rs. 5,376,000 is subject
to the approval of the members in the forthcoming annual general
meeting;
5. As mentioned in Note 27 of Schedule 19, Company has an exposure
o/Rs. 378,865,033 in TCL Industries (Malaysia) Sdn Bhd (TCLMj on
account of advances and suppliers credit. The Company expects that the
same wouldbe recovered in future since the operations of TCLM are
continuing and hence no provisioning is considered necessary at this
stage. We are unable to comment on the same. Our audit report for the
last year was also modified accordingly;
6. As mentioned in Note 23 of Schedule 19, the Company had recognised
in the last year. Deferred Tax Asset (DTAj of Rs. 203,644.679 for the
unabsorbed business losses. Out of the same, the company continues to
recognise Rs. 53.401,261 being the unadjusted amount at the end of the
year as DTA. Had the company followed provisions of AS-22 Accounting
for Taxes on Income, by not recognizing DTA of Rs. 53,401,261 on
account of unabsorbed losses, pro/it for the year would have been lower
and balance of deferred tax liability higher by the said amount with
corresponding effect on reserves. Our audit report for the last year
was also modified accordingly;
7. Further to our comments in the Annexure referred to in above
paragraph, we report that:
a) Subject to our comments in paragraph 5 above, we have obtained all
the information and explanations, which to the best of our knowledge
and belief were necessary for the purposes of our audit;
b) In our opinion, proper books of account, as required by law have
been kept by the Company so far as appears from our examination of the
books of the Company;
c) The Balance Sheet, Profit and Loss Account and the Cash Flow
Statement dealt with by the report are in agreement with the books of
account of the Company;
d) In our opinion, subject to our comments in paragraph 5 and 6 above,
the Balance Sheet, Profit and Loss Account and the Cash Flow Statement
comply with the mandatory Accounting Standards referred to in Section
211 (3C) of the Companies Act, 1956.
e) On the basis of written representations received from the directors
of the Company as on 31=l March 2010, and taken on record by the Board
of Directors, we report that none of the directors is disqualified as
on 31st March 2010, from being appointed as a director in terms of
Section 274(l)(g) of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
Notes to Accounts in Schedule 19 and subject to our observations in
paragraphs 5 and 6 above 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 31st March 2010;
b. In the case of the Profit and Loss Account, of the Profit for the
year ended on that date,
c. In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Statement referred to in paragraph 3 of the Auditors Report of even
date to the Members of THIRUMALAI CHEMICALS LIMITED on the accounts for
the year ended 31st March 2010
On the basis of such checks as considered appropriate and in terms of
the information and explanations given to us, we state as under:
1. (a) The company is maintaining proper records showing full
particulars including quantitative details and situation of the fixed
assets;
1. (b) As explained to us, the management at reasonable intervals
carries out the physical verification of the fixed assets. The
discrepancies noticed on such verification, which were not material,
have been appropriately dealt with in the accounts;
1. (c) The fixed assets disposed off by the company were not
substantial and therefore does not affect the going concern assumption;
2. (a) As explained to us, the inventories have been physically
verified during the year by the management. In our opinion, having
regard to the nature and location of stocks, the frequency of the
physical verification is reasonable;
2. (b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of tie Company and the nature of its business;
2. (c) In our opinion, the Company is maintaining proper records of
inventory and the discrepancies noticed on physical verification of the
same were not material in relation to the operations of the Company and
the same have been properly dealt with in the books of account;
3. (a) As per the information and explanations given to us, the
Company had, in an earlier year granted an unsecured loan to a company
covered in the register maintained under section 301 of the Companies
Act, 1956. The details of such unsecured loan outstanding is as under:
Name of Balance as Maximum
Party on 31 March balance
2010 (Rs.) outstanding
during the
year (Rs.)
TCL Industries 44,890,000 50,720,000
(Malaysia) SDN BHD
3. (b) In case of the aforesaid unsecured loan, the rate of interest
and the other terms and conditions are not prima-facie prejudicial to
the interests of the Company;
3. (c) In case of the aforesaid unsecured loan, the repayment of
principal amount and interest thereon is not regular, {also refer our
comments in paragraph 5 in the audit report and Note 27 of Schedule
191:
3. (d) In case of the aforesaid unsecured loan, we are unable to
comment whether the company is taking reasonable steps for the timely
recovery of the principal and interest. lalso refer our comments in
paragraph 5 in the audit report and Note 27 of Schedule 191:
3. (e) As per the information and explanations given to us, the Company
has taken unsecured loans from a company covered in the register
maintained under section 301 of the Companies Act, 1956. The details of
such unsecured loan taken is as under:
Name of Balance as Maximum
Party on 31 March balance
2010 (Rs.) outstanding
during the
year (Rs.)
Ultramarine & Nil 106,796,775
Pigments Ltd
3. (f) In case of the aforesaid unsecured loan taken, the rate of
interest and the other terms and conditions are not prima-facie
prejudicial to the interests of the Company;
3. (g) In case of the aforesaid unsecured loan, the repayment of
principal amount and interest is regular;
4. In our opinion and as explained to us, there are adequate internal
control procedures commensurate with the size of the Company and the
nature of its business with regard to 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 controls and
there is no continuing failure for the same;
5. (a) Based on the audit procedures applied by us and according to
the information and explanations provided by the management, we are of
the opinion that the transactions that need to be entered into the
register maintained under Section 301 have been so entered;
5. (b) In our opinion and as explained to us, the terms and conditions
of the transactions made in pursuance of contracts or arrangements
entered in the register maintained under Section 301 are reasonable
having regard to the prevailing market prices at the relevant time;
6. In our opinion and as explained to us, the Company has complied
with the provisions of Section 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and rules made there under for
the deposits accepted from the public;
7. In our opinion, the Company has an rnial audit system commensurate
with the size of the Company and the nature of its business:
8. We have broadly reviewed the books of account maintained by the
company in respect of manufacture of chemicals pursuant to the order
made by the Central Government for the maintenance of cost records
prescribed under section 209(l)(d) of the Companies Act, 1956 and are
of the opinion that prima-facie, the prescribed accounts and records
have been made and maintained. We have not, however, made a detailed
examination of the records with a view to determining whether they are
accurate or complete;
9. (a) According to the information and explanations given to us and
the records examined by us, the Company is regular in depositing with
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees state
insurance, income-tax, sales-tax, wealth-tax, service tax, custom duty,
excise-duty, cess and other statutory dues and there are no undisputed
statutory dues outstanding as at 31st March 2010, for a period of more
than six months from the date they became payable;
9. (b) Disputed statutory dues that have not been deposited on account
of disputed matters pending before appropriate authorities are as
under:
Name of Nature of Amount Year/s Forum where
the the dues (Rs.)
to which dispute is
Statute the amount
relates
Central Excise 350,000 2002-03 Central
ExciseAct Duty 2004-05 Excise and
2005-06 ServiceTax
Appellate
Tribunal
Central Excise 99,945 2005-06 Asst.
ExciseAct Duty Commissioner
of Central
Excise
Income Fenalty 43,652.086 1996-97 Commissioner
TaxAct of Income
Tax (Appeals)
Income Income 30,413,847 2007-08 Commissioner
Tax Act Tax of Income
Tax (Appeals)
Foreign Penalty 99,363,453 1996-97 Supreme
Exchange Court of
Managanent India
Act
Tamihiadu Interest 7,537.505 2000-01 Chennai
General on belated to High Court
Sales Tax payments 2005-06
Act of tax
Amounts paid under protest and not charged to Profit and Loss Account
have not been included above. (Refer Notes 3, 4 and 5 of Schedule 19)
10. The company does not have any accumulated losses as on 31st March
2010. The company has not incurred any cash losses during the financial
year. However, it incurred cash losses in the immediately preceding
financial year;
11. Based on the information and explanations given to us, the Company
has not defaulted in repayment of any dues to financial institutions
and banks;
12. Based on our examination of the records and as explained to us,
the Company has not granted any loans and/or advances on the basis of
security by way of pledge of shares, debentures and other securities;
13. The Company is not a chit fund, nidhi, mutual benefit fund or a
society;
14. During the year, the Company has not made any dealing and trading
in shares, securities, debentures and other investments. The Company
holds all shares, debentures and other investments held by the company
in own name;
15. According to the information and explanations given to us, the
Company has given guarantee to a financial institution for loan taken
by another company. In our opinion, the terms and conditions whereof
are not prejudicial to the interest of the company;
16. According to the information and explanations given to us, the
term loans raised during the year were used for the purpose for which
they were raised;
17. As explained to us and on an overall examination of the balance
sheet of the Company, in our opinion there are no funds raised on
short-term basis, which have been used for long-term investment by the
Company;
18. The Company has not made any preferential allotment of shares
during the year;
19. During the year covered by our audit report the Company has not
issued any secured debentures;
20. The Company has not raised any money by public issues during the
year covered by our report.
21. As per the information and explanations given to us, no Ãfraud on
or by the Company has been noticed or reported during the year.
For and on behalf of
Contractor Nayak & Kishnadwala
Chartered Accountants
H. V. Kishnadwala
Partner,
Firm Registration Number: 101961W
Membership No 37391
Mumbai
21st May 2010