Mar 31, 2019
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of Khaitan Chemicals And Fertilizers Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the financial statements including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe financial statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditorâs 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 independence requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Sr. No. |
Key Audit Matter |
Auditors Response |
1. |
Recoverability position of |
Principal Audit Procedures |
trade receivables for newly |
Our procedures on the |
|
explored markets. |
managementâs assessment of |
|
The company has material trade |
exploring the new markets and |
|
receivables amounting to Rs. 917.14 lakhs outstanding from |
realisation of trade receivables included: |
|
more than one year. |
- Understanding and evaluating |
|
In past, the company has explored certain market against |
process and controls designed and implemented by the management including testing of relevant |
|
which recovery from trade |
controls; |
|
receivables are still outstanding. |
- Gaining an understanding of the |
|
Also, recovery is dependent on |
procedure adopted in exploring the |
|
adequacy of monsoon. |
market; |
|
As explained by the management |
- Obtaining sufficient audit |
|
that the stablishing of a newly |
evidence. |
|
explored market takes time and in |
Based on the management estimate, |
|
past monsoon was not adequate. |
representation received, and the audit |
|
Management has represented that |
procedure applied in respect of |
|
the money will be realised, in due |
new market, we consider the |
|
course |
managementâs assessment as |
Information Other than the Financial Statements and Auditorâs Report Thereon
The Companyâs Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Boardâs Report including Annexures to Boardâs Report but does not include the financial statements and our auditorâs report thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our 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.
Managementâs Responsibility for the Financial Statements The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS 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 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.
In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also
- Identify and assess the risks of material misstatement of the 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 financial controls 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 reasonable ness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and event s in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone 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
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid 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 balance sheet, the statement of profit and loss including other comprehensive income, statement of changes in equity and the statement of cash flow dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid financial statements comply with the Ind As specified under Section 133 of the Act, read with relevant rules issued thereunder.
e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditorâs
Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at March 31, 2019 on its financial position in its financial statements - Refer Note 37 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2019
To the Members of Khaitan Chemicals and Fertilizers Limited on its financial statements dated May 09, 2019
Report on the matters specified in paragraph 3 of the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 1 of âReport on Other Legal and Regulatory Requirementsâ section
i. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management according to the programme of periodical verification in phased manner which, in our opinion, is reasonable having regard to the size of the company and the nature of its fixed assets. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.
(c) According to the information and explanation given to us and on the basis of ou r exami nation of the records of the Company, the title deeds of immovable properties as disclosed in the note 4 on fixed assets to the financial statements, are held in the name of the company except in the following cases where title deeds/lease agreement are not held in the name of the Company {Refer Note 4 (b) &(c)}
Nature of Immovable |
No. of |
Gross Carrying |
Net Carrying |
Properties |
Properties |
Value (Rs. In Lakhs) |
Value(Rs. In Lakhs) |
Freehold Land |
2 |
57.47 |
57.47 |
Leasehold Land |
1 |
24.86 |
16.22 |
Total |
3 |
82.33 |
73.69 |
iii. The inventory of the Company has been physically verified by the management during the year (except for stock of Rock Phosphate, Sulphur and Single Super phosphate for which stock is taken on estimation basis and for the stock in transit and stock lying with outside parties). In our opinion, the frequency of verification is reasonable, the discrepancies noticed on physical verification of the inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the register maintained under section 189 of the Act. Thus, the paragraph 3(iii)(a) to (c) of the Order is not applicable to the Company.
iv. As per the information and explanation given to us and on the basis of our examination of the records, the company has complied with provision of section 185 and 186 of the Act, with respect to the loans and investment made.
v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, are not applicable to the Company.
vi. We have broadly reviewed the books of accounts maintained in pursuance to sub section (1) of Section 148 of the Act in respect of single super phosphate fertilizers, sulphuric acid and refined vegetable oil manufactured by the Company and are of the opinion that, prima facie, the prescribed records and accounts have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii. (a) According to the records of the Company examined by us and the information and explanations given to us, the Company is generally regular in depositing its undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues, as applicable, with the appropriate authorities.
Further, there were no undisputed amounts outstanding at the year-end for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales-tax and goods and service tax which have not been deposited on account of any dispute, except the following dues of service tax, income tax, duty of customs, value added tax and cess along with the forum where the dispute is pending as follows:
Name of the Statute |
Nature of dues |
Amount (Rs.) |
Amount paid under protest (in Rs lacs) |
Amount outstanding (in Rs. lacs) |
Period to which the amount relates |
Forum where the dispute is pending |
Mines and Minerals (Development and Regulation) Act,1957 |
Royalty on rock phosphate |
158.36 |
39.59 |
118.77 |
2004-05 |
High Court, Rajasthan |
Commercial Tax Act, 1994 |
Purchase Tax |
63.38 |
63.38 |
2004-05 |
High Court of Madhya Pradesh, Jabalpur |
|
UP Trade Tax, 1948 |
Trade Tax |
1.53 |
0.53 |
1.00 |
2006-07 |
The Deputy Commission Commercial Tax Jhansi |
M.PEntry Tax Act, 1976 |
Entry Tax |
35.37 |
26.88 |
8.49 |
2007-08 |
MP Commercial Tax Appellate Board, Bhopal |
Custom Act, 1962 |
Custom Duty |
185.47 |
13.91 |
171.56 |
2004-05 to 2008-09 |
Commissioner Appeal, Mumbai |
Income Tax Act, 1962 |
Income Tax |
1.16 |
1.16 |
2009-10 |
CIT (Appeal)- New Delhi |
|
Income Tax Act, 1962 |
Income Tax |
21.07 |
21.07 |
2017-18 |
CIT (Appeal)- New Delhi |
|
Income Tax Act, 1962 |
Income Tax |
22.87 |
22.87 |
For various year |
TDS- CPC |
|
UP. Sales Tax |
Sales Tax |
2.66 |
2.66 |
2011-12 |
DY. Commissioner, Jhansi |
|
UP. Sales Tax |
Sales Tax |
2.57 |
2.57 |
2012-13 |
DY. Commissioner, Jhansi |
|
UP. Central Sales Tax, 1956 |
Sales Tax |
0.69 |
0.69 |
2013-14 |
DY Commissioner, Jhansi |
|
UP. Entry Tax, 2007 |
Entry Tax |
0.11 |
0.11 |
2013-14 |
DY Commissioner, Jhansi |
viii. According to the information and explanations given to us and as per the books and records examined by us, in our opinion, the company has not defaulted in repayment of loans or borrowings to a financial institution and banks. The Company has not taken any loans from debenture holders and Government.
ix. In our opinion and on the basis of information and explanations given to us, the company has not raised any monies by way of initial public offer or further public offer or term loan during the financial year, hence the related reporting requirement of the Order are not applicable.
x. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the year, nor have we been informed of such case by the management.
xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V of the Act.
xii. The company is not a Nidhi company, hence the related reporting requirement of the Order are not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by applicable accounting standards.
xiv. As the Company has not made any preferential allotment and private placement of shares or fully & partly convertible debentures during the year under review, the requirement of section 42 of the Act are not applicable.
xv. In our opinion, and 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 provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure B to the Independent Auditorâs Report to the Members of Khaitan Chemicals and Fertilizers Limited (âthe Companyâ) on its financial statements dated May 09, 2019.
Report on the Internal Financial Controls over financial reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 1(f) of âReport on Other Legal and Regulatory Requirementsâ section
We have audited the internal financial controls over financial reporting of Khaitan Chemicals and Fertilizers Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Board of Directors of the company is responsible for establishing and maintaining internal financial controls based on âthe 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 Indiaâ. 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 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 Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the 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 internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 companyâs internal financial control over financial reporting includes those policies and procedures that:
a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
b) 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
c) 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, to the best of our information and according to the explanations given to us, 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, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For NSBP & Co.
Chartered Accountants
Firm Registration No. 001075N
Deepak K. Aggarwal
Place: New Delhi Partner
Date: May 09, 2019 Membership No: 095541
Mar 31, 2018
Report on the Ind AS financial statements
We have audited the accompanying Ind AS financial statements of Khaitan Chemicals and Fertilizers Limited (âthe Companyâ), which comprise the balance sheet as at March 31, 2018, statement of profit and loss (including the statement of other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information (herein after referred to as âInd AS financial statementsâ).
Managementâs Responsibility for the Ind AS financial statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with the Companies ( Indian Accounting Standards) Rules, 2015, as amended thereof.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. In conducting 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 and the Order issued under Section 143(11) of the Act.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing, specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018 and its profit, total comprehensive income, its cash flows and the changes in equity forthe year ended on that date.
Other Matters
The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 01, 2016 included In this Ind AS Financial Statements, are based on the previously issued statutory financial statement prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited and reported by S.S. Kothari Mehta & Co. having firm registration number 000756N who have issued an unmodified audit report dated May 29,2017 and May 27, 2016 respectively, have been furnished to us by the management and which have been relied upon by us for the purpose of issuing the report on the financial statement as adjusted forthe differences in the accounting principles adopted by the Company on transition to Ind AS, which has been audited by us.
Our report is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the âAnnexure A âa statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best ofourknowledge and belief were necessary for the purposes of our audit of the aforesaid Ind AS financial statements;
b. In our opinion, proper books of account as required by law have been kept by the company so far asit appears from our examination of those books;
c. The balance sheet, statement of profit and loss including statement of other comprehensive income, the cash flow statement and statement of changes in equity dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended thereof;
e. On the basis of written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ;and
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and explanations given to us:
i. The Company has disclosed the impact of pending litigations as at March 31,2018 on its financial position in its Ind AS financial statements - Refer Note 37 to the Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and
iii. There is no amount required to be transferred, to the Investor Education and Protection Fund by the Company.
Annexure A to the Independent Auditor''s Report to the Members of Khaitan Chemicals and Fertilizers Limited on its Ind AS financial statements dated May 19,2018
Report on the matters specified in paragraph 3 of the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 1 of âReport on Other Legal and Regulatory Requirementsâsection
I. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management according to the programme of periodical verification in phased manner which, in our opinion, is reasonable having regard to the size of the company and the nature of its fixed assets. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.
(c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties as disclosed in the note 4 on fixed assets to the financial statements, are held in the name of the company except in the following cases where title deeds/lease agreement are not held in the name of the Company {Refer Note 4 (b) & (c).
Nature of Immovable |
No. of |
Gross Carrying |
Net Carrying |
Properties |
Properties |
Value (Rs. In Lakhs) |
Value(Rs. In Lakhs) |
Freehold Land |
2 |
57.47 |
57.47 |
Leasehold Land |
1 |
24.86 |
16.22 |
Total |
3 |
82.33 |
73.69 |
ii. The inventory of the Company has been physically verified by the management during the year (except for stock of Rock Phosphate, Sulphur and Single Super phosphate for which stock is taken on estimation basis and for the stock in transit and stock lying with outside parties). In our opinion, the frequency of verification is reasonable, the discrepancies noticed on physical verification of the inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the register maintained under section 189 of the Act. Thus, the paragraph 3 (iii) (a) to (c) of the Order is not applicable to the Company.
iv. As per the information and explanation given to us and on the basis of our examination of the records, the company has complied with provision of section 185 and 186 of the Act, with respect to the loans and investment made.
v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and consequently, the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, are not applicable to the Company.
vi. We have broadly reviewed the books of accounts maintained in pursuance to sub section (1) of Section 148 of the Act in respect of single super phosphate fertilizers, sulphuric acid and refined vegetable oil manufactured by the Company and are of the opinion that, prima facie, the prescribed records and accounts have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii. (a) According to the records of the Company examined by us and the information and explanations given to us, the Company is generally regular in depositing its undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues, as applicable, with the appropriate authorities during the year and no undisputed amounts are payable which have remained outstanding as at March 31,2018 for a period of more than six months from the date they became payable except work contract tax payable of Rs. 0.69 lakh, since paid and value added tax of Rs. 29.56, adjusted in books with tax refundable.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales-tax and goods and service tax which have not been deposited on account of any dispute, except the following dues of service tax, income tax, duty of customs, value added tax and cess along with the forum where the dispute is pending as follows:
Name of the Statute |
Nature of the dues |
Amount {in Rs. lakhs)* |
Period to which the amount relates |
Forum where the dispute is pending |
Mines and Minerals (Development and Regulation) Act,1957 |
Royalty on rock phosphate |
118.77 |
2004-05 |
High Court,Rajasthan |
Commercial Tax Act, 1994 |
Purchase Tax |
42.85 |
2004-05 |
High Court of Madhya Pradesh .Jabalpur |
UP Trade Tax, 1948 |
Trade Tax |
1.00 |
2006-07 |
The Deputy Commission CommercialTax-Jhansi |
M. P. E ntry Tax Act, 1976 |
Entry Tax |
22.14 |
2007-08 |
MPCommercialTax Appellate Board, Bhopal |
Custom Act, 1962 |
Custom Duty |
171.56 |
2004-05 to 2008-09 |
Commissioner Appeal, Mumbai |
Income Tax Act, 1962 |
Income Tax |
3.53 |
2013-14 |
CIT (Appeal)- New Delhi |
Income Tax Act, 1962 |
Income Tax |
7.06 |
2014-15 |
CIT (Appeal)- New Delhi |
U.P. Sales Tax |
Sales Tax |
2.66 |
2011-12 |
DY. Commissioner, Jhansi |
U.P. Sales Tax |
Sales Tax |
2.57 |
2012-13 |
DY. Commissioner, Jhansi |
U.P. Central Sales Tax, 1956 |
Sales Tax |
0.69 |
2013-14 |
DY. Commissioner, Jhansi |
U.P. Entry Tax, 2007 |
Entry Tax |
0.11 |
2013-14 |
DY. Commissioner, Jhansi |
* Net of amounts paid under protest.
viii. According to the information and explanations given to us and as per the books and records examined by us, in our opinion, the company has not defaulted in repayment of loans or borrowings to a financial institution and banks. The Company has not taken any loans from debenture holders and Government.
ix. In our opinion and on the basis of information and explanations given to us, the company has not raised any monies byway of initial public offer or further public offer or term loan during the financial year, hence the related reporting requirement of the Order are not applicable.
x. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company or any fraud on the Company by its officers or employees has been noticed or reported during the year, nor have we been informed of such case by the management
xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V of the Act.
xii. The company is not a Nidhi company, hence the related reporting requirement of the Order are not applicable.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by applicable accounting standards.
xiv. As the Company has not made any preferential allotment and private placement of shares or fully & partly convertible debentures during the year under review, the requirement of section 42 of the Act are not applicable.
xv. In our opinion, and 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 provisions of section 45-IAof the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure B to the Independent Auditor''s Report to the Members of Khaitan Chemicals and Fertilizers Limited (''the Company'') on its Ind AS financial statements dated May 19,2018
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ) as referred to in paragraph 1(f) of âReport on Other Legal and Regulatory Requirementsâ section
We have audited the internal financial controls over financial reporting of Khaitan Chemicals and Fertilizers Limited''the Companyâ) as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Board of Directors of the company is responsible for establishing and maintaining internal financial controls based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ. 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 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 Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls overfinancial 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 âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control overfinancial reporting includes those policies and procedures that:
a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS 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
c) 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 Ind AS 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, to the best of our information and according to the explanations given to us, 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, 2018, 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 NSBP & Co.
Chartered Accountants
Firm Registration No. 001075N
Deepak K. Aggarwal
Place: New Delhi Partner
Date: May 19,2018 Membership No: 095541
Mar 31, 2017
Report on the Financial Statements
We have audited the accompanying financial statements of Khaitan Chemicals and Fertilizers Limited (âthe Companyâ),which comprise the balance sheet as at March 31, 2017, the statement of profit and loss, 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 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 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 safe guarding 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10)of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report)Order, 2016(âthe Orderâ) issued by the Central Government of India in terms of sub section (11)of section 143 of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3)of the Act, we report that:
a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;
d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) on the basis of written representations received from the directors as on March 31, 2017taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2)of the Act;
f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ, and
g) with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 32 to the financial statements;
ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts- Refer note to the financial statements;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company, during the year ended March 31, 2017;
iv. the Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016to December30,2016and these are in accordance with the books of accounts maintained by the Company-Refer note 33 to the financial statements.
The Annexure as referred to in Independent Auditorâs report to the members of the Company on the financial statements for the year ended March 31, 2017, we report that:
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management according to the programme of periodical verification in phased manner which, in our opinion, is reasonable having regard to the size of the company and the nature of its fixed assets. The discrepancies, if any, noticed on such physical verification have been properly dealt with in the books of accounts.
(c)According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties as disclosed in the note 10 on fixed assets to the financial statements, are held in the name of the company excepting the following cases where title deeds/lease agreement are not held in the name of the Company;(Refer Note 10(b)& (c)
Nature of immovable properties |
No. of properties |
Gross Carrying Value (Rs. in lacs) |
Net Carrying Value (Rs. in lacs) |
Freehold Land |
2 |
57.47 |
57.47 |
Leasehold Land |
1 |
24.86 |
16.49 |
Total |
3 |
82.33 |
73.96 |
ii The inventory of the Company has been physically verified by the management during the year (except for stock of Rock Phosphate, Sulphur and Single Super phosphate for which stock is taken on estimation basis and for the stock in transit and stock lying with outside parties). In our opinion, the frequency of verification is reasonable, the discrepancies noticed on physical verification of the inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the register maintained under section 189 of the Act. Thus, the paragraph 3(iii)(a)to(c) of the Order is not applicable to the Company.
iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under sections 185 and 186oftheAct. Thus, the paragraph 3(iv) of the Order is not applicable to the Company.
v. The Company has not accepted any deposits from the public.
vi. We have broadly reviewed the books of accounts maintained in pursuance to sub section (1) of Section 148 of the Act in respect of single super phosphate fertilizers, sulphuric acid and refined vegetable oil manufactured by the Company and are of the opinion that, prima facie, the prescribed records and accounts have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii. (a)According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Income-Tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities.
According to the information and explanation given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, value added tax, duties of customs, service tax, cess and other material statutory dues were in arrear as March 31, 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no dues of customs and service tax which have not been deposited with appropriate authorities on account of any dispute. However, according to the information and explanations given to us the following dues of income tax, sales tax, excise duty, value added taxes, purchase tax, entry tax and Royalty/cess, have not been deposited by the Company on account of disputes: -
Sr. No. |
Name of the Statute |
Nature of dues |
Amount (Rs. in Lacs) |
Period to which the amount relates |
Forum where the dispute is pending |
1 |
Mines and Minerals (Development and Regulation)Act,1957 |
Royalty on rock phosphate |
118.77* |
2004-05 |
High Court, Rajasthan |
2 |
Commercial Tax Act, 1994 |
Purchase Tax |
42.85* |
2004-05 |
High Court of Madhya Pradesh, Jabalpur |
3 |
UP Trade Tax, 1948 |
Trade Tax |
1.00* |
2006-07 |
The Deputy Commission Commercial Tax-Jhansi |
4 |
M.P. Entry Tax Act, 1976 |
Entry Tax |
22.14* |
2007-08 |
MP Commercial Tax Appellate Board, Bhopal |
5 |
Central Excise Act, 1994 |
Excise Duty & Penalty |
16.85 |
2007-09 |
Commissioner (Appeal)-I, Delhi |
6 |
Custom Act, 1962 |
Custom Duty |
171.56* |
2004-05 to 2008-09 |
Commissioner (Appeal), Mumbai |
7 |
Income Tax Act, 1962 |
Income Tax |
3.53 |
2013-14 |
CIT (Appeal)- New Delhi |
8'' |
Income Tax Act, 1962 |
Income Tax |
7.06 |
2014-15 |
CIT (Appeal)- New Delhi |
9 |
UP Sales Tax |
Sales Tax |
2.66 |
2011-12 |
Dy. Commissioner, Jhansi |
10 |
U.P Sales Tax |
Sales Tax |
2.57 |
2012-13 |
Dy. Commissioner, Jhansi |
11 |
U.P Central Sales Tax, 1956 |
Sales Tax |
0.69 |
2013-14 |
Dy. Commissioner, Jhans |
12 |
U.P. Entry Tax, 2007 |
Entry Tax |
0.11 |
2013-14 |
Dy. Commissioner, Jhansi |
13 |
Minimum Wages Act, 1948 |
Labour Case |
0.30* |
2013-14 |
High Court, Allahabad |
* Net of amounts paid under protest
viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions, The Company has not taken any loan from the government and has not issued any debentures.
ix. According to the information and explanations given to us, the Company did not raise any money byway of initial public offer or further public offer (including debt instruments). The term loans have been applied for the purpose for which they were raised.
x. According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V of the Act.
xii. In our opinion and according to the information and explanations given to us the Company is not a Nidhi Company. Accordingly, paragraph 3 (xii) of the Order is not applicable to the Company.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by applicable accounting standards.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph3(xv) of the Order is not applicable to the Company
xvi. The Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934.
for S S KOTHARI MEHTA & CO.
Chartered Accountants
Firmâs Registration Number: 000756N
Harish Gupta
Place: Gurugram Partner
Date: May 29, 2017 Membership Number: 098336
Mar 31, 2016
To
The Members,
Khaitan Chemicals & Fertilizers Limited
Gurugram
1. We have audited the accompanying financial statements of Khaitan Chemicals & Fertilizers Limited (âthe Companyâ) which comprise the Balance Sheet as at March 31,2016, 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.
2. Managementâs Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ)with respect to the preparation of these financial statements that give a true and Fairview 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 133of the Act, read with Rule7of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3. Auditorâs Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit .We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the cat and the Rules made hereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures appropriate in the circumstances.
An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements
4. Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.
5. Report on Other Legal and Regulatory Requirements
(a) As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ), as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(b) As required by section 143 (3)of the Act, we report that:
. i. 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.
ii. 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.
iii. 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.
iv. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards specified under section 133 of the Act, read with Rule7 of the Companies (Accounts) Rules, 2014.
v. On the basis overwritten representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016from being appointed as a director in terms of Section 164 (2)of the Act.
vi. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
vii. 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 knowledge and belief and according to the information and explanations given to us:
a) The company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29 to the financial statements.
b) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
c) There 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 March31,2016.
(As referred to in paragraph 5(a) of our report to the members of Khaitan Chemicals & Fertilizers Limited financial statements of the Company for the year ended March 31,2016, we report that:
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Fixed Assets have been physically verified by the management
in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the books records and the physical fixed assets have been noticed on such verification.
(c) The title deeds of immovable properties as disclosed in the note 10 on fixed assets to the financial statements, are held in the name of the company except in the following cases where title deeds/lease agreement are not held in the name of the Company;(Refer Note 10
(b) & (c) of the Financial Statement.
Nature of immovable properties |
No. of properties |
Gross Block (Rs) |
Net Block (Rs) |
Freehold Land |
2 |
57.47 lacs |
57.47 lacs |
Leasehold Land |
1 |
24.86 lacs |
16,77 lacs |
Total |
3 |
82.33 lacs |
74.24 lacs |
ii. (a) The inventory of the Company has been physically verified by the
management during the year (except for stock of Rock Phosphate, Sulphur and Single Super phosphate for which stock is taken on estimation basis and for the stock in transit and stock lying with outside parties). In our opinion, the frequency of verification is reasonable
(b) The discrepancies noticed on physical verification of the inventory as compared to books records were not material.
iii. The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Therefore, the provisions of clause 3 (iii) (a) to (c) of the Order are not applicable to the Company.
iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under section 185 and 186. Therefore, the provisions of the clause 3(iv) of the said Order are not applicable to the Company.
v. As per the information and explanations provided to us, the Company has not accepted any deposits and therefore provisions of Sections 73to 76 or any other relevant provisions of the Companies Act and rules there underage not applicable to the Company.
vi. We have broadly reviewed the books of accounts maintained in pursuance to subsection (1)of section 148of the Act in respect of single super phosphate fertilizers, sulphuric acid and refined vegetable oil manufactured by the Company and are of the opinion that, prima facie, the prescribed records and accounts have been made and maintained. However, we have-not carried out a detailed examination of such records to verify its authenticity and accuracy.
vii. (a) According to information and explanations given to us and on the
basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues of including, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities Further, there are no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they become payable.
(b) According to the information and explanationsgivento us, there are no material dues of custom duty and service tax which have not been deposited with appropriate authorities on account of dispute. However, according to the information and explanations given to us the following dues of income tax, sales tax, excise duty, value added taxes, purchase tax, entry tax and Royalty/cess, have not been deposited by the Company on account of any disputes: -
Sr. No. |
Name of the Statute |
Nature of dues |
Amount (Rs.) |
Period to which the amount relates |
Forum where the dispute is pending |
1. |
M.P. Commercial Tax Act, 1974 |
Sales Tax/Trade Tax |
0.48 Lacs |
2001-02 |
Tribunal Commercial Tax, Bhopal |
2. |
Mines and Minerals (Development and Regulation) Act,1957 |
Royalty on rock phosphate |
118.77 Lacs |
2004-05 |
High Court, Rajasthan |
3. |
Purchase Tax Act |
Purchase Tax |
63.38 Lacs |
2004-05 |
High Court of Madhya Pradesh, Jabalpur |
4. |
Central Excise Act |
Penalty |
17.78 Lacs |
2007-08 |
Custom Excise and Service Tax Appellate Tribunal, Delhi |
5. |
UP Trade Tax 1948 |
Sales Tax |
1.00 Lacs |
2006-07 |
The Deputy Commission Commercial Tax-Jhansi |
6. |
M.P. Entry TaxAct 1976 |
Entry Tax |
28.27 Lacs |
2007-08 |
MP Commercial Tax Appellate Board, Bhopal |
7. |
Central Excise Act |
Excise Duty& Penalty |
16.85 Lacs |
2007-09 |
Commissioner (Appeal)-I, Bhopal |
8. |
Custom Act 1962 |
Custom Duty |
171.56 Lacs |
2004-05 to 2008-09 |
Commissioner (Appeal), Mumbai |
viii In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions.
However, the Company has not taken any loan from the government and has not issued any debentures.
ix. Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys byway of initial public offer or further public offer (including debt instruments)and term Loans. Accordingly, the provisionsofclause3(ix) of the Order are not applicable to the Company.
x. Based upon the audit procedures performed and the information and explanations given by the management, we report that no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
xi. Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
xii. In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.
xiii. In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
xiv. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.
xv. The company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company.
xvi. In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisionsofclause3(xvi)of the Order are not applicable to the Company.
(Referred to in paragraph 5 (b) (vi) of our report to the members of Khaitan Chemicals & Fertilizers Limited for the year ended March31,2016)
1. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Khaitan Chemicals & Fertilizers Limited (âthe Companyâ)as of March 31,2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
2. Managementâs Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to 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.
3. Auditors âResponsibility
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 and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design 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.
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.
4. Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 Tehran sections 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.
5. 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.
6. 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 S.S. KOTHARI MEHTA & CO.
Chartered Accountants
Firm Regn.No. 000756N
HARISH GUPTA
Place:Gurugram Partner
Date: 27th May,2016 (Membership N°. °98336)
Mar 31, 2015
1. We have audited the accompanying financial statements of Khaitan
Chemicals & Fertilizers Limited ('the Company') which comprise the
Balance Sheet as at 31st March, 2015, the Statement of Profit and
Loss, the Cash Flaw Statement far the period then ended, and the Nates
ta Financial Statements comprising af a summary of significant
accounting policies and other explanatory information.
2. Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act")
with respect to the preparation of these financial statements that give
a true and fair view af the financial position, financial performance
and cash flows af 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 af
the Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance af adequate accounting records in accordance with the
provisions af the Act far safeguarding the assets af the Company and
for preventing and detecting frauds and other irregularities; selection
and application af 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 far ensuring the accuracy and
completeness af the accounting records, relevant ta the preparation and
presentation af the financial statements that give a true and fair view
and are free from material misstatement, whether due ta fraud or error.
3. Auditors'Responsibility
Our responsibility is to express an opinion on these financial
statements based on aur audit. We have taken into account the
provisions af the Act, the accounting and auditing standards and
matters which are required ta be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted aur audit in accordance with the Standards on Auditing
specified under Section 143(10) af the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
ta 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 auditors' judgment, including the
assessment af the risks of the material misstatement af the financial
statements, whether due to error orfraud. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation af the financial statements that give a
true and fair view in order ta design audit procedures that are
appropriate in the circumstances, but not far the purpose af expressing
an opinion an whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness af such controls. An audit also includes evaluating the
appropriateness of accounting policies used and reasonableness af the
accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation af the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate ta provide a basis far aur audit opinion an the financial
statements.
4. Opinion
In our opinion and ta the best af our information and according ta the
explanations given ta us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state af affairs of the Company as
at 31 March 2015, and its profit and its cash flows far the period
ended an that date.
5. Report on Other Legal and Regulatory Requirements
(a) As required by the Companies (Auditors' Report) Order, 2015
('the Order') issued by the Central Government af India in terms af
sub Section 11 of Section 143aftheAct,wegiveinthe Annexure a statement
on the matters specified in paragraphs 3 and 4 af the Order.
(b) As required under provisions af Section 143(3) of the Act, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessaryforthe purpose of
auraudit;
ii. In aur opinion, proper baaks af accounts as required by law have
been kept by the Company so far as appears from aur examination af
those books;
iii. The Balance Sheet, Statement of Profit and Lass and Cash Flow
Statement dealt with by this Report are in agreement with the books of
accounts;
iv. In ourapinion, the Balance Sheet, Statement of Profit and Lass and
Cash Flaw Statement comply with the Accounting Standards referred ta in
Section 133 af the Act read with Rule 7 of the Company (Accounts)
Rules, 2014.
v. On the basis af written representations received from the Directors,
as on 31" March, 2015 and taken an record by the Board of Directors,
none af the Directors is disqualified as on 31" March, 2015, from
being appointed as a Director in terms of Section 164 (2) af the Act.
(As referred to in paragraph 5(a) of aur report ta the members af
Khaitan Chemicals & Fertilizers Limited an the accounts as at and for
the period ended 31 " March, 2015)
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation af fixed
assets.
(b) The fixed assets are physically verified by the management
according ta a phased programme designed ta caver all the items aver a
period af three years, which in aur opinion, is reasonable having
regard ta the size af the Company and the nature af its assets.
Pursuant ta the programme, a portion af the fixed assets has been
physically verified by the management during the year and no material
discrepancies were noticed an such verification.
(ii) (a) The inventory af the Company has been physically verified by
the management during the year (except far stack af Rack Phosphate,
Sulphur end Single Super phosphate far which stackis taken an
estimetian besisendfarthe stackin transit end stack lying with outside
parties). In aur opinion, the frequency af verification is reasonable.
(b) In aur opinion, the procedures af physical verification af
inventory fallowed by the management are reasonable and adequate in
relation to the size af the Company and the nature af its business.
(c) In aur opinion and according ta the information and explanations
given ta us, the Company is maintaining proper records af inventory.
The discrepancies noticed an verification between the physical stocks
and the book records were not material and have been properly dealt
with in the books af accounts.
(iii) As per the information given to us, the Company has not granted
any loan, secured or unsecured, ta Companies, firms or other parties
covered in the register maintained under Section 189 of the Companies
Act, 2013 ("The Act"). Accordingly, clauses 3 (iii) (a)and (b) af the
Order are not applicable.
(iv) In aur opinion and according ta the information and explanations
given to us, there are adequate internal control systems commensurate
with the size af the Company and the nature af its business with regard
ta purchase af inventory, fixed assets and with regard ta the sale af
goads and services.
Further, an the basis af aur examination af the books and records af
the Company carried out in accordance with the generally accepted
auditing practices in India and according ta the information and
explanations given ta us, we have neither came across nor have been
informed af any continuing failure ta correct major weaknesses in the
aforesaid internal control system.
(v) As per the information and explanations provided ta us, the Company
has not accepted any deposits and therefore provisions af Sections 73
ta 76 ar any other relevant provisions af the Companies Act and rules
there under are not applicable to the Company.
(vi) We have broadly reviewed the books af accounts maintained in
pursuance ta sub Section (1) af Section 148 af the Act in respect af
single super phosphate, sulphuric acid and refined vegetable ail
manufactured by the Company and are af the opinion that, prima facie,
the prescribed records and accounts have been made and maintained.
However, we have not carried out a detailed examination af such records
to verify its authenticity and accuracy.
(vii) (a) According ta the information and explanations given ta us,
and the records af the Company examined by us, in aur opinion, the
Company is generally regular in depositing undisputed statutory dues in
respect af provident fund, employees' state insurance, income tax,
sales tax, wealth tax, service tax, customs duty, excise duty, cess and
other material statutory dues as applicable with the appropriate
authorities.
(b) According ta the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, employees'
state insurance, income tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues were
outstanding, as at 31" March, 2015 far a period af mare than six
months from the date they became payable.
(c) According ta the information and explanations given ta us, there
are no material dues af wealth tax, custom duty, and service tax which
have not been deposited with appropriate authorities on account af
dispute. However, according ta the information and explanations given
ta us the fallowing dues af income tax, sales tax, excise duty, value
added taxes,
S. Name of Nature Amount
No the Statute of dues (Rs.)
1. M.P. Commercial Tax Act, 1974 Sales Tax/Trade Tax 0.48 Lacs
2. UP Trade Tax 1948 Sales Tax/Trade Tax 3.28 Lacs
(Principal)
15.94 Lacs
(Interest)
3. M.P. Commercial TaxAct, 1974 Entry tax 0.11 Lacs
4. Mines and Minerals (Development Royalty on rock 118.77 Lacs
and Regulation) Act, 1957 Phosphate
5. Purchase TaxAct Purchase Tax 63.38 Lacs
6. Central ExciseAct Penalty 17.78 Lacs
7. UP Trade Tax 1948 Sales Tax 1.00 Lacs
8. M.P. Entry Tax Act 1976 Entry Tax 28.27 lacs
9. Central Excise Act Excise Duty & Penalty 16.85 lacs
Name of the Statute Period to which Forum where the
the amount dispute is pending
relates
M.P. Commercial TaxAct, 1974 2001-02 Tribunal Commercial
Tax, Bhopal
UP Trade Tax 1948 Before 1996 Joint Commissioner of
Trade Tax, Lucknow
M.P. Commercial TaxAct, 197 1991-92 Tribunal Commercial
Tax, Bhopal
Mines and Minerals (Development2004-05 High Court, Rajasthan
and Regulation) Act, 1957
Purchase TaxAct 2004-05 High Court of Madhya
Pradesh, Jabalpur
Central Excise Act 2007-08 Custom Excise and
Service Tax Appellate
Tribunal
UP Trade Tax 1948 2006- 07 The Deputy Commission
Commercial Tax,
Jhansi
M.P. Entry Tax Act 1976 2007- 08 MP Commercial Tax
Appellate Board, Bhopal
Central Excise Act 2007-09 Commissioner (Appeal)-I,
Bhopal
purchase tax, entry tax and Royalty/cess, have not been deposited by
the Company on account of any disputes: -
(d) According to the information and explanations given to us, the
amounts which were required to be transferred to Investor Education and
Protection Fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made there under has been
transferred to such fund within time.
(viii) The Company does not have any accumulated losses as at 31"
March, 2015 and it has not incurred any cash losses during the
financial year ended on that date or in the immediately preceding
financial year.
(ix) Based on our audit procedure and on the basis of information and
explanations given to us by the management, we are of the opinion that
the Company has not defaulted in repayment of dues to any financial
institution or bank during the year.
(x) As per the information given to us, the Company has not given
any guarantee for loans taken by others from bank or financial
institutions.
(xi) According to the records of the Company examined by us and the
information and explanations given to us, in our opinion, the term
loans taken by the Company have been applied for the purpose for which
they were obtained.
(xii) Based upon the audit procedures performed and information and
explanation given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
for the year ended 31st March, 2015.
For S.S. KOTHARI MEHTA & CO.
Chartered Accountants
Firm Regn. No. 000756N
HARISH GUPTA
Place : Gurgaan Partner
Date : 16th May, 2015 Membership No. 098336
Mar 31, 2014
1. We have audited the accompanying financial statements of Khaitan
Chemicals & Fertilizers Limited (the ''Company'') which comprise the
Balance Sheet as at 31" March, 2014, and the statement of Profit and
Loss and cash flow statement for the year then ended, and the Notes to
Financial Statements comprising of a summary of significant accounting
policies and other explanatory information.
2. 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 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 controls relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatements, whether due to fraud or error.
3. 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 the material misstatement of the financial
statements, whether due to error of fraud. 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 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.
4. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31" March 2014;
b) In the case of the Statement of Profit and Loss, of the loss 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.
5. Emphasis of Matter
We draw attention to Note No 36 of the notes to the financial
statements for the year ended on 31" March 2014 regarding the fact that
the Company has decided not to provide for mopping up of subsidy on raw
material of fertilizer as on 31-3-2011 in term of Office Memorandum
NO.2311/1/2010-MPR dated 11-07-2011 issued by Ministry of Chemicals &
Fertilizers, Govt, of India, being reconsidered vide their letter No
23011/1/2010-MPR (pt) dated 22.08.2012 and decided not to effect
recovery till a policy in this regard is formulated. The impact on
Revenue from operations and Profit after tax is unascertainable at this
stage.
6. Report on Other Legal and Regulatory Requirements
(a) As required by the Companies (Auditor''s Report) Order, 2003 (''the
Order'') issued by the Central Government of India in terms of section
227 of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
(b) As required under provisions of section 227(3) of the Act, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii. In our opinion, proper books of accounts as required bylaw have
been kept by the Company so far as appears from our examination of
those books;
iii. The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
iv. 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
General Circular 15/2013 dated 13th September 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act,
2013.;
v. On the basis of written representations received from the directors,
as on 31" March, 2014 and taken on record by the Board of Directors,
none of the directors is disqualified as on 31" March, 2014 from being
appointed as a director in terms of Clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956;
(As referred to in paragraph 6(a) of our report to the members of
Khaitan Chemicals & Fertilizers Limited on the accounts as at & for the
year ended31"March2014)
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies were noticed on such verification.
(C) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year. (ii) (a) The inventory of the
Company has been physically verified by the management during the year
(except for stock of Rock Phosphate, Sulphur and Single Super phosphate
for which stock is taken on estimation basis and for the stock in
transit and stock lying with outside parties). In our opinion, the
frequency of 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) On the basis of our examination of the records of inventory, in our
opinion, the Company has maintained proper records of inventory and as
explained to us, discrepancies noticed on physical verification of
inventory as compared to the books records were not material and have
been properly dealt with in the books of accounts. (iii) (a) According
to the information and explanations given to us, the Company has
granted inter-corporate loans/advances to one company covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount involved during the year and the year-end balance of
such loans was Rs. 659.32 lacs and Rs. 96.86 lacs respectively.
(b) In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are prima
facie not prejudicial to the interest of the Company.
(c) The Companies to whom loans have been granted have been regular in
the payment of principal and interest wherever stipulated.
(d) There is no overdue amount outstanding at the end of the yearin
respect of above loans/advances.
(e) The Company has taken loan from three Companies during the year
covered in the Register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year and the year-end
balance of such loans was Rs. 720 lacs and Rs.621.33 lacs respectively.
(iv) In our opinion and according to the information and explanations
given 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, fixed assets and for the
sale of goods. Further, on the basis of our examination of the books and
records of the Company, carried out in accordance with the generally
accepted auditing practices in India, we have neither come across nor
have been informed of any instance of continuing failure to correct
major weaknesses in the aforesaid internal control procedures.
(v) (a) Based on audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered in to the register maintained under Section 301 of the
Companies Act, 1956 have been so entered.
(b) In our opinion and according to information and explanations given
to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
(vi) The company has not accepted any deposits from the public within
the meaning of Section 58A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed there under.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained in
pursuance to section 209 (1) (d) of Companies Act, 1956 in respect of
single super phosphate, Sulphuric acid and refined vegetable oil
manufactured by the Company and are of the opinion that, prima facie,
the prescribed records and accounts have been made and maintained.
However, we have not carried out a detailed examination of such records
to verify its authenticity and accuracy.
(ix) (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the Company
is generally regular in depositing undisputed statutory dues in respect
of provident fund, investor education and protection fund, employees''
state insurance, income tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with the appropriate authorities.
(b) Further, According to information & explanations given to us, there
were no undisputed amounts outstanding at the year- end for a period of
more than six months from the date they became payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income tax, sales tax, custom duty wealth tax, excise duty, service tax
and cess, which have not been deposited on account of any dispute, are
as follows: -
Sr. Name of Nature Amount Period to
which Forum where the
N0 the
Statute of dues (Rs) the
amount
relates dispute is
pending
1. M.P.
Commer
cial Tax
Act,
1974 Sales Tax/
Trade Tax 0.48
Lacs 2001-02 Tribunal Commercial
Tax, Bhopal
2. UPTrade
Tax1948 Sales Tax/
Trade Tax 3.28
Lacs
(Princi
pal) Before
1996 Joint Commissioner of
Trade Tax,
15.94
Lacs
(Inter
est) Lucknow
3. M.P.
Commer
cial Tax
Act,
1974 Entrytax 0.11
Lacs 1991-92 Tribunal
Commercial Tax, Bhopal
4. Mines
and
Minerals
(Develop
ment Royalty
on rock 11.8 77
Lacs 2004-05 High Court, Rajasthan
and Regu
lation)
Act,
1957 Phosphate
5. Purchase
TaxAct Purchase
Tax 63.38
Lacs 2004-05 High Court of
Madhya Pradesh, Jabalpur
6. Central
Excise
Act Penalty 17.78
Lacs 2007-08 Custom Excise and
Service Tax Appellate
Tribunal
7. UPTrade
Tax1948 Sales Tax 1.00
Lacs. 2006-07 The Deputy Commission
Commercial Tax,
Jhansi
8. M.P.
Entry
TaxAct
1976 EntryTax 28.27
lacs 2007-08 MP Commercial Tax
Appellate Board, Bhopal
9. UPTrade
Tax1948 Sales Tax/
Trade Tax 11.73
lacs 2009-10 The Deputy Commission
Commercial Tax,
Jhansi
10. Income
TaxAct
1961 Income Tax 21.70
lacs AY 2010
-11 CIT(Appeal),
New Delhi
11. Income
TaxAct
1961 Income Tax 109.39
lacs AY 2011
-12 CIT(Appeal),
New Delhi
(x) The company does not have any accumulated losses as at 31" March
2014 and it has not incurred any cash losses during the financial year
ended on that date or in the immediately preceding financial year.
(xi) Based on our audit procedure and on the basis of information and
explanations given to us by the management, we are of the opinion that
the Company has not defaulted in repayment of dues to any financial
institution or bank during the year.
(xii) Based on our examination of documents and records, we are of the
opinion that the company has maintained adequate records where the
company has granted loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund, nidhi, mutual benefit fund or a
society.
(xiv) The company has maintained proper records of transactions &
contracts for purchase & sale of securities during the year under
review & timely entries were made therein. All the shares, securities
and other investments have been held by the Company in its own name.
(xv) As per the information and explanations given to us and on our
examination of records, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xvi) According to the records of the Company examined by us and the
information and explanations given to us, in our opinion, the term
loans taken by the Company have been applied for the purpose for which
they were obtained.
(xvii) According to information and explanations given to us and on an
overall examination of balance sheet of the Company, we report that no
funds raised on short term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Act during the year.
(xix) The Company has not issued any debenture during the year.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) Based upon the audit procedures performed and information and
explanation given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
for the year ended March 31,2014.
For S.S. KOTHARI MEHTA & CO
Chartered Accountants
Firm Regn.No. 000756N
HARISH GUPTA
Partner
Place:New Delhi (Membership No. 98336)
Date : 20th May2014
Mar 31, 2013
1. We have audited the accompanying financial statements of Khaitan
Chemicals & Fertilizers Limited (the Company''] which comprise the
Balance Sheet as at 31" March, 2013, and the statement of Profit and
Loss and cash flow statement for the year then ended, and the Notes to
Financial Statements comprising of a summary of significant accounting
policies and other explanatory information.
2. 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, 19S6 (''the Act'']. This responsibility includes
the design, implementation and maintenance of internal controls
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatements, whether due to fraud or error.
3. 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 the material
misstatement of the financial statements, whether due to error of
fraud. 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 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 qualified audit opinion.
4. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a] In the case of the Balance Sheet, of the state of affairs of the
Company as at Sl''March, 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
theyear ended on that date.
5. Emphasis of Matter
We draw attention to Note No 36 of the notes to the financial
statements for the year ended on 31st March 2013 regarding the fact
that the Company has decided not to provide for mopping up of subsidy
on raw material of fertilizer as on 31-3-2011 in term of Office
Memorandum No.2311/1/2010- MPR dated 11-07-2011 issued by Ministry of
Chemicals & Fertilizers, Govt, of India, being reconsidered vide their
letter No 23011/1/2010-MPR (pt] dated 22.08.2012 and decidednotto
effect recovery till apolicy in this regardis formulated. The impacton
RevenuefromOperationsand Profit after tax is
unascertainobleatthisstoge.
6. Report on Other Legal and Regulatory Requirements
[a] As required by the Companies (Auditor''s Report] Order, 2003 (''the
Order''] issued by the Central Government of India in terms of section
227 of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and S of the Order.
[b] As requiredunder provisions of section 227(3] of the Act, we
reportthat:
i. 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; ii. In our opinion, proper books of accounts as required by law
have been kept by the Company so far as appears from our examination of
those books; iii. The Balance Sheet, Statement of Profit & Loss and
Cash Flow Statement dealt with by this Report are in agreement with the
books of account; iv. 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, 19S6; v. On the basis of written representations
received from the directors, as on 31st March, 2013 and taken on record
by the Board of Directors, none of the directors is disqualified as on
31st March, 2013 from beine appointed as a director in terms of Clause
(el of sub-section (11 of Section 274 ofthe Companies Act, 19S6
[As referred to in paragraph 6(a) of our report to the members of
Khaitan Chemicals & Fertilizers Limited on the accounts as at & for the
year ended 31st March 2013)
[I) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
[b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies were noticed on such verification.
[c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii)(a) The inventory of the Company has been physically verified by
the management during the year (except for stock of Rock Phosphate,
Sulphur ond Single Super phosphate for which stock is taken on
estimation basis and for the stock in transit and stock lying with
outside parties). In our opinion, the frequency of 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) On the basis of our examination of the records of inventory, in our
opinion, the Company has maintained proper records of inventory and as
explained to us, discrepancies noticed on physical verification of
inventory as compared to the books records were not material and have
been properly dealt with in the books of accounts.
[hi) (a) According to the information and explanations given to us, the
Company has granted inter-corporate loans/advances to one company
covered in the register maintained under Section 301 of the Companies
Act, 19S6. The maximum amount involved during the year and the year-end
balance of such loans was Rs. 1120 lacs and Rs. 317.68 lacs
respectively.
[b) In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are prima
facie not prejudicial to the interest of the Company.
[c) The Companies to whom loans have been granted have been regular in
the payment of principal and interest wherever stipulated.
[d) There is no overdue amount outstanding at the end of the year in
respect of above loans /advances.
[e) The Company has taken loan from two Companies during the year
covered in the Register maintained under Section 301 of the Companies
Act, 19S6. The maximum amountinvolvedduringthe year and the year-end
balance of such loans was Rs. S1S.12 lacs and Rs.110 lacs respectively.
[iv) In our opinion and according to the information and explanations
given 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, fixed assets and for the
sale of goods. Further, on the basis of our examination of the books
and records of the Company, carried out in accordance with the
generally accepted auditing practices in India, we have neither come
across nor have been informed of any instance of continuing failure to
correct major weaknesses in the aforesaid internal control procedures.
[v) [a) Based on audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered in to the register maintained under Section 301 of the
Companies Act, 1956 have been so entered. [b) In our opinion and
according to information and explanations given to us, the transactions
made in pursuance of such contracts or arrangements have been made at
prices which are reasonable having regard to prevailing market prices
at the relevant time.
[vi) The company has not accepted any deposits from the public within
the meaning of Section S8A and S8AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed there under.
[vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and nature of its business.
[viii) We have broadly reviewed the books of account maintained in
pursuance to section 209 [1) (d) of Companies Act, 19S6 in respect of
single super phosphate, Sulphuric acid and refined vegetable oil
manufactured by the Company and are of the opinion that, prima facie,
the prescribed records and accounts have been made and maintained.
However, we have not carried out a detailed examination of such records
to verify its authenticity and accuracy.
[ix) [a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the Company
is regular in depositing undisputed statutory dues in respect of
provident fund, investor education and protection fund, employees''
state insurance, income tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with the appropriate authorities.
[b) Further, According to information & explanations given to us, there
were no undisputed amounts outstanding at the year-end for a period of
more than six months from the date they became payable.
(x) The company does not have any accumulated losses as at 31st March,
2013 and it has not incurred any cash losses during the financial year
ended on that date or in the immediately precedingfinancial year.
(xi) Based on our audit procedure and on the basis of information and
explanations given to us by the management, we are of the opinion that
the Company has not defaulted in repayment of dues to any financial
institution or bank duringtheyear.
(xii) Based on our examination of documents and records, we are of the
opinion that the company has maintained adequate records where the
company has granted loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund, nidhi, mutual benefit fund or a
society.
(xiv) The company has maintained proper records of transactions &
contracts for purchase & sale of securities during the year under
review & timely entries were made therein. All the shares, securities
and other investments have been held by the Company in its own name.
(xv) As per the information and explanations given to us and on our
examination of records, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xvi) According to the records of the Company examined by us and the
information and explanations given to us, in our opinion, the term
loans taken by the Company have been applied for the purpose for which
they were obtained.
(xvii) According to information and explanations given to us and on an
overall examination of balance sheet of the Company, we report that no
funds raised on short term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Act during the year.
(xix) The Company has not issued any debenture during the year.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) Based upon the audit procedures performed and information and
explanation given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
for the year ended March 31,2013.
For S.S. KOTHARIMEHTA & CO
Chartered Accountants
Firm Regn.No. 000756N
Palce : Dahej HARISH GUPTA
Partner
Date : 14.05.2013 (Membership No. 98336]
Mar 31, 2012
1. We have audited the attached balance sheet of Khaitan Chemicals &
Fertilizers Limited as at 31st March, 2012, the statement of profit and
loss and also the cash flow statement for the year ended as on that
date annexed thereto. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 {as
amended by the Companies (Auditor's Report) (Amendment) Order,
2004}issued by the Central Government of India in terms of Sub-section
(4A) of Section 227 of the Companies Act, 1956, and on the basis of
such checks of the books and records of the Company as we consider
appropriate and according to the information and explanation given to
us, we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said order.
4. We draw our attention to Note No 18 of the financial statement for
the year ended on 31st March 2012 regarding recognition of subsidy
income, on SSP manufactured from the carried over quantity of raw
materials for fertilizers as on 31-3-2011, which is not in line with
Office Memorandum No. 23011/1/2010-MPR dated 11-07-2011 issued by the
Ministry of Chemicals & Fertilizers, Govt, of India and also
constitutes a departure from the Accounting Standards -12 referred to
in sub-section (3C) of section 211 of the Companies Act, 1956. The
impact on Revenue from Operations and Profit after-tax is
unascertainable.
5. Further to our comments in the Annexure referred to in Para 3 above
and subject to Para 4 above, we report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit
ii. In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, statement of profit & loss and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv. In our opinion, the balance sheet, statement of profit & loss and
cash flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956, except Accounting Standards -12
v. On the basis of written representations received from the
directors, as on 31!t March, 2012 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2012 from being appointed as a director in terms of Clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
vi. Subject to our observation in Para (4) above, in our opinion and
to the best of our information and according to the explanations given
to us, the said accounts give the information required by the Companies
Act, 1956, in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
a) in the case of balance sheet, of the state of affairs of the Company
as at 31st March, 2012;
b) in the case of statement of profit and loss, of the profit for the
year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(As referred to in paragraph '3' of our report to the members of
Khaitan Chemicals & Fertilizers Limited on the accounts as at & for
The year ended 31stMarch 2012)
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii) (a) The inventory of the Company has been physically verified by
the management during the year (except for stock of Rock Phosphate,
Sulphur and Single Super phosphate for which stock is taken on
estimation basis and for the stock in transit and stock lying with
outside parties). In our opinion, the frequency of 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) On the basis of our examination of the records of inventory, in our
opinion, the Company has maintained proper records of inventory and as
explained to us, discrepancies noticed on physical verification of
inventory as compared to the books records were not material and have
been properly dealt with in the books of accounts.
(iii) (a) According to the information and explanations given to us,
the Company has granted inter-corporate loans/advances to one company
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year and the year-end
balance of such loans was Rs. 3006.75 lacs and Rs. Nil lacs
respectively.
(b) In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are prima
facie not prejudicial to the interest of the Company.
(c) The Companies to whom loans have been granted have been regular in
the payment of principal and interest wherever stipulated.
(d) There is no overdue amount outstanding at the end of the year in
respect of above loans/advances.
(e) The Company has taken loan from two Companies during the year
covered in the Register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year and the year-end
balance of such loans was Rs. 600 lacs and Rs.500 lacs respectively.
(iv) In our opinion and according to the information and explanations
given 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, fixed assets and for the
sale of goods. Further, on the basis of our examination of the books
and records of the Company, carried out in accordance with the
generally accepted auditing practices in India, we have neither come
across nor have been informed of any instance of continuing failure to
correct major weaknesses in the aforesaid internal control procedures.
(v) (a) Based on audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered in to the register maintained under Section 301 of the
Companies Act, 1956 have been so entered.
(b) In our opinion and according to information and explanations given
to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
(vi) The company has not accepted any deposits from the public within
the meaning of Section 58A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed there under.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained in
pursuance to section 209 (1) (d) of Companies Act, 1956 in respect of
single super phosphate. Sulphuric acid and refined vegetable oil etc.
manufactured by the Company and are of the opinion that, prima facie,
the prescribed records and accounts have been made and maintained.
However, we have not carried out a detailed examination of such records
to verify its authenticity and accuracy.
(ix) (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, the Company
is generally regular in depositing undisputed statutory dues in respect
of provident fund, investor education and protection fund, employees'
state insurance, income tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with the appropriate authorities though there has been
slight delay in few cases.
(b) Further, According to information & explanations given to us, there
were no undisputed amounts outstanding at the yearend for a period of
more than six months from the date they became payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income tax, sales tax, custom duty, wealth tax, excise duty, service
tax and cess, which have not been deposited on account of any dispute,
are as follows: -
S. Name of the Statute Nature of dues Amount Period to
No. (Rs.) which the
amount
relates
1. M.P. Commercial
Tax Act, 1974 Sales Tax/Trade Tax 0.48 2001-02
Lacs
2. UP Trade Tax 1948 Sales Tax/Trade Tax 3.28
Lacs
(Principal) Before
15.94 1996
Lacs
(Interest)
3. M.P. Commercial
TaxAct, 1974 Entry tax 0.11 1991-92
Lacs
4. Mines and Minerals
(Development Royalty on rock
phosphate 118.77 2004-05
Lacs
and Regulation)
Act,1957
5. Purchase Tax Act
Purchase Tax 63.38 2004-05
Lacs
6. Central Excise Act Penalty 17.78 2007-08
Lacs
7. UP Trade Tax 1948 Sales Tax 1.00 2006-07
Lacs
8. M.P.Entry Tax Entry Tax
Act 1976 28.27 2007-08
lacs
9. Income Tax
Act 1961 Income Tax 8.37 2008-09
Lacs
Name of the Statute Forum where the dispute is pending
M.P. Commercial Tax Act,1974 Tribunal Commercial Tax, Bhopal
UP Trade Tax 1948 Joint Commissioner of Trade Tax, Lucknow
M.P. Commercial Tax Act,1974 Tribunal Commercial Tax, Bhopal
Mines and minerals (Development High Court, Rajasthan
and Regulation) Act,1957
Purchese Tax Act High Court of Madhya Pradesh, Jabalpur
Central Excise Act Custom Excise and Service Tax Appellate
Tribunal
UP Trade Tax Act 1976 The Deputy Commission Commercial
Tax-Jhansi
M.P.Entry Tax Act 1976 MP Commercial Tax Appellate Board,
Bhopal ' 2008-09
Income Tax Act 1961 CIT(Appeal), New Delhi
(x) The company does not have any accumulated losses as at 31st March
2012 and it has not incurred any cash losses during the financial year
ended on that date or in the immediately preceding financial year.
(xi) Based on our audit procedure and on the basis of information and
explanations given to us by the management, we are of the opinion that
the Company has not defaulted in repayment of dues to any financial
institution or bank during the year.
(xii) Based on our examination of documents and records, we are of the
opinion that the company has maintained adequate records where the
company has granted loans and advances on the basis of security by way
of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund, nidhi, mutual benefit fund ora
society.
(xiv) The company has maintained proper records of transactions &
contracts for purchase & sale of securities during the year under
review & timely entries were made therein. All the shares, securities
and other investments have been held by the Company in its own name.
(xv) As per the information and explanations given to us and on our
examination of records, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xvi) According to the records of the Company examined by us and the
information and explanations given to us, in our opinion, the term
loans taken by the Company have been applied for the purpose for which
they were obtained.
(xvii) According to information and explanations given to us and on an
overall examination of balance sheet of the Company, we report that no
funds raised on short-term basis have been used for long term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Act during the year.
(xix) The Company has not issued any debenture during the year.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) Based upon the audit procedures performed and information and
explanation given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
for the year ended March 31, 2012.
For S.S.KOTHARI MEHTA & CO.
Chartered Accountants
Firm Regn.No. 000756N
NAVEEN AGGARWAL
Place: New Delhi Partner
Date: 29th May, 2012 Membership No. 94380
Mar 31, 2011
1. We have audited the attached balance sheet of Khaitan Chemicals &
Fertilizers Limited as at 31st March, 2011, the profit and loss account
and also the cash flow statement for the year ended as on that date
annexed thereto. These financial statements are the responsibility of
the Companys management. Our responsibility is to express an opinion
on these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 {as
amended by the Companies (Auditors Report) (Amendment) Order, 2004}
issued by the Central Government of India in terms of Sub-section (4A)
of Section 227 of the Companies Act, 1956, and on the basis of such
checks of the books and records of the Company as we consider
appropriate and according to the information and explanation given to
us, we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The balance sheet, profit & loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit & loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956,;
v. On the basis of written representations received from the directors,
as on 31st March, 2011 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2011 from being appointed as a director in terms of Clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956:
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of balance sheet, of the state of affairs of the Company
as at 31st March, 2011;
b) in the case of profit and loss account, of the profit for the year
ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(As referred to in paragraph 3 of our report to the members of
Khaitan Chemicals & Fertilizers Limited on the accounts as at & for the
year ended 31st March 2011)
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets..
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the yearand no material
discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii) (a) The inventory of the Company has been physically verified by
the management during the year (except for stock of Rock Phosphate,
Sulphur and Single Super phosphate for which stock is taken on
estimation basis and for the stock in transit and stock lying with
outside parties). In our opinion, the frequency of 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) On the basis of our examination of the records of inventory, in our
opinion, the Company has maintained proper records of inventory and as
explained to us, discrepancies noticed on physical verification of
inventory as compared to the books records were not material and have
been properly dealt with in the books of accounts.
(iii) (a) According to the information and explanations given to us,
the Company has granted inter-corporate loans/advances to one company
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year and the year-end
balance of such loans was Rs. 2286.09 lacs and Rs. 621.82 lacs
respectively.
(b) In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are prima
facie not prejudicial to the interest of the Company.
(c) The Companies to whom loans have been granted have been regular in
the payment of principal and interest wherever stipulated.
(d) There is no overdue amount outstanding at the end of the year in
respect of above loans/advances.
(e) The Company has taken loan from two Companies during the year
covered in the Register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year and the year-end
balance of such loans was Rs. 500 lacs and Rs.500 lacs respectively.
(iv) In our opinion and according to the information and explanations
given 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, fixed assets and for the
sale of goods. Further, on the basis of our examination of the books
and records of the Company, carried out in accordance with the
generally accepted auditing practices in India, we have neither come
across nor have been informed of any instance of continuing failure to
correct major weaknesses in the aforesaid internal control procedures.
(v) (a) Based on audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered in to the register maintained under Section 301 of the
Companies Act, 1956 have been so entered.
(b) In our opinion and according to information and explanations
given to us, the transactions made in pursuance of such contracts
or arrangements have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time.
(vi) The company has not accepted any deposits from the public within
the meaning of Section 58A and 58AA or any other relevant provisions
of the Companies Act, 1956 and the rules framed there under.
(vii) In our opinion, the company has an adequate internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account maintained
in pursuance to section 209 (1) (d) of Companies Act, 1956 in respect
of single super phosphate, Sulphuric acid and refined vegetable oil
manufactured by the Company and are of the opinion that, prima facie,
the prescribedrecords and accounts have been made and maintained.
However, we have not carried out a detailed examination of such
records to verify its authenticity and accuracy.
(ix) (a) According to the information and explanations given to us
and the records of the company examined by us,in our opinion, the
Company is generally regular in depositing undisputed statutory dues
in respect of provident fund, investor education and protection fund,
employees state insurance, income tax, sales tax, wealth tax,
service tax, customs duty, excise duty, cess and other material
statutory dues as applicable with the appropriate authorities though
there has been slight delay in few cases.
(b) Further, According to information & explanations given to us,
undisputed amount of Sa/es Tax and Advance Income Tax of Rs. 1.55 lacs
and Rs 181.90 lacs respectively were outstanding as at the Balance
Sheet Date for more than six months from the date they become payable.
(c) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income tax, sales tax, custom duty, wealth tax, excise duty, service
tax and cess, which have not been deposited on account of any dispute,
are as follows: -
S. Name of the
Statute Nature of Amount Period to Forum where the
dispute is
pending
No. dues (Rs.) which the
amount
relates
I. MP.Commerc-
ial Tax Sales Tax 0.48
Lacs 2001-02 Tribunal
Commercial
Tax, Bhopal
Act,1974 Trade Tax 3.98
lacs
2 UP Trade
Tax 1948 Sales Tax (princi-
pal) Before 1996 Joint Commissio-
ner of Trade Tax,
Lucknow
Trade Tax
15.94
Lacs
(Inter-
est)
3. MP. Comme-
rcial Tax Entry tax 0.11
Lacs 1991-92 Tribunal Commer-
cial Tax, Bhopal
1974
4. Mines and
Minerals Royalty on 118.77 2004-05 High Court,
Rajasthan
(Develop-
ment and rock Lacs
Regulation)
Act, 1957 phosphate
5. Purchase
Tax Act Purchase
Tax 63.38
Lacs 2004-05 High Court of
MadhyaPradesh,
Jabalpur
6. Income
Tax Act
1961 Income
Tax 36.87
Lacs 2007-08 CIT(Appeal),New
Delhi
7. Central
Excise
Act Penalty 17.78
Lacs 2007-08 Custom Excise
and Service Tax
Appellate
Tribunal
8. UP Trade
Tax 1948 Sales Tax 0.49
Lacs 2007-08 The Deputy
Commission
Commercial
Tax-Jhansi
9. UP Trade
Tax 1948 Sales Tax 0.93
Lacs 2005-06 The Deputy
Commission
Commercial
Tax-Jhansi
10. UPTrade
Tax1948 Sales Tax 1.00
Lacs. 2006-07 The Deputy
Commission
Commercial
Tax-Jhansi
II. MP. Entry
TaxAct
1976 EntryTax 35.37
lacs 2007-08 MP Commercial
TaxAppellate
Board,Bhopal
x) The company does not have any accumulated losses as at 31st March
2011 and it has not incurred any cash losses during the financial year
ended on that date or in the immediately preceding financial year.
(xi) Based on our audit procedure and on the basis of information and
explanations given to us by the management, we are of the opinion that
the Company has not defaulted in repayment of dues to any financial
institution or bank during the year.
(xii) Based on our examination of documents and records, we are of
the opinion that the company has maintained adequate records
where the company has granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) The Company is not a chit fund, nidhi, mutual
benefit fund or a society. (xiv) The company has maintained proper
records of transactions & contracts for purchase & sale of securities
during the year under review & timely entries were made therein.
All the shares, securities and other investments have been held by
the Company in its own name.
(xv) As per the information and explanations given to us and
on our examination of records, the Company has not given any
guarantee for loans taken by others from banks or financial
institutions.
(xvi) According to the records of the Company examined
by us and the information and explanations given to us, in our opinion,
the term loans taken by the Company have been applied for the purpose for
which they were obtained.
(xvii) According to information and
explanations given to us and on an overall examination of balance sheet
of the Company, we report that no funds raised on short term basis
have been used for long term investment.
(xviii) The Company has not made any preferential
allotment of shares to parties and companies covered in the register
maintained under section 301 of the Act during the year.
(xix) The Company has not issued any debenture during the year.
(xx) The Company has no raised any money by public issues during the
year.
(xxi) Based upon the audit procedures performed and information and
explanation given by the management, we report that no fraud
on or by the Company has been noticed or reported during the course of
our audit for the year ended March 31, 2011.
For: S.S.KOTHARI MEHTA
& CO.
Chartered Accountants
Firm Regn.No. 000756N
NAVEEN AGGARWAL
Partner
Membership No. 94380
Place : New Delhi
Date : 18th May 2011
Mar 31, 2010
1. We have audited the attached balance sheet of Khaitan Chemicals &
Fertilisers Limited as at 31st March, 2010, the profit and loss account
and also the cash flow statement for the year ended as on that date
annexed thereto These financial statements are the responsibility of
the Companys management Our responsibility is to express an opinion on
these financial statements based on our audit,
2. We conducted our audit in accordance with auditing standards
generally accepted in India, Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion,
3. As required by the Companies (Auditors Report) Order, 2003 {as
amended by the Companies (Auditors Report) (Amendment) Order. 2004}
issued by the Central Government of India in terms of Sub-section (4A)
of Section 227 of the Companies Act, 1956, and on the basis of such
checks of the books and records of the Company as we consider
appropriate and according to the information and explanation given to
us. we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said order.
4. Further to our comments in the Annexure referred to above, we
report that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of
our audit;
ii. In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of those
books except in case of leave encashment as mentioned in (vi) below;
iii. The balance sheet, profit & loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the balance sheet, profit & loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act. 1956, except as stated in (vi) below regarding pending
compliance of Accounting Standard-15 (Employee Benefits) issued by the
Institute of Chartered Accountants of India;
v. On the basis of written representations received from the directors,
as on 31st 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 Clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
vi. The gratuity and leave encashment are accounted for and disclosed
as stated in the Note No. 6-9 of Schedule 19 of the Financial
Statement. The unprovided liability for gratuity and leave encashment
is unascertained. The aforesaid provision and disclosure is not in
accordance with the requirements of AS-15 (Employee Benefits) issued by
the Institute of Chartered Accountants of India Impact of the same on
the current years Profit & Loss A/c is unascertained.
vii. Without qualifying our opinion, attention is drawn to Note no.
B-13 of Schedule 19, wherein the remuneration to Managing Director is
subject to the approval of shareholders in the ensuing General Meeting.
viii. Subject to our observation in para (vi) above and read with para
(vii) above, in our opinion and to the best of our information and
according to the explanations given to us, the said accounts give the
information required by the Companies Act, 1956, in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of balance sheet, of the state of affairs of the Company
as at 31st March, 2010;
b) in the case of profit and loss account, of the profit for the year
ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure to Auditors Report"
(As referred to in paragraph 3 of our report to the members of
Khaitan Chemicals & Fertilizers Limited on the accounts as at & for the
year ended 31st March 2010)
(i) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The fixed assets are physically verified by the management
according to a phased programme designed to cove: all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies were noticed on such verification
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
off by the Company during the year.
(ii) (a) The inventory of the Company has been physically verified by
the management during the year (except for stock of Rock Phosphate and
Sulphur for which stock is taken on estimation basis and for the stock
in transit and stock lying with outside parties). In our opinion, the
frequency of 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) On the basis of our examination of the records of inventory in our
opinion the Company has maintained proper records of inventory and as
explained to us, discrepancies noticed on physical verification of
inventory as compared to the books records were not material and have
been properly dealt with in the books of accounts
(iii) (a) According to the information and explanations given to us, the
Company has granted inter-corporate loans advances to two companies
covered in the register maintained under Section 301 of the Companies
Act 1956 The maximum amount involved during the year and the year-end
balance of such loans was Rs 2060 61 lacs and Rs 552.73 lacs
respectively
(b) In our opinion and according to information and explanations given
to us, the rate of interest and other terms and conditions are prima
facie not prejudicial to the interest of the Company
(c) The Companies to whom loans have been granted have been regular in
the payment of principal and interest wherever stipulated.
(d) There is no overdue amount outstanding at the end of the year in
respect of above loans advances
(el The Company has not taken any loan during the year from companies,
firms or other parties covered in the Register maintained under Section
301 of the Companies Act 1956 Consequently the requirements of Clauses
(iii)(f) and (iii)(g) of paragraph of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us there are adequate interna! control procedures commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets and for the sale of goods
Further, on the basis of out examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, we have neither come across nor have been
informed of any instance of continuing failure to correct major
-weaknesses in the aforesaid internal control procedures
(v) (a) Based on audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that all the particulars of contracts or arrangements that need
to be entered into the register maintained under Section 301 of the
Companies Act, 1956 have been so entered
(b) In our opinion and according to information and explanations given
to us, the transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to pre,ailing market prices at the relevant time
(vi) The company has not accepted any deposits from the public within
the meaning of Section 58A and 58AA or any other relevant provisions of
the Companies Act 1956 and the rules framed there under
(vii) In our opinion the company has an adequate internal audit system
commensurate with the size and nature of its business
(viii) We have broadly reviewed the books of account maintained in
pursuance to section 209 (1 ) (d) ol Companies Act 1 956 in respect of
single super phosphate, Sulphuric acid and refined vegetaoie oil
manufactured by the Company and are of the opinion that, prima facie,
the prescribed records and accounts have been made and maintained
However we have not carried out a detailed examination of such records
to verify its authenticity and accuracy
(ix) (a) According to the information and explanations given to us
and the records of the company examined by us in out opinion, the
Company is generally regular in depositing undisputed statutory dues
in respect of provident fund investor education and protection fund,
employees state insurance,income tax. sales tax. wealth tax, service
tax, customs duty, excise duty, cess and other material statutory dues
as applicable with the appropriate authorities Further, there were no
undisputed amounts outstanding at the year-end for a period of more than
six months from the date they became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us the particulars of dues of income
tax. sales tax, custom duty, wealth tax, excise duty, service tax and cess,
which have not been deposited on account of any dispute, are as follows. -
S. Name of Nature of Amount
No. the Statute dues (Rs.)
1. M.P. Commercial Tax Sales Tax/ 0.48 Lacs
Act. 1974 Trade Tax
2. UP Trade Tax 1948 Sales Tax/ 3.28 Lacs
Trade Tax (Principal)
15.94 Lacs
(Interest)
3. MP Commercial Tax Entry tax 0.11 Lacs
Act. 1974
4 Mines and Minerals Royalty on 118.77 Lacs
(Development and rock
Regulation) Act,1957 phosphate
5 Purchase Tax Act Purchase Tax 192 84 Lacs
6 Income Tax Act 1961 Income Tax 65.20 Lacs
7. Central Excise Act Penalty 17.78 Lacs
8. Central Sales Tax Act Sales Tax 1.87 Lacs
9 UP Trade Tax 1948 Sales Tax 0.49 Lacs
10 UP Trade Tax 1948 Sales Tax 0.93 Lacs
11 UP Trade Tax 1948 Sales Tax 1.53 Lacs
S Period to which the Forum where the
NO. amount relates dispute is pending
1. 2001-02 Tribunal Commercial Tax, Bhopal
2. Before Joint Commissioner of Trade Tax.
1996 Lucknow
3. 1991-92 Tribunal Commercial Tax, Bhopal
4. 2004-05 High Court, Rajasthan
5. 2004-05 & High Court of Madhya Pradesh, Jabalpur
2005-06
6. 2006-07 CIT(Appeal), New Delhi
7. 2007-08 Custom Excise and Service Tax
Appellate Tribunal
8. 2005-06 Additional Commissioner of Commercial
Tax-lndore
9. 2007-08 The Deputy Commission Commercial Tax-Jhansi
10. 2005-06 The Deputy Commission Commercial Tax-Jhansi
11. 2006-07 The Deputy Commission Commercial Tax-Jhansi
(x) The company does not have any accumulated losses as at 31st March
2010 and it has not incurred any cash losses during the financial year
ended on that date or in the immediately preceding financial year
(xi) Based on our audit procedure and on the basis of information and
explanations given to us by the management, we are of the opinion that
the Company has not defaulted in repayment of dues to any financial
institution or bank during the year
(xii) Based on our examination of cuments and records, we are of the
opinion that the company has maintained adequate records where the
company has granted loans and advances on the basis of security by way
of pledge of shares debentures and other securities. (xiii) The
Company is not a chit fund, nidhi, mutual benefit fund or a society.
(xiv) The company has maintained proper records of transactions &
contracts for purchase & sale of securities during the year under
review & timely entries were made therein All the shares, securities
and other investments have been held by the Company in its own name.
(xv) As per the information and explanations given to us and on our
examination of records, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xvi) According to the records of the Company examined by us and the
information and explanations given to us. in our opinion, the term
loans taken by the Company have been applied for the purpose for which
they were obtained.
(xvii) According to information and explanations given to us and on an
overall examination of balance sheet of the Company. we report that no
funds raised on short term basis have been used for long term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Act during the year.
(xix) The Company has not issued any debenture during the year.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) Based upon the audit procedures performed and information and
explanation given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
for the year ended March 31.2010,
for S.S. KOTHARI MEHTA & CO.
Chartered Accountants
Firm Reg, No, 00756N
(CA ATUL SEKSARIA)
Place : New Delhi Partner
Date : 14.05.2010 Membership No. 86370
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