Mar 31, 2023
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of NACL Industries Limited (the "Company") which comprise the standalone balance sheet as at March 31, 2023, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Revenue Recognition - Existence |
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See Note 3.1 and Note 22 to standalone financial statements |
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The key audit matter |
How the matter was addressed in our audit |
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The Company recognises revenue from sale of farm inputs |
Our |
audit procedures included the following: |
based on the terms and conditions of transactions which vary |
1. |
Assessed the appropriateness of the revenue recognition |
with different customers. |
policies for compliance with Ind AS 115 - Revenue from |
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We identified the recognition of revenue from sale of goods as |
contracts with customers. |
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a key audit matter because: |
2. |
Tested the design, implementation and operating effectiveness of key internal financial controls with respect |
Revenue is one of the key performance indicators of the |
to revenue recognition. |
|
Company. There could be pressure to meet the expectations of |
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investors/ other stakeholders for the reporting period. |
3. |
Performed testing of selected statistical samples of revenue transactions recorded during the year by verifying the |
Hence, there could be a risk of revenue being recognised before |
underlying documents such as sales invoices and dispatch |
|
the control has been transferred to the customer. |
documents/ acknowledged delivery receipts/shipping documents. |
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4. |
Tested revenue transactions recorded before the year end date and revenue reversal transactions recorded after the year end date, selected on a sample basis using statistical sampling, to assess revenue is recognised in the period in which control is transferred. |
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5. |
Evaluated manual journals, sample selected based on specified risk-based criteria posted to revenue to identify unusual or irregular items. |
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6. |
Evaluated the adequacy of disclosures made in the standalone financial statements. |
Key Audit matter
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and auditor''s report thereon. The annual report is expected to be made available to us after the date of this auditor''s report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance as required under SA 720 "The Auditor''s Responsibilities Relating to Other Information.
Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
⢠Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
The standalone financial statements of the Company for the year ended March 31, 2022 were audited by the predecessor auditor whose report dated May 12, 2022 had expressed an unmodified opinion.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2 A. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B"
B. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations as at March 31, 2023 on its financial position in its standalone financial statements -Refer Note 31to the standalone financial statements.
b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
d (i) The management has represented that, to the best of their knowledge and belief, as disclosed in the Note 43 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(ii) The management has represented that, to the best of their knowledge and belief, as disclosed in the Note 43 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances performed, nothing has come
to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement. e. The final dividend paid by the Company during the year, in respect of the same declared for the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.
The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with Section 123 of the Act.
As stated in Note 14 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend
Place: Hyderabad Date: May 22, 2023
declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend. f. As proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only with effect from April 1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable.
C. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R and Co
Chartered Accountants Firm''s Registration No.: 128510W
Arpan Jain
Partner
Membership No.: 125710 ICAI UDIN: 23125710BGYBQN9591
Mar 31, 2018
INDEPENDENT AUDITORâS REPORT
To The Members of NACL Industries Limited
(formerly âNagarjuna Agrichem Limitedâ)
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of NACL Industries Limited (formerly âNagarjuna Agrichem Limitedâ) (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, 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 standalone 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 standalone 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 standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone 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 standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and other 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 for the 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 1, 2016 included in these standalone Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended March 31, 2017 and March 31, 2016 dated May 27, 2017 and May 21, 2016 respectively expressed an unmodified opinion on those standalone financial statements, and have been restated to comply with Ind AS. Adjustments made to the previously issued said financial information prepared in accordance with the Companies (Accounting Standards) Rules, 2006 to comply with Ind AS have been audited by us.
Our opinion on the standalone Ind AS financial statements is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. 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.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors of the Company 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 Aâ. 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 Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. 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 Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(Referred to in paragraph 1(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
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)
We have audited the internal financial controls over financial reporting of NACL Industries Limited (formerly âNagarjuna Agrichem Industriesâ) (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control 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 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting of the Company 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) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. 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 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 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 (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements.
inherent Limitations of internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, 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 criteria for internal financial control over financial reporting 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.
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a program of verification of fixed assets to cover all the items in a phased manner 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 program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings, are held in the name of the Company as at the balance sheet date. Immovable properties of land and buildings whose title deeds have been pledged as security for term loans and working capital loan are held in the name of the Company based on the confirmations directly received by us from lenders.
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which:
(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Companyâs interest.
(b) The schedule of repayment of principal and payment of interest has been stipulated and the repayments of principal amounts and interest have not been regular as per stipulations.
(c) In respect of amounts of Rs. 167 lakhs and Rs. 135 lakhs of principal and interest, respectively, which has been overdue for more than 90 days, as explained to us, the Management has taken reasonable steps for recovery of the principal amounts and interest.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year.
(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013 for pesticides. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under subsection (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records 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) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State Insurance, Income-tax, Goods & Services Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, , Employeesâ State Insurance, Income-tax, Goods & Services Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on March 31, 2018 on account of disputes are given below:
Name of Statute |
Nature of Dues |
Forum where Dispute is Pending |
Period to which the Amount Relates |
Amount involved ('' in lakhs) |
Amount Unpaid ('' in lakhs) |
Finance Act,1994 |
Service Tax |
Commissioner (Appeals)-II, Visakhapatnam |
2012-13 |
3.13 |
3.13 |
Finance Act,1994 |
Service Tax |
CESTAT, Hyderabad |
2011-12 |
1.43 |
1.29 |
Central Excise Act,1994 |
Excise duty |
Honâble High Court of Andhra Pradesh |
2005-06 2006-07 |
8.13 |
8.13 |
Central Excise Act,1994 |
Excise duty |
Addl. Commissioner (Appeals), Visakhapatnam |
2007-08 |
12.14 |
12.14 |
Sales Tax Act |
Sales Tax |
Sales Tax Department |
2012-13 |
17.01 |
13.61 |
Sales Tax Act |
Sales Tax |
Sales Tax Department |
2013-14 |
14.85 |
13.37 |
Sales Tax Act |
Sales Tax |
Sales Tax Department |
2014-15 |
0.23 |
0.21 |
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government and dues to debenture holders.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year. In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were raised.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
FOR DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firmâs Registration No. 117366W/W-100018)
Ganesh Balakrishnan
Place: Hyderabad Partner
Date: May 19, 2018 (Membership No. 201193)
Mar 31, 2017
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Nagarjuna Agrichem Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statementsâ).
Managementâs responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes 88evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017 and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the following Notes to the financial statements:
Note No. 35 regarding the insurance claim on fire affected Block-5 of Srikakulam Plant during 30th June, 2012 has been settled and the company received an amount of Rs. 32.44 Crores on 15th December, 2016. The total amount of insurance claim proceeds (including scrap realization) of Rs. 45.65 Crores is credited to the Profit & Loss Account. The company has debited to the Profit & Loss Account Rs. 20.08 Crores being the book value of completely damaged assets, partially damaged assets, damaged inventories. The net amount of Rs. 25.57 Crores is shown under Exceptional Items.
Our opinion is not modified in respect of above matters.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on March 31, 2017 taken 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, we give our separate Report in âAnnexure Aâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 all pending litigations on its financial position in its standalone financial statements - refer Note 31 to the standalone financial statements.
ii. The Company did not, as at March 31, 2017, have any material foreseeable losses relating to long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company and its Subsidiary Companies incorporated in India except in cases where in disputes relating to ownership of the underlying shared have remained unresolved.
iv. The Company has provided disclosures in Note 42 in the standalone financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 and December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including those in Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the management.
2. As required by the Companies (Auditors Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in the âAnnexure Bâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
i) According to the information and explanations furnished to us,
(a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets
(b) The said fixed assets have been physically verified by the management during the year based on a phased programme of verification 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 fixed assets. No material discrepancies were noticed in respect of the fixed assets verified during the year and the records in respect thereof.
(c) The title deeds of the immovable properties of the Company are held in its name.
ii) According to the information and explanations furnished to us, physical verification of inventories has been conducted during the year by the management. In our opinion, the frequency of the verification is reasonable. Further, the discrepancies found during such verification were not material and the same have been properly dealt with in the books of the Company.
iii) According to the information and explanations furnished to us, the Company has granted an unsecured loan to its Associate Company covered in the register maintained under Section 189 of the Companies Act 2013, in respect of which, in our opinion,
(a) The terms and conditions of the grant of such loan are not prejudicial to the Companyâs interest.
(b) The repayment of the loan and the payment of interest thereon have not been regular in terms of the stipulated schedule in respect thereof
(c) Principal amount of Rs. 167 Lakhs and interest of Rs. 109.24 Lakhs was overdue for more than 90 days as at the date of the Balance Sheet
(d) The Company has been taking reasonable steps for recovery of such overdue principal and interest.
iv) According to the information and explanations furnished to us, the company has not made any loans to which the provisions of Sections 185 and 186 of the Act apply, except a loan made by the company to its associate company in respect of which in our opinion, the provisions of Sec 186 of the Act to the extent applicable, have been complied with.
v) According to the information and explanations furnished to us, the company has not accepted any deposits covered by sections 73 to 76 of the Companies Act 2013 and the rules framed there under.
vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records prescribed under Section 148(1) of the Companies Act 2013, are of the opinion that prima facie, the prescribed accounts and records 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 information and explanations furnished to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income Tax, Wealth Tax, Service Tax, Customs duty, Excise Duty, Value Added Tax, Cess and other applicable statutory dues with the appropriate authorities; there were no arrears of such statutory dues as at 31st March 2017 for a period of more than six months from the date they became payable.
(b) According to the information and explanations furnished to us, there are no dues of Income Tax, Wealth Tax, Value Added Tax, Customs duty, Service Tax, Excise duty or Cess, which have not been deposited on account of any dispute pending except the following:
Statute |
Nature of the Dues |
Forum where dispute is pending |
Period to which the amount relates |
Demand (Rs. In Lakhs) |
Amount paid under protest (Rs. In Lakhs) |
Dues-Net of amount paid under protest (Rs. In Lakhs) |
Finance Act, 1994 |
Service Tax(including interest & penalty) |
Commissioner (Appeals), Visakhapatnam CESTAT, Bangalore |
2011-12 2012-13 2013-14 2014-15 2015-16 2010-11 |
52.26 4.17 |
3.52 |
48.74 4.17 |
Statute |
Nature of the Dues |
Forum where dispute is pending |
Period to which the amount relates |
Demand (Rs. In Lakhs) |
Amount paid under protest (Rs. In Lakhs) |
Dues-Net of amount paid under protest (Rs. In Lakhs) |
Central |
Excise duty |
Andhra Pradesh |
2004-05 |
|
|
|
Excise Act,1994 |
(including interest And |
Honourable High Court |
2006-07 2007-08 |
8.13 |
- |
8.13 |
|
penalty) |
Additional Commissioner(Appeals) Visakhapatnam |
2006-07 |
27.00 |
14.86 |
12.14 |
(c) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank.
(d) According to the information and explanations given to us, the working capital term loans raised by the Company have been applied for the purpose for which they were raised.
(e) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(f) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(g) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, reporting under paragraph 3(xii) of the Order does not arise.
(h) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(i) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(j) 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, reporting under paragraph 3 (xv) of the Order does not arise.
(k) According to the information and explanations furnished to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934
For M. Bhaskara Rao & Co;
Chartered Accountants
Firm Registration Number: 000459 S
(V. Raghunandan)
Place : Hyderabad Partner
Date : 27th May,2017 Membership No. 26255
Mar 31, 2016
To
The Members of Nagarjuna Agrichem Limited
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of Nagarjuna Agrichem Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âthe Standalone Financial Statementsâ).
Managementâs responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit.
We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Standalone Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Standalone Financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016 and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the following Notes to the financial statements:
Note No. 36 regarding claim lodged with the insurers based on the provisional assessment of loss made by the management of the fire accident in Block No.5 of the Srikakulam factory during the financial year 2012-13 in respect of totally/ partially damaged assets, inventory and other risks and treatment of the same in these Financial Statements as receivable, pending final assessment and acceptance of the same by the insurers on the date of the Balance Sheet dealt with by this report.
Our opinion is not modified in respect of above matters.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, we report that:
- We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
- In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
- The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
- In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
- On the basis of the written 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, 2016 from being appointed as a Director in terms of Section 164 (2) of the Act.
- With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give our separate Report in âAnnexure Aâ.
- With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of all pending litigations on its financial position in its Standalone Financial Statements - refer Note 31 to the standalone financial statements.
ii. The Company did not, as at March 31, 2016, have any material foreseeable losses relating to long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company except in case wherein disputes relating to the ownership of the underlying shares have remained unresolved..
2. As required by the Companies (Auditors Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in the âAnnexure Bâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
ANNEXURE A TO THE INDEPENDENT AUDITORSâ REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Nagarjuna Agrichem Limited (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the âGuidance Note on Audit of Internal Financial Controls over Financial Reportingâ issued by the Institute of Chartered Accountants of India (âICAIâ). 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 Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the âGuidance Note on Audit of Internal Financial Controls over Financial Reportingâ (the âGuidance Noteâ) 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. 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 whether 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 auditors'' 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.
Meaning of Internal Financial Controls over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and Directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
ANNEXURE B TO THE INDEPENDENT AUDITORSâ REPORT
(Statement referred to in paragraph 2 under âOther Legal and Regulatory requirementsâ in our report of even date)
i) According to the information and explanations furnished to us,
(a) the Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets
(b) The said fixed assets have been physically verified by the management during the year based on a phased programme of verification 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 fixed assets. No material discrepancies were noticed in respect of the fixed assets verified during the year and the records in respect thereof.
(c) The title deeds of the immovable properties of the Company are held in its name.
ii) According to the information and explanations furnished to us, physical verification of inventories has been conducted during the year by the management. In our opinion, the frequency of the verification is reasonable. Further, the discrepancies found during such verification were not material and the same have been properly dealt with in the books of the Company.
iii) According to the information and explanations furnished to us, the Company has granted an unsecured loan to its Associate Company covered in the register maintained under Section 189 of the Companies Act 2013, in respect of which, in our opinion,
(a) The terms and conditions of the grant of such loan are not prejudicial to the Companyâs interest.
(b) The repayment of the loan and the payment of interest thereon have not been regular in terms of the stipulated schedule in respect thereof
(c) Principal amount of Rs. 167 lakhs and interest of Rs. 75.12 Lakhs was overdue for more than 90 days as at the date of the Balance Sheet
(d) The Company has been taking reasonable steps for recovery of such overdue principal and interest.
iv) According to the information and explanations furnished to us, the Company has not made any loans to which the provisions of Sections 185 and 186 of the Act apply, except a loan made by the Company to its associate Company in respect of which in our opinion, the provisions of Sec 186 of the Act to the extent applicable, have been complied with.
v) According to the information and explanations furnished to us, the Company has not accepted any deposits covered by Sections 73 to 76 of the Companies Act 2013 and the Rules framed there under.
vi) We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records prescribed under Section 148(1) of the Companies Act 2013, and are of the opinion that prima facie, the prescribed accounts and records 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 information and explanations furnished to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income Tax, Wealth Tax, Service Tax, Customs duty, Excise Duty, Value Added Tax, Cess and other applicable statutory dues with the appropriate authorities; there were no arrears of such statutory dues as at 31st March 2016 for a period of more than six months from the date they became payable.
(b) According to the information and explanations furnished to us, there are no dues of Income Tax, Wealth Tax, Value Added Tax, Customs duty, Service Tax, Excise duty or Cess, which have not been deposited on account of any dispute pending except the following:
Statute |
Nature of the Dues |
Forum where dispute is pending |
Period to which the amount relates |
Demand (Rs. In Lakhs) |
Amount paid under protest (Rs. In Lakhs) |
Dues-Net of amount paid under protest (Rs. In Lakhs) |
2011-12 2012-13, |
||||||
Finance Act, 1994 |
Service Tax (including interest & penalty) |
Commissioner (Appeals), Visakhapatnam |
2013-14, 2014-15, |
|||
2015-16 |
54.63 |
3.52 |
51.11 |
|||
CESTAT, Bangalore |
2010-11 |
4.17 |
- |
4.17 |
||
Andhra Pradesh |
2004-05, 2006-07, 2007-08 2006-07 |
|||||
Central Excise Act,1994 |
Excise duty (including interest And penalty) |
Honorable High Court Additional Commissioner (Appeals) Visakhapatnam |
8.13 27.00 |
14.86 |
8.13 12.14 |
viii) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank.
ix) According to the information and explanations given to us, the working capital term loans raised by the Company have been applied for the purpose for which they were raised.
x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
xi) According to the information and explanations 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 to the Act.
xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, reporting under paragraph 3(xii) of the Order does not arise.
xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations 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, reporting under paragraph 3 (xv) of the Order does not arise.
xvi) According to the information and explanations furnished to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
For M. Bhaskara Rao & Co.,
Chartered Accountants
Firm Registration No. 000459S
(M Bhaskara Rao)
Place : Hyderabad Partner
Date : 2151 May 2016 Membership No.005176
Mar 31, 2015
We have audited the accompanying standalone financial statements of
NAGARJUNA AGRICHEM LIMITED("the Company"), which comprise the Balance
Sheet as at 31st March, 2015, 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.
Management's Responsibility for the Financial Statements:
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards specifi
ed under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014. This responsibility also includes maintenance
of adequate accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance
of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors' Responsibility:
Our responsibility is to express an opinion on these standalone fi
nancial 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 auditors' judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal fi
nancial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its Profit and its cash fl ows for the year
ended on that date.
Emphasis of Matters:
We draw attention to the following matters in the Notes to the fi
nancial statements:
Note No. 36 regarding claim lodged with the insurers based on the
provisional assessment of loss made by the management of the fire
accident in Block No.5 of the Srikakulam factory during the financial
year 2012-13 in respect of totally/ partially damaged assets, inventory
and other risks and treatment of the same as receivable pending final
assessment and acceptance of the same by the insurers, on the date of
the Balance Sheet dealt with by this report.
Our opinion is not modified in respect of these matters.
Report on other Legal and Regulatory Requirements:
1. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
2015 from being appointed as a director in terms of Section 164 (2) of
the Act.
f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements  Refer Note 31 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 the amounts, required to be
transferred to the Investor Education and Protection Fund, by the
Company.
2. As required by the Companies (Auditor's report) Order 2015, issued
by the Government of India in terms of Section 143(11) of the Act we
annex hereto a Statement on the matters specified in paragraphs 3 and
4 of the said Order.
ANNEXURE TO THE AUDITORS' REPORT
Referred to in paragraph 2 under the heading of "Report on Other Legal
and Regulatory Requirements" of our report of even date.
1. According to the information and explanations furnished to us,
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
b) The said Fixed assets have been physically verified by the
management during the year based on a phased programme of verification
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 fixed assets.
No material discrepancies were noticed in respect of the fixed assets
verified during the year and the records in respect thereof.
2. According to the information and explanations furnished to us,
a) Physical verification of its inventories has been conducted during
the year by the management. In our opinion, the frequency of the verifi
cation is reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the Management are reasonable and adequate in
relation to the size of the Company and nature of its business.
c) In our opinion, the Company is maintaining proper records of
inventories. The discrepancies noticed on physical verification of the
inventories were not material in relation to the operations of the
Company and the same have been properly dealt with in the books of
account.
3. According to the information and explanations furnished to us, the
company has granted unsecured loan to a Company covered in the register
maintained under Section 189 of the Companies Act 2013, in respect of
which,
a) The receipt of the principle amounts and interest are not regular
and
b) The Principle amount is due to an extent of Rs. 167lakhs out of which
Rs. 83 Lakhs is overdue as at the date of Balance Sheet.
c) The interest amount is due to the extent of Rs. 57.99Lakhs which
includes overdue amount of Rs. 55.53 Lakhs as at the date of Balance
Sheet.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods
and services. In our opinion and according to the information and
explanations given to us, we have not come across any major weaknesses
in the internal control system that continues to remain uncorrected.
5. According to the information and explanations furnished to us, the
Company has not accepted deposits covered by sections 73 to 76 of the
Companies Act 2013 and the rules framed there under.
6. We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for
maintenance of cost records prescribed under Section 148(1) of the
Companies Act, 2013, and are of the opinion that prima facie, the
prescribed accounts and records 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.
7. a) According to the information and explanations furnished to us,
the Company is regular in depositing undisputed statutory dues
including Provident Fund, Employees' State Insurance, Income Tax,
Wealth Tax, Sales Tax, Value Added Tax, Service Tax, Customs Duty,
Excise Duty, Cess and other applicable statutory dues with the
appropriate authorities; there are no arrears of such statutory dues as
at 31st March, 2015 which are outstanding for a period of more than six
months from the date they became payable.
b) According to the information and explanations furnished to us, there
are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax ,Custom
Duty ,Excise Duty , or Cess which have not been deposited on account of
any dispute pending except the following:
Nature of the Forum where
Statute Dues dispute is pending
Finance Act,
1994 Service Tax Commissioner
(including (Appeals),
Visakhapatnam
interest &
CESTAT, Bangalore
penalty)
Central Excise
Act, Excise duty CESTAT, Bangalore
1994 (including
interest &
Additional C
penalty)
ommissioner (Appeals)
Visakhapatnam
Sales Tax
Laws / Sales Tax /
VAT Commissioner
VAT Laws (Appeals)
Additional
Commissioner
(Appeals)
Income Tax
Act, Income tax Income Tax
Appellate
1961 Tribunal,
Hyderabad
DCIT
DuesÂNet of
Statute Period to which amount paid
the amount
relates under protest
(Rs. In Lakhs)
Finance Act,
1994 2012-13,2013-14 8.77
2009-10 4.17
Central Excice
Act,1994 2004-05, 2006-07, 8.13
2006-07, 2007-08
2006-07 12.14
Sales Tax Laws/ 2009-10, 2010-11, Nil
VAT Laws 2011-12 & 2012-13
2012-13 Nil
Income Tax Act,
1961 2004-05, 2005-06, Nil
2006-07, 2007-08
2009-10 Nil
c) According to the information and explanations furnished to us, the
amount required to be transferred to the Investor Education and
Protection Fund in accordance with the relevant provisions of the
Companies Act, 2013 and the Rules made there under has been transferred
to the said fund within time.
8. The Company has no accumulated losses as at 31st March, 2015. The
Company has not incurred cash losses during the financial year under
report but it did in the immediately preceding financial year
9. According to the information and explanations furnished to us, the
Company has not defaulted in repayment of dues to any financial
institutions or banks.
10. According to the information and explanations furnished to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
11. According to the information and explanations furnished to us,
Term loans were applied for the purpose for which the loans were
obtained.
12. In accordance with the information and explanations given to us
and on our examination of the Company's books and records, no fraud on
or by the Company has been noticed or reported during the year.
For M.BHASKARA RAO & CO;
Chartered Accountants
Firm Registration Number. 000459 S
Place : Hyderabad (V.Raghunandan)
Date : 30th May, 2015 Partner
Membership No. 26255
Mar 31, 2014
We have audited the accompanying Financial Statements of Nagarjuna
Agrichem Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2014, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub Section (3C) of Section 211
of Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors'' 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 auditors'' judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014
(b) in the case of the Statement of Profit and Loss, of the 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.
Emphasis of Matter
We draw attention to following notes to the financial statements:
- Note No.38 regarding claim lodged with insurers based on the
provisional assessment of the loss made by the management of the fire
accident in Block no. 5 of Srikakulam factory during the financial year
2012-2013 in respect of totally / partially damaged assets, inventory
and other risks and treatment of the same as receivable pending final
assessment and acceptance by the insurers, on the date of the Balance
Sheet dealt with by this report.
- Necessary adjustments in the accounts and the final impact, if any,
will be accounted on completion of final assessment and its acceptance
by the insurers.
Our opinion is not qualified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) in our opinion, the said Balance Sheet, Statement of Profit and
Loss, and Cash Flow Statement comply with the Accounting Standards
referred to in subSection (3C) of Section 211 of the Companies Act,
1956;
(e) on the basis of written representations received from the Directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
(f) since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under Section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said Section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS'' REPORT
Referred to in Paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements"
of our Report of even date
i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) Fixed assets have been physically verified by the management during
the year based on a phased programme of verifying all the assets 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 fixed assets. No
material discrepancies were noticed on physical verification.
c) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
ii) a) According to the information furnished to us, physical
verification of inventories has been conducted during the year by the
management. In our opinion, the frequency of the verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c) In our opinion, the Company is maintaining proper records of
inventories and based on the information and explanations given to us,
discrepancies noticed on physical verification were not material in
relation to the operations of the Company and the same have been
properly dealt with in the books of account.
iii) a) According to the information and explanations given to us, the
Company has granted unsecured loan to one party covered in the Register
maintained under Section 301 of the Companies Act 1956. The maximum
balance of the said loan during the year was Rs.194.63 Lakhs and the year
end balance was Rs.194.63 Lakhs.
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of
such loans are prima facie not prejudicial to the interest of the
Company.
c) During the financial year under report, a part of the principal
amount of Rs.83.00 Lakhs falling due together with interest upto 31st
March, 2013 of Rs.60.61 Lakhs has been converted into equity shares.
Further, interest amounting to Rs.27.63 Lakhs is outstanding as at the
date of the Balance Sheet, including an overdue amount of Rs.9.36 Lakhs.
d) In our opinion and according to the information and explanations
given to us, reasonable steps are being taken by the Company for
recovery of the interest.
e) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured from companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, sub clauses (f) and (g) of
clause (iii) of this Order are not applicable.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. In our opinion and according to the information and
explanations given to us, there is no continuing failure to correct
major weaknesses in internal control system.
v) a) In our opinion and according to the information and explanations
given to us, the transactions that need to be entered in the register
maintained under Section 301 of the Companies Act, 1956, have been so
entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements to be entered in the register maintained under Section 301
of the Companies Act, 1956 and exceeding the value of Five Lakhs in
respect of any party during the year 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 public during the
year.
vii) During the year under report, the Internal Audit of the Company
has been conducted by an external agency appointed by the management.
In our opinion the scope and coverage of internal audit is commensurate
with the size of the Company and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for
maintenance of cost records prescribed under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained. We have,
however, not made a detailed examination of the cost records with a
view to determine whether they are accurate or complete.
ix) a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other applicable statutory dues with the appropriate
authorities. According to the information and explanations given to us,
there are no arrears of
statutory dues as at 31st March, 2014 which are outstanding for a
period of more than six months from the date they became payable.
b) According to the information and explanations given to us, there are
no dues of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom
Duty / Excise Duty / Cess which have not been deposited on account of
any dispute except as stated below:
Name of the Amount
Nature of the Dues
Statute (Rs. In Lakhs)
Service Tax Irregular availment of Cenvat Credit 3.13
on Service Tax
Interest on differential duty paid 8.13
on supplementary invoices after
finalization of cost data of the goods
cleared to the sister concern- April,
Excise Duty 04 to Mar,05 & April, 05 to Oct,05)
Irregular availment of cenvat credit 12.14
of 4% SAD against DEPB and
Target plus schemes - July, 06 to
March, 07
Name of the Statute Period to Forum where
which the dispute is pending
amount relates
Service Tax 2012-13 Commissioner (Appeals),
Visakhapatnam
2004-05 & CESTAT, Bangalore
2005-06
Excise Duty 2006-07 Additional
Commissioner (Appeals),
Visakhapatnam
x) The Company has no accumulated losses as at 31st March, 2014. The
Company has incurred cash losses in the financial year under report but
not in the immediately preceding financial year.
xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to a financial
institution, banks.
xii) According to the information and explanations given to us, the
Company has not granted any 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 /
Society. Therefore, the provisions of clause 4(xiii) of this Order are
not applicable.
xiv) The Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of clause
4(xiv) of this Order are not applicable.
xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions.
xvi) According to the information and explanations furnished to us,
term loans were applied for the purpose for which the loans were
obtained.
xvii) On the basis of an overall examination of the Balance Sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short term basis
which have been used for long term investment.
xviii) During the year under report the Company has not made any
preferential allotment of shares to parties and companies covered in
the register maintained under Section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
xx) The Company has not raised any money by public issue during the
year.
xxi) In accordance with the information and explanations given to us
and, on our examination of books and records, no fraud on or by the
Company has been noticed or reported during the year.
For M.BHASKARA RAO & CO;
Chartered Accountants
Firm Registration Number. 000459 S
Place : Hyderabad (V.Raghunandan)
Date : 30th May, 2014 Partner
Membership No. 26255
Mar 31, 2013
Report on Financial Statements
We have audited the accompanying Financial Statements of Nagarjuna
Agrichem Limited ("the Company"), which comprise the Balance Sheet
as at March 31, 2013, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub section (3C) of section 211
of Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors'' 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 auditors'' judgement, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in
the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to following notes to the financial statements:
- Note No.38 regarding claim lodged with insurers based on the
provisional assessment of the loss made by the management of the Are
accident in Block no. 5 of Srikakulam factory in respect of totally /
partially damaged assets, inventory and other risks and treatment of
the same as receivable pending final assessment and acceptance by the
insurers.
- Necessary adjustments in the accounts and the final impact, if any,
will be accounted on completion of final assessment and its acceptance
by the insurers.
Our opinion is not qualified in respect of above matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003
("the Order"'') issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (3C) of section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the Directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
f. since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO THE AUDITORS'' REPORT
Referred to in paragraph 3 of our report of even date.
i) a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) Fixed assets have been physically verified by the management during
the year based on a phased programme of verifying all the assets 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 fixed assets. No
material discrepancies were noticed on physical verification.
c) According to the information and explanations given to us, the
Company has not disposed off substantial part of fixed assets and
hence, reporting on the going concern status in this regard does not
arise.
ii) a) Physical verification of inventories has been conducted during
the year by the management. In our opinion, the frequency of the
verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c) In our opinion, the Company is maintaining proper records of
inventories and based on the information and explanations given to us,
discrepancies noticed on physical verification were not material in
relation to the operations of the Company and the same have been
properly dealt with in the books of account.
iii) a) According to the information and explanations given to us, the
Company has granted unsecured loan to a party covered in the register
maintained under section 301 of the Companies Act 1956. The maximum
amount involved during the year was Rs..288.49 Lakhs and the year end
balance was Rs..288.49 Lakhs
b) In our opinion and according to the information and explanations
given to us, the rate of interest and other terms and conditions of
such loans are prima facie not prejudicial to the interest of the
Company.
c) According to the terms and conditions of the agreement, the
repayment of the principal amounts starts from two years after the
disbursement of such loan and has not yet fallen due. The interest
amount is in arrears since the inception of loan.
d) In our opinion and according to the information and explanations
given to us, reasonable steps have been taken by the Company for
recovery of the interest.
e) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured from companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, sub clauses (f) and (g) of
clause (iii) of this Order are not applicable.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. In our opinion and according to the information and
explanations given to us, there is no continuing failure to correct
major weaknesses in internal control system.
v) a) In our opinion and according to the information and explanations
given to us, the transaction that need to be entered in the register
maintained under section 301 of the Companies Act, 1956, have been so
entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements to be entered in the register maintained under Section 301
of the Companies Act, 1956 and exceeding the value of Five Lakhs in
respect of any party during the year 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 public during the
year.
vii) During the year under report, the Internal Audit of the Company
has been conducted by an external agency appointed by the management.
In our opinion the scope and coverage of internal audit is commensurate
with the size of the Company and nature of its business.
viii) On the basis of records produced to us, we are of the opinion
that, prima facie, the cost records and accounts prescribed by the
Central Government under Section 209(1) (d) of the Companies Act, 1956,
have been maintained.
ix) a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other applicable statutory dues with the appropriate
authorities. According to the information and explanations given to us,
there are no arrears of statutory dues as at 31st March, 2013 which are
outstanding for a period of more than six months from the date they
became payable.
b) According to the information and explanations given to us, there are
no dues of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom
Duty / Excise Duty / Cess which have not been deposited on account of
any dispute except as stated below:
Name Amount
of the Nature of Dues (Rs. in
Statute Lakhs)
Service Irregular availment of Cenvat Credit
on Service Tax 3.13
Tax
Interest on differential duty paid on
supplementary invoices after finalization
of cost data of the goods 8.13
cleared to the sister concern - April,04
to Mar,05 & April, 05 to Oct,05)
Irregular availment of cenvat credit of
4% SAD against DEPB and Target plus
schemes - July,06 12.14
to March,07
Excise Duty Interest on differential duty paid on
supplementary invoices after finalization
of cost data of the 4.15
goods cleared to the sister concern -
April,05 to February,06
Irregular availment of cenvat credit on
inputs(welding electrodes) for the
period from 0.41
January,07 to November,07
Name of the Statute Forum where dispute is pending
Service Tax Commissioner (Appeals), Visakhapatnam.
CESTAT, Bangalore
Additional Commissioner (Appeals), Visakhapatnam.
Excise Duty CESTAT, Bangalore.
CESTAT, Bangalore
x) The Company has no accumulated losses as at 31st March, 2013. The
Company has not incurred any cash losses in the financial year under
report and in the immediately preceding financial year.
xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to a financial
institution, banks.
xii) According to the information and explanations given to us, the
Company has not granted any 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 /
Society. Therefore, the provisions of clause 4(xiii) of this Order are
not applicable.
xiv) The Company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of clause
4(xiv) of this Order are not applicable.
xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions.
xvi) Term loans were applied for the purpose for which the loans were
obtained.
xvii) On the basis of an overall examination of the Balance Sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short term basis
which have been used for long term investment.
xviii) During the year under report the Company has not made any
preferential allotment of shares to parties and companies covered in
the register maintained under Section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the year.
xx) The Company has not raised any money by public issue during the
year.
xxi) In accordance with the information and explanations given to us
and, on our examination of books and records, no fraud on or by the
Company has been noticed or reported during the year.
For M. Bhaskara Rao & Co.,
Chartered Accountants
(Firm Registration No: 000459 S)
(V. Raghunandan)
Place : Hyderabad Partner
Date: 18th May, 2013 Membership No.:26255
Mar 31, 2012
1. We have audited the attached Balance Sheet of Nagarjuna Agrichem
Limited as at 31st March, 2012, the Statement of Profit and Loss and
also the Cash Flow Statement for the year ended on that date, annexed
thereto. These Financial Statements are the responsibility of the
Company's Management. Our responsibility is to express an opinion on
these Financial Statements based on our Audit.
2. We conducted our audit in accordance with the 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) Order, (Amendment 2004
issued by the Central Government in terms of sub-section (4A of Section
227 of the Companies. Act, 1956, we enclose in the Annexure a
Statement on the matter specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above we report
that:
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
iii. The Balance Sheet, 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 dealt with by this report comply with the
applicable Accounting Standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956; and
v. On the basis of written representations received from the
Directors, as on 31st 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. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with note no.10
regarding reconciliation of Unclaimed Dividend Account, "Significant
Accounting Policies" and other notes thereon 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:
i. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012;
ii. In the case of Statement of Profit and Loss, of the profit for the
year ended on that date; and
iii. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
Referred to in paragraph 3 of our Report of even date.
i. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) Fixed assets have been physically verified by the Management during
the year based on a phased programme of verifying all the assets 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 fixed assets. No
material discrepancies were noticed on physical verification.
c) According to the information and explanations given to us, the
Company has not disposed off substantial part of fixed assets and
hence, reporting on the going concern status in this regard does not
arise.
ii. a) Physical verification of inventories has been conducted during
the year by the Management. In our opinion, the frequency of the
verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management are reasonable and adequate in relation to
the size of the Company and nature of its business.
c) In our opinion, the Company is maintaining proper records of
inventories and based on the information and explanations given to us,
discrepancies noticed on physical verification were not material in
relation to the operations of the Company and the same have been
properly dealt with in the books of account.
iii. a) According to the information and explanations given to us, the
Company has not granted any loan, secured or unsecured to Companies,
Firms or other parties covered in the register maintained under section
301 of the Companies Act, 1956. Accordingly, sub clauses (b), (c) and
(d) of clause (iii) of this Order are not applicable.
e) According to the information and explanations given to us, the
Company has not taken any loans, secured or unsecured from Companies,
Firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, sub clauses (f) and (g) of
clause (iii) of this Order are not applicable.
iv. In our opinion and according to the information and explanations
given to us, there are adequate Internal Control Systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. In our opinion and according to the information and
explanations given to us, there is no continuing failure to correct
major weaknesses in Internal Control System.
v. a) In our opinion and according to the information and explanations
given to us, the transaction that need to be entered in the register
maintained under Section 301 of the Companies Act, 1956, have been so
entered.
b) In our opinion and according to the information and explanations
given to us, the transaction made in pursuance of contracts or
arrangements to be entered in the register maintained under Section 301
of the Companies Act, 1956 and exceeding the value of five lakhs in
respect of any party during the year 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 public during the
year.
vii. During the year under report, the Internal Audit of the Company
has been conducted by firms of Chartered Accountants. In our opinion
the scope and coverage of Internal audit is commensurate with the size
of the Company and nature of its business.
viii. On the basis of records produced to us, we are of the opinion
that, prima facie, the cost records and accounts prescribed by the
Central Government under Section 209 (1) (d) of the Companies Act,
1956, have been maintained.
ix. a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other applicable Statutory Dues with the appropriate
authorities. According to the information and explanations given to us,
there are no arrears of Statutory Dues as at 31st March, 2012 which are
outstanding for a period of more than six months from the date they
became payable.
b) According to the information and explanations given to us, there are
no dues of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom
Duty / Excise Duty / Cess which have not been deposited on account of
any dispute except as stated below:
Name of the Amount Forum where
dispute is
Nature of Dues
statute (Rs in Lakhs) pending
Disputed tax on disallowance
of R&D 73.21 Commissioner
of Income
Income Tax expenditure in Assessment
Year 2009-10 Tax (Appeals)
Hyderabad.
Interest on Differential
Duty paid on
supplementary invoices
after finalization of
cost data of the goods
cleared to the sister 8.13 CESTAT,
Bangalore.
concern - April, 04 to
Mar 05 & April 05 to Oct 05)
Irregular availment of
Cenvat Credit of 4% SAD
against DEPB and Target plus
schemes -July 12.14 Additional
Commissioner
06 to March 07 (Appeals),
Visakhapatnam.
Excise Duty
Interest on Differential
Duty paid on supplementary
invoices after finalization of
cost data of the goods cleared
to the sister 4.15 CESTAT,
Bangalore.
concern - April, 05 to
February, 06
Irregular availment of Cenvat
Credit on inputs (Welding
Electrodes) for the period
from 0.41 CESTAT,
Bangalore.
January, 07 to November, 07
x. The Company has no accumulated losses as at 31st March, 2012. The
Company has not incurred any cash losses in the financial year under
report and in the immediately preceding financial year.
xi. According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to a Financial
Institution, Banks.
xii. According to the information and explanations given to us, the
Company has not granted any 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 /
Society. Therefore, the provisions of clause 4 (xiii) of this Order are
not applicable.
xiv. The Company is not dealing in or trading in shares, securities,
debentures and other Investments. Accordingly, the provisions or clause
4 (xiv) of this Order are not applicable.
xv. In our opinion and according to the information and explanations
given to us, the terms and conditions on which the Company has given
guarantee for finances taken by others in the course of business are
not prejudicial to the interests of the Company.
xvi. Term loans were applied for the purpose for which the loans were
obtained.
xvii. On the basis of an overall examination of the Balance Sheet of
the Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short term basis
which have been used for long term investment.
xviii. During the year under report the Company has not made any
preferential allotment of shares to parties and companies covered in
the register maintained under Section 301 of the Companies Act, 1956.
xix. The Company has not issued any debentures during the year.
xx. The Company has not raised any money by public issue during the
year.
xxi. In accordance with the information and explanations given to us
and, on our examination of books and records, no fraud on or by the
Company has been noticed or reported during the year.
For M. Bhaskara Rao & Co.,
Chartered Accountants
(Firm Registration No: 000459 S)
V. Raghunandan
Place : Hyderabad Partner
Date : 19th May, 2012 Membership No. 26255
Mar 31, 2011
1. We have audited the attached balance sheet of NAGARJUNA AGRICHEM
LIMITED as at 31st March, 2011, the Profit and Loss account and also
the cash flow statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the 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) Order, (Amendment) 2004
issued by the Central Government in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matter specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit:
ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
iii) The balance sheet, profit and loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the applicable
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 read with "Significant
Accounting Policies", note no. 20 regarding reconciliation of unclaimed
dividend account and other notes thereon 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:
i) in the case of the balance sheet, of the state of affairs of the
company as at 31st March, 2011;
ii) in the case of the profit and loss account, of the profit for the
year ended on that date; and
iii) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
Referred to in paragraph 3 of our report of even date.
i) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) Fixed assets have been physically verified by the management during
the year based on a phased programme of verifying all the assets 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 fixed assets. No
material discrepancies were noticed on physical verification.
c) According to the information and explanations given to us, the
company has not disposed off substantial part of fixed assets and
hence, reporting on the going concern status in this regard does not
arise.
ii) a) Physical verification of inventories has been conducted during
the year by the management. In. our opinion, the frequency of the
verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management are reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion, the company is maintaining proper records of
inventories and based on the information and explanations given to us,
discrepancies noticed on physical verification were not material in
relation to the operations of the company and the same have been
properly dealt with in the books of account.
iii) a) According to the information and explanations given to us, the
company has not granted any loan, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, sub clauses (b), (c) and
(d) of clause (iii) of this Order are not applicable.
e) According to the information and explanations given to us, the
company has not taken any loans, secured or unsecured from companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, sub clauses (f) and (g) of
clause (iii) of this Order are not applicable.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. In our opinion and according to the information and
explanations given to us, there is no continuing failure to correct
major weaknesses in internal control system.
v) a) In our opinion and according to the information and explanations
given to us, and based on the representations made by the management,
there are no contracts or arrangements that need to be entered in the
register maintained under Section 301 of the Act. Accordingly, sub
clause (b) of clause (v) of this Order is not applicable to the Company
for the current year.
vi) The company has not accepted any deposits from public.
vii) During the year under report, the internal audit of the company
has been conducted by Firms of Chartered Accountants. In our opinion
the scope and coverage of internal audit is commensurate with the size
of the company and nature of its business.
viii) On the basis of records produced to us, we are of the opinion
that, prima facie, the cost records and accounts prescribed by the
Central Government under Section 209(l)(d) of the Companies Act, 1956,
have been maintained. However, we are not required to and, have not
carried out any detailed examination of such accounts and records.
ix) a) According to the records of the company, the company is regular
in depositing undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other applicable statutory dues with the appropriate
authorities. According to the information and explanations given to us,
there are no arrears of statutory dues as at 31st March, 2011 which are
outstanding for a period of more than six months from the date they
became payable.
b) According to the information and explanations given to us, there are
no dues of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom
Duty / Excise Duty / Cess which have not been deposited on account of
any dispute except as stated below:
NAME
OF THE NATURE OF DUES
STATUTE
Income Disputed tax on disallowance of R&D
Tax expenditure in AY 2007-08
Disputed tax on disallowance of R & D
expenditure in AY 2008-09
Excise Interest on differential duty paid
Duty on supplementary invoices after
finalization of cost data of the
goods cleared to the sister concern
- April 2004 to March 2005 & April
2005 to Octobter 2005)
Irregular availment of Cenvat credit of
4% SAD against DEPB and Target plus
schemes - July 2006 to March 2007
Interests on differential duty paid
on supplementary invoices after finalization
of cost data of the goods cleared to the
sister concern - April 2005 to February 2006
Irregular availment of Cenvat credit
on inputs(welding electrodes) for the period
from January 2007 to November 2007
Service Interest and Penalty on Service Tax paid
Tax on Goods Transport Agencies payment
for the period from October 2005 to
February 2006
NAME AMOUNT FORUM WHERE DISPUTE IS
OF THE (Rs. Lakhs) PENDING
STATUTE
Income 59.83 Commissioner of Income Tax
Tax (Appeals), Hyderabad
30.67 Commissioner of Income Tax
(Appeals), Hyderabad
Excise 8.13 CESTAT, Bangalore
Duty
12.14 Additional Commissioner
(Appeals), Visakhapatnam
4.15 CESTAT, Bangalore
0.41 CESTAT, Bangalore
Service 3.39 CESTAT, Bangalore
Tax
x) The company has no accumulated losses as at 31st March, 2011. The
company has not incurred any cash losses in the financial year under
report and in the immediately preceding financial year.
xi) According to the information and explanations given to us, the
company has not defaulted in repayment of dues to a financial
institution, banks.
xii) According to the information and explanations given to us, the
company has not granted any 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 /
Society. Therefore, the provisions of clause 4(xiii) of this Order are
not applicable.
xiv) The company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of
clause 4(xiv) of this Order are not applicable.
xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the company has given
guarantee for finances taken by others in the course of business are
not prejudicial to the interests of the company.
xvi) Term loans were applied for the purpose for which the loans were
obtained.
xvii) On the basis of an overall examination of the Balance Sheet of
the company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short term basis
which have been used for long term investment.
xviii) During the year under report the company has not made any
preferential allotment of shares to parties and companies covered in
the register maintained under Section 301 of the Companies Act, 1956.
xix) The company has not issued any debentures.
xx) The company has not raised any money by public issue during the
year.
xxi) In accordance with the information and explanations given to us
and, on our examination of books and records, no fraud on or by the
company has been noticed or reported during the year.
for M.BHASKARA RAO & CO.,
Chartered Accountants
(Firm Registration No: 00459 S)
(V. RAGHUNANDAN)
Partner
Membership No. 26255
Place: Hyderabad
Date: 11th May, 2011
Mar 31, 2010
1. We have audited the attached balance sheet of NAGARJUNA AGRICHEM
LIMITED as at 31st March, 2010, the profit and loss account and also
the cash flow statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the 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) Order, (Amendment) 2004
issued by the Central Government in terms of sub- section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matter specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
i i i) The balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
iv) In our opinion, the balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the applicable
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, 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) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with "Significant
Accounting Policies" and notes thereon 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:
i) in the case of the balance sheet, of the state of affairs of the
company as at 31st March, 2010;
ii) in the case of the profit and loss account, of the profit for the
year ended on that date; and
iii) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Referred to in paragraph 3 of our report of even date.
i) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) Fixed assets have been physically verified by the management during
the year based on a phased programme of verifying all the assets 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 fixed assets. No
material discrepancies were noticed on physical verification.
c) According to the information and explanations given to us, the
company has not disposed off substantial part of fixed assets and
hence, reporting on the going concern status in this regard does not
arise.
ii) a) Physical verification of inventories has been conducted during
the year by the management. In our opinion, the frequency of the
verification is reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management are reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion, the company is maintaining proper records of
inventories and based on the information and explanations given to us,
discrepancies noticed on physical verification were not material in
relation to the operations of the company and the same have been
properly dealt with in the books of account.
iii) a) According to the information and explanations given to us, the
company has not granted any loan, secured or unsecured to companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, sub clauses (b), (c) and
(d) of clause (iii) of this Order are not applicable.
e) According to the information and explanations given to us, the
company has not taken any loans, secured or unsecured from companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Accordingly, sub clauses (f) and (g) of
clause (iii) of this Order are not applicable.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. In our opinion and according to the information and
explanations given to us, there is no continuing failure to correct
major weaknesses in internal control system.
v) a) In our opinion and according to the information and explanations
given to us, and based on the representations made by the management,
there are no contracts or arrangements that need to be entered in the
register maintained under Section 301 of the Act. Accordingly, sub
clause (b) of clause (v) of this Order is not applicable to the Company
for the current year.
vi) The company has not accepted any deposits from public.
vii) During the year under report, the internal audit of the company
has been conducted by Firms of Chartered Accountants. In our opinion
the scope and coverage of internal audit is commensurate with the size
of the company and nature of its business.
viii)On the basis of records produced to us, we are of the opinion
that, prima facie, the cost records and accounts prescribed by the
Central Government under Section 209(l)(d) of the Companies Act, 1956,
have been maintained. However, we are not required to and, have not
carried out any detailed examination of such accounts and records.
ix) a) According to the records of the company, the company is regular
in depositing undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other applicable statutory dues with the appropriate
authorities. According to the information and explanations given to us,
there are no arrears of statutory dues as at 31st March, 2010 which are
outstanding for a period of more than six months from the date they
became payable.
b) According to the information and explanations given to us, there are
no dues of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom
Duty / Excise Duty / Cess which have not been deposited on account of
any dispute except as stated below:
STATUTE DISPUTE
Income Tax Disputed tax on disallowance of
R&D expenditure & product development
expenditure in AY 2005-06
Disputed tax on disallowance of R&D
expenditure & Business development
expenditure in AY 2006-07
Disputed tax on disallowance of R&D
and certain other expenditure in AY
2004-05
AMOUNT
INVOLVED
STATUTE (Rs. LAKHS) FORUM WHERE DISPUTE IS PENDING
Income Tax 32.21 Commissioner of Income Tax(Appeals),
Hyderabad
31.35 Commissioner of Income Tax(Appeals),
Hyderabad
57.23 Commissioner of Income Tax(Appeals),
Hyderabad
STATUTE DISPUTE
Excise Duty Interest on differential duty paid on
supplementary invoices after finalization
of cost data of the goods cleared to the
sister concern - Apl 04 to Mar 05 & Apl
05 to Oct 05)
Irregular availment of Cenvat credit of
4% SAD against DEPB and Target plus schemes
- July 06 to March 07
Interest on differential duty paid on
supplementary invoices after
finalization of cost data of the goods
cleared to the sister concern - Apl 05
to Feb 06
Irregular availment of Cenvat credit on
inputsfwelding electrodes) for
the period from Jan 07 to Nov 07
Service Tax Irregular availment of abatement of 75% on
value of taxable services -Apl 05 to Feb 06
Interest and Penalty on Service Tax paid on
Goods Transport Agencies payment for the
period from Oct 05 to Feb 06
AMOUNT
STATUTE INVOLVED
(Rs. LAKHS) FORUM WHERE DISPUTE IS PENDING
Excise Duty 8.14 CESTAT, Bangalore
12.14 Additional Commissioner (Appeals),
Visakhapatnam
4.15 Additional Commissioner,
Visakhapatnam
0.41 Asst. Commissioner of Central
Excise, Vijayanagaram
Service Tax25.88 Commissioner Appeals,
Visakhapatnam
3.39 CESTAT, Bangalore
x) The company has no accumulated losses as at 31st March, 2010. The
company has not incurred any cash losses in the financial year under
report and in the immediately preceding financial year.
xi) According to the information and explanations given to us, the
company has not defaulted in repayment of dues to a financial
institution, banks.
xii) According to the information and explanations given to us, the
company has not granted any 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 /
Society. Therefore, the provisions of clause 4(xiii) of this Order are
not applicable.
xiv) The company is not dealing in or trading in shares, securities,
debentures and other investments. Accordingly, the provisions of clause
4(xiv) of this Order are not applicable.
xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the company has given
guarantee for finances taken by others in the course of business are
not prejudicial to the interests of the company.
xvi) Term loans were applied for the purpose for which the loans were
obtained.
xvii) On the basis of an overall examination of the Balance Sheet of
the company, in our opinion and according to the information and
explanations given to us, there are no funds raised on short term basis
which have been used for long term investment.
xviii) During the year under report the company has not made any
preferential allotment of sharesto parties and companies covered in the
register maintained under Section 301 of the Companies Act, 1956.
xix) The company has not issued any debentures.
xx) The company has not raised any money by public issue during the
year.
xxi) In accordance with the information and explanations given to us
and, on our examination of books and records, no fraud on or by the
company has been noticed or reported during the year.
For M.BHASKARA RAO & CO.,
CHARTERED ACCOUNTANTS
(FIRM REGISTRATION
NO. : 00459 S)
(ANILKUMAR MEHTA)
PARTNER
MEMBERSHIP
NO.14284
Place: Hyderabad
Date : 26th April, 2010