Mar 31, 2022
Opinion
We have audited the standalone financial statements of Sudarshan Chemical Industries Limited (the "Company"), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, 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 obtained by us is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matter |
|
The key audit matter |
How our audit addressed the key audit matter |
Revenue from contracts with customer The Company''s revenue is derived primarily from sale of goods. Revenue from the sale of goods is recognised upon the transfer of control of the goods to the customers. The Company uses a variety of shipment terms across its operating markets and this has an impact on the timing of revenue recognition. There is a risk that revenue may be overstated because of fraud, resulting from the pressure management may feel to achieve performance targets. Revenue is also an important element of how the Company measures its performance, upon which management is incentivized. The Company focuses on revenue as a key performance measure, which could create an incentive for revenue to be recognized before control has been transferred. (Refer note 2(c)(i), 21 and 49 to the standalone financial statements) |
We have performed the following procedures over revenue recognition: ⢠We assessed the appropriateness of the Company''s revenue recognition accounting policies in line with Ind AS 115 ("Revenue from contracts with Customers") including adequacy of disclosures; ⢠We evaluated the design, tested the implementation and operating effectiveness of key internal controls including general IT controls and key IT application controls over recognition of revenue; ⢠We performed substantive testing by selecting samples using statistical sampling of revenue transactions recorded during the year by testing the underlying documents which included customer purchase orders, invoices, lorry receipts, customer acceptances and shipping documents (as applicable) to assess revenue is recognised after the transfer of control to customers as per the terms of the contract ⢠We carried out analytical procedures on revenue recognised during the year to identify unusual variances; ⢠We tested, on a sample basis, specific revenue transactions recorded around the financial year end date to determine whether the revenue had been recognised in the appropriate financial period; and |
Impairment assessment for investments in subsidiaries The Company has investments in subsidiaries. These investments are accounted for at cost less impairment. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its value in use. Value in use of the above investments are estimated in order to determine the extent of the impairment loss. Identification of indicators for impairment of these investments and measurement of value in use involves significant estimates and judgements of the Management, including those related to the possible effects of the resurgence of the COVID-19 pandemic. These investments are significant. This is identified as a key audit matter due to inherent uncertainties involved in projecting future cash flows and discount rate which are the basis of impairment assessment. (Refer note 2(c)(d) and note 5 to the standalone financial statements) |
Our audit procedures included: ⢠Evaluated the design, implementation and operating effectiveness of key internal controls around identification of impairment indicators including Management''s controls over estimation of the value in use of the investments in subsidiaries; ⢠Evaluated impairment risk to identify impairment indicators for any investment in a subsidiary based on consideration of external and internal factors affecting the value and performance of the investment; ⢠Evaluated Company''s assessment of value in use for investments where impairment risk is identified; ⢠Evaluated key inputs used in and the arithmetical accuracy of the cash flow projections; ⢠We challenged underlying key assumptions used to determine discount rate, sensitivity of the assumptions and cash flow projections against the historical performance. We took assistance of our valuation specialists for the above testing; ⢠We evaluated the adequacy of disclosures of key assumptions, judgements and sensitivities in respect of impairment assessment for investment in subsidiaries; and ⢠Assessed impact, if any of the resurgence of the COVID-19 pandemic on Management''s estimate. |
The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
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.
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 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure 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 Auditor''s) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements - Refer Note 38 to the standalone financial statements
b) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 18(c) to the standalone financial statements
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 its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, 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 ("Ultimate Beneficiaries") by or on behalf of the Company or
⢠provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(ii) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, 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 ("Ultimate Beneficiaries") by or on behalf of the Funding Party or
⢠provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d) (i) and (d) (ii) contain any material mis-statement.
e) The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Act.
(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.
Chartered Accountants Firm''s Registration No.: 116231W/W-100024
Partner
Membership No. 101190 UDIN: 22101190AJRNPJ9150
Place: Pune Date: 26 May 2022
Mar 31, 2018
INDEPENDENT AUDITORSâ REPORT
To the Members of Sudarshan Chemical Industries Limited Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Sudarshan Chemical Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and 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 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) prescribed under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We are also responsible to conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entityâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditorâs report. However, future events or conditions may cause an entity to cease to continue as a going concern.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31 March 2018, its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Other Matter
The comparative financial information of the Company for the year ended 31 March 2017 and the transition date opening balance sheet as at 1 April 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31 March 2017 and 31 March 2016 dated 26 May 2017 and 27 May 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central
Government in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer 41(b) to the standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There was one instance of delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company, the details of which are as follows:
Amount credited to the fund |
Date of payment |
Date by which amount should have been credited to the fund |
Delay (no. of days) |
Rs 6,635 |
26 December 2017 |
14 September 2017 |
103 |
iv. The disclosures in the financial statements regarding holdings as well as dealings in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been made since they do not pertain to the financial year ended 31 March 2018.
Referred to in paragraph (1) 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 physical verification programme whereby items of fixed assets are physically verified according to a phased programme designed to cover all the items over a period of three years. In our opinion, the frequency of such physical verification programme is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, no physical verification was carried out by the Management during the year.
(c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of the immovable properties are held in the name of the Company.
(ii) The physical verification of inventory has been conducted at reasonable intervals during the year. In our opinion, the frequency of such physical verification is reasonable. Based on the information and explanations given to us, no material discrepancies were noticed on such physical verification.
(iii) The Company had granted unsecured loans to two companies covered in the register maintained under Section 189 of the Act. Out of the above, the loan granted to one subsidiary company was squared off during the year.
(a) In respect of the aforesaid loans, the terms and conditions under which such loans were granted are not, prima facie, prejudicial to the Companyâs interest.
(b) In respect of the aforesaid loans, the schedule of repayment of principal and payment of interest has been stipulated and the parties are repaying the principal amounts, as stipulated, and are also regular in payment of interest as applicable.
(c) In respect of the aforesaid loans, there is no amount which is overdue for more than ninety days.
(iv) According to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 with respect to loans, guarantees, investments and security, as applicable.
(v) According to the information and explanations given to us, the Company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Rules framed thereunder to the extent notified, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.
(vi) Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of some of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
(vii)
(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of professional tax and tax deducted at source, though there has been a slight delay in few cases, and is regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, service tax, value added tax, duty of customs, duty of excise and other material statutory dues with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax and any other material statutory dues were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.
(b) According to information and explanation given to us and the records of the Company examined by us, there are no dues of income-tax, sales-tax, service-tax which have not been deposited on account of any dispute. The particulars of dues of duty of customs, duty of excise and value added tax which have not been deposited on account of any dispute, are as follows:
Name of the Statute |
Nature of dues |
Amount (Rs.) |
Period to which amount relates |
Forum where dispute is pending |
The Central Excise Act, 1944 |
Excise Duty |
3,835,224 |
2004-05 to 2010-11 and 2014-15 to 2016-17 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Excise Duty |
26,803,331 |
2008-09 to 2013-14 |
Custom, Excise & Service Tax Appellate Tribunal |
The Central Excise Act, 1944 |
Excise Duty |
109,864 |
2014-15, 2015-16 |
Commissioner Appeal Central Excise |
Maharashtra VAT Act, 2002 |
VAT |
18,404,869 |
2006-07 to 2008-09 and 2010-11 to 2013-14 |
Joint Commissioner of Sales Tax (Appeal 01) |
Tamil Nadu VAT Act, 2006 |
VAT |
623,691 |
2003-04 |
Assistant Commissioner, Commercial Tax Department Coimbatore |
Andhra Pradesh VAT Act, 2005 |
VAT |
826,015 |
2007-08 |
Assistant Commissioner, Commercial Tax Department (LTU) |
Karnataka VAT Act, 2003 |
VAT |
76,959 |
2008-09 |
The Commercial Tax Inspector, Commercial Tax Check Post |
Customs Act, 1962 |
Custom duty |
33,035,612 |
2006-07 to 2008-09, 2011-12 and 2012-13 |
Custom, Excise & Service Tax Appellate Tribunal |
(viii) Based on the records examined by us and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank as at the Balance Sheet date. Further, the Company did not have loans or borrowings from the government and has not issued any debentures as at the Balance Sheet date.
(ix) The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). Further, based on the records examined by us and according to the information and explanations given to us, the moneys raised by way of term loans were applied for the purpose for which they were obtained.
(x) According to the information and explanations given to us, no material fraud by the Company and on the Company by its officers or employees have been noticed or reported during the year.
(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 for the year ended March 31, 2018 in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of the Act.
(xii) As the Company is not a Nidhi Company, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with them during the year. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
Referred to in paragraph 2(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Act
We have audited the internal financial controls with reference to financial statements of Sudarshan Chemical Industries Limited (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal controls with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by the ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements were established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal controls 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 with reference to financial statements.
Meaning of Internal Financial Control with reference to Financial Statements
A Companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31 March 2018, based on the internal controls with reference to financial statements criteria established by the Company considering the essential components of internal controls stated in the Guidance Note issued by the ICAI.
For B S R & Associates LLP
Chartered Accountants
Firmâs Registration No.: 116231/W-100024
Shiraz Vastani Partner
Membership No. 103334
Place: Pune
Date: 24 May 2018
Mar 31, 2017
To the Members of Sudarshan Chemical Industries Limited Report on the Standalone the Financial Statements
1. We have audited the accompanying Standalone Financial Statements of Sudarshan Chemical Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2017, and the Statements of Profit and Loss and Cash Flow for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
2. 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 Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit.
4. 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 provision of the Act and the Rules made there under.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the Financial Statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Financial Statements.
7. 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
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor''s Report) Order, 2016, issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act (the âOrderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
10. As required by Section 143(3)of the Act, we report that:
a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. in our opinion, proper books of accounts 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 Cash Flow Statement dealt with by this Report are in agreement with the books of accounts;
d. in our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. on the basis of written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017, from being appointed as a director in terms of Section 164(2) of the Act;
f. with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and
g. with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31st March, 2017, on its financial position in its Standalone Financial Statements - Ref. Note No. 3 (i) of Note No. 29 to the Financial Statements
ii. The Company did not have any long-term contracts including derivate contracts for which there were any material foreseeable losses, and
Hi. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
iv. The Company has provided requisite disclosures in the Standalone Financial Statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation, we report that the disclosures are in accordance with books of accounts maintained by the company and as produced to us by the Management. Ref. Note No. 33 of Note No. 29 to the Financial Statements.
Annexure to the Auditors'' Report referred to in paragraph 9 of Report on Other Legal and Regulatory
Requirements in our report of even date:
i.
a. The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.
b. The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed during such verification were not material and have been given effect in the books of accounts.
c. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii. As explained to us, the inventory was physically verified during the year by the management. In our opinion, the frequency of the verification is reasonable. The discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of accounts.
iii. The Company has granted unsecured loan to two wholly owned subsidiary companies covered in the register maintained under Section 189 of the Companies Act, 2013 ("the Actâ)
a. In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the two wholly owned subsidiary companies listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company
b. In respect of the aforesaid loan, the parties are repaying the principal amount, as stipulated, and are also regular in payment of interest as applicable.
c. In respect of the aforesaid loan, there is no overdue amount.
iv. In our opinion and according to the information and explanations given to us, provisions of Section 185 and 186 of the Act in respect of loans given, investment made and guarantees given to parties covered under the respective sections have been complied with by the Company.
v. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73, 74, 75 and 76 or any other relevant provisions of the Act and the Rules framed there under to the extent notified, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.
vi. We have broadly reviewed the books of accounts maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under Sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. a. According to the information and explanations given to us and the records of the Company examined by us, the Company is generally regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and other material statutory dues, as applicable, with the appropriate authorities. There are no arrears of outstanding undisputed statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they become payable.
b. According to the information and explanations given to us and records of the Company examined by us, particulars of dues of Sales Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of disputes are as under:
Name of the Statute |
Nature of Dues |
Amount (Rs.) |
Financial Years to which it pertains |
Forum where the dispute is pending |
The Central Excise Act, 1944 |
Excise Duty |
1,253,189 |
2004-05, 2005-06, 2006-07, 2009-10, 2010-11,2016-17 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Excise Duty |
26,803,331 |
2013-14, 2014-15 |
Custom, Excise & Service Tax Appellate Tribunal |
Name of the Statute |
Nature of Dues |
Amount (Rs.) |
Financial Years to which it pertains |
Forum where the dispute is pending |
The Central Excise Act, 1944 |
Excise Duty |
109,864 |
2015-16 |
Commissioner Appeal Central Excise |
Maharashtra VAT Act, 2002 |
VAT |
19,356,797 |
2006-07 to 2011-12 |
Joint Commissioner of Sales Tax (Appeal 01) |
Tamil Nadu VAT Act, 2006 |
VAT |
623,691 |
2003-04 |
Assistant Commissioner, Commercial Tax Department Coimbatore |
Andhra Pradesh VAT Act, 2005 |
VAT |
826,015 |
2007-08 |
Assistant Commissioner, Commercial Tax Department (LTU) |
Karnataka VAT Act, 2003 |
VAT |
76,959 |
2008-09 |
The Commercial Tax Inspector, Commercial Tax Check Post |
Customs Act, 1962 |
Custom Duty |
32,276,716 |
2011-12, 2012-13 |
Custom, Excise & Service Tax Appellate Tribunal |
Total |
81,326,562 |
viii. Based on the records examined by us and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bankas at the Balance Sheet date.
ix. Based on the records examined by us and according to the information and explanations given to us, during the year, term loans were applied for the purpose for which the loans were obtained. According to the information and explanations given by the management, the Company has not raised any money way of initial public offer/further public offer.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have not come across any instances of frauds by the Company or any material fraud on the Company by its officers or employees nor have any instances of material fraud been reported to us by the management during the year.
xi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V of theAct.
xii. In our opinion and according to the information and explanations given to us, the Company is not a ''Nidhi'' Company. Accordingly, paragraph 3(xii) of the Order is not applicable.
xiii. According to the information and explanation given to us and based on our examination of the records of the Company, transactions with 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. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the Clause 3(xiv) of the Order is not applicable to the Company.
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
xvi. The company is not required to be registered under Section 45-IAof the Reserve Bankof India Act, 1934.
Referred to in paragraph 10(f) of the Independent Auditors'' Report of even date to the members of
Sudarshan Chemical Industries Limited on the Standalone Financial Statements for the year ended
31st March, 2017.
1. We have audited the internal financial controls over financial reporting of Sudarshan Chemical Industries Limited (âthe Companyâ) as of 31st March, 2017 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
2. The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (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 (âthe Actâ).
Auditors'' Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Financial Statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. 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
a. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
b. provide reasonable assurance that transactions are recorded as necessary to permit preparation of Financial Statements in accordance with Generally Accepted Accounting Principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of Management and Directors of the company; and
c. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the Financial Statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of 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
8. 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 31st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
For B. K. Khare and Co.
Chartered Accountants
Firm Registration No. : 105102W
Shirish Rahalkar
Partner
Pune : 26th May, 2017 Membership No. : 111212
Mar 31, 2016
1. We have audited the accompanying Standalone Financial Statements of
Sudarshan Chemical Industries Limited ("the Company"), which comprise
the Balance Sheet as at 31st March, 2016, and the Statements of Profit
and Loss and Cash Flow for the year then ended, and a summary of the
significant accounting policies and other explanatory information
Management''s Responsibility for the Standalone Financial Statements
2. The Company''s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these Standalone Financial Statements that
give a true and fair view of the financial position, financial
performance and cash flows of the Company in accordance with 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 (as amended). This
responsibility also includes maintenance of adequate accounting records
in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the Financial
Statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these Standalone
Financial Statements based on our audit.
4. 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.
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the Financial Statements are
free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the Financial Statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the Financial
Statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the Financial Statements that give a
true and fair view, in order to design audit procedures that are
appropriate in the circumstances, An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the Financial Statements.
7. 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
8. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid Standalone Financial
Statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company, as at 31st March, 2016, and its profit and its
cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor''s Report) Order, 2016, issued
by the Central Government of India in terms of sub-section (11) of
Section 143 of the Act (the "Order"), and on the basis of such checks
Of the books and records of the Company as we considered appropriate and
according to the information and explanations given to us, we give in
"Annexure A" a statement on the matters specified in paragraphs 3 and 4
Of the Order.
10. As required by Section 143(3)of the Act, we report that:
a. we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
b. in our opinion, proper books of accounts 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 Cash Flow
Statement dealt with by this Report are in agreement with the books of
accounts;
d. in our opinion, the aforesaid Standalone Financial Statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014;
e. on the basis of written representations received from the directors
as on 31st March, 2016 taken on record by the Board of Directors, none
of the directors is disqualified as on 31st March, 2016, from being
appointed as a director in terms of Section 164(2) of the Act.
f. with respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate report in "Annexure B"; and
g. with respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its Standalone Financial Statements Ref. Note No.
3(i) of Note No. 29 to the Financial Statements
ii. The Company did not have any long-term contracts including
derivate contracts for which there were any material foreseeable losses
and
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company
Annexure to the Auditors'' Report referred to in paragraph 9 of Report
on Other Legal and Regulatory
Requirements in our report of even date:
i.
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
b) The fixed assets are physically verified by the Management according
to a phased programme designed to cover all the items over a period of
three years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed to us no
material discrepancies as compared to book records were noticed on
assets verified during the year.
c) According to the information and explanations given to us and on the
basis of our examination of the records of the Company, the title deeds
of immovable properties are held in the name of the Company.
ii. As explained to us, the inventory was physically verified during
the year by the Management. In our opinion, the frequency of the
verification is reasonable. The discrepancies noticed on physical
verification of inventory as compared to the book records were not
material and have been properly dealt with in the books of accounts.
iii. The Company has granted unsecured loan to two wholly owned
subsidiaries covered in the register maintained under Section 189 of the
Companies Act, 2013 ("the Act"). Loans given to one of the aforesaid
subsidiaries was repaid during the year.
a) In our opinion, the rate of interest and other terms and conditions
on which the loans had been granted to the two wholly owned
subsidiaries company listed in the register maintained under Section
189 of the Act were not, primafacie, prejudicial to the interest of the
Company
b) In respect of the aforesaid loans, the parties are repaying the
principal amount, as stipulated, and are also regular in payment of
interest as applicable.
c) In respect of the aforesaid loans, there is no overdue amount
iv. In our opinion and according to the information and explanations
given to us, provisions of Section 185 and 186 of the Act in respect of
loans given, investment made and guarantees given to parties covered
under the respective sections have been complied with by the Company.
v. In our opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
73, 74, 75 and 76 or any other relevant provisions of the Act and the
Rules framed there under to the extent notified, with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the Company in respect of the aforesaid
deposits.
vi. We have broadly reviewed the books of accounts maintained by the
Company in respect of products where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under sub-section (1) of Section 148 of the Act, and are of
the opinion that, prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the records with a view to determine whether they are
accurate or complete.
vii.
a) According to the information and explanations given to us and the
records of the Company examined by us, the Company is generally regular
in depositing undisputed statutory dues, including Provident Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Duty of Customs, Duty of Excise, Value Added Tax and other
material statutory dues, as applicable, with the appropriate
authorities.
There are no arrears of outstanding undisputed statutory dues as at the
last day of the financial year concerned for a period of more than six
months from the date they become payable.
b) According to the information and explanations given to us and
records of the Company examined by us, particulars of dues of Sales Tax,
Customs Duty, Excise Duty and Cess which have not been deposited on
account of disputes are as under:
Name of the Nature of Amount Financial Years
to Forum where the
dispute is
Statute Dues (Rs.) which it
pertains pending
The Central
Excise Excise Duty 325,517 2004-05,2005-06, Assistant
Act,1944 2009-10,2010-11
& Commissioner of
Central Excise
2015-16
The Central
Excise Excise Duty 29,275,485 2004-05 Custom, Excise
&
Service Tax
Act,1944 2010-11 &
2014-15 Appellate
Tribunal
Name of the Nature of Amount Financial Years
to Forum where the
dispute is
Statute Dues (Rs.) which it
pertains pending
The Central
Excise Excise Duty 715,548 2013-14 &
2014-15 Commissioner
Appeal Central
Act, 1944 Excise
Maharashtra
VAT VAT 14,500,437 2006-07 to
2011-12 Joint
Commissioner
of Sales Tax
Act,2002 (Appeal 01)
Tamil Nadu
VAT VAT 623,691 2003-04 Assistant
Commissioner,
Act,2006 Commercial Tax
Department
Coimbatore
Andhra
Pradesh VAT 826,015 2007-08 Assistant
Commissioner,
VAT Act, 2005 Commercial Tax
Department
(LTU)
Karnataka VAT VAT 76,959 2008-09 The Commercial
Tax Inspector,
Act,2003 Commercial
Tax Check Post
Total 16,027,102
viii. Based on the records examined by us and according to the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank as at the
Balance Sheet date.
ix. Based on the records examined by us and according to the
information and explanations given to us, during the year, term loans
were applied for the purpose for which the loans were obtained.
According to the information and explanations given by the management,
the Company has not raised any money way of initial public
offer/further public offer.
x. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have not come across any instances of
frauds by the Company or any material fraud on the Company by its
officers or employees nor have any instances of material fraud been
reported to us by the management during the year.
xi. According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
paid / provided for managerial remuneration in accordance with the
requisite approvals mandated by the provisions of Section 197 read with
Schedule V of the Act.
xii. In our opinion and according to the information and explanations
given to us, the Company is not a Nidhi Company. Accordingly, paragraph
3(xii) of the Order is not applicable.
xiii. According to the information and explanation given to us and
based on our examination of the records of the Company, transactions
with 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. The Company has not made any preferential allotment or private
placement of shares or fully or partly convertible debentures during
the year under review. Accordingly, the Clause 3(xiv) of the Order is
not applicable to the Company.
xv. According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not entered into non-cash transactions with Directors or persons
connected with him. Accordingly, paragraph 3(xv) of the Order is not
applicable.
xvi The Company is not required to be registered under section 45-IAof
the Reserve Bank of India Act, 1934.
For B. K. Khare and Co.
Chartered Accountants
Firm Registration No. : 105102W
Naresh Kumar Kataria
Partner
Pune: 27th May, 2016 Membership No.037825
Mar 31, 2015
1. We have audited the accompanying Financial Statements of Sudarshan
Chemical Industries Limited ("the Company"), which comprise the Balance
Sheet as at 31st March ,2015, and the Statementsof Profit and Loss and
Cash Flow for the year then ended, and a summary of the significant
accounting policies and other explanatory information
Management''s Responsibility for the Financial Statements
2. The Company''s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with
respect to the preparation of these Financial Statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014 (as amended). This responsibility also
includes maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding the assets of the Company
and for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the Financial Statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these Financial
Statements based on our audit.
4. 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.
5. 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.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the Financial Statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the Financial
Statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the Financial Statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the Financial Statements.
7. 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
8. 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 flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor''s Report) Order, 2015, issued
by the Central Government of India in terms of sub-section (11) of
Section 143 of the Act (the "Order"), and on the basis of such checks
of the books and records of the Company as we considered appropriate
and according to the information and explanations given to us, we give
in the Annexure a statement on the matters specified in paragraphs 3
and 4 of the Order.
8. As required by Section 143(3) of the Act, we report that:
a. we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
b. in our opinion, proper books of accounts 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 Cash Flow
dealt with by this Report are in agreement with the books of accounts;
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 (as amended);
e. on the basis of 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 (as amended), in our opinion and to the best of our
information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its Financial Statements - Ref. Note No. 3(i) of
Note No. 29 to the Financial Statements
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company
Annexure to the Auditor''s Report referred to in paragraph 9 of Report
on Other Legal and Regulatory Requirements in our report of even date:
i. a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
b) The fixed assets are physically verified by the Management according
to a phased programme designed to cover all the items over a period of
three years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed to us no
material discrepancies as compared to book records were noticed on
assets verified during the year.
ii.
a) As explained to us, the inventory was physically verified 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 inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the book records were not material and have been properly dealt with
in the books of accounts.
iii. The Company has granted unsecured loan to two wholly owned
subsidiary companies covered in the register maintained under Section
189 of the Act.
a) In respect of the aforesaid loan, the party is repaying the
principal amount, as stipulated, and is also regular in payment of
interest as applicable.
b) In respect of the aforesaid loan, there is no overdue amount more
than Rupees One Lac
iv. In our opinion and according to the information and explanations
given to us, having regard to the explanation that, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business for the purchase of inventory,
fixed assets and for the sale of goods and services. Further, on the
basis of our examination of the books and records of the Company, and
according to the information and explanations given to us, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal control system.
v. In our opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
73, 74, 75 and 76 or any other relevant provisions of the Act and the
Rules framed thereunder to the extent notified, with regard to the
deposits accepted from the public. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the Company in respect of the aforesaid
deposits.
vi. We have broadly reviewed the books of account maintained by the
Company in respect of a products where, pursuant to the rules made by
the Central Government of India, the maintenance of cost records has
been prescribed under sub-section (1) of Section 148 of the Act, and
are of the opinion that, prima facie, the prescribed accounts and
records have been made and maintained. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
vii. a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except for
dues in respect of Service Tax Dues relating to a company acquired
during the year , the Company is regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Duty of Customs, Duty of Excise,
Value Added Tax and other material statutory dues, as applicable, with
the appropriate authorities. The extent of the arrears of service tax
outstanding as at 31st March 2015 Rs. 4,255,974, for a period of more
than six months from the date they became payable. The said arrears
have since been paid.
b) According to the information and explanations given to us and
records of the Company examined by us, particulars of dues of Sales
Tax, Customs Duty, Excise Duty and Cess which have not been deposited
on account of disputes are as under:
Name of the Nature of Amount Financial Years to
Statute Dues (Rs.) which it pertains
The Central Excise Excise Duty 17,669,029 2004-05 to 2014 -15
Act, 1944
The Central Excise Excise Duty 4,264,193 2004-05 to 2011-12
Act, 1944
The Central Excise Excise Duty 140,238 2012-13 and 2014-15
Act, 1944
Maharshtra VAT VAT 11,473,731 2006-07 to 2010-11
Act, 2002
Tamil Nadu VAT VAT 623,691 2003-04
Act, 2006
Andhra Pradesh VAT 826,015 2007-08
VAT Act, 2005
Karnataka VAT Act, VAT 76,959 2008-09
2003
TOTAL 35,073,856
Name of the Statute Forum where the dispute is pending
The Central Excise Act, 1944 Assistant Commissioner of Central Excise
The Central Excise Act, 1944 Custom, Excise & ServiceTax Appellate
Tribunal
The Central Excise Act, 1944 Superintendent of Central Excise
Maharshtra VAT Act, 2002 Joint Commissioner of Sales Tax
(Appeal 01)
Tamil Nadu VAT Act, 2006 Assistant Commissioner, Commercial
Tax Department Coimbatore
Andhra Pradesh VAT Act, 2005 Assistant Commissioner, Commercial
Tax Department (LTU)
Karnataka VAT Act, 2003 The Commercial Tax Inspector,
Commercial Tax Check Post
c) The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 2013 and the Rules
made thereunder.
viii. The Company has no accumulated losses as at the end of the
Financial Year and it has not incurred any cash losses in the Financial
Year ended on that date and in the immediately preceding Financial
Year.
ix. Based on the records examined by us and according to the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank as at the
Balance Sheet date.
x. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions, except for the corporate guarantees
issued on behalf of its wholly owned subsidiary Sudarshan Europe B.V
amounting to EURO 3 Million and its step down subsidiary Sudarshan
North America, Inc. amounting to USD 3 Million. The terms and
conditions of the said guarantees are not prejudicial to the interest
of the Company.
xi. Based on the records examined by us and according to the
information and explanations given to us, during the year, term loans
were applied for the purpose for which the loans were obtained.
xii. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have we been informed of any such case by the Management.
For B. K. Khare and Co.
Chartered Accountants
Firm Registration No. : 105102W
Naresh Kumar Kataria
Partner
Pune : 27th May, 2015 Membership No.037825
Mar 31, 2013
1. Report on the Financial Statements
We have audited the accompanying Financial Statements of SUDARSHAN
CHEMICAL INDUSTRIES LIMITED (''the Company'') which comprise the Balance
Sheet as at 31st March, 2013, Statement of Profit and Loss and Cash
Flow Statement for the year ended and a summary of significant
Accounting Policies and other explanatory information.
2. Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these Financial
Statements that give a true and fair view of the Financial Position,
Financial Performance and Cash Flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of Section 211
(as amended) of the Companies Act, 1956 (''the Act''). This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
Financial Statements that give a true and fair view and are free from
material misstatements, whether due to fraud or error.
3. Auditor''s Responsibility
Our responsibility is to express an opinion on these Financial
Statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the Financial Statements are free
from material misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the Financial Statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatements 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.
4. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts, read together with the
Company''s Accounting Policies and the Notes thereto, give the
information required by the Act, in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India;
i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
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 Cash Flow Statement, of the cash flows for the year
ended on that date.
5. Report on Other Legal and Regulatory Requirements
1) As required by ''the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amended) Order, 2004'',
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Act (hereinafter referred to as the "Order"), and
on the basis of such checks of the books and records of the Company as
we considered appropriate and according to the information and
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
2) As required by Section 227(3) of the Act, we report that:
a) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) in our opinion, proper books of accounts 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
accounts;
d) in our opinion, the Balance sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Act;
e) on the basis of written representations received from the directors,
as on 31st March, 2013 and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on 31st March,
2013 from being appointed as a Director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
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 Act,
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
ANNEXURE REFERRED TO IN PARAGRAPH 4 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) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification, which
in our opinion, is reasonable having regard to the size of the
operations of the Company and nature of its fixed asset.
(c) During the year, the Company has not disposed of any substantial or
major portion of fixed assets.
ii. (a) As explained to us, the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the book records were not material and have been properly dealt with
in the books of accounts.
iii. 1 (a) According to the information and explanations given to us,
the Company has granted unsecured loans to wholly owned subsidiaries
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs.
702,283,050 and the year-end balance of loan granted to such companies
is Rs. 557,969,050.
(b) According to the information and explanations given to us, in our
opinion, the rate of interest and other terms and conditions of above
unsecured loans granted by the Company are not prima facie, prejudicial
to the interest of the Company.
(c) According to the information and explanations given to us, the
company to whom loans and advances in the nature of loan have been
given is repaying the principal amount as stipulated and is also
regular in payment of interest.
(d) There is no overdue amount of loan granted to the companies listed
in the register maintained under Section 301 of the Companies Act,
1956.
2 (a) According to the information and explanations given to us, the
Company has taken unsecured loans and fixed deposits from 11 parties
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs.
210,320,000 and the year-end balance of loan taken from such parties is
Rs. 203,570,000.
(b) According to the information and explanations given to us, in our
opinion, the rate of interest and other terms and conditions of above
unsecured loans taken by the Company are not prima facie, prejudicial
to the interest of the Company.
(c) According to the information and explanations given to us, the
company is regular in repayment of principal and interest.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory and fixed assets, and
with regard to the sale of goods and services. During the course of our
audit, no continuing failure to correct major weakness has been noticed
in the internal controls.
v. In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956,
(a) Based on audit procedures applied by us, to the best of our
knowledge and belief and according to the information and explanations
given to us, we are of the opinion that the contracts or arrangements
that needed to be entered into the register maintained under Section
301 have been so entered.
(b) According to the information and explanations given to us,
transactions of purchase of goods and services exceeding the value of
Rs. 5 lacs during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of Sections 58A and 58AA or
any other relevant provisions of the Companies Act, 1956 and the Rules
framed thereunder in respect of the deposits accepted from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
viii. We have broadly reviewed the books of accounts maintained by the
Company pursuant to the Order made by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956, in respect of Pesticides and Pigments and are of the opinion
that prima facie the prescribed accounts and records have been
maintained. We have not, however, made a detailed examination of the
records with a view to determining whether they are accurate or
complete.
ix. (a) According to the records of the Company and information and
explanations given to us, the Company has generally been 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 statutory dues with the appropriate authorities during the year.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection Fund, Employees'' State Insurance, Income Tax,
Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, Cess and
other undisputed statutory dues were outstanding, at the year end or
for a period of more than six months from the date they became payable.
(c) According to the records of the Company and information and
explanation given to us, details of dues of Excise Duty, Sales Tax and
Income Tax which have not been deposited on account of any dispute are
given below:
Name of the Nature Amount
Statute of Dues (Rs.)
The Central Excise
Act, 1944 Excise duty 227,682
26,032
5,193
2,355
1,742,851
31,020
The Central Excise
Act, 1944 Excise duty 3,954,881
123,369
185,943
The Central Excise
Act, 1944 Excise duty 4,286,106
The Central Excise
Act, 1944 Excise duty 114,177
The Central Excise
Act, 1944 Excise duty 8,292
The Central Excise
Act, 1944 Excise duty 25,562
The Income Tax Act,1961 Income Tax 653,233
MVAT Act 2002 MVAT 5,250,291
TOTAL 16,636,987
Name Financial Years Forum where the
to which it
pertains dispute is pending
The Central Excise
Act, 1944 2002-03 Assistant
2004-05 Commissioner of
2005-06 Central Excise
2005-06
2010-11
2011-12
2004-05 Custom, Excise &
The Central Excise
Act, 1944 2009-10 Service Tax Appellate
2011-12 Tribunal
2012-13 Addl. Commissioner
of Central Excise
The Central Excise
Act, 1944 2012-13 Dy. Commissioner
Central Excise
2012-13 Supt. Commissioner
of Central Excise
2012-13 Supt. Of Central Excise
2007-08 Dy. Commissioner
Income Tax
The Central Excise
Act, 1944 2006-07 & Jt. Commissioner of
2008-09 Sales Tax (Appeal), Pune
x. The Company does not have accumulated losses as at the end of the
financial year and the Company has not incurred cash losses during
current and the immediately preceding financial year.
xi. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to financial
institutions and banks.
xii. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended)
are not applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order,
2003 (as amended), are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions, except for the corporate guarantee
issued on behalf of its wholly owned subsidiary Prescient Color Limited
(cancelled during the year) and its step down subsidiary Sudarshan
North America, Inc. amounting to Rs. 122,500,000 and USD 3,000,000
respectively and terms and conditions thereof are not prejudicial to
the interest of the company.
xvi. Based on the information and explanation given to us by the
management, term loans availed by the Company were, prima facie,
applied by the Company during the year for the purpose for which loans
were obtained.
xvii. According to Cash Flow Statement as on the Balance Sheet date and
records examined by us and according to the information and
explanations given to us, on overall basis, we report that no funds
raised on short term basis have, prima facie, been used during the year
for long term investment.
xviii. The Company has not made any preferential allotment to parties
and companies covered under register maintained under Section 301 of
the Companies Act, 1956, during the year and the question of whether
the price at which the shares have been issued is prejudicial to the
interest of the Company does not arise.
xix. The Company has not issued any debentures and hence the question
of creation of any securities does not arise.
xx. The Company has not raised money by any public issues during the
year and hence the question of disclosure and verification of end use
of such money does not arise.
xxi. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the Financial Statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For B. K. Khare & Co.
Chartered Accountants
Firm Registration No. 105102W
Prasad Paranjape
Partner
Pune : 30th May, 2013 Membership No-047296
Mar 31, 2012
We have audited the attached balance sheet of SUDARSHAN CHEMICAL
INDUSTRIES LIMITED as at 31st March 2012, the Statement of Profit and
Loss Account and the Cash Flow Statement for the year ended on that
date annexed thereto. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
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.
We report as follows:
1. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph 1
above:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, the Statement of Profit and Loss Account and the
Cash Flow Statement dealt with by this report are in agreement with the
books of account;
d) In our opinion, the Balance sheet, the Statement of Profit and Loss
account and the Cash Flow Statement dealt with by this report comply
with the accounting standards referred to in sub-section (3C) of
Section 211 of the Companies Act, 1956;
e) 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;
f) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Company's Accounting Policies and the Notes thereto, 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 the Statement of 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 1 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) As explained to us, physical verification of major portion of the
fixed assets as at 31st March, 2012 was conducted by the Management
during the year. In our opinion, the frequency of physical verification
is reasonable having regard to the size of the operations of the
Company and nature of its fixed asset.
(c) During the year, the Company has not disposed of any substantial or
major part of fixed assets.
ii. (a) As explained to us, the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the book records were not material and have been properly dealt with
in the books of account.
iii. 1) (a) According to the information and explanations given to us,
the Company has granted unsecured loans to wholly owned subsidiaries
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs.
428,806,056 and the year-end balance of loan granted to such companies
is Rs. 428,743,000.
(b) According to the information and explanations given to us, in our
opinion, the rate of interest and other terms and conditions of above
unsecured loans granted by the Company are not prima facie, prejudicial
to the interest of the Company.
(c) According to the information and explanations given to us the
company to whom loans and advances in the nature of loan have been
given is repaying the principal amount as stipulated and is also
regular in payment of interest.
(d) There is no overdue amount of loan granted to the companies listed
in the register maintained under Section 301 of the Companies Act,
1956.
2) (a) According to the information and explanations given to us, the
Company has taken unsecured loans and fixed deposits from 32 parties
covered in the register maintained under Section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs.
310,500,950 and the year-end balance of loan taken from such companies
is Rs. 170,370,000.
(b) According to the information and explanations given to us, in our
opinion, the rate of interest and other terms and conditions of above
unsecured loans and fixed deposits taken by the Company are not prima
facie, prejudicial to the interest of the Company.
(c) According to the information and explanations given to us, the
company is regular in repayment of principal and interest.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory and fixed assets, and
with regard to the sale of goods and services. During the course of our
audit, no continuing failure to correct major weakness has been noticed
in the internal controls.
v. In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act 1956,
(a) Based on audit procedures applied by us, to the best of our
knowledge and belief and according to the information and explanations
given to us, we are of the opinion that the contracts or arrangements
that needed to be entered into the register maintained under Section
301 have been so entered.
(b) According to the information and explanations given to us,
transactions of purchase of goods and services exceeding the value of
Rs. 5 lakhs during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of Sections 58A and 58AA or
any other relevant provisions of the Companies Act, 1956 and the Rules
framed there under in respect of the deposits accepted from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the Order made by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956, in respect of Pesticides and Pigments and are of the opinion
that prima facie the prescribed accounts and records have been
maintained. We have not, however, made a detailed examination of the
records with a view to determining whether they are accurate or
complete.
ix. (a) According to the records of the Company and information and
explanations given to us, the Company has generally been 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 statutory dues with the appropriate authorities during the year.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Investor
Education and Protection Fund, Employees' State Insurance, Income-Tax,
Wealth- Tax, Service Tax, Sales-Tax, Customs Duty, Excise Duty, Cess
and other undisputed statutory dues were outstanding, at the year end,
for a period of more than six months from the date they became payable.
(c) According to the records of the Company and information and
explanation given to us, details of dues of Excise Duty, Sales Tax and
Income Tax which have not been deposited on account of any dispute are
given below :
Name of the Nature Amount Financial
Years Forum where the
Statute of Dues (Rs.) to which it
pertains dispute is
pending
The Central
Excise Act,
1944 Excise duty 597,791 1999-00 Assistance
Collector
of Central
Excise
The Central
Excise Act,
1944 Excise duty 227,682 2002-03 Assistance
Collector
of Central
Excise
The Central
Excise Act,
1944 Excise
duty 3,954,881 2004-05 Custom Excise
and Service Tax
Appellate
Tribunal
The Central
Excise Act,
1944 Excise duty 26,032 2004-05 Assistance
Collector
of Central
Excise
The Central
Excise Act,
1944 Excise duty 2,355 2005-06 Assistance
Collector
of Central
Excise
The Central
Excise Act,
1944 Excise duty 487,912 2006 to 2010 Assistance
Collector
of Central
Excise
The Central
Excise Act,
1944 Excise duty 17,550 2007-08 Assistance
Collector
of Central
Excise
The Central
Excise Act,
1944 Excise duty 123,369 2009-10 Custom Excise
and Service
Tax Appellate
Tribunal
The Central
Excise Act,
1944 Excise
duty 1,855,594 2010-11 Assistance
Collector
of Central
Excise
The Central
Excise Act,
1944 Excise
duty 185,943 2011-12 Commissioner
Appeals
The Income
Tax Act,1961 Income Tax 653,233 2007-08 Dy. Commissioner
Income Tax
Total 8,132,342
x. The Company does not have accumulated losses as at the end of the
financial year and the Company has not incurred cash losses during
current and the immediately preceding financial year.
xi. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to financial
institutions and banks.
xii. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted any loans and advances on the basis of security by way of
pledge of shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended)
are not applicable to the Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditor's Report) Order,
2003 (as amended), are not applicable to the Company.
xv. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions, except for the corporate guarantee
issued on behalf of its wholly owned subsidiary Prescient Color Limited
and its step down subsidiary Sudarshan North America, Inc. amounting to
Rs. 12,25,00,000 and USD 1.5 Million respectively and terms and
conditions thereof are not prejudicial to the interest of the company.
xvi. Based on the information and explanation given to us by the
management term loans availed by the company were, prima facie, applied
by the company during the year for the purpose for which loans were
obtained.
xvii. According to the Cash Flow Statement on the balance sheet date
and records examined by us and according to the information and
explanations given to us, on overall basis, we report that no funds
raised on short term basis have, prima facie, been used during the year
for long term investment.
xviii. The Company has not made any preferential allotment to parties
and companies covered under register maintained under Section 301 of
the Companies Act, 1956, during the year and the question of whether
the price at which the shares have been issued is prejudicial to the
interest of the Company does not arise.
xix. The Company has not issued any debentures and hence the question
of creation of any securities does not arise.
xx. The Company has not raised money by any public issues during the
year and hence the question of disclosure and verification of end use
of such money does not arise.
xxi. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the Company has been noticed or reported during
the course of our audit.
For B. K. Khare & Co.
Chartered Accountants
Firm Registration No. 105102W
P. V. Paranjape
Partner
Pune : 25th May 2012 Membership No - 047296
Mar 31, 2011
We have audited the attached balance sheet of SUDARSHAN CHEMICAL
INDUSTRIES LIMITED as at 31st March, 2011, the Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
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 mis-statement. 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.
We report as follows :
1. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph 1
above :
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956;
e) 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;
f) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Companys Accounting Policies and the Notes thereto, 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 AUDITORS REPORT
Referred to in paragraph 1 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) As explained to us, physical verification of major portion of the
fixed assets as at 31st March, 2011 was conducted by the Management
during the year. In our opinion, the frequency of physical verification
is reasonable having regard to the size of the operations of the
Company and nature of its fixed assets.
(c) During the year, the Company has not disposed off any substantial
or major part of fixed assets.
ii. (a) As explained to us, the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the book records were not material and have been properly dealt with
in the books of account.
iii. 1 (a) According to the information and explanations given to us,
the Company has granted unsecured loans to wholly owned subsidiaries
covered in the register maintained under section 301 of the Companies
Act, 1956. The maximum amount involved during the year was Rs.
477,607,160 and the year end balance of loan granted to such companies
is Rs. 457,549,290.
(b) According to the information and explanations given to us, in our
opinion, the rate of interest and other terms and conditions of above
unsecured loans granted by the Company are not prima facie, prejudicial
to the interest of the Company.
(c) According to the information and explanations given to us the
company to whom loans and advances in the nature of loan have been
given is repaying the principal amount as stipulated and is also
regular in payment of interest.
(d) There is no overdue amount of loan granted to the companies listed
in the register maintained under Section 301 of the Companies Act,
1956.
2 (a) According to the information and explanations given to us, the
Company has taken unsecured loans from 11 parties covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 240,350,000 and the
year end balance of loan granted to such companies is Rs. 115,020,000.
(b) According to the information and explanations given to us, in our
opinion, the rate of interest and other terms and conditions of above
unsecured loans taken by the Company are not prima facie, prejudicial
to the interest of the Company.
(c) According to the information and explanations given to us, the
company is regular in repayment of principal and interest.
(d) There is no overdue amount of loan taken from the companies listed
in the register maintained under Section 301 of the Companies Act,
1956.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of inventory and fixed assets, and
with regard to the sale of goods and services. During the course of our
audit, no continuing failure to correct major weakness has been noticed
in the internal controls.
v. In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act 1956,
(a) Based on audit procedures applied by us, to the best of our
knowledge and belief and according to the information and explanations
given to us, we are of the opinion that the contracts or arrangements
that needed to be entered into the register maintained under Section
301 have been so entered.
(b) According to the information and explanations given to us and
excluding certain transactions of purchase of goods and material of
special nature for which alternate quotations are not available, in our
opinion, the contracts or arrangements have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of sections 58A and 58AA or
any other relevant provisions of the Companies Act, 1956 and the Rules
framed thereunder in respect of the deposits accepted from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the Order made by the Central Government for the
maintenance of cost records under Section 209(1) (d) of the Companies
Act, 1956, in respect of Pesticides and are of the opinion that prima
facie the prescribed accounts and records have been maintained. We have
not, however, made a detailed examination of the records with a view to
determining whether they are accurate or complete.
ix. (a) According to the records of the Company and information and
explanations given to us, the Company has generally been 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 statutory dues with the appropriate authorities during the year.
(b) According to the records of the Company and information and
explanation given to us, details of dues of excise duty, sales tax and
Income Tax which have not been deposited on account of any dispute are
given below :
Name of the Nature Amount Financial Years Forum where the
Statute of Dues (Rs.) to which it
pertains dispute is pending
The Central
Excise Act,
1944 Excise duty 3,954,881 2004-05 CESTAT
The Central
Excise Act,
1944 Excise duty 2,355 2005-06 Jt.Secretary
(M.F.D.R.)
The Central
Excise Act,
1944 Excise duty 110,671 2007-08 &
2008-09 Commissioner
(Appeal)
The Central
Excise Act,
1944 Excise duty 2,053 2010-11 Commissioner
(Appeal)
The Central
Excise Act,
1944 Excise duty 227,682 2002-03 A.C.C.E.
The Central
Excise Act,
1944 Excise duty 17,550 2007-08 A.C.C.E.
The Central
Excise Act,
1944 Excise duty 1,430,671 2005-06 to2010-11 A.C.C.E.
The Central
Excise Act,
1944 Excise duty 597,791 1999-00 A.C.C.E.
The Central
Excise Act,
1944 Excise duty 123,369 2009-10 CESTAT
The Central
Excise Act,
1944 Excise duty 26,032 2004-05 A.C.C.E.
The Income
Tax Act,
1961 Income Tax 653,233 2007-08 Dy. Commissioner
Income Tax
Total 7,146,288
x. The Company does not have accumulated losses as at the end of the
year and the Company has not incurred cash losses during current and
the immediately preceding financial year.
xi. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to financial
institutions and 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 provisions of any Special Statute applicable to Chit Fund,
Nidhi or Mutual Benefit Fund/Societies are not applicable to the
Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
xv. 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 ,except for the corporate guarantee
issued on behalf of its wholly owned subsidiary Prescient Color
Limited, amounting to Rs. 122,500,000 and terms and conditions thereof
are not prejudicial to the interest of the company.
xvi. To the best of our knowledge and based on explanations given to
us, the term loans availed during the year by the Company have been
used for the purpose for which the same were raised.
xvii. According to the Cash Flow Statement on the balance sheet date
and records examined by us and according to the information and
explanations given to us, on overall basis, we report that no funds
raised on short term basis have, prima facie, been used during the year
for long term investment.
xviii. The Company has not made any preferential allotment to parties
and companies covered under register maintained under Section 301 of
the Companies Act, 1956, during the year and the question of whether
the price at which the shares have been issued is prejudicial to the
interest of the Company does not arise.
xix. The Company has not issued any debentures and hence the question
of creation of any securities does not arise.
xx. The Company has not raised money by any public issues during the
year and hence the question of disclosure and verification of end use
of such money does not arise.
xxi. To the best of our knowledge and belief and according to the
information and explanation given to us, no fraud on or by the Company
was noticed or reported during the year.
For B. K. Khare & Co.
Chartered Accountants
Firm Registration No. 105102W
U. B. Joshi
Partner
Membership No - 044097
Pune: 27th May, 2011
Mar 31, 2010
We have audited the attached balance sheet of SUDARSHAN CHEMICAL
INDUSTRIES LIMITED as at 31st March, 2010, the Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
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.
We report as follows:
1. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Section 227(4A) of the
Companies Act, 1956, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph 1
above:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance sheet, profit and loss account and cash
flow statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956;
e) 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;
f) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Companys Accounting Policies and the Notes thereto, 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 1 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) As explained to us, physical verification of major portion of the
fixed assets as at 31st March, 2010 was conducted by the Management
during the year. In our opinion, the frequency of physical verification
is reasonable having regard to the size of the operations of the
Company and nature of its fixed assets.
(c) During the year, the Company has not disposed off any substantial
or major part of fixed assets.
ii. (a) As explained to us, the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the book records were not material and have been properly dealt with
in the books of account.
iii. 1 (a) According to the information and explanations given to us,
the Company has granted loans amounting to Rs. 24,47,18,947 to 2
parties listed in the Register maintained under Section 301 of the
Companies Act, 1956.
(b) According to the information and explanations given to us, in our
opinion, the rate of interest and other terms and conditions of above
unsecured loans granted by the Company are not prima facie, prejudicial
to the interest of the Company.
(c) According to the information and explanations given to us the
company to whom loans and advances in the nature of loan have been
given is repaying the principal amount as stipulated and is also
regular in payment of interest.
(d) There is no overdue amount of loan granted to the companies listed
in the register maintained under Section 301 of the Companies Act,
1956.
2 (a) According to the information and explanations given to us, the
Company has taken unsecured loans of Rs. 17,18,30,000/- from 11 parties
listed in the Register maintained under Section 301 of the Companies
Act, 1956.
(b) According to the information and explanations given to us, in our
opinion, the rate of interest and other terms and conditions of above
unsecured loans taken by the Company are not prima facie, prejudicial
to the interest of the Company.
(c) According to the information and explanations given to us, the
company is regular in repayment of principal and interest.
(d) There is no overdue amount of loan taken from the companies listed
in the register maintained under Section 301 of the Companies Act,
1956.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchases of
inventory and fixed assets, and with regard to the sale of goods and
services. During the course of our audit, no continuing failure to
correct major weakness has been noticed in the internal controls.
v. In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act 1956,
(a) Based on audit procedures applied by us, to the best of our
knowledge and belief and according to the information and explanations
given to us, we are of the opinion that the contracts or arrangements
that needed to be entered into the register maintained under Section
301 have been so entered.
(b) According to the information and explanations given to us and
excluding certain transactions of purchase of goods and material of
special nature for which alternate quotations are not available, in our
opinion, the contracts or arrangements have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India and the provisions of sections 58A and 58AA or
any other relevant provisions of the Companies Act, 1956 and the Rules
framed thereunder in respect of the deposits accepted from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company pursuant to the Order made by the Central Government for the
maintenance of cost records under Section 209(l)(d) of the Companies
Act, 1956, in respect of Pesticides and are of the opinion that prima
facie the prescribed accounts and records have been maintained. We
have not, however, made a detailed examination of the records with a
view to determining whether they are accurate or complete.
ix. (a) According to the records of the Company and information and
explanations given to us, the Company has generally been 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 statutory dues with the appropriate authorities during the year.
Name of the Statute Nature of Dues Amount (Rs.)
The Central Excise Duty 252,632
Excise Act, 1944
The Central Excise Duty 172,347
Excise Act, 1944
The Central Excise Duty 597,791
Excise Act, 1944
The Central Excise Duty 4,487,025
Excise Act, 1944
The Central Excise Duty 26,032
Excise Act, 1944
The Income Income Tax 3,377,678
Tax Act, 1961
Total 8,913,505
Name of the Statute Financial Years Forum where the
to which it pertains dispute is pending
The Central Excise Act, 1944 2006-07 and 2007-08 CESTAT
The Central Excise Act, 1944 2006-07 to 2008-09 A.C.C.E.
The Central Excise Act, 1944 1999-00 A.C.C.E.
The Central Excise Act, 1944 2004-05 CESTAT
The Central Excise Act, 1944 2004-05 A.C.C.E.
The Income Tax Act, 1961 2004-05 Income Tax(Appeals)
x. The Company does not have accumulated losses as at the end of the
year and the Company has not incurred cash losses during current and
the immediately preceding financial year.
xi. Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in the repayment of dues to financial
institutions and 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 provisions of any Special Statute applicable to Chit Fund,
Nidhi or Mutual Benefit Fund/Societies are not applicable to the
Company.
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
xv. 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,except for the corporate guarantee
issued on behalf of its wholly owned subsidiary Prescient Color
Limited, amounting to Rs.12,25,00,000 and terms and conditions thereof
are not prejudicial to the interest of the company.
xvi. To the best of our knowledge and based on explanations given to
us, the term loans availed during the year by the Company have been
used for the purpose for which the same were raised.
xvii. According to the Cash Flow Statement on the balance sheet date
and records examined by us and according to the information and
explanations given to us, on overall basis, we report that no funds
raised on short term basis have, prima facie, been used during the year
for long term investment.
xviii. The Company has not made any preferential allotment to parties
and companies covered under register maintained under Section 301 of
the Companies Act, 1956, during the year and the question of whether
the price at which the shares have been issued is prejudicial to the
interest of the Company does not arise.
xix. The Company has not issued any debentures and hence the question
of creation of any securities does not arise.
xx. The Company has not raised money by any public issues during the
year and hence the question of disclosure and verification of end use
of such money does not arise.
xxi. To the best of our knowledge and belief and according to the
information and explanation given to us, no fraud on or by the Company
was noticed or reported during the year.
For B. K. Khare & Co.
Chartered Accountants
Firm Registration No. 105 102 W
U. B.Joshi
Partner
Pune: 29th May, 2010 Membership No - 044097