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BASF India Ltd.

BSE: 500042 Sector: Industrials
NSE: BASF ISIN Code: INE373A01013
BSE LIVE 15:41 | 02 Dec 1022.40 -27.15
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NSE LIVE 15:55 | 02 Dec 1024.85 -27.80
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OPEN

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OPEN 1045.00
PREVIOUS CLOSE 1049.55
VOLUME 2153
52-Week high 1288.95
52-Week low 699.90
P/E
Mkt Cap.(Rs cr) 4425.97
Buy Price 0.00
Buy Qty 0.00
Sell Price 1022.40
Sell Qty 3.00
OPEN 1045.00
CLOSE 1049.55
VOLUME 2153
52-Week high 1288.95
52-Week low 699.90
P/E
Mkt Cap.(Rs cr) 4425.97
Buy Price 0.00
Buy Qty 0.00
Sell Price 1022.40
Sell Qty 3.00

BASF India Ltd. (BASF) - Auditors Report

Company auditors report

To the Members of BASF India Limited

Report on the Financial Statements

We have audited the accompanying financial statements of BASF India Limited ("theCompany")which comprise the Balance Sheet as at 31 March 2016the Statement ofProfit and Loss and the Cash Flow Statement for the year then endedand a summary of thesignificant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act2013 ("the Act") with respect to the preparation andpresentation of these financial statements that give a true and fair view of the financialpositionfinancial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in Indiaincluding the Accounting Standardsspecified under Section 133 of the Actread with Rule 7 of the Companies (Accounts)Rules2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and designimplementation and maintenance of adequate internal financialcontrolsthat were operating effectively for ensuring the accuracy and completeness of theaccounting recordsrelevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatementwhetherdue to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Actthe accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act.Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements.The procedures selected depend on theauditor’s judgmentincluding the assessment of the risks of material misstatement ofthe financial statementswhether due to fraud or error.In making those riskassessmentsthe auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances.An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directorsas well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to usthe aforesaid financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in Indiaof the state of affairs of the Company as at 31March 2016and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order2016 (‘theOrder’) issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Actwe give in the Annexure Aa statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Actwe report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinionproper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheetthe Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

(d) In our opinionthe aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Actread with Rule 7 of the Companies(Accounts) Rules2014.

(e) On the basis of the written representations received from the directors as on 31March 2016taken on record by the Board of Directorsnone of the directors aredisqualified as on 31 March 2016from being appointed as a director in terms of Section164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controlsrefer to ourseparate Report in "Annexure B"; and

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules2014in our opinionand 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 financialposition in its financial statements - Refer Note 25 (10) and Note 25 (20) to thefinancial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amountsrequired to be transferredto theInvestor Education and Protection Fund by the Company.

Annexure A to the Independent Auditors' Report - 31 March 2016

(Referred to in our report of even date)

i. (a) The Company has maintained proper records showing full particularsincludingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of two years.In ouropinionthis periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets.No material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Companythe title deeds of immovable properties are heldin the name of the Companyexcept in respect of the lease cum sale agreement for one ofthe Company's manufacturing locations (gross block: Rs.16.4 million and net block Rs.11.6million included under leasehold land)where the Company is in the process of complyingwith the terms of the lease cum sale agreement so as to execute the final sale agreementand obtain the right to ownership.

ii. The inventoryexcept goods-in-transit and stocks lying with third partieshas beenphysically verified by the management during the year.In our opinionthe frequency of suchverification is reasonable.For stocks lying with third parties at the year-endwrittenconfirmations have been obtained.The discrepancies noticed on verification between thephysical stocks and the book records were not material.

iii. The Company has not granted any loanssecured or unsecuredtocompaniesfirmsLimited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Companies Act2013 ("theAct").Accordinglyparagraphs 3 (iii) (a)(b) and (c) of the Order are not applicableto the Company.

iv. In our opinion and according to the information and explanations given to ustheCompany has not given any loanmade any investmentgiven any guaranteeor provided anysecurity under Section 185 and 186 of the Act.Accordinglyparagraph 3 (iv) of the Order isnot applicable to the Company.

v. In our opinionand according to the information and explanations given to ustheCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the rules framed there under.Accordinglyparagraph 3(v) of the Order is notapplicable to the Company.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules prescribed by the Central Government for maintenance of cost records underSection 148 (1) of the Act and are of the opinion that prima faciethe prescribed accountsand records have been made and maintained.Howeverwe have not made a detailed examinationof the records.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Companyamounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident FundEmployees' StateInsuranceIncome-taxSales-taxService taxDuty of CustomsDuty of ExciseValue addedtaxand other material statutory dues have been generally regularly deposited during theyear by the Company with the appropriate authorities.

According to the information and explanations given to usno undisputed amounts payablein respect of Provident FundEmployees' State InsuranceIncome-taxSales-taxServicetaxDuty of CustomsDuty of ExciseValue added tax and other material statutory dues werein arrears as at 31 March 2016 for a period of more than six months from the date theybecame payable.

(b) According to the information and explanations given to usthere are no dues ofIncome-taxSales-taxService taxDuty of CustomsDuty of Excise and Value added tax whichhave not been deposited with the appropriate authorities on account of any dispute otherthan those mentioned in the Appendix to this report.

viii. In our opinion and according to the information and explanations given to ustheCompany has not defaulted in repayment of dues to financial institutions or banks.TheCompany does not have any loans or borrowings from government or dues to debenture holdersduring the year.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments).In our opinion and according to the informationand explanations given to usthe term loans taken by the Company have been applied for thepurpose for which they are raised.

x. According to the information and explanations given to usno fraud by the Company oron the Company by its officers or employees has been noticed or reported during the courseof our audit.

xi. According to the information and explanations give to us and based on ourexamination of the records of the Companythe Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to ustheCompany is not a Nidhi Company.Accordinglyparagraph 3(xii) of the Order is not applicableto the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Companytransactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations give to us and based on ourexamination of the records of the Companythe Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.Accordinglyparagraph 3 (xiv) of the Order is not applicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Companythe Company has not entered into any non-cashtransactions with directors or persons connected with him.Accordinglyparagraph 3(xv) ofthe Order is not applicable to the Company.

xvi. According to the information and explanations given to usthe Company is notrequired to be registered under Section 45-IA of the Reserve Bank of IndiaAct1934.Accordinglyparagraph 3(xvi) of the Order is not applicable to the Company.

Appendix to the Independent Auditors’ Report - 31 March 2016

Name of tne Statute Nature of tne dues Amounts (in million) Amount paid in dispute (in million) Period Forum where the dispute is pending for CARO
Central Excise Act1944 Duty interest and penalty 0.85 2014-2015 Additional Commissioner
1.83 - 1982-1983 Assistant Commissioner of Central
2008-2009 Excise
2011-2012
0.66 - 2007-2008 Central Excise & Service Tax
Appellate Tribunal
3.31 - 2007-2008 Commissioner of Central Excise
2.04 - 2008-2009 Commissioner (Appeals)
0.51 - 2009-2010 Deputy Commissioner of Central
2010-2011 Excise
3.13 - 1992-1993 High Court
2000-2001
12.33 - Total
The Customs Act1962 Duty interest and penalty 0.89 - 2012-2013 Assistant Commissioner of Central Excise
12.10 - 1992-1993 Central Excise & Service Tax Appellate Tribunal
95.00 - 2005-2006 Supreme Court
107.99 - Total
The Service Tax Act 1975 TaxInterest and Penalty 0.04 - 2008-2010 Asst.Commissioner-Central Excise
2010-2011
8.16 - 2005-2010 Central Excise & Service Tax
2009-2010 Appellate Tribunal
Apr.2008 to
Jan.2013
Jan.2005 to
Mar.2008
1.56 - Dec.2007 - Commissioner (Appeals)
Sep.2009
21.80 - 2005-2006 to Commissioner of Central Excise
2009-2010
13.87 - 2006-2010 Commissioner of Service Tax
2008-2009 to
2012-2013
2009-2010
0.12 - Jan.2012 to Aug.2014 Asst.Commissioner-Central Excise
45.55 - Total
State and Central Sales Tax Act Non Submission of forms 0.38 - 2006-2007 Additional Commissioner of Sales Tax
0.33 - 2012-2013 Assessing Officer
26.51 - 2013-2014 Assistant Commissioner of Commercial Tax
4.02 - 2002-2003 Commissioner of Sales Tax
2007-2008
8.09 0.20 2012-2013 Deputy Commissioner of Sales Tax
2011-2012
2010-2011
19.77 8.10 2011-2012 Deputy Commissioner of Sales Tax
2010-2011 (Appeals)
2008-2009
2009-2010
3.22 - 2005-2006 Joint Commissioner of Sales Tax
2008-2009
169.01 21.90 2006-2007 Joint Commissioner of Sales Tax
2007-2008 (Appeals)
2008-2009
2009-2010
2010-2011
2011-2012
231.33 30.20 Total
Tax interest and penalty 1.67 - 2006-2007 Additional Commissioner of Sales Tax
0.14 - 2011-2012 Assistant Commissioner of Sales Tax
1.56 1.07 2009-2010 Deputy Commissioner of Sales Tax
2010-2011
56.86 - 2007-2008 Deputy Commissioner of Sales Tax (Appeals)
2008-2009
2009-2010
2011-2012
2010-2011
20.72 0.74 2013-2014 Joint Commissioner of Sales Tax
2006-2007
2005-2006
364.16 38.97 2006-2007 Joint Commissioner of Sales Tax (Appeals)
2007-2008
2008-2009
2009-2010
201 0-201 1
2011-2012
1.61 0.07 2006-2007 Tribunal
2007-2008
1993-1994
1994-1995
2004-2005
7.71 - 2002-2003 Commissioner of Sales Tax
454.43 40.85 Total
The Income Tax Act 1961 Tax interest and penalty 0.02 - 2010-2011 Assistant Commissioner of Income Tax
50.73 37.50 2006-2007 Commissioner of Income Tax
2008-2009 (Appeals)
2009-2010
2010-2011
54.50 7.60 2009-2010 Deputy Commissioner of Income Tax
122.70 - 2012-2013 Dispute Resolution Panel
2.70 2.70 2000-2001 High Court
2003-2004
2006-2007
476.41 233.67 2000-2001 Income Tax Appellate Tribunal
2002-2003
2003-2004
2006-2007
2007-2008
2008-2009
2009-2010
2010-2011
2011-2012
707.06 281.47 Total

Annexure B to the Independent Auditors' Report of even date on the Financial Statementsof BASF India Limited - 31 March 2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act2013 ("the Act")

We have audited the internal financial controls over financial reporting of BASF IndiaLimited ("the Company") as of 31 March 2016 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI').Theseresponsibilities include the designimplementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its businessincluding adherence to company's policiesthe safeguarding of itsassetsthe prevention and detection of frauds and errorsthe accuracy and completeness ofthe accounting recordsand the timely preparation of reliable financial informationasrequired under the Companies Act2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit.We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditingissued by ICAI and deemed tobe prescribed under Section 143(10) of the Actto the extent applicable to an audit ofinternal financial controlsboth applicable to an audit of Internal Financial Controlsandboth issued by the Institute of Chartered Accountants of India.Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financialreportingassessing the risk that a material weakness existsand testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk.Theprocedures selected depend on the auditor's judgementincluding the assessment of therisks of material misstatement of the financial statementswhether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles.A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords thatin reasonable detailaccurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principlesand that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisitionuseor disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreportingincluding the possibility of collusion or improper management override ofcontrolsmaterial misstatements due to error or fraud may occur and not bedetected.Alsoprojections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsorthat the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinionthe Company hasin all material respectsan adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2016based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For B S R & Co.LLP

Chartered Accountants

Firm’s Registration No: 101248W/ W-100022

Vijay Mathur

Partner

Membership No: 046476

Mumbai

3rd May2016

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