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Panama Petrochem Ltd.

BSE: 524820 Sector: Industrials
NSE: PANAMAPET ISIN Code: INE305C01029
BSE LIVE 15:45 | 18 Aug 203.20 -10.00
(-4.69%)
OPEN

223.50

HIGH

223.50

LOW

201.00

NSE 15:49 | 18 Aug 203.05 -11.30
(-5.27%)
OPEN

218.40

HIGH

218.40

LOW

198.35

OPEN 223.50
PREVIOUS CLOSE 213.20
VOLUME 36791
52-Week high 223.50
52-Week low 60.65
P/E 17.78
Mkt Cap.(Rs cr) 820
Buy Price 0.00
Buy Qty 0.00
Sell Price 202.55
Sell Qty 100.00
OPEN 223.50
CLOSE 213.20
VOLUME 36791
52-Week high 223.50
52-Week low 60.65
P/E 17.78
Mkt Cap.(Rs cr) 820
Buy Price 0.00
Buy Qty 0.00
Sell Price 202.55
Sell Qty 100.00

Panama Petrochem Ltd. (PANAMAPET) - Auditors Report

Company auditors report

To the Members of Panama Petrochem Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Panama PetrochemLimited ("the Company") which comprise the Balance Sheet as at 31 March 2016the Profit and Loss Statement and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditors' Responsibility

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

We have taken into account the provisions of the Act the 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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's directors as well as evaluating the overall presentationof 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2016 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" statement on the matters specified inparagraphs 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 bestof 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 theCompany so far as it appears from our examination of those books;

c. the Balance Sheet the Profit and Loss Statement and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

d. in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e. on the basis of written representations received from the directors as on 31 March2016 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2016 from being appointed as a director in terms of Section 164(2) of theAct;

f. with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer 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) Rules 2014 in 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 to the financial statements;

ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 34 to the financial statements;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Bhuta Shah & Co LLP
Chartered Accountants
Firm Reg. No.: 101474W/ W100100
CA. Virag Shah
Partner
Mumbai 21 May 2016 Membership No.: 153415

"Annexure A"

to Independent Auditors' Report of even date on the standalone financial statements forthe year ended 31 March 2016 referred to in paragraph 1 under the heading of "Reporton Other Legal and Regulatory Requirements"

(i) In respect of fixed Assets

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

(b) As explained to us all the fixed assets have not been physically verified by themanagement during the year but there is regular programme of verification which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

(c) According to information & explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) In respect of its inventories:

As explained to us inventories have been physically verified during the year by themanagement and in our opinion the frequency of verification is reasonable. In our opinionand on the basis of our examination of the records the Company is generally maintainingproper records of its inventories. No material discrepancy was noticed on physicalverification of stocks by the management as compared to book records.

(iii) The Company has not granted any loan secured or unsecured to companies firms orother parties covered in the register maintained under Section 189 of the Act andaccordingly the provisions of Clause (iii) (a) to (c) of Para 3 of the Order are notapplicable to the Company.

(iv) ) In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of section 185 and 186 of the Act withrespect to the guarantees and investments made. The Company has not given any loans duringthe year.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public as per the provisions of section 73 to 76 of the Actand rules framed there under and accordingly the provisions of Clause (v) of Para 3 ofthe Order are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection (1) of section 148 of the Act related to manufacture of specialty petroleumproducts and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained.

(vii) In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/accrued in the books ofaccounts in respect of undisputed statutory dues including Provident Fund Employees'State Insurance Income-tax Sales-tax Wealth Tax Service Tax duty of Customs duty ofExcise Value Added Tax cess and any other statutory dues have generally been regularlydeposited during the year by the Company with the appropriate authorities. According tothe information and explanations given to us there were no outstanding statutory dues ason 31 March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us there are no duesoutstanding in respect of income tax sales tax or wealth tax or value added tax whichhave not been deposited on account of any dispute.

According to the information and explanations given to us the following dues inrespect of service tax duty of customs and duty of excise have not been deposited by theCompany on account of disputes:

Name of the Statute Nature of the Dues Amount (Rs. In lakhs) Period to which the amount relates Forum where dispute is pending
Finance Act 1994 Service Tax and Penalty 58.25 FY 2007-08 to FY 2011-12 Commissioner of Central Excise (Appeals) - IV Mumbai
Finance Act 1994 Service Tax 22.46 FY 2012-13 Addl. Commissioner Service Tax - 1 Mumbai
Custom Act 1962 Custom Duty Fine and Penalty 126.701 FY 2011-12 CESTAT Mumbai
Central Excise Act 1944 Central Excise Duty 66.511 April 2009 to November 2013 CESTAT Ahmedabad
Central Excise Act 1944 Central Excise Duty 23.171 December 2013 to October 2014 CESTAT Ahmedabad

1Net of amounts paid under protest & pre-deposit.

(viii) In our opinion and according to the information and explanations given to usthe company has not defaulted in the repayment of dues to banks. The company did not haveany borrowings from financial institutions government or debenture holders.

(ix) Based on our audit procedures and on the information and explanations given by themanagement the term loans taken by the Company have been applied for the purpose forwhich they were obtained. The Company has not raised moneys by way of initial public offeror further public offer (including debt instruments) during the year.

(x) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.

(xi) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid / provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly the provisions of Clause (xii) of Para 3 ofthe Order are not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions 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 Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with the directors. Accordingly theprovisions of Clause (xv) of Para 3 of the Order are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and accordingly question of obtaining registration thereof doesnot arise.

For Bhuta Shah & Co LLP
Chartered Accountants
Firm Reg. No.: 101474W/ W100100
CA. Virag Shah
Partner
Mumbai 21 May 2016 Membership No.: 153415

"Annexure B"

to Independent Auditors' Report of even date referred to in paragraph 2(f) under theheading of "Report on Other Legal and Regulatory Requirements"

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of he Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PanamaPetrochem Limited ("the Company") as of 31 March 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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 design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

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 Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively 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 financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether 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 that in reasonable detail accurately 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 principles and 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 acquisition use or 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Bhuta Shah & Co LLP
Chartered Accountants
Firm Reg. No.: 101474W/ W100100
CA. Virag Shah
Partner
Mumbai 21 May 2016 Membership No.: 153415