You are here » Home » Companies » Company Overview » Punjab Alkalies & Chemicals Ltd

Punjab Alkalies & Chemicals Ltd.

BSE: 506852 Sector: Industrials
NSE: PUNALKALI ISIN Code: INE607A01014
BSE LIVE 15:00 | 22 Aug 16.00 -0.60
(-3.61%)
OPEN

17.00

HIGH

17.00

LOW

16.00

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 17.00
PREVIOUS CLOSE 16.60
VOLUME 5825
52-Week high 27.40
52-Week low 12.10
P/E
Mkt Cap.(Rs cr) 43
Buy Price 16.00
Buy Qty 135.00
Sell Price 17.35
Sell Qty 50.00
OPEN 17.00
CLOSE 16.60
VOLUME 5825
52-Week high 27.40
52-Week low 12.10
P/E
Mkt Cap.(Rs cr) 43
Buy Price 16.00
Buy Qty 135.00
Sell Price 17.35
Sell Qty 50.00

Punjab Alkalies & Chemicals Ltd. (PUNALKALI) - Auditors Report

Company auditors report

To the Shareholders of

PUNJAB ALKALIES & CHEMICALS LIMITED

Report on the Financial Statements:

1. We have audited the accompanying financial statements of Punjab Alkalies &Chemicals Limited which comprise the Balance Sheet as at 31st March 2016 and theProfit 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 Financial Statements:

2. 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 preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the Accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rule 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the Assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgement and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditors’ Responsibility:

3. Our responsibility is to express an opinion on these financial statements based onour audit. We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions 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.

4. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company's Directors as well as evaluating the overallpresentation of the financial statements.

5. 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:

6. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

(a) In the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2016;

(b) In the case of the Profit and Loss Statement of the loss for the year ended onthat date; and

(c) In the case of the Cash Flow Statement of the Cash Flows for the year ended onthat date.

Emphasis of Matter

7. We draw attention to the following Note in the financial statements:

"Note No. 1(a): The financial statements are prepared under the historicalcost convention and on the basis of going concern. Accumulated losses have resulted inerosion of net worth of the Company. The financial statements have been prepared on agoing concern basis on the strength of continued support of the promoters financialinstitutions and banks. The Company has filed a reference before the Board for Industrialand Financial Reconstruction (BIFR). BIFR has registered the company's reference as SickIndustrial Company as Case No. 152/2015. At the request of Company CDR Empowered Group hassanctioned conversion of outstanding loan amount of Rs.4286 lacs into 6605246 EquityShares as per SEBI Formula i.e. @ Rs.22.95 (Face Value Rs.10/- per share) and FullyConvertible Debentures (FCD) amounting to Rs.2770 lacs. It was further provided that theCompany will issue Non-Convertible Debentures (NCD) to CDR Lenders to the extent of Markto Market Loss in respect of fresh Equity issued by PACL. These FCDs and NCDs shall bearcoupon rate equivalent to IDBI base rate as on 30th June 2015 i.e. 10% p.a. CDR EGfurther approved waiver of interest on outstanding O.T.S. amount during period April toJune 2015. The Company has received sanctions from IDBI Bank Limited IFCI Limited andLIC of India Limited. The Company has been given time upto 31st October 2016 for the saidconversion. The individual sanction from Punjab National Bank and Punjab & Sind Bankis awaited. The Company is optimistic of a favourable decision in the matter. The Board ofDirectors considering the future plan for operations and support of the promoterslenders business associates and workmen is hopeful of improved profitability leading toimprovement in its financial position. All expenses and incomes to the extent consideredpayable and receivable respectively unless stated otherwise have been accounted for onmercantile basis."

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements:

8. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure-A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

9. 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 purpose 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 these 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 financial statements comply with the AccountingStandards 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 and taken onrecord by the Board of Directors none of the Directors of the Company is disqualified ason 31st 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 wherever applicable-Refer Note Nos. 20 30 and 32 tothe financial statements.

ii) The Company is not required to make provisions as at 31st March 2016 under theapplicable law or accounting standards for material foreseeable losses on long termcontracts including derivative contracts.

iii) There has been no amount required to be transferred to the Investors Education andProtection Fund by the company during the year ended 31st March 2016.

For A.K. SOOD & ASSOCIATES For S.TANDON & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Registration No. 000072N Firm Registration No. 006388N
Sd/- Sd/-
(GAURAV SOOD) (H.S. KHURANA)
Place: Chandigarh Partner Partner
Date : May 26 2016 Membership No. 507583 Membership No. 86331

ANNEXURE -A TO THE INDEPENDENT AUDITORS’ REPORT

Annexures referred to in Paragraph (8) of The Auditor's Report of even date to theShareholders of PUNJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended31st March 2016.

(i) a) The Company has maintained proper records showing full particulars includingthe quantitative details and situation of Fixed Assets.

b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.

c) According to the information and 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) a) The stock of Finished Goods Stores Spare Parts and Raw Material lying in thefactory has been physically verified by the management during /at the year-end. In ouropinion and according to information and explanations given to us the frequency ofphysical verification is reasonable.

b) In our opinion and according to the information and explanations given to us theprocedures of the physical verification of stock followed by the management are reasonableand 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 theCompany is maintaining proper records of its inventories and no material discrepancieswere noticed on such verification.

d) Discrepancies noticed on physical verification of inventory were not material andhave been adequately dealt with in the books of account.

(iii) The Company has not granted any loans secured or unsecured to Companies Firmsor other parties covered in the register maintained under Section 189 of the CompaniesAct 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

(v) The Company has not accepted any deposits from the public during the year withinthe meaning of Section 73 to 76 of the Act and the Rules framed there-under.

(vi) We have broadly reviewed the books of account as required to be maintained by theCompany under Section 148(1) of the Companies Act 2013 and are of the opinion that primafacie the prescribed accounts and the records have been made and maintained.

(vii) a) According to the information and explanation to us and on the basis of ourexamination of the records of the company amount deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees StateInsurance Income Tax Sales Tax Wealth Tax Custom Duty Excise Duty and Cess and othermaterial statutory dues have been regularly deposited with the appropriate authoritiesduring the year by the company. As explained to us there were no arrears of the statutorydues for the period more than six months from the date they became payable at the end ofthe Financial year.

b) Following dues are not deposited on account of disputes pending at various forums:

Name of the Statue Nature of Dues Amount (Rs. in Lacs) Period to which amount relates Forum where dispute is pending
Central Excise Act 1944 Excise duty and Penalty 13.58 July’14 to Feb’15 Additional Commissioner Central Excise Chandigarh
Central Excise Act 1944 Excise duty and Penalty 16.43 July’14 to Feb’15 Additional Commissioner Central Excise Chandigarh
Central Excise Act 1944 Excise duty and Penalty 60.17 2004-2008 CESTAT
Central Excise Act 1944 Excise duty and Penalty 5.49 2004-05 to 2008 and April 2008 to June 2008 CESTAT
Finance Act1994 Service T ax and Penalty 4.66 Apr’11 to Dec’11 CESTAT
Finance Act1994 Service T ax and Penalty 116.09 Feb’07 to Mar’11 CESTAT
Central Excise Act 1944 Excise Duty and Penalty 3.11 January 2012 to November 2012 CESTAT
Central Excise Act 1944 Excise Duty and Penalty 2.66 July 2011 to December 2011 CESTAT
Finance Act1994 Service T ax & Penalty 25.79 January 2012 to November 2012 CESTAT
Central Excise Act 1944 Excise Duty and Penalty 0.28 July 2013 to December 2013 Superintendent Central Excise Naya Nangal
Finance Act1994 Service T ax & Penalty 11.72 July 2013 to December 2013 CESTAT
Finance Act1994 Service T ax & Penalty 9.98 December 2012 to June 2013 CESTAT
Finance Act1994 Service T ax & Penalty 19.9 January 2014 to June 201 4 CESTAT
Central Excise Act 1944 Excise Duty and Penalty 5.47 January 2012 to November 2012 Asstt. Commissioner Central Excise Ropar
Central Excise Act 1944 Excise Duty and Penalty 6.37 1996-97 Asstt. Commissioner Central Excise Ropar
Central Excise Act 1944 Excise Duty and Penalty 7.08 1994-95 Asstt. Commissioner Central Excise Ropar
Central Excise Act 1944 Excise Duty and Penalty 3.82 1995-96 Asstt. Commissioner Central Excise Ropar
Total 312.60

(viii) According to the information and explanations given to us the company has notdefaulted in repayment of dues to the banks during the year.

(ix) According to the information and explanations given to us no term loan has beenreceived by the company during previous year.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid/ provided anymanagerial remuneration. Accordingly paragraph 3 (xi) of the Order is not applicable.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

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 him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi) The company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For A.K. SOOD & ASSOCIATES For S.TANDON & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Registration No. 000072N Firm Registration No. 006388N
Sd/- Sd/-
(GAURAV SOOD) (H.S. KHURANA)
Place: Chandigarh Partner Partner
Date : May 26 2016 Membership No. 507583 Membership No. 86331

ANNEXURE -B TO THE INDEPENDENT AUDITORS’ REPORT

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

We have audited the internal financial controls over financial reporting of PunjabAlkalies and Chemicals Ltd. as of 31 March 2016 in conjunction with our audit of theCompany 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

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 Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated 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 A.K. SOOD & ASSOCIATES For S.TANDON & ASSOCIATES
Chartered Accountants Chartered Accountants
Firm Registration No. 000072N Firm Registration No. 006388N
Sd/- Sd/-
(GAURAV SOOD) (H.S. KHURANA)
Place: Chandigarh Partner Partner
Date : May 26 2016 Membership No. 507583 Membership No. 86331