You are here » Home » Companies » Company Overview » Southern Petrochemicals Industries Corporation Ltd

Southern Petrochemicals Industries Corporation Ltd.

BSE: 590030 Sector: Agri and agri inputs
NSE: SPIC ISIN Code: INE147A01011
BSE LIVE 15:56 | 18 Aug 24.90 -0.45
(-1.78%)
OPEN

25.00

HIGH

25.30

LOW

24.65

NSE 15:42 | 18 Aug 24.85 -0.55
(-2.17%)
OPEN

25.30

HIGH

25.35

LOW

24.60

OPEN 25.00
PREVIOUS CLOSE 25.35
VOLUME 49985
52-Week high 31.85
52-Week low 17.60
P/E 20.08
Mkt Cap.(Rs cr) 550
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 25.00
CLOSE 25.35
VOLUME 49985
52-Week high 31.85
52-Week low 17.60
P/E 20.08
Mkt Cap.(Rs cr) 550
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Southern Petrochemicals Industries Corporation Ltd. (SPIC) - Auditors Report

Company auditors report

TO THE MEMBERS OF SOUTHERN PETROCHEMICAL INDUSTRIES CORPORATION LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of SOUTHERNPETROCHEMICAL INDUSTRIES CORPORATION LIMITED ("the Company") which comprisethe Balance Sheet as at 31st March 2017 the Statement of Profit and Loss and the CashFlow Statement for the year then ended and a summary of the significant accountingpolicies 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 thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the AccountingStandards prescribed under section 133 of the Act.

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 design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the standalone financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the standalone financial statements. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone financial statements that give atrue and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone financialstatements. We believe that the audit evidence obtained by us is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.

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 31st March 2017 and its Profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to Note No. 28(ii) of the financial statements regarding computationof subsidy based on the provisional retention price in line with the Government's policydated 17th June 2015 as the final retention price has not been announced by theDepartment of Fertilizers. The necessary adjustments if any will be made when the finalretention price is notified by the Department of Fertilizers.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit we report to theextent applicable 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 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 opinion the aforesaid standalone financial statements comply with theAccounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from 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 controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements – refer Note 30 of the financialstatements;

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the standalone financialstatements as regards its holding and dealings in Specified Bank Notes as Defined in theNotification S.O. 3407(E) dated the 8th November 2016 of the Ministry of Finance duringthe period from 8th November 2016 to 30th December 2016. Based on audit proceduresperformed and the representations provided to us by the management we report that thedisclosures are in accordance with the books of account maintained by the Company and asproduced to us by the Management.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in Paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' Section of our report of even date)

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

(b) Some of the fixed assets were physically verified during the year by the Managementin accordance with a programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals.

According to the information and explanations given to us no material discrepancieswere noticed on such verification. (c) According to the information and explanations givento us and the records examined by us and based on the examination of the registered saledeed / transfer deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date. (ii) As explained to us the inventories werephysically verified during the year by the Management at reasonable intervals and nomaterial discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. (vi) The maintenance of cost records has beenspecified by the Central Government under section 148(1) of the Companies Act 2013. Wehave broadly reviewed the cost records maintained by the Company pursuant to the Companies(Cost Records and Audit) Rules 2014 as amended prescribed by the Central Governmentunder sub-section (1) of Section 148 of the Companies Act 2013 and are of the opinionthat prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales Tax Service TaxCustoms Duty Excise Duty Value Added Tax cess and other material statutory duesapplicable to it to the appropriate authorities. (b) There were no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax SalesTax Service Tax Customs Duty Excise Duty Value Added Tax cess and other materialstatutory dues in arrears as at 31 March 2017 for a period of more than six months fromthe date they became payable.

(c) Details of dues of Sales Tax Service Tax and Excise Duty which have not beendeposited as on 31 March 2017 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates Amount Involved (Rs. in lac) Amount Unpaid (Rs. in lac)
The Central Excise Act 1944 Excise Duty Commissioner of Central Excise (Appeals) / Customs Excise and 1998-99 to 2006-07 336.30 300.03
Service Tax Appellate Tribunal
Commissioner of Central Excise
The Finance Act 1994 Service Tax (Appeals) / Customs Excise and Service Tax Appellate Tribunal / Hon'ble Madras High Court 2003-04 to 2011-12 226.61 173.99
The Sales Local Deputy Commissioner (Appeals) / Additional Commissioner
Tax Act under various state enactments Sales Tax (Appeals) / Sales Tax Appellate Tribunal / Hon'ble Madras High Court and High Court of Telangana and Andhra Pradesh 1996-97 to 2012-13 1687.03 1295.56

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks. TheCompany does not have any borrowings from financial institutions and government and hasnot issued any debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe CARO 2016 Order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable. (xiii) In our opinion and according to the informationand explanations given to us the Company is in compliance with Section 188 and 177 of theCompanies Act 2013 where applicable for all transactions with the related parties andthe details of related party transactions have been disclosed in the financial statementsetc. as required by the applicable accounting standards. (xiv) During the year the Companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures and hence reporting under clause (xiv) of CARO 2016 Order is notapplicable to the Company. (xv) In our opinion and according to the information andexplanations given to us during the year the Company has not entered into any non-cashtransactions with its directors or persons connected with him and hence provisions ofsection 192 of the Companies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-I of the ReserveBank of India Act 1934.

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' Section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SOUTHERNPETROCHEMICAL INDUSTRIES CORPORATION LIMITED ("the Company") as of 31 March2017 in conjunction with our audit of the standalone financial statements of the Companyfor 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. 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 judgement 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 refl ect 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm's Registration Number: 008072S)
M K Ananthanarayanan
Place : Chennai Partner
Date : 18 May 2017 (Membership Number: 19521)