TOTHEMEMBERSOF AMINES &PLASTICIZERS LIMITED
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Amines &Plasticizers Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss (including other comprehensive income)the Statement of Cash Flows for the year then ended and including a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas 'Standalone Financial Statements').
2. 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 Companies Act 2013 (the' Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards ('Ind AS') specified under Section 133 of the Act of thestate of affairs (financial position) of the Company as at 31 March 2020 and its profit(financial performance including other comprehensive income ) its cash flows and thechanges in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143 (10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Codeof Ethics issued by the Institute of Chartered Accountants ofIndia ('ICAI') together with the ethical requirements that are relevant to our audit ofthe standalone financial statements under the provisions of the Companies Act 2013 andthe Rules There under and we have fulfilled our other ethical responsibilities inaccordance with These requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Emphasis of Matter
4. We draw your attention to Note 44 to the Statement of Standalone audited Results forthe quarter ended March 31 2020 which describes the impact of the outbreak ofCoronavirus (COVID-19) on the business operations of the Company. In view of the highlyuncertain economic environment a definitive assessment of the impact on the subsequentperiods is highly dependent upon circumstances as they evolve. Our conclusion is notmodified in respect of this matter. Due to the COVID-19 related lockdown we were unableto observe the Management's year- end physical verification of inventory at certainlocations of the Company in India amounting to Rs 5939.19 lacs. We have performedalternate procedures to audit the existence of inventory as per the guidance provided inSA 501 "Audit Evidence - Specific Considerations for Selected Items" whichincludes inspection of supporting documentation relating to purchases production salesresults of cyclical count performed by the Management through the year and such otherthird party evidences where applicable and have obtained sufficient appropriate auditevidence to issue our unmodified opinion on These Standalone Financial Results. Our reportis not modified in respect ofthis matter.
5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion There on and we do not provide a separate opinion onThese matters.
6. We have determined the matter described below to be the key audit matters determinedto be communicated in our report on standalone financial statements.
|Key Audit Matters ||How our audit addressed the key audit matter |
|a. Recoverability of Amounts from APL Infotech Limited (Subsidiary Company till 04.03.2020) (as described in note 5 of the Ind AS financial statements) || |
|As at 31st March 2020 - Loans aggregating to Rs 300 lakhs remained outstanding. ||Our audit procedures included and were not limited to the following:- |
|During the current year company sold its entire stake from APL Infotech Limited (a 51 % subsidiary company) via agreement of sale of shares. According to Memorandum of Understanding Cum Guarantee Agreement APL Infotech Limited will settle the entire dues including the interest accrued till the date by making a onetime settlement payment of Rs 300 Lakhs. || Obtained an understanding of management's process and evaluated design and tested operating effectiveness of controls around recoverable ability of the said amounts. |
|Total amount of Loan amount & Interest outstanding as on date of transfer was' 601.91 Lakhs (Net of adjustment for interest accrued in current year till date of transfer) against which Rs.300.00 Lakhs will be paid over period of 4years by APL Infotech Limited. Further the recoverable amount is backed by guarantee given by purchaser of shares of APL Infotech Ltd. || Assessed cash flow forecasts to ensure consistency with current operations of the Company and performed sensitivity analysis on key assumptions used in management's calculated recoverable value. |
| || Verification of sale of shares agreement & Understanding Cum Guarantee Agreement and cash flow arising on sale of shares. |
| || Evaluated the adequacy of disclosures given in the standalone financial statements including disclosure of significant assumptions judgements and sensitivity analysis performed in accordance with applicable accounting standards. |
|Exceptional amount on account of one time settlement aggregating to Rs 301.91 Lakhs is reported under as exceptional item in Statement of Profit & Loss - Refer Note No.43. || |
|Considering the materiality of the amounts involved the significant management judgement required in estimating the timelines of recoverability of the amounts and such estimates and judgements being inherently subjective this matter has been identified as a key audit matter for the current year audit. || |
|b. Capitalization of property plant and equipment || |
|During the year ended March 31 2020 the Company has incurred significant capital expenditure. Further out of the total additions to property plant and equipment of Rs 3 444.42 Lakhs in the current year significant part of the capitalization pertains to the EMEA Plant. ||Our audit procedures included and were not limited to the following: |
| || Performed walk-through of the capitalization process and tested the design and operating effectiveness of the controls in the process. |
|The EMEA Plant have been successfully commissioned and capitalized during the year . || Assessed the nature of the additions made to property plant and equipment and capital work-in-progress on a test check basis to test that they meet the recognition criteria as set out in para 16 to 22 of Ind AS 16 including any such costs incurred specifically for trial run. |
|Significant level of judgement is involved to ensure that the aforesaid capital expenditure / additions meet the recognition criteria of Ind AS 16 - Property Plant and Equipment specifically in relation to determination of trial run period and costs associated with trial runs for it to be ready for intended use. || |
| || Assessed that the borrowing cost capitalized is in accordance with the accounting policy of the Company. |
|As a result the aforesaid matter was determined to be a key audit matter || Reviewed the project completion/handover certificate provided by the management to determine whether the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
7. The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the included in the Company's annual reportbut does not include the standalone financial statements and our auditor's report Thereon.
8. Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion There on.
9. In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that There is a material misstatement ofthis other information; we are required to report that fact. We have nothing to report inthis regard.
Responsibility of Management for the Standalone Financial Statements
10. The Company's Board of Directors are responsible for the matters stated in Section134 (5) of the Companies Act 2013 ("the Act") with respect to the preparationof These standalone financial statements to give a true and fair view of the state ofaffairs (financial position) profit or loss (financial performance including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Ind AS specifiedunder Section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies making judgments andestimates that are reasonable and prudent;and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether dueto fraud or error.
11. In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
12. The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
13. Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detecta material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of These standalone financial statements.
14. As part of an audit in accordance with SAs we have exercised professional judgmentand maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and have obtained audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(I)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
15. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
16. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bearonourin dependence and where applicable related safeguards.
17. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are There fore the key audit matters. We describe These matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
18. As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
19. As required by the Companies (Auditor's Report) Order 2016' issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act (hereinafterreferred to as the "Order") we give in the "Annexure A'" astatement on the matters specified in paragraphs 3 and4 of the Order to the extentapplicable.
20. Further to our comments in Annexure A as required by Section 143(3) of the Actwere port that
i. 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;
ii. In our opinion proper books of account as required bylaw have been kept by theCompany so far as it appears from our examination of those books;
iii. The Standalone Financial Statements dealt with by this report are in agreementwith the books of account;
iv. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act;
v. On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164(2) of the Act;
vi. 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" expressed an unmodified opinion;
21. 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 the standalone financial statements ReferNote31 to the standalone financialstatements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich There were any material foreseeable losses needs to be provided as at March 312020;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31stMarch2020.
|For B D G & Associates |
|Chartered Accountants |
|FRN No. 119739W |
|Nikhil Rathod |
|Membership No.: 161220 |
|Place: Mumbai |
|Date: 29th June 2020 |
|UDIN : 20161220AABV8019 |
Annexure A to Independent Auditors' Report
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation
of Property Plant& Equipment.
(b) The Company has a regular program of physical verification of its property plantand equipment under which property plant and equipment are verified in a phased mannerover a period of three years which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. In accordance with this program certainproperty plant and equipment were verified during the year and no material discrepancieswere noticed on such verification.
(c) The title deeds of all the immovable properties (which are included under the Note3 'Property plant and equipment') are held in the name of the Company.
2. The Inventory physical verification have been conducted at reasonable intervals bythe Management during the year except for goods-in-transit and stocks lying with thirdparties. For stocks lying with the third parties at the yearend written confirmationshave been obtained by the management .The discrepancies noticed on physical verificationof inventory by Management as compared to book records were not material.
3. The Company has granted interest free unsecured loans to one company covered in theregister maintained under Section 189 of the Act:
a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company's interest.
b) In respect of the aforesaid loans the schedule repayment of principal and paymentof interest has been stipulated and the parties are repaying the principal amounts asstipulated and are also regular in payment of interest as applicable.
c) In respect of the aforesaid loans There is no amount which is over due for loansgranted to These Companies
4. 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 Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it inrespect of Loan.
5. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 as amended with regard to the deposits accepted. According to the information andexplanations given to us no order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal
6. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. However we havenot however made a detailed examination of the records with a view to determine whetherthey are accurate or complete.
7. In respect of statutory dues:
a) According to the information and explanations given to us and according to therecords of the Company examined by us in our opinion the Company is generally regular indepositing undisputed statutory dues including Provident Fund Employee's' StateInsurance Income Tax Sales Tax Service Tax Custom Duty Excise Duty Value Added TaxCess Goods and Services Tax and any other material statutory dues with the appropriateauthorities wherever applicable.
Further no undisputed amounts payable in respect of aforesaid dues were outstanding asat March 31 2020 for a period of more than 6 months from the date they became payable.
b) According to the information and explanations given to us and records examined byus There are no disputed dues in respect of Income Tax Sales Tax Service Tax Duty onCustom Duty on Excise Value Added tax Good sand Service Tax Cess except the following:
|Name of the Statute ||Nature of Dues ||Period to which it relates ||Amount (Rs in Lacs) ||Amount Paid/ adjusted (Rs in Lacs) ||Forum where dispute is pending |
|Central Excise & Customs ||Cenvat In put Credit - Commission ||2010 to 2015 ||385.60 ||28.92 ||CESTAT |
|The Central Sales Tax Act 1956 and Value Added Tax ||Sales Tax and VAT ||2013-2014 ||9.86 ||1.24 ||Joint Commissioner (Appeals) |
8. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or dues to debenture holders as at the balance sheetdate.The Company did not have any outstanding loans or borrowings from government duringthe year .
9. The Company has not raised any moneys by way of initial public offer further publicoffer (including debt instruments).In our opinion the term loans were applied for thepurposes for which the loans were obtained.
10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
11. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
12. As the Company is not a Nidhi Company and the Nidhi Rules 2014are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.
13. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the standalone Ind AS financial statements as requiredunder Indian Accounting Standard (AS) 24 Related Party Disclosures specified underSection 133 of the Act.
14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.
15. The Company has not entered into non-cash transactions with directors or personsconnected with him. Accordingly theprovisionsofClause3(xv) of the Order are notapplicable to the Company.
16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.Accordingly theprovisionsofClause3(xvi) of the Order are notapplicable to the Company.
For B D G & Associates
FRN No. 119739W
Membership No.: 161220
Date: 29th June 2020
Annexure B to 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")
1. Report on internal financial controls over financial reporting
We have audited the internal financial controls over financial reporting of Amines& Plasticizers Limited ("the Company") as of March 31 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
2. Management's Responsibility for lnternal 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.
3. 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 standalone financial statements whether due to fraud orerror.
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.
4. Meaning of lnternal 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 that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the Company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorised acquisitionuse or disposition of the Company's assets that could have a material effect on thefinancial statements.
5. 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.
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 March 31 2020 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 B D G & Associates |
|Chartered Accountants |
|FRN No. 119739W |
|Nikhil Rathod |
|Membership No.: 161220 |
|Date: 29th June 2020 |
|UDIN : 20161220AABV8019 |