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Panama Petrochem Ltd.

BSE: 524820 Sector: Industrials
NSE: PANAMAPET ISIN Code: INE305C01029
BSE 00:00 | 18 Apr 128.30 -1.65
(-1.27%)
OPEN

127.25

HIGH

137.00

LOW

125.25

NSE 00:00 | 18 Apr 127.75 -2.60
(-1.99%)
OPEN

127.75

HIGH

137.50

LOW

126.30

OPEN 127.25
PREVIOUS CLOSE 129.95
VOLUME 13658
52-Week high 230.85
52-Week low 88.80
P/E 18.33
Mkt Cap.(Rs cr) 776
Buy Price 127.00
Buy Qty 10.00
Sell Price 132.00
Sell Qty 1.00
OPEN 127.25
CLOSE 129.95
VOLUME 13658
52-Week high 230.85
52-Week low 88.80
P/E 18.33
Mkt Cap.(Rs cr) 776
Buy Price 127.00
Buy Qty 10.00
Sell Price 132.00
Sell Qty 1.00

Panama Petrochem Ltd. (PANAMAPET) - Auditors Report

Company auditors report

To

The Members of

Panama Petrochem Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of PanamaPetrochem Limited ("the Company") which comprise the Balance Sheet as at 31March 2018 the statement of Profit and Loss (including other comprehensive income) theStatement of Changes in Equity 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 Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act2013 ("the Act") with respect to the preparation andpresentation of these standalone Ind AS financial statements that give a true and fairview of the financial position financial performance (including other comprehensiveincome) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act read with relevant rules issued thereunder. 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 judgments 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 standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS financialstatements based on our audit.

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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone Ind AS financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the standalone Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's directors as well asevaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31 March 2018 and its profit (including other comprehensive income) thechanges in equity 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 to the extent applicable.

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 Statement of Profit and Loss (including other comprehensiveincome) the Statement of changes in equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account;

d. In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with relevantrules issued there under;

e. On the basis of written representations received from the directors as on 31 March2018 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2018 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 30 to the standalone Ind AS financialstatements;

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 41 to the standalone Ind AS financial statements;

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

For Bhuta Shah & Co. LLP

Chartered Accountants

Firm Reg. No.: W100100

Harsh Bhuta

Partner

Membership No.: 137888

Mumbai May 25 2018

"Annexure A" referred to in paragraph 1 under "Report on Other Legal andRegulatory Requirements" of our report of even date

(i) In respect of property plant and equipments:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipments.

(b) As informed to us the property plant and equipments have been physically verifiedby the management during the period according to a phased programme. In our opinion suchprogramme is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification by the management asfurther informed to us.

(c) According to information 8i 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 informed 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 loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act and accordingly the provisions of Clause (iii) (a) to (c) of Para3 of the Order are not applicable to the Company.

(iv) The Company has not granted any loan under section 185 of the Act. The Company hascomplied with the provisions of section 186 of the Act with respect to the guaranteesmade. The Company has neither made any investment nor given any loans during the year.

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

(vi) We have broadly reviewed accounts and records 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. We have however not made a detailed examination of recordswith a view to determine whether they are accurate.

(viii) 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 with the appropriate authorities undisputed statutory dues including ProvidentFund Employees' State Insurance Income-tax Sales-tax Wealth Tax Service Tax duty ofCustoms duty of Excise Value Added Tax cess and any other statutory dues whereverapplicable.

According to the information and explanations given to us there were no outstandingstatutory dues as on 31 March 2018 for a period of more than six months from the date theybecame 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 (INR in lakhs) Period to which the amount relates Forum where dispute is pending
Finance Act 1994 Service Tax 2.42 F. Y. 2015-16 Addl. Commissioner Service Tax -1 and II Mumbai
Custom Act 1962 Custom Duty Fine and Penalty 109.96 F. Y. 2011-12 High Court Mumbai
Central Excise Act 1944 Central Excise Duty 66.51 April 2009 to November 2013 CESTAT Ahmedabad
Central Excise Act 1944 Central Excise Duty 23.17 December 2013 to October 2014 CESTAT Ahmedabad
Central Excise Act 1944 Central Excise Duty 0.27 October. 2015 to February 2016 Central Excise Customs and Sales Tax Bharuch.
Central Excise Act 1944 Central Excise Duty 25.88 October 2015 to June 2017 The Commissioner Appeals CGST 8i Central Excise Commissionerate Surat.
Central Excise Act 1944 Central Excise Duty 37.44 November 2014 to September 2015 The Commissioner Appeals Central Excise Customs 8i Service Tax Daman.

(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 to usthe Company did not raise any money by way of initial public offer or further public offer(including debt instruments) during the year. According to the information andexplanations given to us the term loans raised have been applied by the Company duringthe year for the purposes for which they were raised.

(x) Based upon the audit procedures performed and the information and explanationsgiven by the management no fraud by the Company and no material fraud on the Company byits officers 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. Accordingly clause 3 (xvi) of the Order is not applicable to theCompany.

For Bhuta Shah & Co. LLP

Chartered Accountants

Firm Reg. No.: W100100

Harsh Bhuta

Partner

Membership No.: 137888

Mumbai May 25 2018

"Annexure B" referred to in paragraph titled as "Report on the InternalFinancial Controls under clause (i) of Sub- section 3 of Section 143 of the Companies Act2013" ("the Act")

We have audited the internal financial controls over financial reporting of PanamaPetrochem Limited ("the Company") as of 31 March 2018 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat 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 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 2018 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. W100100

Harsh Bhuta

Partner

Membership No.: 137888

Mumbai May 25 2018