You are here » Home » Companies » Company Overview » Pasupati Acrylon Ltd

Pasupati Acrylon Ltd.

BSE: 500456 Sector: Industrials
NSE: PASUPTACRY ISIN Code: INE818B01023
BSE 09:57 | 28 Jul 30.00 -0.50
(-1.64%)
OPEN

30.60

HIGH

30.65

LOW

30.00

NSE 05:30 | 01 Jan Pasupati Acrylon Ltd
OPEN 30.60
PREVIOUS CLOSE 30.50
VOLUME 25623
52-Week high 32.45
52-Week low 8.40
P/E 6.21
Mkt Cap.(Rs cr) 267
Buy Price 29.90
Buy Qty 100.00
Sell Price 30.00
Sell Qty 1534.00
OPEN 30.60
CLOSE 30.50
VOLUME 25623
52-Week high 32.45
52-Week low 8.40
P/E 6.21
Mkt Cap.(Rs cr) 267
Buy Price 29.90
Buy Qty 100.00
Sell Price 30.00
Sell Qty 1534.00

Pasupati Acrylon Ltd. (PASUPTACRY) - Auditors Report

Company auditors report

TO THE MEMBERS OF PASUPATI ACRYLON LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Pasupati Acrylon Limited("the Company") which comprise the balance sheet as at 31st March 2020 and thestatement of Profit and Loss statement of changes in equity and statement of cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information. In our opinion and tothe best of our information and according to the explanations given to us the aforesaidstandalone financial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and profit/loss changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

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 theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

We draw attention to Note no 35 to the standalone financial Results which describesthe uncertainities and the impact of COVID -19 PANDEMIC on the company's operations andresults as assessed by the management. Our opinion is not modified in respect of thismatter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

1. Major portion of the company's business i.e. both export and import is transactedin foreign currency and consequently the company is exposed to foreign exchange risk.Foreign currency exchange rate exposure due to its imports is partly balanced by export ofgoods. The balance foreign currency exchange rate exposure is hedged through derivativelike foreign exchange forward contracts. (Refer Note No. 37 to the financialstatements).We assessed the foreign exchange risk management policies adopted by thecompany. The company manages risk through formulating risk management objectives andpolicies which are reviewed by the senior management Audit Committee and Board ofDirectors. Our audit approach was a combination of test of internal controls andsubstantive procedures to evaluate chances of minimizing the risk involved.

2. The company has certain matters under dispute which involves judgement to determinethe possible outcome of these disputes (Refer Note No. 24(a) to the financialstatements).We obtained the details of the disputes with their present status anddocuments. We made an in depth analysis of the dispute. We also considered legalprocedures and other rulings in evaluating management's position on these disputes toevaluate whether any change was required to management's position on these disputes.

3. Company's major Raw Material is imported which is subject to variation due tovolatility in crude oil prices and demand & supply ratio. These are monitored onregular basis using pricing trends and forecast from internationally reputed newsagencies. To manage the price risk associated of these transactions the Companyformulates risk management objectives & policies which are reviewed by the seniormanagement Audit Committee and Board of Directors. Our Audit Approach was a combinationof test of material controls & substantive procedures to evaluate chances ofminimising the risk involved.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those Charged With Governance for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud 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 financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of 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. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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

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 Companies Act 2013 we give in the "Annexure A" statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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 Statement of Changes in Equityand the Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount.

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

e) On the basis of 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.

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". 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 the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

h) 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 standalone Ind AS Financial Statements - Refer note no. 24(a) & 24(c)to the financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any in respect of long term contractsincluding derivative contracts - Refer note no. 37 to the financial statements.

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

For Suresh Kumar Mittal & Co.
Chartered Accountants
Firm Registration No. 500063N
Sd/-
Ankur Bagla
Place : New Delhi Partner
Date : 27th July 2020 Membership No. : 521915
UDIN : 20521915AAAACJ8097

Annexure A referred to in Paragraph (I) under the heading of "Report on OtherLegal and Regulatory Requirements" of our report of even date to the members ofPasupati Acrylon Limited on the standalone Ind AS Financial Statements for the year ended31st March 2020.

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

(b) The fixed assets have been physically verified by the management during the year asper the phased program designed to cover all the fixed assets over a period which in ouropinion is reasonable having regard to the size of the company and nature of its assets.Discrepancies noticed on such verification which are not material have been properlydealt with in the books of accounts.

(c) The title deeds of immovable properties are held in the name of the company.

(ii) As explained to us the inventories have been physically verified by themanagement during the year except stocks lying with third parties in respect of whomconfirmations have been obtained and the discrepancies noticed on physical verification ascompared to book record which are not material have been properly dealt with in thebooks of account. In our opinion the frequency of such verification is reasonable.

(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 and as such clauses (iii) (a) (b) and (c) of theorder are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us noloans investments guarantees and security covered under section 185 and 186 of theCompanies Act 2013 has been given by the company. And as such clause (iv) of the orderare not applicable to the company.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public within the meaning of sections 737475 and 76 ofthe Act and the rules framed there under and hence reporting under clause (v) of the Orderis not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the company pursuantto the order made by the Central Government for the maintenance of cost records undersection 148(1) of the Act and we are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we are neither required tocarry out nor have carried out detailed examination of such cost accounting records with aview to determine whether they are accurate or complete.

(vii) According to the records of the company examined by us and information andexplanations given to us:

(a) The company is generally regular in depositing with the appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of customs duty of excise value added tax cess andothers as applicable. There are no undisputed amounts payable in respect of aforesaid duesoutstanding as at 31st March 2020 for a period of more than six months from thedate they became payable.

(b) There are no disputed dues of income tax or sales tax or service tax or duty ofcustoms or duty of excise or value added tax or goods and service tax outstanding as at 31stMarch 2020 except:

S. No. Name of the Statue Nature of the dues Amount (Rs .in lacs) Period to which amount relates Forum where dispute is pending
1. Service Tax and Customs Act Cenvat Credit availed on service tax paid 11.39 2007-2008 Allahabad high court
2. Custom Duty Act Custom Duty 16.42 34.41 2010-2011 2011-2012 CETSAT(MUMBAI) CETSAT (DELHI)
3. Service Tax Act Service Tax on Ocean Freight 76.59 2017-2018 Allahabad High Court

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to financialinstitution banks and Government and dues to debenture holders

(ix) In our opinion and according to the information and explanations given to usduring the year the Company has not raised any moneys by way of initial public offer orfurther public offer (including debt instruments). Further the Term loans have beenapplied by the Company for the purposes for which they were raised.

(x) Based on the audit procedures performed and according to the information andexplanations given to us no fraud by the Company or 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/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The company is not a nidhi company and hence provisions of clause (xii) of theorder are not applicable to the company

(xiii) In our opinion and according to the information and explanations given to usthe Company's transactions with its related parties are in compliance with sections 177and 188 of the Act where applicable and details of related party transactions have beendisclosed in the Standalone Ind AS financial statements etc as required by the accountingstandards in notes to the Financial Statements

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause (xiv) of the Order is not applicable to the Company

(xv) In our opinion and according to the information and explanation given to usduring the year the company has not entered into any non-cash transactions with directorsor persons connected with him

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934

For Suresh Kumar Mittal & Co.
Chartered Accountants
Firm Registration No. 500063N
Sd/-
Ankur Bagla
Place : New Delhi Partner
Date : 27th July 2020 Membership No. : 521915
UDIN : 20521915AAACJ8097

Annexure B referred to in Paragraph (II)(f) under the heading of "Report on OtherLegal and Regulatory Requirements" of our report of even date to the members ofPasupati Acrylon Limited on the standalone Ind AS Financial Statements for the year ended31st March 2020.

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 PasupatiAcrylon Limited ("the Company") as of March 31st 2020 inconjunction with our audit of the Standalone Ind AS 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI)". These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by ICAI and deemed to beprescribed 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 ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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:

a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

b) 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 authorizations of management and directors of the Company; and

c) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial 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 2020 based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI".

For Suresh Kumar Mittal & Co.
Chartered Accountants
Firm Registration No. 500063N
Sd/-
Ankur Bagla
Place : New Delhi Partner
Date : 27th July 2020 Membership No : 521915
UDIN : 20521915AAACJ8097

.