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Punjab Chemicals & Crop Protection Ltd.

BSE: 506618 Sector: Industrials
NSE: PUNJABCHEM ISIN Code: INE277B01014
BSE 11:00 | 16 Aug 1256.75 -12.60
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NSE 10:49 | 16 Aug 1254.00
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OPEN 1250.05
PREVIOUS CLOSE 1269.35
VOLUME 1214
52-Week high 1930.00
52-Week low 1127.00
P/E 19.28
Mkt Cap.(Rs cr) 1,541
Buy Price 1249.85
Buy Qty 6.00
Sell Price 1256.20
Sell Qty 32.00
OPEN 1250.05
CLOSE 1269.35
VOLUME 1214
52-Week high 1930.00
52-Week low 1127.00
P/E 19.28
Mkt Cap.(Rs cr) 1,541
Buy Price 1249.85
Buy Qty 6.00
Sell Price 1256.20
Sell Qty 32.00

Punjab Chemicals & Crop Protection Ltd. (PUNJABCHEM) - Auditors Report

Company auditors report

To the Members of Punjab Chemicals and Crop Protection Limited

Report on the Audit of the Standalone Financial

Statement

Opinion

We have audited the standalone financial statements of Punjab Chemicals and CropProtection Limited (the "Company") which comprise the standalone balancesheet as at 31 March 2022 and the standalone statement of profit and loss (includingother comprehensive income) standalone statement of changes in equity and standalonestatement of cash flows for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation.

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 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2022 and its profit and othercomprehensive 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 Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our opinion on the standalone financial statements.

Key Audit Matters

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 standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Description of Key Audit Matter

Revenue recognition

See note 2 (j) and 27 to the standalone financial statements

The key audit matter How the matter was addressed in our audit
The Company recognises revenue from the sales of products and services when control over goods is transferred to the customer/ services are rendered based on the specific terms and conditions of the sale/service contracts entered into with respective customers. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
• We assessed the compliance of the revenue recognition accounting policies against the requirement of Ind AS 115 i.e.
We have identified recognition of revenue as a key audit matter as- Revenue from contracts with customers.
• We evaluated the design implementation and operating effectiveness of key financial controls with respect to revenue recognition on selected transactions (using random sampling).
• revenue is a key performance indicator; and
• there is a presumed fraud risk of revenue being overstated through manipulation of the timing and amount of revenue recognized due to pressures to achieve performance targets as well as meeting external expectations.
• We performed substantive testing by using statistical sampling for revenue transactions recorded during the financial year. For such samples verified the underlying documents including invoices good dispatch notes customer acceptances shipping documents (as applicable) and subsequent receipts in the bank statements to assess whether these are recognized in the appropriate period in which control is transferred or services are provided.
• We carried out analytical procedures on revenue recognized during the year to identify unusual variances.
• We tested specific item on manual journals posted to revenue ledger selected based on specified risk-based criteria to identify unusual items.
• We selected revenue transactions on a sample basis recorded during specified period around the year end date and checked whether revenue has been recognised in the correct reporting period by examining the underlying documents.
• We assessed the adequacy of disclosures in the financial statements against the requirement of Ind AS 115.

Other Information

The Company's Management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditor'sreport 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 in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of Directors' Responsibilities for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) 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 were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

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

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

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 detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the Management and Board ofDirectors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting in preparation of standalone financial statementsand based on the audit evidence obtained whether a material uncertainty exists relatedto events or conditions that may cast significant doubt on the Company's ability tocontinue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thestandalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue 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.

• Obtain sufficient appropriate audit evidence regarding the financial statementsof the Company to express an opinion on the standalone financial

statements. We are responsible for the direction supervision and performance of theaudit of 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or 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

1. As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government of India in terms of Section 143 (11) of the Act we givein the "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order to the extent applicable.

2. (A) 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) I n 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) I n our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 1April 2022 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2022 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in 'Annexure B".

(B) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations as at 31 March 2022 onits financial position in its standalone financial statements - Refer Note 41 to thestandalone financial statements.

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

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

d) (i) The management has represented that to the best of its knowledge and belief asdisclosed in Note 52 to the financial statements no funds have been advanced or loaned orinvested (either from borrowed funds or share premium or any other sources or kind offunds) by the Company to or in any other persons or entities including foreign entities("Intermediaries") with the understanding whether recorded in writing orotherwise that the Intermediary shall:

• directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Companyor

• provide any guarantee security or the like to or on behalf of the UltimateBeneficiaries.

(ii) The management has represented that to the best of its knowledge and belief asdisclosed in Note no. 52 to the financial statements no funds have been received by theCompany from any persons or entities including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall:

• directly or indirectly lend or invest in other persons or entities identifiedin any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of theFunding Party or

• provide any guarantee security or the like from or on behalf of the UltimateBeneficiaries.

(iii) Based on such audit procedures as considered reasonable and appropriate in thecircumstances nothing has come to our notice that has caused us to believe that therepresentations under sub-clause (d)

(i) and (d) (ii) contain any material mis-statement.

e) The final dividend paid by the Company during the year in respect of the dividenddeclared for the previous year is in accordance with section 123 of the Companies Act 2013to the extent it applies to payment of dividend. As stated in Note 39(ii) to the financialstatements the Board of Directors of the Company have proposed final divided for the yearwhich is subject to the approval of the members at the ensuing Annual General Meeting. Thedividend declared is in accordance with section 123 of the Act to the extent it applies todeclaration of dividend.

(C) With respect to the matter to be included in the Auditor's Report under Section197(16) of the Act:

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to director is not inexcess of the limit laid down under Section 197 of the Act. The Ministry of CorporateAffairs has not prescribed other details under Section 197(16) of the Act which arerequired to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Gaurav Mahajan
Partner
Membership No. 507857
ICAI UDIN: 22507857AILAUW7696
Place: Mumbai
Date: 05 May 2022

Annexure A referred to in clause 1 under ‘Report on Other Legal and RegulatoryRequirements' of the Independent Auditor's Report to the Members of Punjab Chemicals andCrop Protection Limited on the accounts for the year ended 31 March 2022.

We report that:

(i) (a) (A) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment.

(B) The Company has maintained proper records showing full particulars of intangibleassets.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has a regular programme of physicalverification of its Property Plant and Equipment by which all property plant andequipment are verified in

a phased manner over a period of three years. In accordance with this programmecertain property plant and equipment were verified during the year. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. The discrepancies noticed on such verification werenot material and have been properly adjusted in the books of account.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties (otherthan immovable properties where the Company is the lessee and the leases agreements areduly executed in favour of the lessee) disclosed in the standalone financial statementsare held in the name of the Company except for the following which are not held in thename of the Company:

Description of property Gross carrying value Held in the name of Whether promoter director or their relative or employee Period held- indicate range where appropriate Reason for not being held in the name of the Company. Also indicate if in dispute
Three Residential flats at Tarapur Palghar Maharashtra 18 lakhs STS Chemicals Limited No 17 years STS Chemicals Limited was merged in Punjab Chemicals and Crop Protection Limited in 2005. As informed to us the Company is yet to make the necessary filings for transfer of ownership and that there is no dispute in relation to ownership of these flats.
Lease agreement for Industrial building at H.A.Limited Compound Pimpri Pune Maharashtra Not applicable. Lease premises has immovable Property plant and equipment of Rs.173 lakhs (Net Value Rs.Nil.) Excel Phospho Chem (Sole Proprietors) No 17 years Excel Phospho Chem was merged with STS Chemicals Limited and STS Chemicals Limited was merged with Punjab Chemicals and Crop Protection Limited in 2005. As informed by the Company Civil Appeal is pending in the District Court Pune under the Public Premises Act 1971. Also refer to note 41(a) of the financial Statements.

(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not revalued its PropertyPlant and Equipment (including Right of Use assets) or intangible assets or both duringthe year.

(e) According to information and explanations given to us and on the basis of ourexamination of the records of the Company there are no proceedings initiated or pendingagainst the Company for holding any benami property under the Prohibition of BenamiProperty Transactions Act 1988 and rules made thereunder.

(ii) (a) The inventory except goods-in-transit has been physically verified by themanagement during the year. For goods-in-transit subsequent evidence of receipts has beenlinked with inventory records. In our opinion the frequency of such verification isreasonable and procedures and coverage as followed by management were appropriate. Nodiscrepancies were noticed on verification between the physical stocks and the bookrecords that were more than 10% in the aggregate of each class of inventory.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has been sanctioned working capitallimits in excess of five crore rupees in aggregate from banks or financial institutionson the basis of security of current assets. In our opinion the quarterly returns orstatements filed by the Company with such banks or financial institutions are in agreementwith the books of account of the Company except as follows:

Quarter Name of bank Particulars Amount as per books of account (in Rs. lakhs) Amount as reported in the quarterly return/ statement (in Rs. lakhs) Amount of difference (in Rs. lakhs) Whether return/statement subsequently rectified
30 June 2021 RBL Bank Purchases 14584 13258 1326 Yes the Company has subsequently revised the Statement on 3 May 2022.

(iii) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not provided guarantee orsecurity or granted any advances in the nature of loans secured or unsecured tocompanies firms limited liability partnership or any other parties during the year. TheCompany has made investments in other parties and granted loans to its employees duringthe year. The requisite information on loans to employees is stated in paragraph (iii)(a)below. Except as stated above the Company has not made any investments or granted anyloans secured or unsecured to Companies firms or limited liability partnership duringthe year.

(a) Based on the audit procedures carried on by us and as per the information andexplanations given to us the Company has provided loans to employees as below.

Particulars Interest bearing loans to employees Amount in INR Lakhs
Aggregate amount of loan granted during the year 8
Balance outstanding as at 6
Balance Sheet date with employees

(b) According to the information and explanations given to us and based on the auditprocedures conducted by us in our opinion that the terms and conditions of theinvestments made during the year and loans granted during the year are prima facie notprejudicial to the interest of the Company.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company in case of loans given to employees in ouropinion the repayment of principle and payment of interest has been stipulated and therepayments or receipts have been regular. However in case of advance in the nature ofloan of Rs. 40 lakhs given to Rajhans Nutriments Private Limited in earlier years theschedule of repayment of principal and payment of interest has not been stipulated andaccordingly we are unable to comment on whether the repayments or receipts are regular.

(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there is no overdue amounts for more thanninety days in respect of loans given. However in case of advance in the nature of loansof Rs. 40 lakhs given to Rajhans Nutriments Private Limited in earlier years the schedulefor repayment of principal and payment of interest have not been stipulated andaccordingly we are unable to comment on the amount overdue for more than ninety days.

(e) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there is no loan or advance in the nature ofloan granted falling due during the year which has been renewed or extended or freshloans granted to settle the overdues of existing loans given to same parties.

(f) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company in our opinion the Company has not granted anyloans or advances in the nature of loans either repayable on demand or without specifyingany terms or period of repayment except as presented in

the table below. Further no such loans or advances in the nature of loans have beengranted by the Company to its Promoters and related parties as defined in Clause (76) ofSection 2 of Companies Act 2013 ("the Act").

(INR Lakhs)
All Parties other than promoters and related parties
Aggregate of loans/advances in nature of loan
- Repayable on demand (A) -
- Agreement does not specify any terms or period of Repayment (B) 40
Total (A+B) 40
Percentage of loans/advances in nature of loan to the total loans 2%

(iv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not given any guarantee orsecurity as specified under Section 185 and 186 of the Act. According to the informationand explanations given to us and on the basis of our examination of records of theCompany in respect of loans and investments by the Company in our opinion theprovisions of Section 185 and 186 of the Act have been complied with except for thedetails reported in the table below relating to non-compliance of Section 186 of the Act.

Non-compliance of Section 186
S. NO. Name of company/ party Nature of relationship with company Maximum amount during the year Balance as at balance sheet date Remarks if any
1 Defaults with respect to subsection (4) (5) and (9) of Section 186 of the Act in relation to Advance granted in the nature of loan. Rajhans ; Nutriments Private Limited Not a related party INR 40 lakhs INR 40 Lakhs

(v) The Company has not accepted any deposits or amounts which are deemed to bedeposits from the public. Accordingly clause 3(v) of the Order is not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148(1) of the Act in respect of its manufactured goods and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. Howeverwe have not carried out a detailed examination of the records with a view to determinewhether these are accurate or complete.

(vii) (a) According to the information and explanations

given to us and on the basis of our examination of the records of the Company in ouropinion amounts deducted/ accrued in the books of account in respect of undisputedstatutory dues including Goods and Services Tax ('GST') Provident Fund Employees' StateInsurance

Income tax Duty of Customs Cess and other statutory dues have generally beenregularly deposited with the appropriate authorities though there have been slight delaysin a few cases of Employees' State Insurance GST income tax and other statutory dues.

According to the information and explanations given to us and on the basis of ourexamination of the records of the Company no undisputed amounts payable in respect ofGST Provident Fund Employees' State Insurance Income tax Duty of Customs Cess andother statutory dues were in arrears as at 31 March 2022 for a period of more than sixmonths from the date they became payable.

The Company does not have liability in respect of Service tax Duty of excise Salestax and Value added tax during the year since effective 1 July 2017 these statutory dueshas been subsumed into GST.

(b) According to the information and explanations given to us and on the basis of theexamination of the records of the Company statutory dues relating to GST Provident FundEmployees State Insurance Income-Tax Duty of Customs or Cess or other statutory dueswhich have not been deposited on account of any dispute are as follows

(All amounts are in Lakhs)
Name of statute Nature of Dues Amount disputed* Amount deposited Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income tax 1373 Assessment Year 2008-2009 2009-2010 and 2017-2018 Income Tax Appellate Tribunal (ITAT)
Income Tax Act 1961 Income tax 142 70 Assessment Year 2007-2008 2011-12 to 2015-2016 and 2018-2019 to 2020-2021 Commissioner of Income tax (Appeals)
Central Excise Act 1944 Service tax 1 - 1999-2000 High Court
The Punjab Sales Tax Act 2005 Sales tax 11 - 2004-2005 High Court

*amount as per demand orders including interest and penalty wherever indicated in theorder.

(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not surrendered ordisclosed any transactions previously unrecorded as income in the books of account inthe tax assessments under the Income Tax Act 1961 as income during the year.

(ix) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not defaulted in repaymentof loans and borrowing or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not been declared a wilfuldefaulter by any bank or financial institution or government or government authority.

(c) According to the information and explanations given to us by the management theCompany has not obtained any term loan during the year. Accordingly clause 3(ix)(c) ofthe Order is not applicable.

(d) According to the information and explanations given to us and on the basis of ouroverall examination of the Balance Sheet of the Company we report that no funds raised onshort-term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us and on an overallexamination of the standalone financial statements of the Company we report that theCompany has not taken any funds from any entity or person on account of or to meet theobligations of its subsidiary as defined under the Act. Further the Company does not holdany investment in any associate or joint venture (as defined under the Act) during theyear ended 31 March 2022.

(f) According to the information and explanations given to us and procedures performedby us we report that the Company has not raised loans during the year on the pledge ofsecurities held in its subsidiary. Further the Company does not hold any investment inany associate or joint venture (as defined under the Act) during the year ended 31 March2022.

(x) (a) The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments). Accordingly clause 3(x)(a) of the Order is notapplicable.

(b) According to the information and explanations given to us and on the basis of 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. Accordingly clause 3(x)(b) of the Order is not applicable

(xi) (a) Based on examination of the books and records of the Company and according tothe information and explanations given to us no fraud by the Company or on the Companyhas been noticed or reported during the course of the year.

(b) According to the information and explanations given to us no report undersub-section (12) of Section 143 of the Act has been fi led by the auditors in Form ADT-4as prescribed under rule 13 of the Companies (Audit and Auditors) Rules 2014 with theCentral Government.

(c) As represented to us by the management there are no whistle blower complaintsreceived by the Company during the year.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Accordingly clause 3(xii) of the Order is not applicable.

(xiii) l n our opinion and according to the information and explanations given to usthe transactions with related parties are in compliance with Section 177 and 188 of theAct where applicable and the details of the related party transactions have beendisclosed in the standalone financial statements as required by the applicable accountingstandards

(xiv) (a) Based on information and explanations provided to us and our auditprocedures in our opinion the Company has an internal audit system commensurate with thesize and nature of its business.

(b) We have considered the internal audit reports of the Company issued till date forthe period under audit.

(xv) l n our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected to its directors and hence provisions of Section 192 of the Act are notapplicable to the Company.

(xvi) (a) The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934. Accordingly clause 3(xvi)(a) of the Order is notapplicable.

(b) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly clause 3(xvi)(b) of the Order is not applicable.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of the Order is notapplicable.

(d) The Company is not a part of any group (as per the provisions of the CoreInvestment

Companies (Reserve Bank) Directions 2016 as amended). Accordingly the requirements ofclause 3(xvi)(d) of the Order are not applicable.

(xvii) The Company has not incurred cash losses in the current financial year and inthe immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year.Accordingly clause 3(xviii) of the Order is not applicable.

(xix) According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the standalone financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that the Company is not capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date. We however state that this is not an assurance as to the futureviability of the Company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the Company as and when they fall due.

(xx) In our opinion and according to the information and explanations given to usthere is no unspent amount under sub-section (5) of section 135 of the Act pursuant to anyproject. Accordingly clauses 3(xx) (a) and 3(xx)(b) of the Order are not applicable.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Gaurav Mahajan
Partner
Membership No. 507857
ICAI UDIN: 22507857AILAUW7696
Place: Mumbai
Date: 05 May 2022

Annexure B to the Independent Auditors' report on the standalone financial statementsof Punjab Chemicals & Crop Protection Limited for the period ended 31 March 2022.

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

(Referred to in paragraph 2(A)(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to financial statementsof Punjab Chemicals & Crop Protection Limited ("the Company") as of 31 March2022 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2022 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 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 withreference to financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and

expenditures 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 Standalone financial statements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to Standalone financial statements to

future periods are subject to the risk that the internal financial controls withreference to standalone financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No. 101248W/W-100022
Gaurav Mahajan
Partner
Membership No. 507857
ICAI UDIN: 22507857AILAUW7696
Place: Mumbai
Date: 05 May 2022

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