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Punjab Chemicals & Crop Protection Ltd.

BSE: 506618 Sector: Industrials
NSE: PUNJABCHEM ISIN Code: INE277B01014
BSE 00:00 | 20 Feb 453.00 -14.05
(-3.01%)
OPEN

452.40

HIGH

460.00

LOW

452.00

NSE 00:00 | 20 Feb 455.60 -7.75
(-1.67%)
OPEN

463.35

HIGH

470.00

LOW

450.55

OPEN 452.40
PREVIOUS CLOSE 467.05
VOLUME 120
52-Week high 764.00
52-Week low 432.00
P/E 30.44
Mkt Cap.(Rs cr) 555
Buy Price 452.00
Buy Qty 1.00
Sell Price 460.00
Sell Qty 5.00
OPEN 452.40
CLOSE 467.05
VOLUME 120
52-Week high 764.00
52-Week low 432.00
P/E 30.44
Mkt Cap.(Rs cr) 555
Buy Price 452.00
Buy Qty 1.00
Sell Price 460.00
Sell Qty 5.00

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

Company auditors report

To the Members of Punjab Chemicals and Crop Protection Limited

1. Report on the Audit of the Standalone Ind AS FinancialStatements

We have audited the accompanying standalone Ind AS financial statementsof Punjab Chemicals and Crop Protection Limited ("the Company") which comprisethe Balance Sheet as at 31 March 2018 the Statement of Profit and Loss the Statement ofChanges in Equity and the Cash Flows Statement for the year then ended and summary of thesignificant accounting policies and other explanatory information (hereinafter referredto as "the standalone Ind AS financial statements").

2. Management's Responsibility for the Standalone Ind ASFinancial Statements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone Ind AS financial statements that give a true and fairview of the state of affairs profit or loss and including other comprehensive incomechanges in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error. In preparing the standalone IndAS financial statements management is responsible for assessing the Company'sability to continue as a going concern disclosing as applicable matters related togoing concern and using the going concern basis of accounting unless management eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based on our audit.

We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the standalone Ind AS financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone Ind AS financial statements. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind ASfinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overallpresentation of the standalone Ind AS financial statements.

We are also responsible to conclude on the appropriateness ofmanagement's use of the going concern basis of accounting and based on the auditevidence obtained whether a material uncertainty exists related to events or conditionsthat may cast significant doubt on the entity's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in the auditor's report to the related disclosures in the standalone Ind ASfinancial statements or if such disclosures are inadequate to modify the opinion. Ourconclusions are based on the audit evidence obtained up to the date of the auditor'sreport. However future events or conditions may cause an entity to cease to continue as agoing concern. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

4. Opinion

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31 March 2018 its profit and including other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

5. Other matter

The comparative financial information of the Company for the year ended31 March 2017 and the transition date opening Balance Sheet as at 1 April 2016 included inthese standalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 audited by the predecessor auditor whose report for the year ended 31 March2017 and 31 March 2016 dated 25 May 2017 and 30 May 2016 respectively expressed anunmodified opinion on those standalone financial statements as adjusted for thedifferences in the accounting principles adopted by the Company on transition to the IndAS which have been audited by us.

Our opinion is not modified in respect of the above matter.

6. Report on Other Legal and Regulatory Requirements

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

(ii) As required by Section 143(3) of the Act we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss the Statement of Changes in Equity and the Cash Flow Statement dealt with bythis Report are in agreement with the books of account. d) In our opinion the aforesaidstandalone Ind AS financial statements comply with the Indian Accounting Standardsprescribed under section 133 of the Act. e) On the basis of the written representationsreceived from the directors as on 31 March 2018 taken on record by the Board of Directorsnone of the directors is disqualified as on 31 March 2018 from being appointed as adirector in terms of Section 164(2) of the Act. f) With respect to the adequacy of theinternal financial controls with reference to the standalone Ind AS financial statementsof the Company and the operating effectiveness of such controls refer to our separateReport in "Annexure B". g) With respect to the other matters to be included inthe Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us: i. The Company has disclosed the impact of pending litigationson its financial position in its standalone Ind AS financial statements; - Refer Note42(i) to the standalone Ind AS financial statements. ii. The Company did not have any longterm contracts including derivative contracts for which there were any materialforeseeable losses. iii. There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company. iv. The disclosures in thestandalone Ind AS financial statements regarding holdings as well as dealings in specifiedbank notes during the period from 8 November 2016 to 30 December 2016 have not been madesince they do not pertain to the financial year ended 31 March 2018.

However amounts as appearing in the audited standalone financialstatements for the year ended 31 March 2017 have been disclosed. Also refer note 50 tothe standalone Ind AS financials Statements.

For B S R & Co. LLP
Chartered Accountants
Registration No.: 101248W/W-100022
Pravin Tulsyan
Place: Mumbai Partner
Date: 29 May 2018 Membership No: 108044

ANNEXURE ‘A' REFERRED TO IN PARAGRAPH 6(I) OF THE INDEPENDENTAUDITOR'S REPORT TO THE MEMBERS OF PUNJAB CHEMICALS AND CROP

PROTECTION LIMITED ON THE STANDALONE IND AS FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2018.

i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets (includinginvestment property).

(b) According to the information and explanations given to us theCompany has a regular programme of physical verification of its fixed assets (includinginvestment property) by which all fixed assets (including investment property) areverified in a phased manner over a period of three years. In accordance with thisprogramme certain fixed assets being plant and equipment were verified during the year.The discrepancies noticed on such verification were not material and have been properlyadjusted in the books of account.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

ii) According to the information and explanation given to us theinventories except goods-in-transit has been physically verified by the managementduring the year. In our opinion the frequency of such verification is reasonable. Asinformed to us the discrepancies noticed on verification between the physical stocks andthe book records were not material and have been properly adjusted in the books ofaccount.

iii) The Company has not granted any loans secured or unsecured tocompanies limited liability partnerships and other parties covered in the registermaintained under section 189 of the Act.

Further there are no firms covered in the register required undersection 189 of the Act.

iv) According to information and explanations given to us in respectof loans and investments made by the Company the provision of section 185 and 186 of theAct has been complied with as applicable. As informed to us the Company has not providedany guarantee or security as specified under section 185 or 186 of the Act.

v) According to the information and explanations given to us theCompany has not accepted any deposits covered under section 73 to 76 or other provisionsof the Act and rules framed thereunder. Thus paragraph 3(v) of the Order is notapplicable.

vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the Rules made by the Central Government for the maintenance of costrecords under section 148 (1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the records with a view to ensuring whether they are accurate orcomplete.

vii) (a) According to the information and explanations given to us andon the basis of our examination of the records of the Company amounts deducted / accruedin the books of account in respect of undisputed statutory dues including duty of exciseProvident fund Employees' State Insurance Income-tax Sales tax Value added taxService tax Duty of Customs Cess and other statutory dues have generally been regularlydeposited with the appropriate authorities though there have been slight delays in fewcases of Employees' State Insurance Sales Tax Value added tax Service tax andother statutory dues.

According to the information and explanations given to us noundisputed amounts payable in respect of duty of excise Provident fund Employees'State Insurance Income-tax Sales tax Value added tax Service tax duty of CustomsCess and Goods and services tax and other material statutory dues were in arrears as at 31March 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us thereare no dues of Sales tax Value added tax Income tax service tax cess duty of exciseand duty of Customs which have not been deposited with the appropriate authorities onaccount of any dispute except as mentioned below:

Name of the statute Nature of Dues Amount disputed# (Rs. in lakhs) Amount deposited (Rs. in lakhs)* Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income tax 1 - Assessment Year 2004-2005 High Court
Income Tax Act 1961 Income tax 879 455 Assessment Year 2008-09 to 2010-2011 Income tax Appellate Tribunal
Income Tax Act 1961 Income tax 53 53 Assessment Year 2007-2008 2011-12 to 2014-2015 Commissioner of Income tax (Appeals)
Central Excise Act 1944 Service tax 1 - 1999-2000 High Court
The Punjab Sales Tax Act 2005 Sale tax 11 - 2004-2005 High Court
Central Excise Act 1944 Excise duty 38 7 2006-2007 to 2009-2010 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
Central Excise Act 1944 Service tax 2 - 2009-2010 to 2010-2011 Customs Excise and Service Tax Appellate Tribunal (CESTAT)
Central Excise Act 1944 Excise duty 15 13 2012-2013 to 2014-2015 Commissioner (Appeals)
Central Excise Act 1944 Service tax 11 1 2009-2010 to 2015-2016 Commissioner (Appeals)
Central Excise Act 1944** Excise duty 332 - 2005-2006 2006-2007 2014-2015 and 2015-2016 Commissioner and Assistant Commissioner
Central Excise Act 1944** Service tax 4 - 2010-2011 2015-2016 and 2016-2017 Assistant Commissioner

#Amounts as per demand order including interest and penalty whicheverindicated in the order * Paid under protest by utilising the balance in CENVAT credit.

**relates to show cause notice received

viii) According to the information and explanations given to us theCompany has delayed in repayment of loans or borrowings to its bankers to the extent of Rs3293 lakhs (delay from 1 day to 2009 days) and Rs 339 lakhs of such dues were in arrearsas on the balance sheet date. The lender wise details are tabulated as under.

Particulars Amount of default as at the Balance sheet (in lakhs) Period of default*
Union Bank of India 69 30 September 2012 till date
Allahabad Bank 196 31 December 2017 till date
EXIM Bank 63 31 March 2018 till date
Bank Baroda 11 31 March 2018 till date

* represents the earliest default date. Further the Company has paidsubsequently an amount of Rs.60 lakhs Rs. 196 lakhs and Rs. 63 lakhs to Union Bank ofIndia Allahabad Bank and EXIM Bank respectively.

The Company has not defaulted in repayment of dues to financialinstitutions and Company did not have any outstanding dues in respect of debenture holdersduring the year.

ix) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not raised anymoney by way of initial public offer further public offer (including debt instruments)and term loans. Accordingly paragraph 3 (ix) of the Order is not applicable.

x) According to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees has been noticed or reportedduring the course of our audit for the year.

xi) According to the information and explanations given to us and basedon our examination of the records of the Company the managerial remuneration has beenpaid or provided by the Company in accordance with the provision of section 197 read withSchedule V of the Act.

xii) According to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3 (xii) of the Order is notapplicable.

xiii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company transactions with the relatedparties are in compliance with section 177 and 188 of the Act where applicable and thedetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

xiv) According to the information and explanations give to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly paragraph 3(xiv) of the order is not applicable.

xv) According to the information and explanations given to us theCompany has not entered into any non-cash transactions with the directors or personsconnected with him during the year. Accordingly paragraph 3(xv) of the Order is notapplicable.

xvi) 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 B S R & Co. LLP
Chartered Accountants
Registration No.: 101248W/W-100022
Pravin Tulsyan
Place: Mumbai Partner
Date: 29 May 2018 Membership No: 108044

ANNEXURE B REFERRED TO IN PARAGRAPH 6 (II)(F) OF THE INDEPENDENTAUDITOR'S REPORT TO THE MEMBERS OF PUNJAB CHEMICALS AND CROP

PROTECTION LIMITED BEING REPORT ON THE INTERNAL FINANCIAL CONTROLSUNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THEACT")

We have audited the internal financial controls with reference to thestandalone Ind AS financial statements of Punjab Chemicals and Crop Protection Limited("the Company") as of 31 March 2018 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tothe standalone Ind AS financial statements 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. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to the standalone Ind AS financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of internal financial controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tothe standalone Ind AS financial statements was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to the standaloneInd AS financial statements and their operating effectiveness. Our audit of internalfinancial controls with reference to financial statements included obtaining anunderstanding of internal financial controls with reference to financial statementsassessing 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 Ind AS financial statements whether due to fraudor error. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to the standalone Ind AS financial statements.

Meaning of Internal Financial Controls with reference to the StandaloneInd AS Financial Statements

A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial statements and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a materialeffect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to the standalone Ind AS Financial Statements to future periodsare subject to the risk that the internal financial control with reference to thestandalone Ind AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to the standalone Ind AS financialstatements and such internal financial controls with reference to the standalone IndASfinancial statements were operating effectively as at 31 March 2018 based on the internalcontrol with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of internal financial controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For B S R & Co. LLP
Chartered Accountants
Registration No.: 101248W/W-100022
Pravin Tulsyan
Place: Mumbai Partner
Date: 29 May 2018 Membership No: 108044