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Southern Petrochemicals Industries Corporation Ltd.

BSE: 590030 Sector: Agri and agri inputs
NSE: SPIC ISIN Code: INE147A01011
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OPEN 23.00
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VOLUME 5357
52-Week high 41.50
52-Week low 22.10
P/E 11.49
Mkt Cap.(Rs cr) 502
Buy Price 22.40
Buy Qty 500.00
Sell Price 22.95
Sell Qty 30.00
OPEN 23.00
CLOSE 23.00
VOLUME 5357
52-Week high 41.50
52-Week low 22.10
P/E 11.49
Mkt Cap.(Rs cr) 502
Buy Price 22.40
Buy Qty 500.00
Sell Price 22.95
Sell Qty 30.00

Southern Petrochemicals Industries Corporation Ltd. (SPIC) - Auditors Report

Company auditors report

TO THE MEMBERS OF

SOUTHERN PETROCHEMICAL INDUSTRIES CORPORATION LIMITED Report on the Standalone Ind ASfinancial statements

We have audited the accompanying Standalone Ind AS financial statements of SOUTHERNPETROCHEMICAL INDUSTRIES CORPORATION LIMITED ("the Company") which comprisethe Balance Sheet as at 31 March 2018 and the Statement of Profit and Loss (includingOther Comprehensive Income) the Cash Flow Statement and the Statement of Changes inEquity for the year then ended and a summary of the significant accounting policies andother explanatory information.

Management's Responsibility for the Standalone Ind AS financial statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the Indian Accounting Standards(Ind AS) prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

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

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderissued under section 143(11) of the Act.

We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS financial statements. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind ASfinancial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the Ind AS and other accounting principles generally accepted in India of the stateof affairs of the Company as at 31 March 2018 and its profit total comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to Note No. 33(iii) of the Standalone Ind AS financial statementsregarding computation of subsidy based on the provisional Retention Price (RP) in linewith the Government's policy dated June 17 2015 as the final retention price has notbeen announced by the Department of Fertilizers. The necessary adjustments if any andits consequential impact will be assessed when the final retention price is notified bythe Department of Fertilizers.

Our opinion is not modified in respect of this matter.

Other Matter

The comparative financial information of the Company for the year ended 31 March 2017and the transition date opening balance sheet as at 1 April 2016 included in theseStandalone Ind AS financial statements are based on the statutory financial statementsprepared in accordance with the Companies (Accounting Standards) Rules 2006 audited bythe predecessor auditor whose report for the year ended 31 March 2017 and 31 March 2016dated 18 May 2017 and 30 May 2016 respectively expressed an unmodified opinion on thosefinancial statements and have been restated to comply with Ind AS. Adjustments made tothe previously issued said financial information prepared in accordance with the Companies(Accounting Standards) Rules 2006 to comply with Ind AS have been audited by us.

Our opinion on the Standalone Ind AS financial statements is not modified in respect ofthis matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid Standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014 and the Companies (Indian Accounting Standards)Rules 2015 as amended.

e) On the basis of the written representations received from the directors of theCompany as on 31 March 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2018 from being appointed as a director in termsof Section 164(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 A". 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 Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS financial statements. refer Note 35 of the financialstatements.

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

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

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

For MSKA & Associates (Formerly known as MZSK & Associates)
Chartered Accountants
(Firm's Registration No. 105047W)
Geetha Jeyakumar
Place: Chennai (Partner)
Date: May 17 2018 (Membership No. 29409)

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SouthernPetrochemical Industries Corporation Limited("the Company") as of March 312018in conjunction 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 Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's 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 (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2018 based on the criteria forinternal financial control over financial reporting established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For MSKA & Associates (Formerly known as MZSK & Associates)
Chartered Accountants
(Firm's Registration No. 105047W)
Geetha Jeyakumar
Place: Chennai (Partner)
Date: May 17 2018 (Membership No. 29409)

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

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

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

(b) Some of the fixed assets were physically verified during the year by the Managementin accordance with a programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. According to the informationand explanations given to us no material discrepancies were noticed on such verification.

(c) According to the information and explanation given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.

Immovable properties of land and buildings whose title deeds have been pledged withbanks as security for term loans are held in the name of the Company based on theMortgage deed executed between the bank and the Company for which confirmations have beenobtained from respective bankers.

ii. As explained to us the inventories were physically verified during the year by themanagement at reasonable intervals and no material discrepancies were noticed on physicalverification.

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 (‘the Act').

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.

v. In our opinion and according to the information and explanations given to us thereare no amounts outstanding which are in the nature of deposits as on March 312018 and theCompany has not accepted any deposits during the year.

vi. We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the Company pursuant to the Companies (Cost Records andAudit) Rules 2014 as amended specified by the Central Government for the maintenance ofcost records under sub-section (1) of section 148 of the Act and we are of the opinionthat prima facie the prescribed accounts and records have been made and maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate or complete.

vii. (a) According to the information and explanations given to us the Company hasgenerally been regular in depositing undisputed dues in respect of provident fundemployees' state insurance Goods and Services tax income-tax sales-tax service taxcustoms duty excise duty value added tax cess and any other material statutory duesapplicable to the Company.

(b) According to the information and explanation given to us and examination of recordsof the Company the outstanding dues of income-tax sales-tax service tax customs dutyexcise duty value added tax cess and any other statutory dues which have not beendeposited on account of any dispute are as follows:

Name of the statute Nature of dues Period to which the amount relates Forum where dispute is pending Amount Unpaid (' Lakhs)
The Central Excise Act 1944 Excise Duty 1998-99 to 2012-13 Commissioner of Central Excise (Appeals) / Customs Excise and Service Tax appellate Tribunal 321.06
The Finance Act 1994 Service Tax 2003-04 to 2011-12 Customs Excise and Service Tax appellate Tribunal 164.97
The Sales Tax Act under various state enactments Local Sales Tax 1996-97 to 2012-13 Deputy Commissioner (Appeals) / Additional Commissioner (Appeals) / Sales Tax Appellate Tribunal / Hon'ble Madras High Court and High Court of Telangana and Andhra Pradesh 741.88

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings from banks. The companydoes not have any loans or borrowings from financial institutions and has not issued anydebentures.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordingly theprovisions stated in paragraph 3 (ix) of the Order are not applicable to the Company.

x. During the course of our audit examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employees.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii) ofthe Order are not applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly the provisions stated in paragraph 3 (xiv) of the Order are notapplicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly provisions statedin paragraph 3(xv) of the Order are not applicable to the Company.

xvi. In our opinion the Company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions stated in paragraphclause 3 (xvi) of the Order are not applicable to the Company.

For MSKA & Associates (Formerly known as MZSK & Associates)
Chartered Accountants
(Firm's Registration No. 105047W)
Geetha Jeyakumar
Place: Chennai (Partner)
Date: May 17 2018 (Membership No. 29409)