TO THE MEMBERS OF
SHREE PUSHKAR CHEMICALS & FERTILISERS LIMITED
REPORT ON THE AUDIT OF STANDALONE IND-AS FINANCIAL STATEMENTS
We have audited the standalone Ind-AS financial statements of Shree PushkarChemicals & Fertilisers Limited ('the Company') which comprise the standaloneBalance Sheet as at March 31 2021 the standalone Statement of Profit and Loss (includingOther Comprehensive Income) the standalone Cash Flow Statement and the standaloneStatement of Changes in Equity for the year then ended and notes to the Ind-AS financialstatements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as 'the standalone Ind-AS financialstatements').
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 Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian accounting Standards ("IndAS") prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India of the state of affairs of the Company as at March 31 2021 its profitand other comprehensive income changes in equity and its cash flows for the year ended onthat 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 Ind ASFinancial 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 theStandalone Ind-AS financial statements under the provisions of the Companies Act 2013 andthe Rules there-under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our opinionon the standalone financials.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentyear. These matters were addressed in the context of our audit of the standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key audit matters ||How our audit addressed the key audit matter |
|Revenue from contracts with customers || |
|The Company is engaged in manufacturing of dye dye intermediaries and fertilisers through its various plants. It has developed procedures to record the revenue on the basis of the movement of the goods and revenue accrues as per Indian Accounting Standard 115. ||We assessed the design and tested the operating effectiveness of internal controls related to revenue recognition discounts and rebates. |
|Due to different terms with different customers and transaction price there is a risk that the revenue or discounts or rebates; and export incentives thereon might not be recorded correctly. ||We performed sample tests of individual sales transaction and traced to related documents considering the terms of dispatch. |
|Revenue is a key parameter to ascertain the Company's performance. The Company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the risk and rewards have been transferred. ||We tested cut-off procedures with respect to year-end sales transactions made. |
|The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. ||We also performed monthly analytical procedures of revenue by streams to identify any unusual trends. |
|The Company considered current and anticipated future economic conditions relating to industries the Group deals with and the countries where it operates. ||As a part of our audit we: |
|In calculating expected credit loss the Company has also considered related credit information for its customers to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID -19. || Tested the effectiveness of controls over the development of the methodology for the allowance for credit losses including consideration of the current and estimated future economic conditions completeness and accuracy of information used in the estimation of probability of default and computation of the allowance for credit losses. |
| || Verified the mathematical accuracy and computation of the allowances by using the same input data used by the Group. |
Information Other Than the Financial Statements and Auditor's Report thereon
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.
Responsibilities of Management and Those Charged with Governance for the StandaloneInd-AS Financial Statements
The Company's management and Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone Ind-ASfinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting 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 wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind-AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the Standalone Ind-AS financial statements management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS 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 Ind AS 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 Standalone Ind ASfinancial 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 management and Board of Directors.
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 Ind AS 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 Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves 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 standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone 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 Ind AS financialstatements for the year ended March 31 2021 and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the "AnnexureB" a statement on the matters specified in paragraphs 3 and 4 of the Order tothe extent applicable.
2. As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
c) The Standalone Balance Sheet the Standalone Statement of Profit and Loss (includingOther Comprehensive Income) the Standalone Cash Flow Statement and the StandaloneStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account;
d) In our opinion the aforesaid Standalone Ind-AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014;
e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors are disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure A".
g) 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.
h) With respect to the other matters to be included in the Auditors' 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 financial statements - Refer Note 42 on Contingent Liabilitiesto the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at March 31 2021;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
Referred to in paragraph 2(f) under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date to the members of ShreePushkar Chemicals & Fertilisers Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act
1. We have audited the internal financial controls over financial reporting of ShreePushkar Chemicals & Fertilisers Limited ("the Company") as of March 312021 in conjunction with our audit of the standalone Ind AS financial statements of theCompany for the year ended on that date.
Management's Responsibility for Internal Financial Controls
2. The Company's Board of Directors are responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia ("the ICAI"). These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit conducted in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both issued by the Institute of Chartered Accountants of India (ICAI).Those Standards and the Guidance Note require that we comply with the ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting with reference to these financialstatements was established and maintained and if such controls operated effectively in allmaterial respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial control system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedoperating and understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risk ofmaterial misstatement of the financial statement whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Company's internal financial controls overfinancial reporting with reference to the standalone financial statements of the Company.
Meaning of Internal Financial controls with Reference to Financial Statements
6. 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:
i. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
ii. 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
iii. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or dispositions of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting withReference to these Financial Statements
7. 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 financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
8. In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols with reference to standalone financial statements and as such internal financialcontrols were operating effectively as at March 31 2021 based on the criteria forinternal financial controls with reference to standalone financial statements 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 ICAI (the "Guidance Note").
Referred to in paragraph 1 under the heading "Report on Other Legal and RegulatoryRequirements" of our report of even date to the members of Shree PushkarChemicals & Fertilisers Limited
(i) In respect of Company's property plant and equipment :
(a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of property plant & equipment.
(b) The Company has a regular program of physical verification of its property plant& equipment by which all property plant & equipment are verified in a phasedmanner. In our opinion this periodicity of physical verification is reasonable havingregard to the size of the Company and the nature of its assets. The frequency of physicalverification is reasonable and no material discrepancies were noticed on suchverification.
(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the conveyance deeds / registered sale deed providedto us we report that the title deeds comprising of all immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.
(ii) As explained to us physical verification of inventory has been conducted atreasonable intervals by the management and no material discrepancies were noticed onphysical verification.
(iii) In respect of the loans secured or unsecured granted by the Company tocompanies firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Companies Act 2013 .
(a) In our opinion and the information given to us the terms and conditions of theloans given by the company are prima facie not prejudicial to the interest of theCompany.
(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments of principal amounts and/or receipts of interest have been regular as perstipulations.
(c) There are no overdue amounts as at the year-end in respect of both principal andinterest.
(iv) In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of loans making investments and providing guarantees and securities.
(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public covered under Section 73 to 76 of the Act andaccordingly paragraph 3(v) of the Order is not applicable.
(vi) Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company in our opinion the Company is generallyregular in depositing the undisputed statutory dues including provident fund employees'state insurance income-tax goods and services tax cess and other material statutorydues as applicable with the appropriate authorities.
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax sales tax goods & servicetax duty of customs duty of excise or value added tax or cess which have not beendeposited on account of any dispute except as follows :
|Name of Statue ||Name of dues ||Amount (Rs in lakhs) ||Period to which amount relates ||Forum where the dispute is pending |
|Income Tax Act 1961 ||Income Tax Demand ||17.68 ||AY 2009-10 ||High Court |
|Income Tax Act 1961 ||Income Tax Demand ||5.95 ||AY 2010-11 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax Demand ||151.00 ||AY 2013-14 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act 1961 ||Income Tax Demand ||65.01 ||AY 2018-19 ||Assessing Officer |
|MVAT Act 2002 ||Value Added Tax including interest ||14.88 ||FY 2013-14 ||The Hon'ble Maharashtra Sales Tax Tribunal (Pune Bench) |
|Central Sales Tax Act1956 ||Central Sales Tax including interest ||78.52 ||FY 2013-14 ||The Joint Commissioner of State Tax (Appeals) |
|MVAT Act 2002 ||Value Added Tax including interest ||27.40 ||FY 2014-15 ||The Hon'ble Maharashtra Sales Tax Tribunal (Pune Bench) |
|MVAT Act 2002 ||Value Added Tax including interest ||12.80 ||FY 2015-16 ||The Joint Commissioner Of State Tax (Appeals) |
|Central Sales Tax Act1956 ||Central Sales Tax including interest ||3.54 ||FY 2015-16 ||The Joint Commissioner Of State Tax (Appeals) |
(viii) According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto financial institution or banks at the balance sheet date. The Company does not have anyloans or borrowings from Government. Further the Company has not issued any debentures.Accordingly the Paragraph 3(viii) of the order is not applicable to the Company.
(ix) According to the information and explanations given to us and the records of theCompany examined by us the Company has not raised any money by way of initial publicoffer or further public offer (including debt instruments) and utilized the money raisedby the way of term loans for the purpose for which they were obtained during the period.
(x) According to the information and explanations given to us no fraud by the Companyor fraud on the Company by its officers and employees has been noticed or reported duringthe course of our audit.
(xi) In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V to the CompaniesAct 2013.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and accordingly the provisions of clause 3(xii) of theOrder are not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions entered into by the Company withthe related parties are in compliance with Sections 177 and 188 of the Act whereapplicable and the details of related party transactions as required by the applicableaccounting standards have been disclosed in the standalone financial statements.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence the provisions ofclause 3(xiv) of the Order are not applicable to the Company.
(xv) According to the reports of the Company examined by us and the information andexplanations given to us the Company has not entered into non-cash transactions withdirectors or persons connected with them. Accordingly the provisions of clause 3(xv) ofthe Order are not applicable to the Company.
(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly the provisions of clause 3(xvi) of the Order are not applicable to theCompany.