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Tuticorin Alkali Chemicals & Fertilizers Ltd.

BSE: 506808 Sector: Industrials
NSE: TUTICORALK ISIN Code: INE400A01014
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NSE 05:30 | 01 Jan Tuticorin Alkali Chemicals & Fertilizers Ltd
OPEN 5.25
PREVIOUS CLOSE 5.30
VOLUME 601
52-Week high 10.25
52-Week low 3.21
P/E
Mkt Cap.(Rs cr) 8
Buy Price 5.25
Buy Qty 899.00
Sell Price 5.50
Sell Qty 500.00
OPEN 5.25
CLOSE 5.30
VOLUME 601
52-Week high 10.25
52-Week low 3.21
P/E
Mkt Cap.(Rs cr) 8
Buy Price 5.25
Buy Qty 899.00
Sell Price 5.50
Sell Qty 500.00

Tuticorin Alkali Chemicals & Fertilizers Ltd. (TUTICORALK) - Auditors Report

Company auditors report

To The Members of Tuticorin Alkali Chemicals and Fertilizers Limited Report on the IndAS Financial Statements

We have audited the accompanying Ind AS financial statements of Tuticorin AlkaliChemicals and Fertilizers Limited ("the Company") which comprise the BalanceSheet as at 31st March 2018 and the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

Management's Responsibility for the 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.

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 Ind ASfinancial 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 Ind AS financial statements basedon 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 Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditors' judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with the IndAS and other accounting principles generally accepted in India of the state of affairs ofthe Company as at 31st March 2018 and its loss total comprehensive loss its cash flowsand the changes in equity for the year ended on that date.

Emphasis of matter

We draw attention to Note 36 to the IND AS Financial Statements which states that theCompany has incurred a net loss of Rs 4514 lakhs during the year ended 31st March 2018and as of that date the Company's accumulated losses is Rs 26487 lakhs which has fullyeroded the Company's net worth. These conditions cast significant uncertainty on theCompany's ability to continue as a going concern. However as stated in the note havingregard to continued production in the Company financial support from its promotersfurther restructuring exercises being pursued the Ind AS financial statements of theCompany have been prepared on a going concern basis and that no adjustments are requiredto the carrying value of assets and liabilities.

Our opinion is not modified in respect of this matter.

Other Matter

The comparative financial information of the Company for the year ended 31st March 2017and the transition date opening balance sheet as at 1st April 2016 included in these IndAS financial statements are based on the statutory financial statements prepared inaccordance with the Companies (Accounting Standards) Rules 2006 audited by thepredecessor auditor whose report for the year ended 31st March 2017 and 31st March 2016dated 17th May 2017 and 25th May 2016 respectively expressed an unmodified opinion onthose financial statements and have been restated to comply with Ind AS. Adjustments madeto the previously issued said financial information prepared in accordance with theCompanies (Accounting Standards) Rules 2006 to comply with Ind AS have been audited byus.

Our opinion on the Ind AS financial statements is not modified in respect of thismatter.

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 Ind AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act read with Rule 7 of theCompanies (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 31st March 2018 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2018from being appointed as a director interms of 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 Ind AS financial statements.

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 (Auditors' 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.

MSKA & ASSOCIATES
(FORMERLY KNOWN AS MZSK & ASSOCIATES)
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO. 105047W
GEETHA JEYAKUMAR
Place: Chennai PARTNER
Date: May 16-2018 MEMBERSHIP NO.029409

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 TuticorinAlkali Chemicals and Fertilizers Limited ("the Company") as of March 31 2018 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended 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 312018 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.

MSKA & ASSOCIATES
(FORMERLY KNOWN AS MZSK & ASSOCIATES)
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO. 105047W
GEETHA JEYAKUMAR
Place: Chennai PARTNER
Date: May 16-2018 MEMBERSHIP NO.029409

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. All the fixed assets have been physically verified by the management during the yearand no material discrepancies were identified on such verification.

c. With respect to immovable properties of acquired land and

buildings that are freehold according to the information and explanations given to usand the records examined by us and based on the examination of the registered sale deedsprovided to us we report that the title deeds of such immovable properties are held inthe name of the Company as at the balance sheet date except for the following immovableproperties:

Leasehold/

Freehold

Gross Block as at March 31 2018 Net Block as at March 31 2018
Freehold land 1.07 lakhs 1.07 lakhs

Immovable properties of land and buildings whose title deeds are deposited with banksas security for the working capital loans are held in the name of the Company based onthe Memorandum of Deposit of title deeds executed between the bank and the Company forwhich confirmations have been obtained from respective bankers.

ii. As explained to us the inventories were physically verified

during the year by the management at reasonable intervals. The discrepancies noticed onverification of between the physical stocks and book records were not material and havebeen dealt with in the books.

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').

Name of the statute Nature of the dues Amount (Rs. Lakhs) Period to which the amount relates Due Date Date of Payment
Tamil Nadu Municipal Laws Act Professional Tax 6.94 2006 to 2017 Various dates Not paid
Tamil Nadu General Sales Tax Act 1959 Deferred Sales tax 243.72 2003- 04

2004- 05 2005-06

Various dates Not paid

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:

iv. In our opinion and according to the information and explanations given to us theCompany has not either directly or indirectly granted any loan to any of its directors orto any other person in whom the director is interested in accordance with the provisionsof section 185 of the Act and the Company has not made investments through more than twolayers of investment companies in accordance with the provisions of section 186 of theAct. Accordingly provisions stated in paragraph 3(iv) of the Order are not applicable tothe Company.

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 and other items of cost maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 as amended specified by the CentralGovernment for the maintenance of cost records under subsection (1) of section 148 of theAct and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have not however made a detailed examination of the recordswith a view to determine whether 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 taxduty of customs duty of excise value added tax cess and any other material statutorydues applicable to the company except in case of Deferred sales tax liability andProfessional tax which were outstanding as at March 312018 for a period of more than sixmonths from the date they became payable are as follows:

Name of the statute Nature of dues Period to which the amount relates Forum where dispute is pending Amount Unpaid (Rs. Lakhs)
Tamil Nadu General Sales Tax Act 1959 Purchase tax Penalty 1983-84 Sales Tax Appellate T ribunal 67.93
Tamil Nadu General Sales Tax Act 1959 Purchase tax Penalty 1984-85 Hon'ble High Court of Madras 92.26
Tamil Nadu General Sales Tax Act 1959 Sales tax 1996-97 Appellate Assistant Commissioner 0.37
The Central Sales Tax Act 1956 Sales tax - Non submission of Prescribed Form (F Form) 1997-98 Appellate Assistant Commissioner 11.47
Tamil Nadu General Sales Tax Act 1959 Sales Tax 1997-98 Appellate Assistant Commissioner 175.72
Tamil Nadu General Sales Tax Act 1959 Sales Tax 2001-02 Sales Tax Appellate T ribunal 2.51
Finance Act 1994 Service tax 2006-07 The Customs Excise and Service Tax Appellate Tribunal 83.10
The Central Excise Act 1944 Wrong Availment of Cenvat Credit 2007-08 Madurai Bench of Madras High Court 109.00
Employees Provident Funds & Miscellaneous Provisions act 1952 Provident fund - Damages and Interest 2013-2016 Industrial Tribunal cum Labour Court 52.93

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loan 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 further public offer (including debt instruments) and term loans during theyear. Accordingly the provisions stated in paragraph 3 (ix) of the Order are notapplicable to the Company.

x. During the course of our audit examination of the books and

records of the Company carried out in accordance with the generally accepted auditingpractices in India and according to the information and explanations given to us we haveneither come across any instance of material fraud by the Company or on the Company by itsofficers or employees.

xi. According to the information and explanations given to us and

based on our examination of the records of the Company the Company has paid/ providedfor managerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 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 our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

xiv. According to the information and explanations given to us and

based on 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 the provisions stated in paragraph 3 (xiv) of theOrder are not applicable to the Company.

xv. According to the information and explanations given to us and

based on our examination of the records of the Company the Company has not enteredinto non-cash transactions with directors or persons connected with him. Accordinglyprovisions stated in 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.

MSKA & ASSOCIATES
(FORMERLY KNOWN AS MZSK & ASSOCIATES)
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO. 105047W
GEETHA JEYAKUMAR
Place: Chennai PARTNER
Date: May 16 2018 MEMBERSHIP NO.029409
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