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Tuticorin Alkali Chemicals & Fertilizers Ltd.

BSE: 506808 Sector: Industrials
NSE: TUTICORALK ISIN Code: INE400A01014
BSE 13:46 | 06 Jul 7.40 0.15
(2.07%)
OPEN

7.50

HIGH

7.50

LOW

6.90

NSE 05:30 | 01 Jan Tuticorin Alkali Chemicals & Fertilizers Ltd
OPEN 7.50
PREVIOUS CLOSE 7.25
VOLUME 2271
52-Week high 9.09
52-Week low 2.58
P/E
Mkt Cap.(Rs cr) 90
Buy Price 6.90
Buy Qty 150.00
Sell Price 7.40
Sell Qty 499.00
OPEN 7.50
CLOSE 7.25
VOLUME 2271
52-Week high 9.09
52-Week low 2.58
P/E
Mkt Cap.(Rs cr) 90
Buy Price 6.90
Buy Qty 150.00
Sell Price 7.40
Sell Qty 499.00

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

Company auditors report

To the Members of Tuticorin Alkali Chemicals and Fertilizers Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Tuticorin Alkali Chemicals and Fertilizers Limited (the Company) which comprise the balance sheet as at 31st March 2019 and the statement of Profit and Loss statement of changes in equity and statement of cash flows for the year then ended and notes to the financial statements including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us the aforesaid financial statements give the information required by the Companies Act 2013(the Act') in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March 2019 and loss changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty related to Going Concern

We draw attention to Note 34 to the financial statements which indicates that the Company has incurred a net loss of Rs. 3767.75 Lakhs during the year ended March 31 2019 and as of that date the Company's current liabilities exceeded its total assets by Rs.17437.06 Lakhs. As stated in the said note these events or conditions along with other matters as set forth in Note indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. However as stated in the note having regard to continued production in the Company financial support from its promoters the financial statements have been prepared on going concern basis.

Our opinion is not modified in respect of this matter.

Information Other than the Financial Statements and Auditors' Report thereon

The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Report Chairman's Statement Director's Report etc but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to report that fact. We have nothing to report in this regard.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. In addition to the matters described in Material Uncertainty related to Going Concern section we have determined the matter described below to be the key audit matter to be communicated in our report.

Impairment assessment of Property Plant and Equipment.

Key Audit MatterHow the Key Audit Matter was addressed in our audit
As at March 312019 Property Plant and EquipmentOur audit procedures in respect of this matter included:
(PPE) amounting to Rs. 6248.97 Lakhs represents 51% of the Company's total assets. The company is incurring losses and the net worth has been fully eroded. Refer to Note 34 to the financial statements.1. Evaluated the methodology used by the management to determine the recoverable amount on the basis of value in use and to compare it with that required by IND AS 36. We also verified the mathematical accuracy of the model used.
This required an impairment assessment of the carrying value of assets based on the future cash flows of these assets. Calculation of recoverable amount based on requirement of 'IND AS 36:2. Verify the accuracy and relevance of input data by reference to supporting evidence such as approved budgets and considered the reasonableness of these budgets in comparison to the Company's historical results and performance.
Impairment of Assets' in the said case involves significant judgement and estimates by management w.r.t utilisation of assets attributable disposable values discount rates applied for evaluating future cash flows etc. Accordingly we have considered this as Key Audit Matter3. Reviewed the methodology of the calculation of value in use and use of certain assumptions including discount rates and long term growth rates etc.
4.Testing the appropriateness of the weighted average cost of capital used to discount the impairment models through engaging our internal valuations experts.
5. Performed sensitivity analysis over key assumptions principally sales growth rate terminal value multiple and discount rates in order to assess the potential impact of a range of possible outcomes.

Responsibilities of Management and those charged with Governance for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position financial performance changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Accounting Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate implementation and maintenance of accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statement that give a true and fair view and are free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financial reporting process.

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

We give in Annexure A a detailed description of Auditor's responsibilities for Audit of the Financial Statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act we give in Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order to the 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 best of 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 the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31st March 2019 taken on record by the Board of Directors none of the directors is disqualified as on 31st March 2019 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls refer to our separate Report in Annexure C.

g) With respect to the other matters to be included in the 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 the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 31 to the financial statements;

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

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

3. As required by The Companies (Amendment) Act 2017 in our opinion according to information explanations given to us the remuneration paid by the Company to its directors is within the limits laid prescribed under Section 197 of the Act and the rules thereunder.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Geetha Jeyakumar
Place: ChennaiPartner
Date: May 17 2019Membership No. 029409

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT ON EVEN DATE ON THE FINANCIAL STATEMENTS OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LIMITED

Auditor's Responsibilities for the Audit of the Financial Statements

As part of an audit in accordance with SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.

 Obtain an understanding of internal control relevant to the audit in order to design 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 has internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

 Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However future events or conditions may cause the Company to cease to continue as a going concern.

 Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Place: Chennai Geetha Jeyakumar
Partner
Date: May 17 2019Membership No. 029409