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Tuticorin Alkali Chemicals & Fertilizers Ltd.

BSE: 506808 Sector: Industrials
NSE: TUTICORALK ISIN Code: INE400A01014
BSE 00:00 | 25 Jun 10.52 -0.30
(-2.77%)
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10.80

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NSE 05:30 | 01 Jan Tuticorin Alkali Chemicals & Fertilizers Ltd
OPEN 10.80
PREVIOUS CLOSE 10.82
VOLUME 25434
52-Week high 14.50
52-Week low 5.50
P/E
Mkt Cap.(Rs cr) 128
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 10.80
CLOSE 10.82
VOLUME 25434
52-Week high 14.50
52-Week low 5.50
P/E
Mkt Cap.(Rs cr) 128
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company auditors report

To the Members of Tutlcorln 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 FertilizersLimited ("the Company") which comprise the balance sheet as at March 31 2020and the statement of Profit and Loss statement of changes in equity and statement of cashflows for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013('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 March 31 2020 loss changes in equity and its cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Material Uncertainty related to Going Concern

We draw attention to Note 33 to the financial statements which states that the companyhas incurred a net loss of Rs. 2355.36 lakhs during the year ended March 31 2020 and asof that date the company's current liabilities exceeded its total assets by Rs.19792.42lakhs. These conditions indicate that a material uncertainty exists that may castsignificant doubt on the Company's ability to continue as going concern. However as statedin the note having regard to continued production of the company and financial supportfrom its promoters and group companies the financial statements of the company have beenprepared on a going concern basis and that no adjustments are required to the carryingvalue of assets and liabilities.

Our opinion Is not modified In respect of this matter.

Emphasis of Matter

We draw attention to Note 35 to the financial statements which states that themanagement has made an assessment of the impact of COVID- 19 on the Company's operationsfinancial performance and position as at and for the year ended March 31 2020 and hasconcluded that there is no impact which is required to be recognized in the financialstatements. Accordingly no adjustments have been made to the financial statements.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matters described in Emphasis of Matter paragraph we have determined thematter described below to be the key audit matter to be communicated in our report.

Impairment assessment of Property Plant and Equipment

Key Audit Matter How the Key Audit Matter was addressed in our audit
Refer Note 33 to the financial statements with respect to the disclosures relating to Impairment assessment of Property Plant and Equipment's. As at March 31 2020 PPE amounting to Rs. 5928.88 Lakhs represents 44% of the Company's total assets. Our audit procedures with respect to this area included:
• Evaluated whether the impairment test was performed by management in accordance with IND AS 36;
Management had carried out an impairment assessment in accordance with IND AS 36 to determine whether the recoverable value of PPEs are less than the respective carrying value using the fair value less costs of disposal method. The assessment involves adoption of critical assumptions and judgement in determining the recoverable amounts. • Assessing the reasonableness of the recent valuation obtained evaluating the independent professional valuer's competence capabilities and objectivity;
• Verified the mathematical accuracy of management's computation of the fair value less costs of disposal;
The Management has assessed the fair value of freehold land basis recent valuation and selling price of comparable properties in similar locations adjusted for property size and costs of disposal; the fair value of plant and equipment furniture and fixtures office equipment were based on the written down value of these assets carried in the books of account as at March 312020. • Considering the assumptions used in the Company's calculations and performing independent sensitivity analysis of a probable reduction in values considered;
• Assessing the appropriateness of the disclosures in the notes to the financial statements with reference to IND AS 36.
We have determined the impairment assessment of PPE to be a key audit matter as the process involves significant judgements and critical assumptions in determining the recoverable amounts of PPE.

Information Other than the Financial Statements and Auditors' Report Thereon

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

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

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

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance changes inequityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under section 133 of theAct. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and

completeness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

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

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

Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 financial statements.

We give in "Annexure A" a detailed description ofAuditor's responsibilitiesfor Audit of the Financial Statements.

Other Matters

Due to the restrictions and lock down laid by the government due to the COVID-19pandemic it was impracticable for us to attend the physical inventory verification ofinventory carried out by the management subsequent to the year end. Consequently we haveperformed related alternative audit procedures and have obtained sufficient appropriateaudit evidence over the existence of inventory (amounting to Rs.2199.49 Lakhs) as onMarch 312020.

Our opinion is not modified in respect of this matter.

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 ofthe Act we givein"Annexure B" a statement on the matters specified inparagraphs 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 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 faras it appears from our examination of those books.

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

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards 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 March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March

312020 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the internal financial controls with reference to financialstatements of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure C".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule11 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 initsfinancial statements - Refer Note 30 to the 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

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

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Geetha Jeyakumar
Place: Chennai Partner
Date: 15.06.2020 Membership No. 029409
UDIN:20029409AAAAFE8668

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

Auditors' 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• 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 hasinternal financial controls with reference to financial statements in place and theoperating effectiveness of such controls.

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

• 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 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'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

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

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 applicablerelated safeguards.

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

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Geetha Jeyakumar
Place: Chennai Partner
Date: 15.06.2020 Membership No. 029409
UDIN:20029409AAAAFE8668

ANNEXURE "B" TO INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LIMITED FOR THE YEAR ENDED MARCH312020 [Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report]

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

(b) All the fixed assets were physically verified by the management in the previousyear in accordance with a planned programme of verifying them once in three years whichin our opinion is reasonable having regard to the size of the Company and the nature ofits assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company except for the following immoveable properties.

No. of cases Leasehold/ Freehold Gross Block as at March 31 2020 Net Block as at March 31 2020
1 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 banks and the Company forwhich confirmations have been obtained from respective bankers.

ii. The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on verification between the physical stock and the book records.

iii. The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships (LLP) or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (‘the Act'). Accordingly the provisionsstated in paragraph 3 (iii) (a) to (c) of the Order are not applicable to the Company.

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 31 2020 andthe Company has not accepted any deposits during the year falling within the purview ofthe provisions of Section 73 to 76 of the Companies Act 2013.

vi. We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the Company pursuant as specified by the CentralGovernment for the maintenance of cost records under sub-section (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 and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingwith appropriate authorities undisputed statutory dues including provident fundemployees' state insurance income-tax goods and service tax duty of customs cess andany other statutory dues applicable to the company except in case of Deferred Sales taxliability and Professional tax which were outstanding as at March 31 2020 for a periodmore than six months from the date they became payable are as follows;.

Name of the statute Nature of the dues Amount (Rs. In Lakhs) period to which the amount relates Due Date Date of payment
Tamil Nadu Municipal Laws Act Professional Tax 7.12 2006 to 2017 Various Dates Not Paid
Tamil Nadu General Sales Tax Act 1959 Deferred Sales Tax 243.72 2003 to 2006 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 goods and service tax customs dutycess and any other statutory dues on account of any dispute are as follows:

Name of the statute Nature of dues Amount (Rs. In Lakhs) period to which the amount relates Forum where dispute is pending
Tamil Nadu General Sales Tax Act 1959 Purchase Tax Penalty 67.93 1983-84 Sales Tax Appellate Tribunal
Tamil Nadu General Sales Tax Act 1959 Purchase Tax Penalty 92.26 1984-85 Honorable High Court of Madras
Tamil Nadu General Sales Tax Act 1959 Sales Tax 0.37 1996-97 Appellate Assistant Commissioner
The Central Sales Tax Act 1956 Sales Tax - Non-Submission of prescribed Form (F Form) 11.47 1997-98 Appellate Assistant Commissioner
Tamil Nadu General Sales Tax Act 1959 Sales Tax 175.72 1997-92 Appellate Assistant Commissioner
Tamil Nadu General Sales Tax Act 1959 Sales Tax 2.51 2001-02 Sales Tax Appellate Tribunal
Finance Act 1994 Service Tax 83.10 2006-07 The Customs Excise and Service Tax Appellate Tribunal
The Central Excise Act 1944 Wrong Availment of Cenvat Credit 109.00 2007-08 Madurai Bench of Madras High Court
Employees Provident Funds & Miscellaneous Provisions Act 1952 Provident Fund - Damages and Interest 52.93 2013-16 Industrial Tribunal cum Labour Court

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings from banks. The company doesnot have any loans or borrowings from financial institution and has not raised 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 in compliance with sections 177 and 188 ofthe Act where applicable and details of such transactions have been disclosed in thefinancial statements as required by the applicable accounting 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
Chartered Accountants
ICAI Firm Registration No. 105047W
Geetha Jeyakumar
Place: Chennai Partner
Date: 15.06.2020 Membership No. 029409
UDIN:20029409AAAAFE8668

ANNEXURE "C" TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF TUTICORIN ALKALI CHEMICALS AND FERTILIZERS LIMITED

[Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report]

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof Tuticorin Alkali Chemicals and Fertilizers Limited ("the Company") as ofMarch 31 2020 in conjunction with our audit of the 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI) (the"Guidance Note"). 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 of fraudsand errors the accuracy and completeness of the accounting records

and the timely preparation of reliable financial information as required under theAct.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing issued by ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements

assessing the risk that a material weakness exists and testing and evaluating thedesign and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material 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 withreference to financial statements.

Meaning of Internal Financial Controls With Reference to Financial Statements

A Company's internal financial control 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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations of

management and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls With Reference to FinancialStatements

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.

Opinion

In our opinion the Company has in all material respects an internal financialcontrols with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 31 2020 basedon the internal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote.

For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Geetha Jeyakumar
Place: Chennai Partner
Date: 15.06.2020 Membership No. 029409
UDIN:20029409AAAAFE8668