The Members of Ultramarine & Pigments Limited
Report on the Standalone Financial Statements
1.1 We have audited the standalone financial statements of Ultramarine &Pigments Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2020 and the Statement of Profit and Loss Statement of Changes in Equity andStatement of Cash Flows for the year then ended and Notes to the Standalone financialstatements including a Summary of Significant Accounting Policies and other explanatoryinformation ("the standalone financial statements").
1.2 In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2020 and Profit changes in equity and its cash flows for the year endedon that date.
2 Basis for Opinion
2.1 We conducted our audit in accordance with the Standards on Auditing (SAs)specifiedunder section143(10) of the Companies Act 2013. Our responsibilitiesunder thoseStandards are further described in the
Auditor's Responsibilitiesfor the Audit of the Standalone financial statementssectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered
Accountants of India together with the ethical requirements that are relevant to ouraudit of the standalone financial statements under the provisions of the Companies Act2013 and the Rules thereunder and we have fulfilled our other ethical responsibilitiesinaccordance 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 ouropinion.
3 Emphasis of Matter
3.1 We draw your attention to Note 2.F to the standalone financial statements whichdescribes the management's assessment of the impact of the outbreak of Coronavirus(Covid-19) on the business operations of the Company. The management believes that noadjustments are required to be made for the financial results and carrying value of assetsand liabilities as it does not have any impact for the current financial year. However ine assessment of the impact on the subsequent definitivviewofthehighlyuncertaineconomicenvironmenta periods is dependent upon circumstances asthey evolve.
3.2 Our opinion is not modified in respect of this matter.
4 Key Audit Matters
4.1 Key audit matters are those matters that in our professional judgment were ofmost significance in our audit of the standalone financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined that there are no other key auditmatters to be communicated in our report.
5 Information Other than the Standalone financial statements and Auditor'sReport Thereon
5.1 The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in Board's Reportincluding Annexures to Board's Report and Shareholder's Information but does not includethe standalone financial statements and our auditor's report thereon.
5.2 Our opinion on the standalone financial statements does not cover the otherinformation and we do not any form of assurance conclusion thereon.
5.3 In connection with our audit of the financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone statements or our knowledge obtained duringthe course of our audit or otherwise appears to be materially misstated.
5.4 If based on the work we have performed we conclude that there is a materialmisstatement of this other report in this regard.
with Governance for the Standalone financial 6 Responsibilities statements
6.1 The Company's Board of Directors is responsible for the matters stated in section134(5) of the 2013 ("the Act") with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate 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 thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
6.2 In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to ceaseoperations or has no 6.3Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
7 Auditor's Responsibilities for the Audit of the Standalone financialstatements
7.1 Our objectives are to obtain reasonable assurance about whether the standalone as awhole are free from material misstatement whether due to fraud or error and to issue anauditor's report that includes our opinion. Reasonable assurance is a high level ofassurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese standalone financial statements.
7.2 As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
misstatement . of the standalone financial statements whether due to fraud orerror design and perform audit procedures responsive to those risks and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for oneresultingfrom error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.
b. Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
d. Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 we conclude that a material uncertainty exists we are required to draw attentionin our auditor's report to the related disclosures in the standalone financial statementsor if such disclosures are inadequate to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. However futureevents or conditions may cause the Company a going concern.
e. Evaluate the overall presentation structure and content of the standalone financialincluding the disclosures and whether the standalone financial statements represent theunderlying manner that achieves fair presentation. transactionsand 7.3 Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in that we identify during our audit.
7.4 We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
7.5 From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of such
8 Report on Other Legal and Regulatory Requirements
8.1 As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection143oftheActwegivein" Annexure A" a statement on thematters specified in paragraphs 3 and 4 of 8.2 As required by Section 143 (3) of the Actwe report that:
- 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.
- 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.
- The Balance Sheet the Statement of Profit and Loss Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
- In our opinion the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
- On the basis of the written representations received from the directors as on31 st March 2020 taken on record by the Board of Directors none of the directors is disqualified as on 31st March 2020 from being appointed as a director in terms of Section 164 (2) of the Act.
- With respect to the adequacy of the internal financial controls over financial reportingofthe Company and the operating effectiveness of such controls refer to our separate report in" Annexure B". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's financial controls over financial reporting; and
- With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act: In our opinion and to the best of our information and according to the explanations given to us the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
- 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:
- The Company has disclosed the impact of pending litigations as at31 st March 2020 on its financial position in Note 40 to the standalone financial statements
- The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
Annexure A' to Independent Auditors' Report
[Referred to in paragraph 7.1 under Report on Other Legal and Regulatoryrequirements' of our Report of even date] On the basis of such checks as consideredappropriate and in terms of the information and explanation furnished to us we state asunder:
- (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets;
(b) As explained to us the company has a program of verification to cover all a phasedmanner which in our opinion is reasonable. Pursuant to the program the managementcarried out the physical verification of the fixed assets during the year. Thediscrepancies noticed on such verification were not material;
(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 in one case wherein a portion of land costing` 28750/-for which the title of property in the name of the company as per revenue records and inoccupation of a third party claiming the title and the company has taken steps to protectits title and the case is pending disposal.
(ii) As explained to us the inventories have been physically verified during the yearby the management. The discrepancies noticed on physical verification of the same were notthe Company and the same have been properly dealt with in the books of account.
(iii) In our opinion and according to the information and explanations any loanssecured or unsecured to companies firms limited liability partnerships or other partiescovered in the register maintained under Section 189 of the Act. Therefore clauses(iiia) (iiib) and (iiic) of paragraph 3 of the Order are not applicable to the companyfor the year.
(iv) In our opinion and according to the information and explanations any loans orprovided any guarantees or security to the parties covered under section 185 of the Act.The Company has complied with the provisions of Section 186 of the Act in respect of theinvestments made in a subsidiary. The Company has not provided any security or guaranteesto the parties covered under Section 186 of the Act.
(v) The Company has not accepted any deposit to which the provisions of Sections 73 to76 of the Act and The Companies (Acceptance of Deposits) Rules 2014 would apply. Asinformed to us no order has been passed by Company Law Board or National Company LawTribunal or Reserve Bank of tribunal related to compliance with above provisions.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 prescribed by the Central Governmentunder section 148(1) of the Act and are of the opinion that prima-facie the prescribedaccounts and cost records have been made and maintained.
We have not however made a detailed examination of the cost records with a view todetermining whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and the recordsexamined by us the Company is regular in depositing with appropriate authoritiesprovident fund employees' state insurance income-tax Goods and Services Tax duty ofcustoms cess and other statutory dues and there are no undisputed statutory duesoutstanding as at 31st March 2020 for a period of more than six months fromthe date they became payable.
(b) According to the records of the company and information outstanding amounts inrespect of sales tax service tax duty of customs goods and services tax that have notbeen deposited with the appropriate authorities on account of tax value added tax thathave not been deposited on account of disputed matters pending before appropriateauthorities are as under:
|Name of the Statute ||Nature of Dues ||Amount in `l akhs ||Year to which it relates ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income tax ||0.51 ||Financial Year 2005-06 ||Commissioner of Income Tax (Appeals) Mumbai Commissioner of Income Tax |
|Income Tax Act 1961 ||Income tax ||30.36 ||Financial Year 2009-10 ||(Appeals) Mumbai Commissioner of Income Tax |
|Income Tax Act 1961 ||Income tax ||106.80 ||Financial Year 2011-12 ||(Appeals) Mumbai |
|Tamil Nadu Value Added Tax Act 2006 ||Tamil Nadu Value Added Tax ||12.60 ||Financial Year 2012-13 2013-14 and 2015-16 ||Appellate Deputy Commissioner of Commercial Taxes Chennai |
|Tamil Nadu Value Added Tax Act 2006 ||Tamil Nadu Value Added Tax ||8.41 ||Financial Year 2013-14 & 2014-15 ||Joint Commissioner of Commercial Taxes Chennai |
Disputed taxes paid under protest and not charged to Statement of Profit and Loss hasnot been included above. [Refer Note 40 to the standalone financial statements].
(viii) According to the information and explanations given to us the company hasavailed term loan from a bank during the year and repayment of term loan is not due duringthe year. The company did not avail any loan or borrowings from financial institutions andalso did not have any debentures outstanding during the year under report.
(ix) According to the information and explanations given to us the Company did notraise any money by way of or further public offer (including debt instruments). Thecompany has availed a term loan initial from a bank during the year and utilized term loanfor the purpose for which they were raised.
(x) To the best of our knowledge andbelief informationand explanations given tousaccordingto there have been no cases of fraud by the company or on the companyby its officers or employees has been noticed or reported during the year under report.
(xi) Accordingtotheinformationandexplanationsgive to us and based on our examination ofthe records of the Company the Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act. (xii) In our opinion and according to the information andexplanations company. Accordingly paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanationsgiven to us and based on theCompany transactionswiththerelatedpartiesare in compliance with sections 177 and 188 ofthe Act where applicable and details of such transactions have been disclosed in thestandalone financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations give 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.
(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-cashtransactionswith directors or persons connected with them. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
ANNExURE - "B" TO AUDITORS' REPORT
Referred to in paragraph 7.2(f) of our report of even date
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the CompaniesAct 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting ofUltramarine & Pigments Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
2. 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 (ICAI'). Theseresponsibilitiesinclude the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Note") and the Standards on Auditingissued by FinancialControlsoverFinancialReporting ICAI and deemed to be prescribed undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
5. 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
6. A company'sinternal financial reporting is a process designed to providereasonable controlover assurance regarding the reliability of financial reporting and thepreparation of standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. Because of the inherent limitations of internal financial controls of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols over financial reporting to future periods are subject to the risk that theinternal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 based on theinternal control over financial reporting criteria 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.