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Insecticides India Ltd.

BSE: 532851 Sector: Agri and agri inputs
NSE: INSECTICID ISIN Code: INE070I01018
BSE 00:00 | 24 Apr Insecticides India Ltd
NSE 05:30 | 01 Jan Insecticides India Ltd
OPEN 399.35
PREVIOUS CLOSE 394.40
VOLUME 2513
52-Week high 740.00
52-Week low 207.00
P/E 6.86
Mkt Cap.(Rs cr) 836
Buy Price 395.00
Buy Qty 20.00
Sell Price 405.00
Sell Qty 100.00
OPEN 399.35
CLOSE 394.40
VOLUME 2513
52-Week high 740.00
52-Week low 207.00
P/E 6.86
Mkt Cap.(Rs cr) 836
Buy Price 395.00
Buy Qty 20.00
Sell Price 405.00
Sell Qty 100.00

Insecticides India Ltd. (INSECTICID) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR’S REPORT ON STANDALONE FINANCIAL STATEMENT

To the Members of Insecticides (India) Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Insecticides(India)Limited ("the Company") which comprise the Balance Sheet as at March31 2019 the Statement of Profit and Loss (including other comprehensive income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "thestandalone financial statements").

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 Companies Act 2013 (" the Act") in the manner so required and give atrue and fair view in conformity with the Indian Accounting Standards prescribed undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015as amended ("Ind AS") and other accounting principles generally accepted inIndia of the state of affairs of the Company as at March 312019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor’sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the Standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI’s Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matter

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the consolidated financial statements of the current period.These matters were addressed in the context of our audit of the consolidated financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report

Key Audit Matter Auditor’s Response
Accuracy of recognition measurement presentation and disclosures of revenue in view of adoption of Ind AS-115 "revenue from Contracts with Customers" in place of Ind AS-18 "Revenue" Principal Audit Procedures
• We performed process walkthrough to understand the adequacy and the design of the revenue cycle. We tested internal controls in the revenue and trade receivables over the accuracy and timing of revenue accounted in the financial statements.
• Understanding the policies and procedures applied to revenue recognition as well as compliance thereof including an analysis of the effectiveness of controls related to revenue recognition processes employed by the Company.
The Company recognizes revenue at the point in time when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. In determining the transaction price for the sale the Company considers the effects of variable consideration and consideration receivable from the customer. • We reviewed the revenue recognition policy applied by the Company to ensure its compliance with Ind-AS 115 requirements.
For the year ended March 31 2019 the Company’s Statement of Profit & Loss included Sales of Rs. 119194.54 Lakhs. The nature of rebates discounts and sales returns if any involve judgment in determining sales revenues and revenue cut-off. The risk is therefore that revenue may not be recognized in the correct period. • We performed a detailed testing on transactions ensuring revenues were recognized in the correct accounting period. We also tested journal entries recognized in revenue focusing on unusual or irregular transactions.
Refer to Accounting policies Note 2.2 (b) and Note No. 20 of the standalone Financial Statements. • We validated the appropriateness and completeness of the related disclosures in Note No. 20 of the Standalone financial statements.

Information Other than the Standalone Financial Statements and Auditor’s ReportThereon

The Company’s Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board’s Report including Annexures to Board’s ReportCorporate Governance and Shareholder’s Information but does not include thestandalone financial statements and our auditor’s report thereon.

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

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 standalone financial statementsthat

give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withInd AS and other accounting principles generally accepted in India. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

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

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

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act 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.

• 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 basis of accounting and based on the audit evidence obtainedwhether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company’s ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor’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. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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

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

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016("theOrder") issued by the Central Government of India in terms of section 143 (11) ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. 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 Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified 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 March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.

g) With respect to the other matters to be included in the Auditor’s Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

h) 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 standalone financial statements. - Refer Note 38 to the standalonefinancial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on longterm contracts includingderivative contracts.

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

For Devesh Parekh & Co. For S S Kothari Mehta & Company
Chartered Accountants Chartered Accountants
Firm’s Registration Firm’s Registration
Number: 013338N Number: 000756N
Devesh Parekh Harish Gupta
Partner Partner
Membership Number: 092160 Membership Number: 098336
Place: New Delhi
Date: May 28 2019

ANNEXURE ‘A’ TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report to the Members of Insecticides (India)Limited ofeven date)

i. In respect of the Company’s property plant & equipment:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant & equipment.

(b) The property plant & equipment have been physically verified by the managementaccording to the programme of periodical verification in phased manner which in ouropinion is reasonable having regard to the size of the Company and the nature of itsproperty plant & equipment. According to the information and explanations given tous 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 records of the Company the title deeds of immovable properties are held inthe name of the Company.

ii. We have been explained by the management that the inventory (except stock lyingwith the third parties and in transit for which confirmations have been received/material received) has been physically verified at reasonable intervals and the proceduresof physical verification of inventory followed by the management are reasonable inrelation to the size of the Company and nature of its business. According to informationand explanations given to us the material discrepancies if any noticed on such physicalverification of inventory as compared to book records were properly dealt within the booksof accounts.

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 Act. Accordingly the provisions of paragraph iii (a) to (c) of theOrder are not applicable to the Company.

iv. According to the information explanations and representations given to us andbased upon audit procedures performed we are of the opinion that in respect of loansinvestments guarantees and securities the Company has complied with the provisions ofsection 185 and 186 of the Act.

v. The Company has not accepted any deposits from public.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by Central Government for the maintenance of the cost records under section148(1) of the Act in respect to the Company’s products to which said rules are madeapplicable and are of the opinion that prima facie the prescribed records have been madeand maintained. We have however not made a detailed examination of the said records with aview to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to

us and on the basis of examination of the records of the Company the Company hasgenerally been regular in depositing undisputed statutory dues including provident fundemployees’ state insurance income tax goods and service tax custom duty cess andany other material statutory dues with the appropriate authorities to the extentapplicable and further there

were no undisputed statutory dues payable for a period of more than six months from thedate they become payable as at March 312019.

(b) According to the records and information and explanations given to us there are nodues in respect

of income tax sales tax service tax goods and service tax duty of excise duty ofcustom and value added tax that have not been deposited on account of any dispute exceptas given below:

S. No. Name of the Statute Nature of Dues Period to which it relates Forum where dispute is pending Gross Liability (A) Amount Deposited under protest (B) Net Amount* (Rs. In Lacs) (A-B)
1 Gujarat Stamp Act 1958 Stamp Duty 2013-14 Commissioner of Revenue Department Tehsil Vagra District Bharuch 89.60 19.60 70.00
2 Gujarat Value Added Tax Act 2003 VAT & CST 2011-12 & 2012-13 Joint Commissioner of commercial Tax Baroda 268.27 85.28 182.99
3 Andhra Pradesh VAT Act 2005 VAT 2014-15 APVAT Appellate Tribunal Visakhapatnam. 122.08 61.04 61.04
4 MP VAT Act 2002 CST 2012-13 Assistant Commissioner VAT Indore 1.52 0.15 1.37
5 Central Excise Act 1944 Excise Duty 2015-16 Central Excise & Service Tax Audit Commissionerate Jaipur 352.10 17.60 334.50
6 Central Excise Act 1944 Excise Duty 2015- 16 2016- 17 & 2017-18 Central Excise Audit Commissionerate Jaipur 294.37 11.04 283.33
7 Central Excise Act 1944 Excise Duty 2012-13 & 2013-14 Central Excise Audit Commissionerate Jammu 360.56 9.01 351.55
8 Central Excise Act 1944 Excise Duty 2012-13 & 2013-14 Central Excise Audit Commissionerate Jammu 135.14 5.07 130.07

viii. In our opinion on the basis of audit procedures and according to the informationand explanations given to us the Company has not defaulted in repayment of loan orborrowing to any bank.

The Company has not taken any loans or borrowings from the government and financialinstitution. Further the Company had not issued any debentures.

ix. According to the information and explanations given to us the Company has notraised money by way of initial public offer or further public offer (including debtinstruments) during the year. The term loans have been applied for the purposes for whichthey were raised.

x. Based on the audit procedures performed and on the basis of information andexplanations provided by the management no instance of fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid/ provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance

with section 177 and 188 of the Act where applicable for all transactions with therelated parties and the details of related parties transactions have been disclosed in thestandalone financial statements as required by the applicable Accounting standards.

xiv. According to the information and explanations given to us the Company has notmade any preferential allotment of shares or private placement of shares or fully / partlyconvertible debentures during the year in terms of provisions of Sections 42 of the Act.

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 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 as the provisions of the section is not applicable to the Company.

For Devesh Parekh & Co. For S S Kothari Mehta & Company
Chartered Accountants Chartered Accountants
Firm’s Registration Firm’s Registration
Number: 013338N Number: 000756N
Devesh Parekh Harish Gupta
Partner Partner
Membership Number: 092160 Membership Number: 098336
Place: New Delhi
Date: May 28 2019

ANNEXURE "B" TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements’ section of our report to the Members of Insecticides (India)Limited ofeven date)

Report on the Internal Financial Controls over Financial Statements under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls with reference to financial statementsof INSECTICIDES (INDIA) LIMITED ("the Company") as of March 31 2019 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

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control with reference to financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include 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 respective Company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the internal financial controls withreference to financial statements 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 theAct to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements 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 with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor’sjudgment including the assessment of the risks of material misstatement of the financialstatements 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 internal financial controls system withreference to financial statements of the Company.

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 controlwith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial 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 assets that could have a material effect on thefinancial 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 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 with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at March 31 2019 basedon the internal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Devesh Parekh & Co. For S S Kothari Mehta & Company
Chartered Accountants Chartered Accountants
Firm’s Registration Firm’s Registration
Number: 013338N Number: 000756N
Devesh Parekh Harish Gupta
Partner Partner
Membership Number: 092160 Membership Number: 098336
Place: New Delhi
Date: May 28 2019