Punjab Alkalies & Chemicals Auditors Report


This report is to be read with our letter of even date which is annexed as "Annexure A" and forms an integral part of this report.

Opinion

We have audited the accompanying Standalone Ind AS financial statements of Primo Chemicals Ltd (Formerly Known as Punjab Alkalies & Chemicals Limited) ("the Company"), which comprise the Standalone Balance Sheet as at March 31,2023, the Standalone Statement of Profit and Loss (including the Standalone statement of Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Cash Flow Statement for the year ended on that date, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the Standalone Ind As financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS 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 Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We have conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Ind AS 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 independence requirements that are relevant to our audit of the Standalone Ind AS financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.

Managements Responsibility for the Standalone Financial Statements

1. The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards)

Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone financial statements, management is responsible for assessing the Companys 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.

The Board of Directors are also responsible for overseeing the companys financial reporting process.

Auditors Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors 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 Standalone financial statements.

  1. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements.
  2. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.
  3. Report on Other Legal and Regulatory Requirements

  4. As required by the Companies (Auditors report) Order, 2020 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

As required by section 143 (3) of the Act, we report that:

  1. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
  2. 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;
  3. The Balance Sheet, Profit and Loss statement including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
  4. In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, Companies (Indian Accounting Standards) Rules, 2015, as amended;
  5. On the basis of written representations received from the directors as on March 31,2023, and taken on record by the Board of Directors, none of the directors of the company is disqualified as on March 31, 2023, from being appointed as a director in terms of section 164 (2) of the Act;
  6. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" to this report;
  7. With respect to the other matters to be included in the Auditors Report in accordance 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 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.
  8. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.
  9. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
  1. The Company has disclosed the impact of pending litigation on its financial position in its Standalone Ind AS financial statements.
  2. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
  3. There has been no amount which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31st March 2023.
  4. (a) The Management has represented that, to the best of its knowledge and belief, no funds

(which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

For S Tandon & Associates

Chartered Accountants

ICAI Firm Registration Number 006388N

ICAI UDIN: 23518893BGXMLV6076

Sd/-

(Nipun Rastogi)

Partner

Membership No. 518893

Place of Signature: Chandigarh

Date: May 26, 2023

(Annexure referred to in paragraph under "Report on other legal and regulatory requirements" of the

Independent audit report)

  1. a) The company has maintained proper records showing full particulars, including the quantitative details

and situation of tangible and intangible assets.

  1. The Company has a regular programme of physical verification of its property plant and equipments by which assets are verified in a phased manner over a period of three years. In accordance with this programme, certain property plant and equipments were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets.
  2. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties (except properties which are taken on lease by the company with duly executed lease agreements in favour of the lessee) disclosed in the Standalone financial statements are held in the name of the company.
  3. According to the information and explanations given to us the company has not revalued its Properties, Plant and Equipments or intangible assets or both during the year.
  4. No proceedings have been initiated during the year or are pending against the Company as at March 31,2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.
  1. a) The items of inventories has been physically verified by the management during the year. As per our
  2. opinion the coverage and procedure of such verification by the management is appropriate and no discrepancies of 10% or more in the aggregate for each class of inventory were noticed.

    b) The company has been sanctioned working capital limits of Rs 65 crores (fund based and non-fund based) and the quarterly returns and statements filed with the banks are in agreement with the books of accounts of company.

  3. The company has made investments but not provided any guarantee or security or not granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties. In our opinion, the investments made during the year are, prima facie, not prejudicial to the Companys interest.
  4. In our opinion and according to the information and explanations given to us, the company has not given any loans as per section 185 in respect of loans provided to directors. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 186 of the companys act 2013 with respect to the investment made.
  5. The Company has not accepted any deposit or amounts which are deemed to be deposits. Hence, reporting under clause 3(v) of the Order is not applicable.
  6. We have broadly reviewed the books of account as required to be maintained by the Company under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained.
  7. a) According to the information and explanation to us and on the basis of our examination of the records of the company, amount deducted/ accrued in the books of account in respect of undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Custom Duty, Excise duty and Cess and other material statutory dues have been regularly deposited with the appropriate authorities. As explained to us there were no arrears of the statutory dues for the period more than six months from the date, they became payable at the end of the financial year.
  8. b) Following Disputed Statutory Dues are not deposited on account of disputes pending at various forums:

    Name of the Statue Nature of Dues Amt. in Lakhs Period to which amount relates Forum where dispute is pending
    Central Excise Act,1944 Excise Duty & Penalty 60.17 2004-2008 CESTAT
    Central Excise Act,1944 Excise Duty & Penalty 5.49 April08 to June08 CESTAT
    Finance Act, 1994 Service Tax Penalty 4.66 April11 to Dec11 CESTAT
    Finance Act, 1994 Service Tax Penalty 116.09 Feb07 to March11 CESTAT
    Central Excise Act,1944 Excise Duty & Penalty 3.11 Jan12 to Nov12 CESTAT
    Central Excise Act,1944 Excise Duty & Penalty 5.32 July11 to Dec11 CESTAT
    Finance Act, 1994 Service Tax Penalty 25.79 Jan12 to Nov12 CESTAT
    Finance Act, 1994 Service Tax Penalty 35.85 July13 to Dec13, Dec12 to June13 CESTAT
    Pb. Value Added Tax, 2005 Entry Tax 7.42 2009-10 VAT Tribunal, Chandigarh
    Pb. Value Added Tax, 2005 Entry Tax 54.59 2011-12 Dy. Excise & Taxation Commissioner (Appeal), Mohali/Rupnagar
    Pb. Value Added Tax, 2005 Entry Tax 57.91 2012-13 VAT Tribunal, Chandigarh
    Pb. Value Added Tax, 2005 Entry Tax ETO Ropar 4.2 AY 2013-14 Appeal Filed on 23.11.2020
    House Tax House Tax 79.84 Revision is Pending
  9. According to the information and explanations given to us, the company has not surrendered or disclosed any income during the year in the tax assessments under the Income Tax Act, 1961.
  10. a) According to the information and explanations given to us, the company has not defaulted in repayment

of dues to any lender;

  1. The company has not declared willful defaulter by any bank or financial institution or other lender.
  2. According to the information and explanations given to us, the company has applied the term loans received during the year for the purposes for which the loans were obtained.
  3. According to information and explanations given to us funds raised on short term basis have not been utilized for long term purposes.
  4. On an overall examination of the financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries.
  5. According to the information and explanations given to us and procedures performed by us, we report

that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies.

  1. a) The company has not raised money by way of initial public offer or further public offer (including debt
  2. instruments) during the year and hence reporting under clause 3(x)(a) of the Order is not applicable.

    b) According to the information and explanations give to us and based on our examination of the records of the Company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

  3. a) According to the information and explanations given to us, no fraud by the company or on the company

has been noticed or reported during the course of our audit;

  1. According to the information and explanations give to us there is no requirement to report under subsection (12) of section 143 of companies act and also no requirement to file ADT-4 by the auditors as prescribed under rule 13 companies (Audit and auditors) rules 2014 with the central government.
  2. There are no whistle-blower complaints that have been received by the company.
  1. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.
  2. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Standalone financial statements as required by the applicable accounting standards.
  3. According to the information and explanations given to us, the company has an adequate internal audit system commensurate with the size and nature of its business and we as statutory auditors have considered the internal audit reports issued by the Internal Auditors for the period under audit in determining the nature, timing and extent of our audit procedure.
  4. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.
  5. a) The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act,

1934.

  1. In our opinion and according to the information and explanations given to us, the Company is not a Non-Banking Financial company or Housing Finance company. Accordingly, paragraph 3(xvi(b)) of the Order is not applicable.
  2. In our opinion and according to the information and explanations given to us, the Company is not a Core Investment Company. Accordingly, paragraph 3(xvi(c)) of the Order is not applicable.
  1. As per the information and explanations given to us, the company has not incurred any cash losses in the financial year and in the immediately preceding financial year;
  2. There is no resignation of the statutory auditors during the year, accordingly, paragraph 3(xviii) of the Order is not applicable. The previous auditor had been retired and new statutory auditors have been appointed.
  1. On the basis of financial ratios, aging and expected date of realization of financial assets and payments of financial liabilities and other information accompanying the financial statements, in our opinion and according to the information and explanations given to us, there is no material uncertainty that exists as on the date of the audit report of the company that the company is not capable of meeting its liabilities existing at the date of the balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.
  2. a) There are no remaining unspent amounts towards corporate social responsibility on other than ongoing
  3. projects requiring transfer to a fund specified in schedule VII to the companies act in compliances with second proviso to sub section (5) of section 135 of the said Act pursuant. Hence reporting under this clause is not applicable.

    b) In respect of ongoing projects there are no remaining unspent amounts towards corporate social responsibility as on balance sheet date, so company is not required to transfer the unspent amount to a special account within a period of 30 days from the end of said financial year in compliance with provision of section 135 (6) of the act.

  4. There have been no qualifications or adverse remarks by the respective auditors reports of the companies included in the consolidated financial statements.

For S Tandon & Associates

Chartered Accountants

ICAI Firm Registration Number 006388N

ICAI UDIN: 23518893BGXMLV6076

Sd/-

(Nipun Rastogi)

Partner

Membership No. 518893

Place of Signature: Chandigarh

Date: May 26, 2023

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

We have audited the internal financial controls over financial reporting of Primo Chemicals Ltd. (Formerly Known As Punjab Alkalies & Chemicals Limited) as of 31st March 2023 in conjunction with our audit of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, with reference to standalone financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the Standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial

control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys assets that could have a material effect on the Standalone financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For S Tandon & Associates

Chartered Accountants

ICAI Firm Registration Number 006388N

ICAI UDIN: 23518893BGXMLV6076

Sd/-

(Nipun Rastogi)

Partner

Membership No. 518893

Place of Signature: Chandigarh Date: May 26, 2023

STANDALONE BALANCE SHEET as at 31st March, 2023

For and on Behalf of the Board

Sd/- Sd/- Sd/- Sd/-

(ARUN KUMAR KAUSHAL) (SUGANDHA KUKREJA) (JATIN DAHIYA) (NAVEEN CHOPRA)

Chief Financial Officer Company Secretary Executive Director Managing Director

FCS-11578 DIN: 08106876 DIN: 08465391

As per our separate report of even date

For S. Tandon & Associates

Chartered Accountants
Firm Registration No. 006388N
ICAI UDIN : 23518893BGXMLV6076

Sd/-

(Nipun Rastogi)

Place: Chandigarh Partner

Date: May 26, 2023 Membership No. 518893

STANDALONE STATEMENT OF PROFIT AND LOSS

for the year ended 31st March, 2023

For and on Behalf of the Board

Sd/- Sd/- Sd/- Sd/-

(ARUN KUMAR KAUSHAL) (SUGANDHA KUKREJA) (JATIN DAHIYA) (NAVEEN CHOPRA)

Chief Financial Officer Company Secretary Executive Director Managing Director

FCS-11578 DIN: 08106876 DIN: 08465391

As per our separate report of even date

For S. Tandon & Associates

Chartered Accountants
Firm Registration No. 006388N
ICAI UDIN : 23518893BGXMLV6076

Sd/-

(Nipun Rastogi)

Place: Chandigarh Partner

Date: May 26, 2023 Membership No. 518893