The Members of
Camlin Fine Sciences Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Camlin FineSciences Limited ("the Company") which comprise the balance sheet as at March31 2017 the statements of profit and loss and the cash flow for the year then ended anda summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
2. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 (asamended). This responsibility also includes the maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of internal financialcontrol that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
8. 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 2017 and its profit and cash flows for the year ended on that date.
Emphasis of Matters
9. We draw attention to Note No. 11 of the standalone financial statements in respectof the Company's investment of Rs 56.01 lakhs in and loans of Rs 199.66 lakhs given to itssubsidiary company recoverability of which is based on successful implementation ofmanagement's future plans in respect of the subsidiary.
Our opinion is not modified in respect of this matter.
Report on other Legal and Regulatory Requirements
10. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act (the"Order") and on the basis of such checks of the books and records of theCompany as we considered appropriate and according to the information and explanationsgiven to us we give in Annexure A a statement on the matters specified in the paragraphs3 and 4 of the Order.
11. 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 far as appears from our examination of those books;
c) the Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith 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 written representations received from the directors as on 31 March2017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 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".
g) With respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) in our opinionand to our 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 in its standalone financial statements - Refer Note 34 to the standalonefinancial statements.
ii. The Company did not have any long term contracts including derivative contracts onwhich provision for material foreseeable losses was required under the applicable law oraccounting standards.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and protection Fund by the Company.
iv. The Company has provided requisite disclosures in Note 38 to the standalonefinancial statements as to holdings as well as dealings in Specified Bank Notes during theperiod from November 8 2016 to December 30 2016. Based on our audit procedures andrelying on the management representation we report that the disclosures are in accordancewith books of account maintained by the Company and as produced by to us by themanagement.
ANNEXURE A TO THE AUDITOR'S REPORT REFERRED TO IN PARAGRAPH 10 OF OUR REPORT OF EVENDATE ON THE STANDALONE FINANCIAL STATEMENTS OF MEMBERS OF CAMLIN FINE SCIENCES LIMITED FORTHE YEAR ENDED MARCH 31 2017
1) i. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
ii. According to the information and explanations given to us the fixed assets arephysically verified by the management according to a phased programme designed to coverall the items over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets.
iii. The title deeds of immovable property of the Company are held in the name of theCompany.
2) Management has conducted physical verification of inventory during the year.Confirmations have been received in respect of inventories lying with third parties. Inour opinion the frequency of verification is reasonable. The discrepancies noticed onverification between physical stocks and book records were not material and have beenproperly dealt with in the books of account.
3) The Company has granted unsecured loans to 8 companies covered in the registermaintained under Section 189 of the Act which aggregated Rs 3661.35 lakhs at March 312017.
i. The aforesaid loans have been made to its subsidiaries. According to the informationand explanations given to us and having regard to management's representation that theloans given to subsidiaries of the Company are in the interest of the Company's businessthe rate of interest and other terms and conditions for such loans are not prima facieprejudicial to the interest of the Company.
ii. According to the information and explanations given to us and to the best of ourknowledge no schedule of repayment of principal and interest has been stipulated inrespect of the loans aggregating
Rs 936.09 lakhs. In respect of the other loans the same are repayable over a period of2 to 3 years (includes one loan whose terms has been extended to 2 to 3 years) from thedate on which these have been granted without any specific stipulation as to payment ofinterest and principal.
iii. In respect of the loans referred to in this clause in view of no specificstipulation as to payment of interest and principal we are unable to comment on theoverdue amount if any on such loans.
4) In our opinion and according to the information and explanations given to us theCompany has complied with all provisions of Section 185 and 186 of the Companies Act 2013and the Rules framed thereunder in respect of loans investments guarantees and othersecurity given by the Company.
5) As indicated in Note 8 to the standalone financial statements the Company has inrespect of the deposits accepted by it complied with the provisions of Section 73-76 ofthe Act read with the Rules framed thereunder. According to the information andexplanations given to us the Company has not accepted deposits during the year endedMarch 31 2017. According to information and explanations given to us and to the best ofour knowledge and belief no order has been passed by the Company Law Board or the ReserveBank of India or any court or other tribunal which is to be complied with by the Company.
6) We have broadly reviewed the books of account maintained by the Company in respectof the products where pursuant to the rules made by the Central Government of India themaintenance of cost records has been prescribed under Section 148 of the Act and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.
7) i. According to the records of the Company the Company is generally regular indepositing with the appropriate authorities undisputed statutory dues including ProvidentFund Employees' State Insurance Income Tax Excise Duty Customs Duty Sales TaxService Tax Customs Duty Value Added Tax and other statutory dues applicable to it.
ii. According to the information and explanations given to us there are no undisputedamounts payable in respect of Provident Fund Employees' State Insurance Income TaxSales Tax Excise Duty Service Tax Customs Duty and Value Added Tax that wereoutstanding at the year-end for a period of more than six months from the date theybecame payable.
iii. According to the information and explanations given to us and records of theCompany examined by us except sales tax and value added tax there are no dues of IncomeTax Sales Tax Value Added Tax Service Tax Excise Duty and Custom Duty which have notbeen deposited on account of any dispute except as indicated below:
|Name of the Statue ||Nature of Dues ||Rs In lakhs ||Period to which the amount relates ||Forum |
|Maharashtra ||Value ||72.16 ||2010-2011 ||Joint |
|Value Added ||Added || || ||Commissioner |
|Tax Act 2002 ||Tax || || ||Appeals |
|Central Sales ||Sales Tax ||630.35 ||2010-2011 ||Joint |
|Tax 1956 || || || ||Commissioner |
| || || || ||Appeals |
8) Based on the records examined by us and according to the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to any financial institution bank or Government during the year. The Companyhas not issued any debentures.
9) In our opinion and according to the information and explanations given to us theterm loans availed by the Company have been applied by the Company for the purposes forwhich they were obtained. The Company has not raised money by way of initial public offeror further public offer (including debt instruments) during the year.
10) During the course of our audit carried out in accordance with the generallyaccepted auditing practices in India and according to the information and explanationsgiven to us we have neither come across any instance of fraud by the Company or on theCompany by its officers or employees noticed or reported during the year nor have webeen informed of such case by the management.
11) Based on the records examined by us and according to the information andexplanations given to us 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.
12) The Company not being a Nidhi Company the para 3(xii) of the Order is notapplicable to the Company.
13) Based on the records examined by us and according to the information andexplanations given to us transactions with the related parties are in compliance withsections 177 and 188 of the Act where applicable and details of such transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.
14) According to the information and explanation given to us and to the best of ourknowledge and belief the placement of equity shares of the Company to QualifiedInstitutional Buyers during the year is in compliance with the requirements of Section 42of the Act. The amount raised have been used for the purpose for which these have beenraised and pending such utilization have been invested in money market mutual funds aspermissible under the Placement Document issued by the Company at the time of the issue.The Company has not issued any preferential allotment or private placement of fully orpartly convertible debentures.
15) According to the information and explanations given to us the Company has notentered into non-cash transactions with directors or persons connected with them. Henceprovisions of para 3(xv) are not applicable to the Company.
16) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Hence provisions of para 3(xvi) of the Order are not applicableto the Company.
Annexure B to the Independent Auditor's Report of even date on the standalone financialstatements of Camlin Fine Sciences Limited Report on the Internal Financial Controls underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")
We have audited the internal financial controls over financial reporting of Camlin FineSciences Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
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 Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement 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 systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements..
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
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 2017 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.
| ||For B. K. Khare and Co. |
| ||Chartered Accountants |
| ||Firm's Registration No. : 105102W |
| ||Himanshu Chapsey |
| ||Partner |
|Mumbai May 19 2017 ||Membership No. : 105731 |