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Carborundum Universal Ltd.

BSE: 513375 Sector: Engineering
NSE: CARBORUNIV ISIN Code: INE120A01034
BSE LIVE 09:15 | 09 Dec 262.00 2.00
(0.77%)
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262.00

HIGH

262.00

LOW

262.00

NSE LIVE 09:35 | 09 Dec 261.70 0.95
(0.36%)
OPEN

261.55

HIGH

261.80

LOW

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OPEN 262.00
PREVIOUS CLOSE 260.00
VOLUME 1
52-Week high 307.40
52-Week low 158.50
P/E 31.34
Mkt Cap.(Rs cr) 4941.32
Buy Price 261.30
Buy Qty 20.00
Sell Price 264.25
Sell Qty 3.00
OPEN 262.00
CLOSE 260.00
VOLUME 1
52-Week high 307.40
52-Week low 158.50
P/E 31.34
Mkt Cap.(Rs cr) 4941.32
Buy Price 261.30
Buy Qty 20.00
Sell Price 264.25
Sell Qty 3.00

Carborundum Universal Ltd. (CARBORUNIV) - Auditors Report

Company auditors report

To

The Members of Carborundum Universal Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of CarborundumUniversal Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements

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. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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 and the Order under section 143(11) ofthe Act.

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.

An audit involves performing procedures to obtain audit evidence about the amounts andthe 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 a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

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.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

(1) 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 it appears from our examination of those books.

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

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in termsof Section 164 (2) of the Act.

(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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit & Auditors) Rule 2014 in our opinionand to the best of our information and according to the explanation given to us :

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements. Refer note 25 to the financial statements.

(ii) The Company did not have any long term contracts and there were no losses on thederivative contracts. Refer Note 41A to the financial statements.

(iii) There has been no delays in transferring amounts were no amounts which wererequired to be transferred to the Investor Education and Protection Fund by the Company.

(2) As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No.: 008072S)
Geetha Suryanarayanan
Partner
Chennai May 4 2016 (Membership No.: 29519)

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph (f) under 'Report on Other Legal and Regulatory Requirements'of our report of even date)

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

We have audited the internal financial controls over financial reporting of CarborundumUniversal Limited ("the Company") as of March 31 2016 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 controlstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting 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 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.

Auditor's Responsibility

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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. 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.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe 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 whether a risk of material weakness exists testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls 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.

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 over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2016 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India".

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No.: 008072S)
Geetha Suryanarayanan
Partner
Chennai May 4 2016 (Membership No.: 29519)

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

(i) In respect of Fixed assets :

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

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and based on theexamination of the registered title deeds provided to us we report that the title deedsof all the immovable properties of land and buildings are held in the name of the Companyas at the balance sheet date; Immovable properties of land and buildings whose title deedshave been pledged as security for loans guarantees etc. are held in the name of theCompany as per the Memorandum of Entry executed by the Company and confirmed by the bankeras on the balance sheet date. In respect of immovable properties of land and buildingsthat have been taken on lease and disclosed as fixed asset in the financial statementsthe lease agreements are in the name of the Company where the Company is the lessee inthe agreement.

(ii) In respect of inventories physical verification was carried out by the managementat reasonable intervals and no material discrepancies were noticed on such verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability

Partnerships or other parties covered in the register maintained under section 189 ofthe Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of making investments and providing guarantees.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. There were no unclaimed deposits at any time duringthe year.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 as amended prescribed by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has been generally regular in depositing undisputed statutory duesincluding provident fund EMPLOYEES' state insurance income tax sales tax service taxvalue added tax duty of customs duty of excise cess and other material statutory duesapplicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable by the Company in respect of ProvidentFund EMPLOYEES' State Insurance Income-tax Sales Tax Service Tax Customs Duty ExciseDuty Value Added Tax cess and other material statutory dues in arrears as at March 312016 for a period of more than six months from the date they became payable.

(c) Details of Sales Tax Service Tax and Excise Duty which have not been deposited ason March 31 2016 on account of disputes are given below:

Name of Statute Nature of dues Forum where dispute is pending Period to which the Amount Relates Amount involved (Rs. in Mio) Amount unpaid (Rs. in Mio)
Central Sales Tax Act 1956 Local Sales Tax Laws of various states Sales Tax Commissioner of Sales Tax 2003-2004 31.73 22.32
(Appeals) 2005 to 2009
2010 to 2014
Sales Tax Appellate Tribunal 1995-1996 2.20 0.14
2001 to 2003
Madras High Court 1989-1990 0.47 0.47
Central Excise Act 1944 Excise Duty Commissioner of Central 2009-2010 0.16 0.16
Excise (Appeals) 2011-2012
Kerela High Court 1986-1987 0.95 0.95
The Customs Excise & Service 1991-1992 2.80 1.66
Tax Appellate Tribunal 1993-1994
1995-1996
1998 to 2003
Service Tax Act 1994 Service Tax Commissioner of Central 2010-2011 0.03 0.01
Excise (Appeals)
The Customs Excise & Service 2004 to 2008 2.86 2.31
Tax Appellate Tribunal

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions and banks. The company has not issued any debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe CARO 2016 is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under Section 45-I of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No.: 008072S)
Geetha Suryanarayanan
Partner
Chennai May 4 2016 (Membership No.: 29519)

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