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Carborundum Universal Ltd.

BSE: 513375 Sector: Engineering
NSE: CARBORUNIV ISIN Code: INE120A01034
BSE LIVE 15:41 | 13 Dec 379.45 -1.30
(-0.34%)
OPEN

378.40

HIGH

384.30

LOW

371.65

NSE 15:40 | 13 Dec 380.15 -0.65
(-0.17%)
OPEN

380.10

HIGH

384.80

LOW

377.50

OPEN 378.40
PREVIOUS CLOSE 380.75
VOLUME 27365
52-Week high 395.00
52-Week low 236.35
P/E 58.65
Mkt Cap.(Rs cr) 7,168
Buy Price 379.45
Buy Qty 62.00
Sell Price 0.00
Sell Qty 0.00
OPEN 378.40
CLOSE 380.75
VOLUME 27365
52-Week high 395.00
52-Week low 236.35
P/E 58.65
Mkt Cap.(Rs cr) 7,168
Buy Price 379.45
Buy Qty 62.00
Sell Price 0.00
Sell Qty 0.00

Carborundum Universal Ltd. (CARBORUNIV) - Auditors Report

Company auditors report

To

The Members of Carborundum Universal Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of CarborundumUniversal Limited (“the Company”) which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss (including Other Comprehensive Income) andthe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary policies and other explanatory of the significant information.

Management's Responsibility for the Standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant ws and to the preparation and presentation of thestandalone Ind AS financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2017 its profit flothe changes intotalcomprehensiveincomeitscash equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit referred to in theOther Matters paragraph above we report to the extent applicable 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 the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 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 and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations givento us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements (Refer Note 31 to the financialstatements);

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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 the standalone Ind AS financialstatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated the 8th November 2016 of the Ministry of Finance duringthe period from 8th November 2016 to 30th December 2016. Based on audit proceduresperformed and the representations provided to us by the management we report that thedisclosures are in accordance with the books of account maintained by the Company. (ReferNote 47 to the financial statements).

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
Chennai Partner
May 9 2017 (Membership No. 29519)

Annexure “A” to the Independent Auditor's Report

(Referred to in paragraph (f) under ‘Report on Other Legal and RegulatoryRequirements' of our report of even date) Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 (“the Act”)

We have audited the internal financial controls over financial reporting of CarborundumUniversal 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 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 and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch controls operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing whether arisk of material weakness exists 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 thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.

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 2017 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 Internal Financial Controls Over Financial Reporting issued by the Instituteof Chartered Accountants of India”.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No.: 008072S)
Geetha Suryanarayanan
Partner
Chennai May 9 2017 (Membership No.: 29519)

Annexure “B” to the Independent Auditors' Report

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' 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 the lease agreements are in the name of the Company wherethe Company is the lessee in the 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 undersection 189 of the 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 deposits 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 TaxCustoms Duty Excise Duty Value Added Tax 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 312017 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 2017 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 (Appeals) 2000 - 2001 26.68 17.75
2004 - 2008
2011 - 2015
Sales Tax Appellate Tribunal 1995 - 1997 4.92 1.36
2000 - 2003
Madras High Court 1989 - 1990 0.47 0.47
Central Excise Act 1944 Excise Duty Commissioner of Central Excise (Appeals) 1999 - 2000 1.09 0.58
2009 - 2010
2011 - 2012
Kerala High Court 1986 -1987 0.95 0.95
The Customs Excise & Service Tax Appellate Tribunal 1991 - 1992 2.80 1.66
1993 - 1994
1995 - 1996
1998 - 2003
Service Tax Act 1994 Service Tax Commissioner of Central Excise (Appeals) 2010 - 2011 0.03 0.01
The Customs Excise & Service Tax Appellate Tribunal 2004 - 2008 2.86 2.31

(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 theinformation and explanations given to us no fraud by the Company and no material fraud onthe Company 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 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 177 and 188 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
Chennai Partner
May 9 2017 (Membership No. 29519)