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Chembond Chemicals Ltd.

BSE: 530871 Sector: Industrials
NSE: N.A. ISIN Code: INE995D01025
BSE LIVE 15:40 | 09 Dec 199.60 -0.55
(-0.27%)
OPEN

204.50

HIGH

204.50

LOW

199.10

NSE LIVE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 204.50
PREVIOUS CLOSE 200.15
VOLUME 1055
52-Week high 257.48
52-Week low 159.50
P/E 8.02
Mkt Cap.(Rs cr) 268.26
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 204.50
CLOSE 200.15
VOLUME 1055
52-Week high 257.48
52-Week low 159.50
P/E 8.02
Mkt Cap.(Rs cr) 268.26
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Chembond Chemicals Ltd. (CHEMBONDCHEM) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR'S REPORT

To

The Members of

Chembond Chemicals Limited

1. Report on the Standalone Financial Statements

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

2. Management's Responsibility for the Standalone 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 read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

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 there under.

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 controls 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 control 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.

4. Opinion

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 2016 and its Profit and Loss and its Cash Flows for the year ended onthat date.

5. Emphasis of Matter

Reference is invited to Note No. 35c of the Notes on Financial Statements. The Companyhad Investments Loans and Advances and debts due from subsidiaries/associate aggregating' 1440.14 lacs. The Net Worth of these entities has eroded. During the year underconsideration the Company has written off debtors and Loans and Advances aggregating '238.46 lacs. Provisions have not been made for the balance amount aggregating ' 1201.68lacs as the Investments are long term and in the opinion of the Management the losses aretemporary in nature.

Our opinion is not modified in respect of these matters.

6. Report on Other Legal and Regulatory Requirements

A) As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order.

B) 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 purpose 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 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 March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 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 to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the 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 financial statements

ii. In our opinion and as per the information and explanations provided to us theCompany has not entered in to any long-term contracts including derivative contractsrequiring provision under applicable laws or accounting standards for material foreseeablelosses and

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

For M/S Kastury & Talati

Chartered Accountants

Firm's Registration No: 104908W

Dhiren P. Talati

(Partner)

Membership No : F/41867

Place: Mumbai

Date: 28th May 2016

'Annexure A' to the Independent Auditor's Report

The Annexure Referred to in paragraph 6A of our report of even date to the members ofChembond Chemicals Limited for the year ended March 31 2016:

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

(b) The Company has a regular programme of physical verification of its Fixed Assets bywhich Fixed Assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain Fixed Assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of Company and the natureof its Assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

2) The management has conducted the physical verification of inventory at reasonableintervals. The discrepancies noticed on physical verification of the inventory as comparedto books records were not material.

3) The Company had granted unsecured loans aggregating ' 64.27 lacs to a subsidiarycompany covered in the Register maintained under section 189 of the Act. Interest thereonhas been received up to the year end. However at the year end the Company has written offthe principal amount of the said loan as irrecoverable. Accordingly the provisions ofclause 3(iii)(a) to (iii)(c) of the order are not commented upon.

4) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act 2013In respect of loans and investments made and guarantees and security provided by it.

5) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

6) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. We have however not made a detailed examinationof the cost records with a view to determine whether they are accurate or complete.

7) a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and other material statutory dues with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of the above were in arrears as at March 312016 for a period of morethan six months from the date they become payable.

b) According to the information and explanation given to us and the records of theCompany examined by us as at March 2016 there are no dues of income tax sales taxservice tax duty of customs duty of excise and value added tax which have not beendeposited on account of any dispute except as follows:

Nature of Dues Amount (Rs. in lakhs) Period for which the amount relates Forum where the dispute is pending
Income Tax 50.10 (already paid) AY 2012-2013 Commissioner of Income Tax (Appeals)

8) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the books of accounts and the records of the Company theCompany has not defaulted in repayment of loans or borrowings to banks. The Company hasnot taken any loan or borrowings either from financial institutions or from the governmentand has not issued any debentures.

9) Based upon the audit procedures performed and the information and explanations givenby the management the Company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans during the year.Accordingly the provisions of clause 3(ix) of the order are not applicable to theCompany.

10) Based upon the audit procedures performed and the information and explanationsgiven by the management no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.

11) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;

12) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore the provisions of clause 3(xii) of the Orderare not applicable to the Company.

13) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act and details of such transactions have beendisclosed in the Financial Statements as required by the applicable accounting standards.

14) Based upon the audit procedures performed and the information and explanationsgiven to us and based on our examination of the records of the Company the Company hasnot made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly the provisions of clause3(xiv) of the Order are not applicable to the Company.

15) Based upon the audit procedures performed and the information and explanationsgiven to us and based on our examination of the records of the Company the Company hasnot entered into any non-cash transactions with directors or persons connected with him.Accordingly the provisions of clause 3(xv) of the Order are not applicable to theCompany.

16) In our opinion the Company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934. Accordingly the provisions of clause 3(xvi) of theOrder are not applicable to the Company.

For M/S Kastury & Talati

Chartered Accountants

Firm's Registration No: 104908W

Dhiren P. Talati

(Partner)

Membership No : F/41867

Place: Mumbai

Date: 28th May 2016.

'Annexure B' to the Independent Auditor's Report

The Annexure Referred to in paragraph 6B(f) of our report of even date to the membersof Chembond Chemicals Limited for the year ended March 312016:

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of ChembondChemicals Limited ("the Company") as of March 31 2016 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

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 (ICAI) These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' 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") 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 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 the risk that a material weakness exists and 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 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.

Opinion

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 2016 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 M/S Kastury & Talati

Chartered Accountants

Firm's Registration No: 104908W

Dhiren P. Talati

(Partner)

Membership No : F/41867

Place: Mumbai

Date: 28th May 2016.

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