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Deepak Nitrite Ltd.

BSE: 506401 Sector: Industrials
NSE: DEEPAKNTR ISIN Code: INE288B01029
BSE LIVE 10:52 | 27 Jul 170.40 -3.35
(-1.93%)
OPEN

173.00

HIGH

174.20

LOW

170.05

NSE 10:35 | 27 Jul 171.80 -2.20
(-1.26%)
OPEN

174.15

HIGH

174.45

LOW

171.65

OPEN 173.00
PREVIOUS CLOSE 173.75
VOLUME 10525
52-Week high 194.80
52-Week low 75.80
P/E 39.54
Mkt Cap.(Rs cr) 2,227
Buy Price 169.75
Buy Qty 57.00
Sell Price 170.40
Sell Qty 8.00
OPEN 173.00
CLOSE 173.75
VOLUME 10525
52-Week high 194.80
52-Week low 75.80
P/E 39.54
Mkt Cap.(Rs cr) 2,227
Buy Price 169.75
Buy Qty 57.00
Sell Price 170.40
Sell Qty 8.00

Deepak Nitrite Ltd. (DEEPAKNTR) - Auditors Report

Company auditors report

To the Members of Deepak Nitrite Limited Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Deepak NitriteLimited ("the Company") which comprise the standalone balance sheet as at March31 2017 and the related standalone statements of profit and loss and cash flow for theyear then ended and a summary of the significant accounting policies and otherexplanatory information thereon.

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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 (as amended). 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.

Auditor's Responsibility

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 the 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. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the 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.

Opinion

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 its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. 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 the Annexure I a statement on the matters specified in paragraphs3 and 4 of the Order.

10. As required by Section 143(3) of the Act we report that: a. we have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit; b. in our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c. the balance sheet the statement of profit and loss andcash flow dealt with by this Report are in agreement with the books of account; d. In ouropinion the aforesaid standalone financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 (as amended); e. on the basis of written representations receivedfrom the directors as on March 31 2017 taken on record by the Board of Directors none ofthe directors is disqualified as on March 31 2017 from being appointed as a director interms of Section 164(2) of the Act. f. With respect to the adequacy of internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate report in Annexure II. g. With respect to the othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014(as amended) in our opinion and to the best of ourinformation and according to the explanations given to us: i) The Company has disclosedthe impact of pending litigations on its financial position in its financial statements– Refer Note 32 to the financial statements. ii) The Company has made provision asrequired under the applicable law or accounting standards for material foreseeablelosses if any on long-term contracts including derivative contracts. iii) There has beenno delay in transferring amounts required to be transferred to the Investor Educationand Protection Fund by the Company. iv) The Company has provided requisite disclosures inthe standalone financial statements as to holdings as well as dealings in Specified BankNotes during the period from November 8 2016 to December 30 2016. Based on auditprocedures and relying on the management representation we report that the disclosuresare in accordance with books of account maintained by the Company and as produced to us bythe Management. Refer Note 34.

For B. K. Khare & Co.
Chartered Accountants
Firm's Registration Number 105102W
Himanshu Chapsey
Partner
Membership Number: 105731
Mumbai
April 28 2017

ANNEXURE I

TO THE AUDITOR'S REPORT

Referred to in paragraph 9 of our report of even date on the standalone financialstatements of Deepak Nitrite Limited for the year ended March 31 2017 1. i) The Companyhas maintained proper records showing full particulars including quantitative details andsituation of fixed assets. ii) The Company has a rotational programme for verification ofits fixed assets over a period of 3 years. In our opinion the frequency of verificationis reasonable having regard to the size of the Company and the nature of its assets. Thefixed assets have been physically verified by the Management during the year.Discrepancies noticed on such verification were not material and have been properly dealtwith in the books of accounts. iii) According to the information and explanations given tous and on the basis of our examination of the records of the Company the title deeds ofimmovable properties are held in the name of the Company.

2. Inventories have been physically verified by management at reasonable intervalsduring the year. The discrepancies noticed on such verification were not material and havebeen adjusted in the books of account of the Company.

3. As informed to us and to the best of our knowledge and belief the Company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under section 189 of the Act. Accordingly the provisions of para3(iii) of the Order are not applicable to the Company.

4. The Company has not granted any loans or provided any guarantees or security to theparties covered under Section 185 and 186. According to the information and explanationsgiven to us and to the best of our knowledge the provisions of section 185 and 186 of theAct have been complied with in respect of the investments made by the Company.

5. In our opinion and according to the information and explanations given to us and asdescribed in Note 10 to the financial statements the Company has in respect of thedeposits accepted by it complied with the directives issued by the Reserve Bank of Indiato the extent applicable and the provisions of Sections 73-76 of the Act read with theRules framed thereunder. According to the information and explanations given to us and tothe best of our knowledge and belief no order has been passed by the Company Law Board orthe National Company Law Tribunal or the RBI or any other court or tribunal which is to becomplied with by the Company.

6. As informed to us the maintenance of cost records has been prescribed by theCentral Government under section 148(1) of the Companies Act 2013 in respect of theactivities carried on by the Company. We have broadly reviewed the books of accountrelating to materials labour and other items of cost maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records and are ofthe opinion that prima facie the prescribed accounts and records have beenmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of customs duty of excise value added tax cess andother material statutory dues as applicable with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof such statutory dues are in arrears as on March 31 2017 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanations given to us dues of income-taxsales tax service tax excise duty customs duty and work contract tax which have notbeen deposited on account of any dispute are as follows:

Name of the Statue Nature of Dues Rs lakhs Period to which the amount relates Forum where pending
Central Excise Act 1944 Excise Duty 103.42 April 2011 to March 2016 Assistant Commissioner Central Excise
Central Excise Act 1944 Excise Duty 168.74 April 2012 to March 2016 Commissioner Central Excise
Central Excise Act 1944 Excise Duty 213.85 July 1998 to March 2016 Central Excise & Service Tax Appellate Tribunal

Name of the Statue Nature of Rs lakhs Period to which the Forum where pending Duesamount relates

Central Excise Act 1944 Excise Duty 7.22 April 2010 to March 2014 DeputyCommissioner - Central Excise Central Sales Tax Act Sales Tax 72.84 April 2005 to March2013 Additional Commissioner Sales Tax Mumbai Stamp Act Stamp Duty 22.85 March 2010 ChiefController of Revenue Authorities Hyderabad Metropolitan Sewerage 11.13 2008-09 to 2013-14High Court of Andhra Water Supply & Sewerage Cess Pradesh Act 1989

8. According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to any financial institution or bank or Government. The Company has not raisedany money via debentures.

9. The Company has not raised any moneys by way of initial public offer or furtherpublic offer during the year and hence the provisions of para 3(ix) of the Order are notapplicable to the Company. According to the information and explanations given to us andto the best of our knowledge and belief the money raised by way of term loans have beenapplied for the purposes for which these were raised.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

11. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

12. According to the information and explanations given to us the Company is not aNidhi Company and hence the provisions of para 3(xii) of the Order are not applicable tothe Company.

13. According to the information and explanations given to us the related partytransactions entered into by the Company are in accordance with the provisions of Section177 and 188 of the Act.

14. According to the information and explanations 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 amounts 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.

15. According to the information and explanations given to us and to the best of ourknowledge and belief the Company has not entered into any non-cash transactions with itsdirectors or persons connected with them. Accordingly the provisions of para 3(xv) of theOrder are not applicable to the Company.

16. According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For B. K. Khare & Co.
Chartered Accountants
Firm's Registration Number 105102W
Himanshu Chapsey
Mumbai Partner
April 28 2017 Membership Number: 105731

ANNEXURE II

TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTSOF DEEPAK NITRITE LIMITED

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 DeepakNitrite Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company as at and for the year endedon 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatoperate effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the 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. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 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 & Co.
Chartered Accountants
Firm's Registration Number 105102W
Himanshu Chapsey
Mumbai Partner
April 28 2017 Membership Number: 105731