You are here » Home » Companies » Company Overview » Himadri Speciality Chemical Ltd

Himadri Speciality Chemical Ltd.

BSE: 500184 Sector: Industrials
NSE: HSCL ISIN Code: INE019C01026
BSE LIVE 09:54 | 24 Nov 169.00 -1.55
(-0.91%)
OPEN

171.25

HIGH

171.75

LOW

168.25

NSE 09:39 | 24 Nov 169.30 -1.80
(-1.05%)
OPEN

171.40

HIGH

171.40

LOW

168.50

OPEN 171.25
PREVIOUS CLOSE 170.55
VOLUME 64242
52-Week high 178.30
52-Week low 32.70
P/E 46.56
Mkt Cap.(Rs cr) 7,071
Buy Price 168.90
Buy Qty 762.00
Sell Price 169.30
Sell Qty 8.00
OPEN 171.25
CLOSE 170.55
VOLUME 64242
52-Week high 178.30
52-Week low 32.70
P/E 46.56
Mkt Cap.(Rs cr) 7,071
Buy Price 168.90
Buy Qty 762.00
Sell Price 169.30
Sell Qty 8.00

Himadri Speciality Chemical Ltd. (HSCL) - Auditors Report

Company auditors report

To the Members of Himadri Chemicals & Industries Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Himadri Chemicals& Industries Limited ("the Company") which comprise the Balance Sheet as at31 March 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.

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 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. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement 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.

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 theauditors’ judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditors’ consider internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall 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 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 31 March 2016 and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Companies Act 2013 we give in the "Annexure A" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. 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 read with Rule 7 of theCompanies (Accounts) Rules 2014.

e. On the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (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 B’’.

g. With respect to the other matters to be included in the Auditors’ 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 explanation given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - refer note 31(a) 37 and 40 to the financialstatements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - refer note 35 to the financial statements;

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

For B S R & Co. LLP For S. JAYKISHAN
Chartered Accountants Chartered Accountants
Firm’s Registration No.: 101248W/W-100022 Firm’s Registration No.: 309005E
Sd/- Sd/-
Jayanta Mukhopadhyay B. K. Newatia
Partner Partner
Membership No.: 055757 Membership No.: 050251
Place: Kolkata Place: Kolkata
Date: 23 May 2016 Date: 23 May 2016

Annexure –A to the Independent Auditors’ Report

(Referred to in our report of even date)

(i) (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 all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its fixed assets. In accordance with this programmecertain items of fixed assets have been physically verified during the year and nomaterial discrepancies were noticed on such verification.

(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.

(ii) The inventory except stock lying with third parties and goods in transit havebeen physically verified by the management during the year. In our opinion the frequencyof such verification is reasonable. For stock lying with third parties as at the year endwritten confirmations have been obtained by the management. The discrepancies noticed onverification between the physical stocks and the book records were not material.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under Section 189 of theAct. Accordingly provisions of paragraph 3(iii) of the Order are not applicable to theCompany.

(iv) The provisions of Section 185 are not applicable to the Company. In our opinionand according to the information and explanations given to us with respect to the loansinvestments and guarantees given the Company has complied with the provisions of Section186 of the Act. The Company has not provided any security under the provisions of Section186 of the Act.

(v) The Company has not accepted any deposits from the public in accordance with theprovisions of Section 73 to 76 of the Act and rules framed thereunder. Accordinglyprovisions of paragraph 3(v) of the Order are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148(1) of the Act in respect of the products manufactured by the Company and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of such records.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees’State Insurance Income-tax Sales tax Value added tax Service tax Customs duty Exciseduty Cess and any other material statutory dues have generally been regularly depositedwith the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees’ State Insurance Income-tax Salestax Value added tax Service tax Customs duty Excise duty Cess and any other materialstatutory dues were in arrears as at 31 March 2016 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Value added tax Service tax Customs duty and Excise duty whichhave not been deposited with the appropriate authorities on account of any dispute exceptas mentioned below:

Name of the statute Nature of the dues Total amount under dispute ( in Lakhs) Total amount paid under protest ( in Lakhs) Period to which the amount relates Forum where dispute is pending
Central Sales Tax Act 1956 Central Sales tax 775.8 5.02 2005 to 2012 Appellate and Revision Board
30.45 7.61 2005-2006 Sales Tax Appellate Tribunal
369.16 55.37 2012-2013 Senior Joint Commissioner
West Bengal Value Added Tax Act 2003 Value added tax 2119.43 - 2005 to 2011 Appellate and Revision Board
257.91 - 2005-2006 Senior Joint Commissioner -Special Cell
Central Excise Act 1944 Excise duty 433.42 - 2006 to 2008 Custom Excise and Service Tax Appellate Tribunal
7.29 - 2011 to 2013 Assistant Commissioner of Central Excise
9.41 0.16 2004 to 2012 Commissioner (Appeals) of Central Excise
30.66 - 2011-2012 Additional Commissioner of Central Excise
718.12 204.56 2010-2011 Commissioner of Central Excise
1.13 - 2014-2016 Deputy Commissioner of Central Excise
19.97 - 2011-2012 Joint Commissioner of Central Excise
The Custom Act 1962 Custom duty 28.83 3 2000-2001 Custom Excise and Service Tax Appellate Tribunal
Finance Act 1994 Service tax 50.33 - 2010-2011 Commissioner of Central Excise
Chhattisgarh Entry Tax Act 1976 Entry tax 353.21 189.9 2012-2016 Hon’ble High Court of Judicature Chhatisgarh at Bilaspur.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to any financialinstitution banks government or debenture holders during the year.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyprovisions of paragraph 3 (ix) of the Order are not applicable to the Company.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid and provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

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

(xiii) 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 Section 188 of the Act where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theapplicable accounting standards.

(xiv) During the year the Company has issued 32675297 number of equity shares of H1per share to Himadri Coke & Petro Limited a related party covered under Section 189of the Act at a price of H19 per share (including premium of H18 per share) onpreferential basis in consideration for other than cash in lieu of 12300 Deep DiscountDebentures valued at H6208.30 lakhs by an independent qualified valuer. According to theinformation and explanations given to us the Company has complied with the requirementsof Section 42 of the Act to the extent applicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them in respect of which provisionsof Section 192 of the Act are applicable. Accordingly provisions of paragraph 3(xv) ofthe Order are not applicable to the Company.

(xvi) 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.Accordingly provisions of paragraph 3(xvi) of the Order are not applicable to theCompany.

For B S R & Co. LLP For S. JAYKISHAN
Chartered Accountants Chartered Accountants
Firm’s Registration No.: 101248W/W-100022 Firm’s Registration No.: 309005E
Sd/- Sd/-
Jayanta Mukhopadhyay B. K. Newatia
Partner Partner
Membership No.: 055757 Membership No.: 050251
Place: Kolkata Place: Kolkata
Date: 23 May 2016 Date: 23 May 2016

Annexure – B to the Independent Auditors’ Report of 31 March 2016 on theStandalone Financial Statements of Himadri Chemicals & Industries Limited

(Referred to in our report of even date)

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 HimadriChemicals & Industries Limited ("the Company") as of 31 March 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear 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"). 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 safeguardingof its 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.

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 auditors’ 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea 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 31 March 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 B S R & Co. LLP For S. JAYKISHAN
Chartered Accountants Chartered Accountants
Firm’s Registration No.: 101248W/W-100022 Firm’s Registration No.: 309005E
Sd/- Sd/-
Jayanta Mukhopadhyay B. K. Newatia
Partner Partner
Membership No.: 055757 Membership No.: 050251
Place: Kolkata Place: Kolkata
Date: 23 May 2016 Date: 23 May 2016