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Kamar Chemicals & Industries Ltd.

BSE: 531001 Sector: Industrials
NSE: N.A. ISIN Code: INE728D01012
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Kamar Chemicals & Industries Ltd. (KAMARCHEMICALS) - Auditors Report

Company auditors report

To

The Members of

MIS. KAMAR CHEMICALS & INDUSTRIES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of "M/S. KAMAR CHEMICALS& INDUSTRIES LIMITED" ("the company") which comprise the balancesheet as at March 31 2015 and a summary of significant accounting policies and otherexplanatory information.

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 oftheses financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.This responsibility includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of thecompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; and design implementation and maintenanceof adequate internal financial control relevant that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fare viewand are free from misstatement whether due to fraud or error.

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 n the audit repost 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 anddisclosures in the financial statements. The procedures selected depend on theaudit’s judgments including the assessment of the risks of material misstatements ofthe financial statements whether due fraud or error. In making those risk assessmentsthe auditor considers 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 give appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place and adequate internal financialcontrol systems over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating 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 financial statements.

Basis for Adverse Opinion

In our opinion the concept of "GOING CONCERN" is no more valid as far asthis company is concerned having regards to the following:

a. . The Company has incurred a net loss of Rs.385705 /- and a cash loss ofRs.71654/- in the current year. .

b. The net worth has been fully eroded and the accumulated losses as at 31.03.2015stand at Rs.24.16 Crores as against the net owned shareholders funds ofRs.7.33 Crores.

c. The SIPCOT has takeover all the assets of the Company during the financial year20072008 and the viability of the Company appears to be doubtful as the company is not ina position to recommence its production.

d. In view of the above we are of the opinion that the Company’s Accounts shouldNOT have been compiled on "GOING CONCERN" basis. Had the Company not followed‘GOING CONCERN ACCOUNTING" there would have significant Adjustments to theassets and liabilities as on 31st March 2015 which may result in further erosion in networth of the Company. The impact of above on the accounts is not ascertainable at thisstage.

Adverse Opinion

In our opinion because of the omission of the information mentioned in the Basis forAdverse

Opinion paragraph the financial statements do not give the information required by theCompanies Act 2013 in the manner so required and also do not give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31s* March 2015 and its profit or loss and its cash flowsfor the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Government (Auditor’s Report) Order 2015 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act2013 we give in the Annexure a statement on the mattersspecified in paragraphs 4 and 5 of the Order to the extent applicable.

2. As required by section 143(3) of the Act we report that

a. We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit. •

b. In our opinion proper books of accounts as required by law have been kept by theCompany so far as appears from our examination of those books:

c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby the Report are in agreement with the books of account.

d. In our opinion the Balance Sheet Statement and Profit and Loss and cash FlowStatement comply with Accounting Standards specified under section 133 of the Act readwith Rule 7 of the Companies Act 2013. .

e. On the basis of written representations received from the directors as on 31st March2015 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 312015 from being appointed as a director in terms of section 134 (2) of theAct.

f. With respect to the other matter to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rule 2014 in our opinionand to the best of our information and according te the explanation given to us;

i. the Company has disclosed the impact of pending litigations on its financialposition in its financial statements as referred to in Note -20 to the financialstatements;

ii. the Company did not have any material foreseeable losses on long-term contractsincluding derivatives contracts;

iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For S.VENKATRAM & CO
Chartered Accountants
F R No 004656S
Place : Chennai -18 . B GOWTHAMAN
Date : 29/05/2015 Partner
(M.No.201737)

Annexure -1

ANNEXURE REFERRED TO IN OUR REPORT OF EVEN DATE

Referred to in paragraph 1 of our report of even date

(i) a) The Company has maintained proper records showing full particulars includingquantitative details and location of the Fixed Assets.

b) All the assets have not been physically verified by the management during the yearbut there is a regular program of physical verification which in our opinion isreasonable having regard to the size of the Company and the nature of fixed assets. Nomaterial discrepancies have been noticed in respect of the assets physically verifiedduring the year.

(ii) The company does not have any inventories.

(iii) The company has not granted loans secured of unsecured to companies firm orother parties covered in the register maintained under section 189 of the Companies ActAccordingly the requirements of clauses (iii) (a) to (b) of the Paragraph 3 of the Orderare not applicable.

(iv) In Our opinion and according to the information and explanations given to us theCompany there is-adequate internal control system commensurate with the size of theCompany and the nature of its business with regard to purchase of inventory and fixedassets and for the sale of goods and services. During the course of our audit no majorweakness has been noticed in the internal control.

(v) In Our Opinion and according to the information and explanations given to us theCompany has complied with the directive issued by Reserve Bank of India and the Provisionsof Sections 73 to 76 of the Act and the rules framed here under with regard to depositsaccepted from the public.

(vi) The Central Government has not prescribed for the maintenance of cost recordsunder section 148(1) of the Companies Act 2013 any of the products dealt by the company.

(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 income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company did not have any dues onaccount of employees’ state insurance and duty of excise.

According to the information and explanations given to me no undisputed amountspayable in respect of provident fund income tax sales tax wealth tax service tax dutyof customs value added tax cess and other material-statutory dues were in arrears as at31 March 2015 for a period of more than six months from the date they became payableexcept sales tax payable of Rs.115375/-

(b) According to the information and explanations given to us there are no materialdues of income tax sales tax wealth tax service tax duty of customs duty of excisevalue added tax or cess which have not been deposited with the appropriate authorities onaccount of any dispute.

(viii) The company has accumulated losses at the end of the financial year and it hasincurred cash losses in the current and immediately preceding financial year

(ix) The Company has not borrowed any amount from financial institutions or banks andraised any funds through debentures during the year.

(x) The Company has not given any guarantee for loans taken by others from banks orfinancial institutions. Hence we have no comments to offer in this regard.

(xi) No term loans were obtained by the company during the year under audit.

(xii) No fraud on or by the company has been noticed or reported during the course ofour audit.

For S.VENKATRAM & CO
Chartered Accountants
F R No 004656S
Place : Chennai -18 B GOWTHAMAN
Date : 29/05/2015 Partner
(NI.No.201737)