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Kanoria Chemicals & Industries Ltd.

BSE: 506525 Sector: Industrials
NSE: KANORICHEM ISIN Code: INE138C01024
BSE LIVE 15:40 | 22 Aug 74.75 -1.85
(-2.42%)
OPEN

77.20

HIGH

77.90

LOW

74.30

NSE 15:44 | 22 Aug 74.90 -1.75
(-2.28%)
OPEN

77.60

HIGH

77.60

LOW

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OPEN 77.20
PREVIOUS CLOSE 76.60
VOLUME 19531
52-Week high 99.80
52-Week low 62.80
P/E 10.43
Mkt Cap.(Rs cr) 327
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 77.20
CLOSE 76.60
VOLUME 19531
52-Week high 99.80
52-Week low 62.80
P/E 10.43
Mkt Cap.(Rs cr) 327
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kanoria Chemicals & Industries Ltd. (KANORICHEM) - Auditors Report

Company auditors report

TO THE MEMBERS OF KANORIA CHEMICALS & INDUSTRIES LIMITED

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of KANORIACHEMICALS & INDUSTRIES LIMITED ('the Company') which comprise the Balance Sheetas at 31st March 2016 the Statement of Profit and Loss and the Cash Flow Statement forthe year then ended and a summary of significant accounting policies and otherexplanatory 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 of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments 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.

AUDITOR'S 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 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.

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 31st March 2016 and its profit and its cash flows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 'A' a statement on the matters specified in the paragraph3 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 theapplicable Accounting Standards specified under Section 133 of the Act read with Rule 7of the Companies (Accounts) Rules 2014;

e. on the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st 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'; and

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 litigation on its financial positionin its financial statement - Refer Note No. 28 to the financial statements;

ii. the Company has long term contracts including derivative contracts as at 31stMarch 2016 for which there were no 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 except for Rs. 0.43 millionwhich is held in abeyance due to pending legal cases.

ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31 March 2016 we reportthat:

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

(b) As per the information and explanations given to us physical verification of fixedassets have been carried out in terms of the phased program of verification of its fixedassets adopted by the Company and no material discrepancies were noticed on suchverification. In our opinion the frequency of verification is reasonable having regard tosize of the Company and nature of its business.

(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. As per the information and explanations given to us the inventories have beenphysically verified at reasonable intervals during the year by the management and nomaterial discrepancies between book stock and physical stock have been found.

iii The Company has not granted any loans secured or unsecured to companies firmslimited liability partnership or other parties listed in the register maintained underSection 189 of the Companies Act 2013. Accordingly the provisions of paragraph 3(III)3(III)(a) to 3(III)(c) of the said order are not applicable.

iv. 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 Act with respectto loans and investments made during the year.

v. The Company has not accepted any deposit from the public within the meaning ofsection 73 74 75 and 76 of the Act and Rules framed thereunder

to the extent notified.

vi. We have broadly reviewed the books of accounts maintained by Company in respect ofproduct where pursuant to the rule made by the Central Government of India themaintenance of cost records has been prescribed under section 148 (1) of the Companies Act2013 and are of the opinion that prima facie the prescribed records have beenmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company is generally regular indepositing undisputed statutory dues including provident fund employee's state insuranceincome tax sales tax service tax duty of customs duty of excise value added tax cessand other statutory dues with the appropriate authorities. According to the informationand explanations given to us no undisputed amounts are payable in respect of providentfund employees' state insurance income tax sales tax service tax duty of customsduty of excise value added tax cess and other material statutory dues were in arrears asat 31st March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us the dues of sales taxincome tax duty of customs duty of excise service tax and value added tax which havenot been deposited on account of any dispute and the forum where the dispute is pending ason 31st March 2016 are as under :-

Name of the statute Nature of Dues Amount (Rs in Million) Year Forum where dispute is pending
The Service Tax under the Finance Act 1994 Service Tax 6.60 Apr-2009 to Aug-2012 Commissioner (A) - Central Excise
The Indian Stamp Act 1899 Stamp Duty 3.19 2011-12 Rajasthan High Court

viii. According to the records of the Company examined by us and the information andexplanations provided to us the Company has not defaulted in repayment of loans orborrowings to any Financial Institutions or Banks or dues to debenture holders. Further asat the Balance sheet date the Company does not have any loans or borrowing from theGovernment.

ix. The company did not raise any money by way of initial public offer or furtherpublic offer including debt instruments during the year. However the

Company has raised Term Loan during the year and has applied the same for the purposefor which term loans are raised.

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

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order isnot applicable.

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 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT

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 KANORIACHEMICALS & INDUSTRIES LIMITED ("the Company") as of 31st 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'). 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.

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") 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 judgment 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 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 authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 SINGHI & CO.
Chartered Accountants
Firm Registration No.302049E
(RAJIV SINGHI)
Place: New Delhi (Partner)
Date: 27th May 2016 Membership No. 53518