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Khaitan Chemicals & Fertilizers Ltd.

BSE: 507794 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE745B01028
BSE LIVE 15:40 | 15 Dec 21.25 -0.65
(-2.97%)
OPEN

21.30

HIGH

22.55

LOW

21.00

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 21.30
PREVIOUS CLOSE 21.90
VOLUME 41802
52-Week high 28.60
52-Week low 12.60
P/E 118.06
Mkt Cap.(Rs cr) 206
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 21.30
CLOSE 21.90
VOLUME 41802
52-Week high 28.60
52-Week low 12.60
P/E 118.06
Mkt Cap.(Rs cr) 206
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Khaitan Chemicals & Fertilizers Ltd. (KHAITANCHEMICAL) - Auditors Report

Company auditors report

To the Members of Khaitan Chemicals and Fertilizers Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Khaitan Chemicals andFertilizers Limited ("the Company")which comprise the balance sheet as at March31 2017 the statement of profit and loss the cash flow statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

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 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.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 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 proceduresappropriate in the circumstances. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 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 subsection (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. As required by section 143 (3) of theAct 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 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 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" 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 litigations on its financialposition in its financial statements - Refer note 32 to the financial statements;

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 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 during the year ended March 312017;

iv. the Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from November 82016 to December 30 2016 and these are in accordance with the books of accountsmaintained by the Company-Refer note 33 to the financial statements.

for S S KOTHARI MEHTA & CO.
Chartered Accountants
Firm's Registration Number: 000756N
Harish Gupta
Place: Gurugram Partner
Date: May 29 2017 Membership Number: 098336

"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure as referred to in Independent Auditor's report to the members of theCompany on the financial statements for the year ended March 31 2017 we report that:

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

(b) The fixed assets have been physically verified by the management according to theprogramme of periodical verification in phased manner which in our opinion is reasonablehaving regard to the size of the company and the nature of its fixed assets. Thediscrepancies if any noticed on such physical verification have been properly dealt within the books of accounts.

(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties asdisclosed in the note 10 on fixed assets to the financial statements are held in the nameof the company except in the following cases where title deeds/lease agreement are notheld in the name of the Company;(Refer Note 10 (b) & (c)

Nature of immovable properties No of properties Gross Carrying Value Net Carrying Value
(Rs. in lacs) (Rs. in lacs)
Freehold Land 2 57.47 57.47
Leasehold Land 1 24.86 16.49
Total 3 82.33 73.96

ii The inventory of the Company has been physically verified by the management duringthe year (except for stock of Rock Phosphate Sulphur and Single Super phosphate forwhich stock is taken on estimation basis and for the stock in transit and stock lying withoutside parties). In our opinion the frequency of verification is reasonable thediscrepancies noticed on physical verification of the inventory as compared to bookrecords were not material.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the register maintained undersection 189 of the Act. Thus the paragraph 3(iii)(a)to(c) of the Order is not applicableto the Company.

iv. The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under sections 185 and 186 of the Act. Thusthe paragraph 3(iv) of the Order is not applicable to the Company.

v. The Company has not accepted any deposits from the public.

vi. We have broadly reviewed the books of accounts maintained in pursuance to subsection (1) of Section 148 of theAct in respect of single super phosphate fertilizerssulphuric acid and refined vegetable oil manufactured by the Company and are of theopinion that prima facie the prescribed records and accounts have been made andmaintained.

We have however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

vii. (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 Income-Tax sales tax service tax dutyof customs duty of excise value added tax cess and any other statutory dues with theappropriate authorities .

According to the information and explanation given to us no undisputed amounts payablein respect of provident fund income tax sales tax value added tax duties of customsservice tax cess and other material statutory dues were in arrear as March 31 2017 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofcustoms and service tax which have not been deposited with appropriate authorities onaccount of any dispute. However according to the information and explanations given to usthe following dues of income tax sales tax excise duty value added taxes purchase taxentry tax and Royalty/cess have not been deposited by the Company on account of disputes:-

Sr. No. Name of the Statute Nature of dues Amount (Rs. in Lacs) Period to which the amount relates Forum where the dispute is pending
1 Mines and Minerals (Development and Regulation) Act 1957 Royalty on rock phosphate 118.77* 2004-05 High Court Rajasthan
2 Commercial Tax Act 1994 Purchase Tax 42.85* 2004-05 High Court of Madhya Pradesh Jabalpur
3 UP Trade Tax 1948 Trade Tax 1.00* 2006-07 The Deputy Commission Commercial Tax-Jhansi
4 M.P. Entry Tax Act 1976 Entry Tax 22.14* 2007-08 MP Commercial Tax Appellate Board Bhopal
5 Central Excise Act 1994 Excise Duty & Penalty 16.85 2007-09 Commissioner (Appeal)-I Delhi
6 Custom Act 1962 Custom Duty 171.56* 2004-05 to 2008-09 Commissioner (Appeal) Mumbai
7 Income Tax Act 1962 Income Tax 3.53 2013-14 CIT (Appeal)- New Delhi
8' Income Tax Act 1962 Income Tax 7.06 2014-15 CIT (Appeal)- New Delhi
9 UP Sales Tax Sales Tax 2.66 2011-12 Dy. Commissioner Jhansi
10 U.P Sales Tax Sales Tax 2.57 2012-13 Dy. Commissioner Jhansi
11 U.P Central Sales Tax 1956 Sales Tax 0.69 2013-14 Dy. Commissioner Jhans
12 U.P Entry Tax 2007 Entry Tax 0.11 2013-14 Dy. Commissioner Jhansi
13 Minimum Wages Act 1948 Labour Case 0.30* 2013-14 High Court Allahabad

* Net of amounts paid under protest

viii In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks and financial institutionsThe Company has not taken any loan from the government and has not issued any debentures.

ix. According to the information and explanations given to us the Company did notraise any money by way of initial public offer or further public offer (including debtinstruments). The term loans have been applied for the purpose for which they were raised.

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 thecourse of our audit.

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 of the Act.

xii In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3 (xii) of the Order is notapplicable 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 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by 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.

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 to the Company.

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

for S S KOTHARI MEHTA & CO.
Chartered Accountants
Firm's Registration Number: 000756N
Harish Gupta
Place: Gurugram Partner
Date: May 29 2017 Membership Number: 098336

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT

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

We have audited the internal financial controls over financial reporting of KhaitanChemicals and Fertilizers Limited ("the Company") as of March 31 2017 inconjunction with our audit of the financial statements of the Company 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 thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required undertheAct.

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 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 (a) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (b) 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 (c) 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 ofCharteredAccountants of India.

for S S KOTHARI MEHTA & CO.
Chartered Accountants
Firm's Registration Number: 000756N
Harish Gupta
Place:Gurugram Partner
Date: May 29 2017 Membership Number: 098336