To the Members of Oriental Carbon & Chemicals Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Oriental Carbon& Chemicals Limited ("the Company") which comprise the Balance Sheet as at31st March 2017 the Statement of Profit and Loss the Cash Flow Statement and a summaryof the significant accounting policies and other explanatory information for the year thenended.
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 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 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.
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 standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error. In making those riskassessments the 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 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 standalone 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.
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 Companies Act 2013 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2017 and its profit and its cashflows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 (the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure A a statement on the matters specified inparagraphs 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 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 3 1st March 2017 from being appointed as a director interms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial control 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 explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 29.01 to the standalone financialstatements
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses on long-term contracts including derivativecontracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in Note No. 30.13 to these financialstatements as to holding of Specified Bank Notes on November 8 2016 and December 30 2016as well as dealing in Specified Bank Notes during the period from November 8 2016 toDecember 30 2016. Based on our audit procedures and relying on the managementrepresentation regarding the holding and nature of cash transactions including SpecifiedBank Notes we report that these disclosures are in accordance with the book of accountsmaintained by the company
For SINGHI & CO.
Chartered Accountants Firm Reg. No. 302049E
B K Sipani
Place : Noida Partner
Date : 23rd May 2017 Membership No 088926
Annexure A referred to in paragraph 1 of our report of even date on the other legal andregulatory requirements (Re: Oriental Carbon & Chemicals Limited)
(i) a. The Company has maintained proper records showing full particulars includingquantitative details and situation
of fixed assets.
b. Fixed Assets have been physically verified by the management at reasonable interval.No material discrepancies were noticed on such verification.
c. According to information and explanations given by the management the title deedsof immovable properties included
in fixed assets are held in the name of the Company except immovable properties for Rs.3496.42 Lakhs for which registration in the name of the Company is pending.
(ii) As informed to us the management has conducted physical verification ofinventories (except stock lying with third parties) at reasonable intervals during theyear and no material discrepancies were noticed on such physical verification.
(iii) a. The Company has granted unsecured loan to a company covered in the registermaintained under Section 189 of the
Companies Act 2013. In our opinion the terms and conditions of the grant of such loanare not prejudicial to the interest of the Company. The Company has not granted any loanto Firms Limited Liability Partnership or other parties covered in the registermaintained under section 189 of the Companies Act2013. b. The Company has stipulatedschedule of repayment of principal and payment of interest and repayment of the principalamount and receipt of interest are not due at balance sheet date.
(iv) The Company has complied with provisions of Section 186 of the Companies Act 2013in respect of loan granted guarantees provided and Investments made. However the companyhas not granted any loan and guarantees provided under section 185 of the CompaniesAct2013.
(v) The Company has complied with the directives issued by the Reserve Bank of Indiaand the provisions of section 73 to 76 of the Companies Act 2013 and the rules framedthereunder as applicable. We are informed by the management that no order has been passedby the Company Law Board or National Company Law Tribunal or Reserve Bank of India or anyother court or any other tribunal
(vi) The Central Government has specified maintenance of cost records under section148(1) of the Companies Act2013 for chemical product and in our opinion such accounts andrecords have been made and maintained. We have however not made a detailed examinationof the same with a view to determine whether they are accurate or complete.
(vii) a. According to the records of the Company the Company is generally regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand other material statutory dues deducted/ accrued in the books with the appropriateauthorities. There was no undisputed outstanding statutory dues as at the year end for aperiod of more than six months from the date they became payable.
b. According to the records of the Company there are no dues outstanding of incometax sales tax service tax duty of customs duty of excise and value added tax onaccount of any dispute other than the followings:
|Name of Statute ||Nature of Dues ||Period to which Amount relates ||Amount * (Rs in Lacs) ||Forum where Dispute is pending |
|The Income Tax ||Demand for Income tax and ||Assessment Year ||81.84 ||CIT (Appeals) |
|Act 1961 ||Interest thereon ||2009-10 - 2014-15 || ||Kolkata |
*Net of amount paid
(viii) The Company has not defaulted in repayment of loans or borrowings to financialinstitution and banks. The Company did not have any outstanding loan from Government anddues to debenture holders.
(ix) The Company has applied term loans for the purpose for which it was raised. TheCompany has not raised any monies by way of initial public offer or further public offer(including debt instruments).
(x) Based upon the audit procedures performed in accordance with generally acceptedauditing practice in India for the purpose of reporting the true and fair view of thefinancial statements and according to the information and explanations given to us nofraud by the Company or no fraud on the Company by its officers and employees has beennoticed or reported during the year.
(xi) According to the information and explanations given by the management managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with schedule V to the Companies Act 2013.
(xii) In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company.
(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theCompanies Act 2013 wherever applicable and the details for the same have been disclosedin the Financial Statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given by the management theCompany has not made any preferential allotments or private placement of shares or fullyor partly convertible debentures during the year under review. Therefore the provisionsof clause 3(xiv) of the Order are not applicable.
(xv) According to the information and explanations given by the management the Companyhas not entered into any noncash transactions with directors or persons connected withdirectors. Therefore the provisions of clause 3(xv) of the Order are not applicable.
(xvi) In our opinion the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934. Therefore the provisions of clause 3 (xvi) of theOrder are not applicable.
For SINGHI & CO.
Chartered Accountants Firm Reg. No. 302049E
B K Sipani
Place : Noida Partner
Date : 23rd May 2017 Membership No 088926
Report on the Internal Financial controls under Clause (i) of Sub - section 3 ofSection 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of OrientalCarbon & Chemicals Limited ("the Company") as of March 312017 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 the 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 underthe Companies Act 2013.
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 deemed to be prescribedunder section 143(10) of the Companies Act 2013 to the extent 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 exist 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 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 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 authorization ofmanagement and directors of the company ; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
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 the financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India.
For Singhi & Co.
Chartered Accountants Firm Reg. No. 302049E B. K. Sipani
Place : Noida Partner
Date : 23rd May 2017 Membership No. 088926