Saboo Sodium Chloro Limited
Reports on the Financial Statements
We have audited the accompanying financial statements of Saboo Sodium Chloro Limited.("the Company) which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss and the Cash Flow Statement for the year ended on that dateand a summary of the significant accounting policies and other explanatory information
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated insub-section 5 of Section 134 of the Companies Act 2013 ("the Act) with respectto the preparation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules2014. 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.
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 there under.
We conducted our audit in accordance with the Standards on Auditing specified undersub-section 10 of Section 143 of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the 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 auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the
Company has in place an adequate internal financial controls system over financialreporting and the operating effectiveness of such controls. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Companys 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 financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the said accounts give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India.
(a) in the case of balance sheet of the state of affairs of the Company as at 31stMarch 2016;
(b) in the case of profit and loss account of the profit for the year ended on thatdate except as appearing in clause 2(g) below; and
(c) in the case of the cash flow statement of the cash flows for the year ended onthat date.
Report on Other Legal & Regulatory Requirement
As required by the Companies (Auditors Report) Order 2015 ('the Order)issued by the Central Government of India in exercise of powers conferred by sub-section11 of section 143 of the Act we enclose in the Annexure 'A a statement on thematters specified in paragraphs 3 and 4 of the Order.
As required by sub-section 3 of Section 143 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 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 the written representations received from the Directors as on March31 2016 taken on record by the Board of Directors none of the Directors are disqualifiedas on March 31 2016 from being appointed as a Director in terms of sub-section 2 ofSection 164 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. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Companys internal financial controlsover financial reporting
(g) The company has not complied with the mandatory AS-15 on Retirement Benefits (seenote 1.9 on accounting policies) however impact not expected to be substantial ouropinion remain unmodified
(h) 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:
1. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 34 to the financial statements;
2. There are no material foreseeable losses on long-term contracts includingderivatives contracts on which provision is required to be made in the financialstatements.
3. There are no amounts required to be transferred to the Investor Education andProtection Fund by the Company.
|Jaipur May 30th 2016 ||For N. Kataria & Associates |
| ||Chartered Accountants |
| ||Firm Reg. No.014941C |
| ||(Nikhilesh Kataria FCA) |
| ||Proprietor |
| ||Membership No.079048 |
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
(Referred to in our report of even date)
Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirements of our report of even date to the financial statements of the Company for theyear ended March 31 2016:
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 in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed asset has been physicallyverified by the management during the year and no material discrepancies between the booksrecords and the physical fixed assets have been noticed.
(c) With respect to immovable properties of acquired land and buildings that arefreehold according to the information and explanations given to us and the recordsexamined by us and based on the examination of the registered sale deed/transferdeed/conveyance deed/court orders approving schemes of arrangements/amalgamations providedto us we report that the title deeds of such immovable properties are held in the nameof the Company as at the balance sheet date. In respect of immovable properties of landand buildings that have been taken on lease and disclosed as fixed asset in the financialstatements the lease agreements are in the name of the Company where the Company is thelessee in the agreement.
ii. As explained to us the management has conducted the physical verification ofinventories at reasonable intervals. No material discrepancies were noticed on physicalverification of the inventories as compared to books records
iii. The Company has not granted during the year any loans secured or unsecured tocompanies firms Limited Liability partnerships or other parties covered in the Registermaintained under section 189 of the Act. However there are opening balances to the tuneof Rs.707.06 lacs as at April 1st 2015 (March 31st 2016-Rs.632.88 lacs) of such unsecured loans & in respect of the same:
a. The terms and conditions of the grant of such loans are not prejudicial to thecompany's interest except to the extent that no interest is charged by the company
b. The schedule of repayment of principal and payment of interest (n.a.) is notstipulated as the interest free loans are given on demand
c. There are no overdue amounts
iv. In our opinion and according to the information and explanations given to usduring the year the company has not made loans investments guarantees and security ascontemplated u/s 185 & 186 of the Companies Act 2013. Though there are outstandingbalances as at April 1st 2015 to the tune of Rs.707.06 lacs (March 31st2016- Rs.632.88 lacs) the details of which are duly appearing in note 19 & note23 of the audited financial statements.
v. According to the information and explanations given to us the Company has notaccepted any deposits from the public and hence the directives issued by the Reserve Bankof India and the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the Companies (Acceptance of Deposit) Rules 2015 with regard to the depositsaccepted from the public are not applicable. According to the information and explanationsgiven to us no Order has been passed by the Company Law Board or the National Company LawTribunal or the Reserve Bank of India or any Court or any other Tribunal on the Company
vi. As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company
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 Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at March 31 2016 for a period of more than six monthsfrom the date on when they become payable.
b) On the basis of information and explanation given to us details of dues ofIncome-tax Sales Tax Service Tax Customs Duty Excise Duty and Value Added Tax whichhave not been deposited as on 31st March 2016 on account of disputes are given below:
|Name of the Statute ||Nature of dues 1 ||Amount Demanded ||Amount Deposited ||Period ||Appeal Status |
|Income Tax Act 1961 ||Income Tax ||Nil* ||Nil ||AY 08-09 ||Pending before Hon'ble ITAT |
*Though this year there are no tax implications in this year but in the subsequentyears it may have tax implication to the tune of appx. Rs.50.00 lacs
viii. In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government and dues to debenture holders
ix. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
x. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act
xii. In our opinion the Company is not a Nidhi Company. Therefore the provisionsof clause 4 (xii) of the Order are not applicable to the Company.
xiii. In our opinion all transactions with the related parties are in compliancewith section 177 and 188 of Companies Act 2013 and the details have been disclosed in thenote 33 of Financial Statements as required by the applicable accountingstandards.
xiv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares
or fully or partly convertible debentures during the year under review. Accordinglythe provisions of clause 3 (xiv) of the Order are not applicable to the Company and hencenot commented upon.
xv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
xvi. In our opinion the company is not required to be registered under section 45IA of the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3(xvi) of the Order are not applicable to the Company and hence not commented upon.
For N. Kataria & Associates
Firm Reg. No.014941C
(Nikhilesh Kataria FCA)
Jaipur May 30th 2016
ANNEXURE 'B' TO THE INDEPENDENT AUDITORS' REPORT
(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 SabooSodium Chloro Limited ("the Company) as of March 31 2016 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Companys 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 the respective companys 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.
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 Companys 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 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 authorisations ofmanagement and directors of the company; and (3) 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.
In our opinion to the best of our information and according to the explanations givento us the Company have in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2016 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.