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Sanghi Industries Ltd.

BSE: 526521 Sector: Industrials
NSE: SANGHIIND ISIN Code: INE999B01013
BSE LIVE 10:32 | 15 Dec 117.95 2.55
(2.21%)
OPEN

117.10

HIGH

119.70

LOW

115.00

NSE 10:17 | 15 Dec 118.00 2.90
(2.52%)
OPEN

116.70

HIGH

119.75

LOW

113.65

OPEN 117.10
PREVIOUS CLOSE 115.40
VOLUME 45113
52-Week high 137.00
52-Week low 46.20
P/E 35.31
Mkt Cap.(Rs cr) 2,595
Buy Price 117.70
Buy Qty 109.00
Sell Price 117.95
Sell Qty 148.00
OPEN 117.10
CLOSE 115.40
VOLUME 45113
52-Week high 137.00
52-Week low 46.20
P/E 35.31
Mkt Cap.(Rs cr) 2,595
Buy Price 117.70
Buy Qty 109.00
Sell Price 117.95
Sell Qty 148.00

Sanghi Industries Ltd. (SANGHIIND) - Auditors Report

Company auditors report

To the Members of Sanghi Industries Limited Report on the Financial Statements

We have audited the accompanying financial statements of Sanghi Industries Limited("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory 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 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 relevant rules there under. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls and ensuring theiroperating effectiveness and the accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material 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 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 anddisclosures in the financial statements. The procedures selected depend on the auditors'judgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 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 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 31stMarch 2017 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 (Auditors' 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 "Annexure 1" 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 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 relevant rules there under;

e. On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on 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 we give ourseparate Report in "Annexure 2".

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 financialposition in its financial statements – Refer Note 36 on Contingent Liabilities to thefinancial statements;

(ii) The Company did not have any long-term contracts including derivative contracts.Hence the question of any material foreseeable losses does not arise;

(iii) The Company does not have any liability which is required to be transferred tothe Investor Education and Protection Fund.

(iv) The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with the books of accountmaintained by the Company and as produced to us by the Management (Refer Note No. 43(7) tothe financial statements);

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of SanghiIndustries Limited on the financial statements for the year ended March 31 2017]

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) During the period fixed assetshave been physically verified by the management as per the regular programme ofverification which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. As informed no material discrepancies were noticed on suchverification.

(c) The title deeds of immovable properties recorded in the books of account of theCompany are held in the name of the Company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. As informed no materialdiscrepancies were noticed on physical verification carried out during the year. (iii) Asinformed 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. Accordingly paragraph 3 (iii)(a) 3 (iii)(b) and 3 (iii)(c) ofthe Order are not applicable to the Company.

(iv) Based on information and explanation given to us in respect of loans investmentsguarantees and securities the Company has complied with the provisions of Section 185 and186 of the Act. (v) In our opinion and according to the information and explanations givento us the Company has not accepted any deposits from the public within the provisions ofSections 73 to 76 of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where the maintenance of cost records has been specified by the CentralGovernment under sub-section (1) of Section 148 of the Act and the rules framed thereunder and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax salestax service tax value added tax customs duty excise duty cess and any other materialstatutory dues applicable to it.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxservice tax value added tax customs duty excise duty cess and any other materialstatutory dues applicable to it were outstanding at the year end for a period of morethan six months from the date they became payable.

(b) According to the information and explanation given to us the dues outstanding withrespect to income tax sales tax service tax value added tax customs duty excise dutyon account of any dispute are as follows:

Name of the statute Nature of dues Amount (Rs in Crore) Period to which the amount relates Forum where dispute is pending
Central Excise Act1944 Excise Duty 40.00 Various years Customs Excise & Service tax Appellate Tribunal
Service Tax Act CENVAT Credit 21.46 Various years Customs Excise & Service tax Appellate Tribunal
Customs Act 1962 Customs Duty 12.41 2005-10 Customs Excise & Service tax Appellate Tribunal
Sales Tax Sales Tax 1.76 Various years Joint Commissioner Appeal Rajkot
Gujarat Electricity Duty Act 1958 Electricity duty on power Generation 3.30 Various years Gujarat High Court
Bombay Land Revenue Code 1879 Land Revenue on Leasehold Land 1.17 Various years Gujarat High Court

(viii)According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institutions banksgovernments or dues to debenture holders. (ix) According to the information andexplanations given to us the money raised by way of term loans have been applied by theCompany for the purposes for which those are raised. (x) During the course of ourexamination of the books and records of the Company carried out in accordance with thegenerally accepted auditing practices in India and according to the information andexplanations given to us we have neither come across any instance of fraud by the Companyor any fraud on the Company by its officers or employees noticed or reported during theyear nor have we been informed of any such instance by the management.

(xi) As per the information and explanations given to us managerial remuneration hasbeen paid/provided in accordance with the requisite approvals mandated by the provisionsof Section 197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Therefore paragraph 3(xii)of the Order is not applicable to the Company.

(xiii)As per the information and explanation given to us all transactions entered intoby the Company with the related parties are in compliance with Sections 177 and 188 ofAct where applicable and the details have been disclosed in the Financial Statementsetc. as required by the applicable Indian accounting standards.

(xiv)The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Thereforeparagraph 3(xiv) of the Order is not applicable to the Company. (xv) The Company has notentered into any non-cash transactions with directors or persons connected with him.(xvi)Based on the information and explanation given to us the Company is not required tobe registered under Section 45-IA of the Reserve Bank of India Act 1934.

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of SanghiIndustries Limited on the financial statements for the year ended March 31 2017]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SanghiIndustries Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the financial statements of the Company for the year 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"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits 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.

Auditors' 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 specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.

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.

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 ICAI.

For Ankit & Co. For Haribhakti & Co. LLP
Chartered Accountants Chartered Accountants
ICAI Firm Registration No.000181S ICAI Firm Registration No. 103523W/W100048
S. Brijkumar Atul Gala
Partner Partner
Membership No.:019357 Membership No.: 048650
Place: Ahmedabad
Date: May 24 2017