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Binani Industries Ltd.

BSE: 500059 Sector: Others
NSE: BINANIIND ISIN Code: INE071A01013
BSE 00:00 | 25 Jun 86.85 -1.25
(-1.42%)
OPEN

90.50

HIGH

90.50

LOW

86.55

NSE 00:00 | 25 Jun 87.30 -1.25
(-1.41%)
OPEN

87.55

HIGH

88.90

LOW

87.05

OPEN 90.50
PREVIOUS CLOSE 88.10
VOLUME 3190
52-Week high 152.80
52-Week low 67.05
P/E
Mkt Cap.(Rs cr) 272
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 90.50
CLOSE 88.10
VOLUME 3190
52-Week high 152.80
52-Week low 67.05
P/E
Mkt Cap.(Rs cr) 272
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Binani Industries Ltd. (BINANIIND) - Auditors Report

Company auditors report

To The Members of BINANI INDUSTRIES LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of BinaniIndustries Limited ("the Company") which comprise the Balance Sheet as at31st March 2017 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Cash Flow and the Statement of Changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the stateof affairs (financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) prescribed under Section 133 of the Act read with Rule 7 of theCompanies (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 standalone IndAS 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 Ind AS financialstatements based 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 of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financialposition) of the Company as at 31st March 2017 and itsfinancial performance including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the standalone Ind ASfinancial statements:

a) With reference to note no 40 of the standalone financial statements pursuantto a separate Scheme of Amalgamation approved by the Hon'ble High Court at Calcuttabetween WlEL and a step down wholly owned subsidiary of the Company being the Company asa successor to WIEL the Company has applied AS 30 the Accounting Standard on FinancialInstruments: Recognition and Measurement issued by the Institute of Chartered Accountantsof India (ICAI). All equity investment including investment in Subsidiaries arecategorized as available for sale and measured at fair value and corresponding increase onaccount of fair valuation was credited to Business Reorganization Reserve("BRR") since March 31 2014. During the year ICAI has withdrawn AS 30.Consequent to this the Company backed by legal opinion has applied principles ofnotified Ind AS related to Financial Instruments being new accounting standards applicableinstead of AS 30. All equity investment including investment in Subsidiaries aredesignated as fair value through profit & loss. However to give effect to theaccounting policies applicable to WIEL and to the Company as a successor to WIEL beingaccounting policies adopted as per the Scheme of Amalgamation approved by the Hon'ble HighCourt at Calcutta the said treatment has been given BRR. The net decrease in restated fairvalue credited to BRR of Rs. 678.07 lacs (previous year increase- Rs 9694.29 lacs).Further with reference to Note 41 of the financial results in accordance with the saidscheme the Company has offset certain expenses amounting to Rs. 5854.02 Lacs against BRRin the current year. Had certain revenue expenses not been offset against the BRR theprofit for the financial year would have been lower by Rs. 5854.02 Lacs (previousyear Rs. 9145.36 Lacs).

b) With reference to note no. 19 of the standalone financialstatements TheCompany was in the process of restructuring its bank borrowings with the Lender. Howeverin the interim the said Lender has communicated to the Company that it is recalling itsborrowings and has also designated the foreign currency debt into INR denominated debtwith higher coupon rate and has demanded repayment of all outstanding includingcorresponding interest and penal interest immediately. The Company has requested theLender to defer the recall and has in the interim provided alternative mechanism forrepayment of its loans in due course. The Company is awaiting response from the Lender inthis behalf. Hopeful of a favourable consideration by the Lender of its alternativemechanism the Company continues to denominate such loans in foreign currency and has notclassified the outstanding Loan asCurrent Liabilities. Further it has also not accruedpenal interest amounting to INR 1870.65 lacs as at the reporting date.

c) With reference to Note 36 of the standalone financial statements regardingoutstanding guarantees aggregating toRs. 540927.28 lacs (previous year Rs. 528729.44Lacs) issued by the Company to banks and financial institutions on behalf of varioussubsidiaries including one step down subsidiary which are significantin relation to thenet worth of the Company as at March 31 2017 in the opinion of the management these arenot expected to result into any financial liability to the Company.

Our opinion is not modified in respect of these matters.

Other Matter

The comparative financial information of the Company for the year ended March 31 2016and the transition date opening balance sheet as at April 1 2015 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006. For the year ended March 31 2015 on which the predecessor auditor expressedan unmodifiedopinion vide audit report dated May 30 2015 and for the year ended March 312016 in which we expressed an unmodified opinion vide our report dated May 30 2016respectively on those standalone financial statements as adjusted for the differences inthe accounting principles adopted by the Company on transition to the Ind AS which havebeen audited by us.

Report on Other Legal and Regulatory Requirements

1. 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 the Statement of Cash Flow andthe Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) In our opinion there are no matters that may have an adverse effect on thefunctioning of the Company.

(f) 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 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

(g) 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 A'

(h) 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 standalone Ind AS financial statements Refer Note 36 to the standalonefinancial statements.

ii. The Company did not have any long term contracts including derivativecontracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its standalone Ind ASfinancial statements as to holdings as well as dealings in Specified Bank Notes during theperiod from 8th November 2016 to 30th December 2016. Based on audit procedures andrelying on the management representation we report that the disclosures are in accordancewith books of account maintained by the Company and as produced to us by the ManagementRefer Note no. 47 of the standalone financial statements

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of sub-section 11 of section 143 of the Act wegive in the ‘Annexure B' a statement on the matters specified in paragraphs 3 and 4of the Order.

For MZSK & Associates
Chartered Accountants
Firm Registration No. 105047W
Abuali Darukhanawala
Partner
Place: Mumbai Membership No. 108053
Date : May 29 2017

ANNEXURE A TO INDEPENDENT AUDITORS' REPORT

[Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report of even date to the members of BinaniIndustries Limited (‘the Company') on the standalone financial statements for theyear ended March 31 2017]

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

(b) All the fixed assets have been physically verified by the management during theyear and no material discrepancies were identified on such verification.

(c) According to information and explanations given to us and based on our examinationof the records of the Company the title deeds of immovable properties are held in thename of the Company.

ii. The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is No material discrepancies were noticed onverification between the physical stock and the book records.

iii. The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships (LLP) or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (‘the Act'). Accordingly the provisionsstated in paragraph 3 (iii) (a) to (c) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanation given to us theCompany has complied with the provision of Section 185 & 186 of the Act in respect ofloans investments and guarantees and securities.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Sections 7374 75 and 76 of the Act and the rules framed there under.

vi. The provisions of sub-section (1) of section 148 of the Act are not applicable tothe Company as the Central Government of India has not specified the maintenance of costrecords for any of the products of the Company. Accordingly the provisions stated inparagraph 3 (vi) of the Order are not applicable to the Company.

vii. (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of custom value added tax cess and other materialstatutory dues as applicable to it except for slight delay in few cases. According to theinformation and explanations given to us no undisputed arrears of statutory dues wereoutstanding as at March 31 2017 for a period of more than six months from the date theybecame payable.

(b) According to the information and explanations given to us andexamination of records of the Company there are no dues of sales-tax custom dutyservice tax and value added tax which have not been deposited with the appropriateauthorities on account of any dispute except in cases of income-tax which is describedbelow:

Name of the Statute Nature of Dues Amount (Rs. In lacs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax Matters 1837.03 F Y 2011-12 CIT (Appeals)
Income Tax Act 1961 Income Tax Matters 3017.26 F Y 2006-07 High Court
Income Tax Act 1961 Income Tax Matters 120.38 F Y 2009-10 CIT (Appeals)
Income Tax Act 1961 Income Tax Matters 0.49 F Y 2002-03 Assessing officer

viii. According to the records of the Company examined by us and information andexplanation gives to us the Company has not defaulted in repayment of dues to debentureholder government and financial institution except for default in repayment of dues tobanks details of which are as follows:

Particulars Principal Amount (in lacs) Interest Amount (in lacs) Remark if any
Export Import Bank of India 1706.53 4820.07 Term Loan

The Company was in the process of restructuring its bank borrowings with the Lender.However in the interim the said Lender has communicated to the Company that it isrecalling its borrowings and has also designated the foreign currency debt into INRdenominated debt with higher coupon rate and has demanded repayment of all outstandingincluding corresponding interest and penal interest immediately. The Company has requestedthe Lender to defer the recall and has in the interim provided alternative mechanism forrepayment of its loans in due course. The Company is awaiting response from the Lender inthis behalf. Hopeful of a favourable consideration by the Lender of its alternativemechanism the Company continues to denominate such loans in foreign currency and has notclassified the outstanding Loan as Current Liabilities.

ix. The Company did not raise any moneys by way of initial public offer or furtherpublic offer (including debt instrument) and term loans were applied for the purpose forwhich those were raised during the year.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any instance of fraud on the Company by itsofficers/employees has been noticed or reported during the year nor have we been informedof such case by the management.

xi. According to information and explanations given to us and based on our examinationof the records of the Company the Company has paid/provided managerial remuneration inaccordance with the requisite approvals mandated by the provision of section 197 read withSchedule V to the Companies Act.

xii. In our opinion and according to information and explanation given to us theCompany is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii) ofthe Order are not applicable 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 the applicableIndian Accounting 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 the provisions stated in paragraph 3 (xiv) of the Order are notapplicable to the Company.

xv. According to information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into any non-cash transactionswith directors or persons connected with him. Accordingly provisions stated in paragraph 3(xv) of the Order is not applicable to the Company.

xvi. In our opinion the Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934 and accordingly the provisions stated inparagraph clause 3 (xvi) of the Order are not applicable to the Company.

For MZSK & Associates
Chartered Accountants
Firm Registration No.105047W
Abuali Darukhanawala
Partner
Place: Mumbai Membership No.108053
Date: May 29 2017

ANNEXURE B

TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTSOF BINANI INDUSTRIES LIMITED Report on the Internal Financial Controls 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 BinaniIndustries Limited ("the Company") as of 31 st March 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

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) (the "GuidanceNote". These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 financialthat 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 principles andthat receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

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.

For MZSK & Associates
Chartered Accountants
Firm Registration No. 105047W
Abuali Darukhanawala
Place: Mumbai Partner
Date: May 29 2017 Membership No. 108053