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Dharamsi Morarji Chemicals Co Ltd.

BSE: 506405 Sector: Agri and agri inputs
NSE: DHARAMORAR ISIN Code: INE505A01010
BSE 00:00 | 21 Jun 108.00 -2.00
(-1.82%)
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NSE 05:30 | 01 Jan Dharamsi Morarji Chemicals Co Ltd
OPEN 109.00
PREVIOUS CLOSE 110.00
VOLUME 10124
52-Week high 148.00
52-Week low 92.15
P/E 21.95
Mkt Cap.(Rs cr) 269
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 109.00
CLOSE 110.00
VOLUME 10124
52-Week high 148.00
52-Week low 92.15
P/E 21.95
Mkt Cap.(Rs cr) 269
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Dharamsi Morarji Chemicals Co Ltd. (DHARAMORAR) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

THE DHARAMSI MORARJI CHEMICAL COMPANY LIMITED

(After Merger of Borax Morarji Limited)

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of THE DHARAMSIMORARJI CHEMICAL COMPANY LIMITED ("the Company") for the year ended on 31stMarch 2017 wherein the effect of merger of Borax Morarji Limited with the Company hasbeen given pursuant to the approved Scheme of Arrangement with effect from the AppointedDate i.e. 1st April 2016.

The standalone financial statements of the Company for the year ended on 31st March2017 without considering the effect of aforesaid merger were approved by the Board ofDirectors which were audited and reported by us vide our report dated 26th May 2017.Subsequently the aforesaid Scheme of Arrangement was filed with National Company LawTribunal Mumbai Bench (NCLT) on 29th June 2017 which has been approved vide NCLT Ordersdated 18th October 2017.

These standalone Financial Statements wherein the effect of the Scheme of Arrangementhas been given comprise the Balance Sheet as at 31st March 2017 the Statement of Profitand Loss the Cash Flow Statement for the year then ended and a summary of thesignificant accounting policies and other explanatory information.

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. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

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 accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial 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 the auditor considers internal financial controlrelevant to the Company's preparation of the financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion on these standalone 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 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 sub-section (11) of section 143 ofthe Act we give in the ‘Annexure

A a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 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 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.

(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".

(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 (net of provision made) in its financial statements - Note - 3A to the financialstatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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 its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 at Note No. 12 and these are in accordance with the books ofaccount maintained by the Company.

For K.S. Aiyar & CO.
Chartered Accountants
ICAI FRN: 100186W
RAJESH S. JOSHI
Place of Signature : Mumbai Partner
Date : 10th November 2017 Membership No. 38526

ANNEXUREA

Re: THE DHARAMSI MORARJI CHEMICAL COMPANY LIMITED.

(After Merger of Borax Morarji Limited)

Referred to in paragraph 1 on Report on Other Legal and Regulatory Requirements of ourreport

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets; however the particulars regarding thelocation of some of the fixed assets of Chemical Division of erstwhile Borax MorarjiLimited transferred to new manufacturing facility at Dahej Gujarat needs to be updatedin the fixed asset register;

(b) A substantial portion of these fixed assets has been physically verified by themanagement during the year. In our opinion the same is reasonable having regard to thesize of the Company and the nature of its fixed assets. No material discrepancies werenoticed on such verification.

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

(ii) Physical verification of inventory has been conducted at reasonable intervals bythe management and No material discrepancies were noticed on physical verification.

(iii) The Company has not granted any secured or unsecured loans to companies firmslimited liability partnership or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Therefore the requirements of sub-clause (a) (b)and (c) of clause (iii) are not applicable to the Company.

(iv) There are no loans given no investments made no guarantees given and nosecurity given by the Company in terms of provisions of section 185 and 186 of theCompanies Act 2013.

(v) The erstwhile Borax Morarji Limited had accepted deposits prior to the commencementof Companies Act 2013 (Earlier deposits) which have remained unpaid as at year endamounting to Rs.31.68 Lakhs and interest due thereon of Rs.0.01 Lakhs. We are informedthat these earlier deposits will be repaid

on the respective due dates as per the terms of acceptance of the same in terms ofexplanation to Rule 19 of the Companies (Acceptance of Deposits) Rules 2014.

The Company has not accepted any deposits during the year to which the provisions ofsection 73 to 76 of the Companies Act 2013 and Companies (Acceptance of deposits) Rules2014 apply.

(vi) The Central Government has specified the maintenance of cost records undersub-section (1) of section 148 of the Companies Act 2013. Such accounts and records havebeen made and maintained by the Company.

(vii) (a) The Company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax sales-tax service taxduty of customs duty of excise value added tax cess and any other statutory dues withthe appropriate authorities. The Company has not accepted any deposits during the year towhich the provisions of section 73 to 76 of the Companies Act 2013 and Companies(Acceptance of deposits) Rules 2014 apply. According to the information and explanationsgiven to us there are no undisputed outstanding dues in respect of the above items inarrears as at March 31 2017 for a period of more than six months from the date theybecame payable.

(b) Dues of income tax or sales tax or service tax or duty of customs or duty of exciseor value added tax that have not been deposited on account of any dispute are as under.

Name of the Statute Nature of Dues Forum where dispute is Pending Period to which relate Amount ( Rs in Lakhs)
Central Excise Act Duty/Interest/Penalty Asst.Commissioner April 2008 to February 2013 24.48
Duty/Interest/Penalty Asst.Commissioner August 2002 to March 2007 0.57
Duty/Interest/Penalty Asst.Commissioner 2005 to 2006 1.18
Duty/Interest/Penalty Asst.Commissioner October 2008 to August 2013 56.59
Duty Dy. Commissioner March 2013 to September 2013 3.79
Duty CESTAT West Zone Bench. Sept 13 to Aug 14 14.70
Duty Additional Commissioner of Central Excise Nov 10 to Sept 13 5.96
Duty Suptd. Of Central Excise(Tech)-IVth Division Mahad Oct 13 to Aug 14 0.50
Duty Additional Commissioner of Central Excise Oct 2013 to June 2014 14.28
Duty Asst. Commissioner of Central Excise September 2014 to December 2014 4.43
Duty Asst. Commissioner of Central Excise January 2015 to April 2015 1.58
Transport Fees on SDS Bombay High Court 2007-08 to 2016-17 51.24
Customs Act Utilization of DEPB Licences Collector of Customs 2002-03 16.60
Total 195.90

(viii) The Company has not defaulted in repayment of loans or borrowings to a financialinstitution bank government or dues to debenture holders.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) or any term loans during the year.

(x) According to the information and explanations given to us no fraud by the Companyor any fraud on the Company by its officers or employees has not been noticed or reportedduring the year.

(xi) Managerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct.

(xii) The Company is not a Nidhi Company and therefore the compliance requirementsrelevant to a Nidhi Company are not applicable.

(xiii) All transactions with related parties are in compliance with section 177 and 188of the Companies Act 2013 where applicable and the details have been disclosed in thefinancial statements etc. as required by the applicable accounting standards.

(xiv) The Company has made preferential allotment of 588930 Equity shares of theCompany to the two of the promoter group companies during the year wherein therequirements of section 42 of the Companies Act 2013 have been complied with. The Companyhas not made any issue of Debentures during the year on a preferential basis.

(xv) Pursuant to the provisions of section 192 of the Companies Act 2013 the Companyhas not entered into any non-cash transactions with directors or persons connected withhim/her.

(xvi) The Company is not required to be registered under section 45-1(A) of the ReserveBank of lndia Act 1934.

For K. S. Aiyar & CO.
Chartered Accountants
ICAI FRN: 100186W
RAJESH S. JOSHI
Place of Signature : Mumbai Partner
Date : 10th November 2017 Membership No. 38526

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF THE DHARAMSI MORARJI CHEMICAL COMPANY LIMITED (After Merger of Borax Morarji Limited)

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 THEDHARAMSI MORARJI CHEMICAL COMPANY LIMITED ("the Company") as of March 312017 in conjunction with our audit of the financial statements of the Company for the yearended 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. 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.

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 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 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 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 maintenanceofrecords 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

The internal financial control system over financial reporting that has beenestablished by the management consists mainly of manual/automated controls in variousbusiness processes. These controls were verified by us on a test basis during the yearand were found to be operating effectively in all material respects. We are informed thatthe Company is still in the process of implementing SAP ERP for improved integration andsystem driven controls.

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlswere operating effectively as at March 31 2017 based on the internal control overfinancial reporting criteria established by the Company as stated in the precedingparagraph considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For K.S. Aiyar & CO.
Chartered Accountants
ICAI FRN: 100186W
RAJESH S. JOSHI
Place of Signature : Mumbai Partner
Date : 10th November 2017 Membership No. 38526