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Finolex Industries Ltd.

BSE: 500940 Sector: Industrials
NSE: FINPIPE ISIN Code: INE183A01016
BSE 00:00 | 19 Mar 519.00 -12.05
(-2.27%)
OPEN

532.35

HIGH

532.35

LOW

514.00

NSE 00:00 | 19 Mar 514.40 -15.85
(-2.99%)
OPEN

532.00

HIGH

534.25

LOW

512.00

OPEN 532.35
PREVIOUS CLOSE 531.05
VOLUME 52925
52-Week high 712.90
52-Week low 440.00
P/E 16.21
Mkt Cap.(Rs cr) 6,441
Buy Price 512.50
Buy Qty 1.00
Sell Price 519.00
Sell Qty 528.00
OPEN 532.35
CLOSE 531.05
VOLUME 52925
52-Week high 712.90
52-Week low 440.00
P/E 16.21
Mkt Cap.(Rs cr) 6,441
Buy Price 512.50
Buy Qty 1.00
Sell Price 519.00
Sell Qty 528.00

Finolex Industries Ltd. (FINPIPE) - Auditors Report

Company auditors report

Independent Auditors’ Report

TO THE MEMBERS OF FINOLEX INDUSTRIES LIMITED

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of FinolexIndustries Limited ("the Company") which comprise the Balance Sheet as at March31 2018 the Statement of Profit and Loss the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and a summary of the significant accountingpolicies and other explanatory information hereinafter referred to as ("theStandalone Ind AS Financial Statements").

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors are 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 thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and 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 Standalone Ind AS Financial Statements that give a true and fair view and are freefrom material misstatement 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 theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under. We conductedour audit in accordance with the Standards on Auditing specified under Section 143(10) ofthe Act. Those Standards require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether the Standalone Ind ASFinancial Statements are free from 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 Statementsthat give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by theCompany’s Directors as well as evaluating the overall presentation of the StandaloneInd AS 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 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 of the state of affairs(financial position) of the Company as at March 31 2018 its profit (financialperformance including other comprehensive income) its cash flows and the changes inequity 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 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in "Annexure A" a statement onthe matters specified in paragraphs 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 Statement the Cash FlowStatement and the Statement of Changes in Equity dealt with by this report are inagreement with the books of account.

(d) In our opinion the aforesaid Standalone Ind AS Financial Statements comply withIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.

(e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) For our opinion on the internal financial controls with reference to Standalone IndAS Financial Statements of the Company and the operating effectiveness of such controlsrefer to our separate 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 as amended inour opinion and to the best of our information and according to the explanations given tous: i. The Company has disclosed pending litigations and the impact on its financialposition - refer note 38.2 to the Standalone Ind AS Financial Statements.

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.

For M/s P.G. BHAGWAT

Chartered Accountants

Firm’s Registration Number:101118W

Abhijeet Bhagwat

Partner

Membership Number:136835

Place: Pune

Date: May 23 2018

Annexure A to the Independent Auditors’ Report

Referred to in paragraph 1 under the heading "Report on Other legal andRegulatory Requirements" of our report on even date: (i) (a) The Company ismaintaining proper records showing full particulars including quantitative details andsituation of fixed assets.

(b) The fixed assets are being physically verified by the management at regularintervals based on the programme of verification which in our opinion is reasonable. Partof the major fixed assets has been verified by the management in the current year anddiscrepancies noticed on such physical verification were not material and the same havebeen properly dealt with in the books of account.

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

(ii) Physical verification of inventory has been conducted by the management during thecurrent year. In our opinion the interval of such verification is reasonable.Discrepancies noticed on physical verification were not material and the same have beenproperly dealt with in the books of account.

(iii) 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 Companies Act 2013 in the current year. Accordingly clause (iii) (a)(b) and (c) of the Order are not applicable to the Company.

(iv) According to the information and explanation provided to us there are no loansguarantees and security given by the Company to Directors covered under the provisionsof section 185 of the Companies Act 2013. According to the information and explanationsprovided to us provisions of section 186 of the Companies Act 2013 have been compliedwith respect to loans guarantees investment and security.

(v) According to information and explanation provided to us the Company has notaccepted deposits hence the directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Companies Act andthe rules framed there under are not applicable to it. According to information andexplanation provided to us no order has been passed by Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any court or any other tribunal.

(vi) We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the Company pursuant to the rules made by the CentralGovernment for the maintenance of cost records under sub-section (l) of section 148 of theCompanies Act 2013 and we are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. We have not however made a detailed examination ofrecords with a view to determine whether they are accurate and complete.

(vii) (a) The Company is generally regular in depositing undisputed statutory duesincluding provident fund employees’ state insurance income-tax sales-tax servicetax duty of customs duty of excise goods and service tax value added tax cess and anyother statutory dues with the appropriate authorities. According to the information andexplanation provided to us no undisputed amounts payable in respect of statutory dueswere in arrears as at March 31 2018 for a period more than six months from the date theybecame payable except goods and service tax on customer advances for the month of July2017 of Rs. 272.35 lakhs which was paid on May 22 2018.

(b) According to the information and explanation provided to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise goods and service taxvalue added tax or cess which have not been deposited on account of any dispute exceptthose mentioned below:

Name of the Statute Nature of Dues Amount (in lakhs) Period to which the amount relates Forum where dispute is pending
Customs Act 1962 Customs Duty 112.41 2013-14 CESTAT
Central Excise Act Excise Duty 4754.72 1996-97 2000-16 CESTAT
1944
Finance Act 1994 Service Tax 411.70 December 2005 to Deputy Commissioner
December 2007
152.84 2008-12 2014-15 CESTAT
4.12 2013-14 Assistant
Commissioner Appeals
21.99 April 2015 to Commissioner Appeals
December 2015
82.56 August 2015 to Commissioner
August 2016

(viii) Based on our audit procedures and according to the information and explanationprovided to us the Company has not defaulted in repayment of loans or borrowings to afinancial institution bank or government. The Company did not have debenture holders.

(ix) According to information and explanation provided to us the Company has notraised moneys by way of initial public offer or further public offer (including debtinstruments) in the current year.

The Company does not have any term loans in the current year. Accordingly clause 3(ix) of the Order for reporting on application of money raised is not applicable to theCompany.

(x) Based upon the audit procedures performed by us and according to the informationand explanation provided to us by the management no fraud by the Company or any fraud onthe Company by its officers or employees has been noticed or reported to us during theyear.

(xi) According to the information and explanation provided to us the managerialremuneration has been paid and provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act.

(xii) The Company is not a Nidhi Company and accordingly clause (xii) of the Order isnot applicable to the Company.

(xiii) According to the information and explanation provided to us all transactionswith the related parties are in compliance with sections 177 and 188 of Companies Act2013 wherever applicable and the details have been disclosed in the Standalone Ind ASFinancial Statements as required by the applicable accounting standards.

(xiv) According to the information and explanation provided to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review.

(xv) According to the information and explanation provided to us the Company has notentered into any non-cash transactions with directors or persons connected with him.

(xvi) According to the information and explanation provided to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For M/s P.G.BHAGWAT

Chartered Accountants

Firm’s Registration Number:101118W

Abhijeet Bhagwat

Partner

Membership Number:136835

Place: Pune

Date: May 23 2018

Annexure B to the Independent Auditors’ Report

Referred to in paragraph 2 (f) under the heading "Report on Other legal andRegulatory Requirements" of our report on even date:

Report on the Internal Financial Controls with reference to Standalone Ind AS FinancialStatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls with reference to Standalone Ind ASFinancial Statements of Finolex Industries Limited ("the Company") as at March31 2018 in conjunction with our audit of the Standalone Ind AS Financial Statements ofthe 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. 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 theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable

financial information as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols with reference to Standalone Ind AS Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal financialcontrols over financial reporting (the "Guidance Note") and the Standards onAuditing to the extent applicable to an audit of internal financial controls both issuedby the Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference toStandalone Ind AS Financial Statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to Standalone Ind AS Financial Statements and theiroperating effectiveness. Our audit of internal financial controls with reference toStandalone Ind AS Financial Statements included obtaining an understanding of internalfinancial controls with reference to Standalone Ind AS Financial Statements assessing therisk that 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

Standalone Ind AS 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 controlswith reference to Standalone Ind AS Financials Statements.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control with reference to financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Standalone Ind AS Financial Statements for externalpurposes in accordance with generally accepted accounting principles. A company’sinternal financial control over financial reporting includes those policies and proceduresthat (1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation ofStandalone Ind AS Financial Statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorised acquisitionuse or disposition of the company’s assets that could have a material effect on theStandalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls Over Financials Reporting

Because of the inherent limitations of internal financial controls over financialsreporting 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 internal financial controlswith reference to Standalone Ind AS Financials Statements and such internal financialcontrols with reference to Standalone Ind AS Financial Statements were operatingeffectively as at March 31 2018 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal financial controls over financialreporting issued by the Institute of Chartered Accountants of India.

For M/s P.G.BHAGWAT

Chartered Accountants

Firm’s Registration Number:101118W

Abhijeet Bhagwat

Partner

Membership Number:136835

Place: Pune

Date: May 23 2018