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Indokem Ltd.

BSE: 504092 Sector: Industrials
NSE: N.A. ISIN Code: INE716F01012
BSE 00:00 | 18 Oct 5.27 -0.26
(-4.70%)
OPEN

5.79

HIGH

5.79

LOW

5.26

NSE 05:30 | 01 Jan Indokem Ltd
OPEN 5.79
PREVIOUS CLOSE 5.53
VOLUME 5489
52-Week high 20.70
52-Week low 4.99
P/E
Mkt Cap.(Rs cr) 13
Buy Price 5.30
Buy Qty 275.00
Sell Price 5.70
Sell Qty 50.00
OPEN 5.79
CLOSE 5.53
VOLUME 5489
52-Week high 20.70
52-Week low 4.99
P/E
Mkt Cap.(Rs cr) 13
Buy Price 5.30
Buy Qty 275.00
Sell Price 5.70
Sell Qty 50.00

Indokem Ltd. (INDOKEM) - Auditors Report

Company auditors report

To the Members of Indokem Limited report on the Ind As Financial statements

We have audited the accompanying Ind AS financial statements of Indokem Limited (‘theCompany') which comprise the Balance Sheet as at March 31 2018 the Statement of Profitand Loss (including Other Comprehensive Income) the Cash Flow statement and the Statementof Changes in Equity for the year then ended and a summary of significant accountingpolicies and other explanatory information.

Management's responsibility for the 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flowsaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified in the Companies (Indian Accounting Standards)Rules 2015 as amended under Section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgements and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatements whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon 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 Ind AS financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the Ind AS financial statements. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Ind AS financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the Ind 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Ind AS of the financialposition of the Company as at March 31 2018 and its financial performance including othercomprehensive income its cash flows and the changes in Equity for the year ended on thatdate.

Other Matters

The comparative financial information of the Company for the year ended March 31 2017and the transition date opening Balance Sheet as at April 1 2016 included in these Ind ASfinancialstatements are based on the previously issued statutory financial statementsprepared in accordance with the Companies (Accounting Standards) Rules 2006 audited bythe predecessor auditor whose report for the year ended March 31 2017 and March 31 2016dated May 10 2017 and May

12 2016 respectively expressed an unmodified opinion on those financial statements asadjusted for the differences in the accounting principles adopted by the Company ontransition to the Ind AS which have been audited by us.

Our opinion is not modified in respect of this matter.

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 inthe paragraph 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 accounts 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 Cash Flow Statement andthe Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of accounts;

(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act;

(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 director is disqualifiedas on March 31 2018 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to adequacy of the internal financial controls with reference tofinancial statement of the Company and the operating effectiveness of such controls referto 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 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 Ind AS financial statements- Refer Note 25 to the Ind AS financialstatements;

ii. The Company does not have any material foreseeable losses for which a provision maybe necessary; and

iii. There were no amounts that were required to be transferred to the InvestorEducation Protection Fund by the Company.

For C n K & Associates LLp
Chartered Accountants
Firm Registration No.: 101961 W/ W - 100036
sd/-
Manish sampat
Place : Mumbai Partner
Date : May 9 2018 Membership No.: 101684

Annexure - A to the Independent Auditors' report

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) As explained to us all fixed assets have not been physically verified by themanagement during the year but there is a regular program of verification which in ouropinion is reasonable having regard to the size of the Company and nature of its assets.No material discrepancies were noticed such physical verification;

(c) According to the information and explanations given to us and on the basis of ourexamination of the records the title deeds of the immovable properties other than thosedisclosed below are in the name of the Company.

Asset Class No. of Cases Gross Block Net Block Remarks
(Rs. in lakhs) (Rs. in lakhs)
Building - Offices in Delhi 2 133.60 114.27 The Company became the owners of the premises by virtue of Scheme of Amalgamation of M/s. Manish Dyes and M/s. Ramakem Limited with it. However pending completion of relevant formalities the asset continues to be in the name of the erstwhile amalgamated Company.

(ii) As informed to us the inventory has been physically verified by the Management atreasonable intervals during the year and no material discrepancies have been noticed onsuch verification. (iii) In our opinion and according to the information and explanationsgiven to us and on the basis of documents verified by us the Company has not granted anyloans secured or unsecured during the year to any party covered in the registermaintained under Section 189 of the Companies Act 2013. Accordingly clause 3(iii) of theOrder is not applicable to the Company.

(iv) The Company has not granted any loans made any investments or provided anyguarantees or security and hence reporting under clause 3(iv) of the Order is notapplicable. (v) The Company has not accepted any deposits within the meaning of Sections73 to 76 of the Act and the rules framed there under to the extent notified.

(vi) According to the information and explanations given to us the Company is notrequired to maintain cost records pursuant to the Companies (Cost Records and Audit)Amendment Rules 2016 and prescribed by the Central Government under sub-section (1) ofsection 148 of the Companies Act 2013; (vii) (a) According to the information andexplanation given to us and the records of the Company examined by us in our opinion theCompany is regular in depositing undisputed statutory dues including provident fundemployees' state insurance income-tax sales-tax service tax duty of customs duty ofexcise value added tax and other statutory dues as applicable except for dues of Rs.15.88 lakhs towards provident fund damages Rs. 8.43 lakhs towards Professional Tax andRs. 0.03 lakhs towards Employer State Insurance Corporation which were outstanding formore than six months as on Balance Sheet date.

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income tax sales tax and service taxas at March 31 2018 which have not been deposited on account of a dispute are asfollows:

Name of the statute Nature of dues Amount (Rs. in lakhs) period to which the amount relates Forum where the matter is pending
Income Tax Act 1961 Income Tax 30.13 2001-02 Commissioner of Income Tax (Appeals)
Income Tax 28.06 2002-03 Commissioner of Income Tax (Appeals)
Income Tax 32.51 2003-04 Commissioner of Income Tax (Appeals)
Income Tax 30.60 2004-05 Commissioner of Income Tax (Appeals)
Income Tax 42.17 2005-06 Commissioner of Income Tax (Appeals)
Income Tax 41.68 2006-07 Commissioner of Income Tax (Appeals)
Income Tax 11.92 2007-08 Commissioner of Income Tax (Appeals)
Income Tax 22.18 2008-09 Commissioner of Income Tax (Appeals)
Income Tax 28.73 2009-10 Commissioner of Income Tax (Appeals)
Income Tax 2.09 2006-07 Commissioner of Income Tax (Appeals)
Sales Tax Sales Tax 9.93 1990-91 Sales Tax Tribunal
Sales Tax Sales Tax 11.54 1995-96 Sales Tax Tribunal
Sales Tax Sales Tax 1.61 2004-05 Assistant Commissioner (Appeals)
Service Tax Service Tax 2.78 2004-05 Service Tax and Excise Tribunal

(viii) In our opinion the Company has not defaulted in the repayment of loans orborrowings to financial institution banks. The Company has not taken any loans orborrowings from any government and has not issued any debentures. (ix) In our opinion andaccording to the information and explanations given to us the Company has not raised anymoney by way of initial public offer or further public offer (including debt instruments)during the year. The term loans availed by the Company have been applied for the purposesfor which they were obtained.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

(xi) According to the records of the Company examined by us and the information andexplanations given to us the Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act 2013 (Also Refer Note 34 of the Ind AS financialstatements).

(xii) The Company is not a Nidhi Company and therefore the provisions of clause 3 (xii)of the Order are not applicable to the Company.

(xiii) According to the records of the Company examined by us and the information andexplanation given to us all transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 where applicable and the details thereof havebeen disclosed in the Ind AS Financial Statements etc. as required by the applicableaccounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeclause 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly clause 3(xv) ofthe Order is not applicable to the Company.

(xvi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

For C n K & Associates LLp
Chartered Accountants
Firm Registration No.: 101961 W/ W - 100036
sd/-
Manish sampat
Place : Mumbai Partner
Date : May 9 2018 Membership No.: 101684

Annexure - B to the Auditors' report

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 IndokemLimited ("the Company") as of March 31 2018 in conjunction with our auditof the Ind AS 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 with reference to financial statements 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 (‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls with reference to financial statementsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including 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 asrequired under the Companies Act 2013

Auditors' responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls with reference tofinancial statements 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 with reference to financial statements wereestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancialstatements included obtaining an understanding of internal controls withreference to financial statements assessing the risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditor's judgementincluding the assessment of the risks of material misstatement of the financialstatements 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls over Financial reporting

A Company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding financialreporting and thepreparation of financial statements the reliability of for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control withreference to Ind AS financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation ofInd AS financial statements in accordance with generally accepted accounting principlesand receipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the Ind ASfinancial statements.

Inherent Limitations of Internal Financial Controls over Financial reporting

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion except in case of inventory where preventive controls need to bestrengthened although mitigating control exists; the Company has in all materialrespects an adequate internal financial controls system with reference to financialstatements and such internal financial controls with reference to financial statementswere operating effectively as at March 31 2018 based on the internal control withreference to financial statements 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.

For C N K & Associates LLp
Chartered Accountants
Firm Registration No.: 101961 W/ W - 100036
Sd/-
Manish sampat
Place : Mumbai Partner
Date : May 9 2018 Membership No.: 101684