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Mangalam Organics Ltd.

BSE: 514418 Sector: Industrials
NSE: N.A. ISIN Code: INE370D01013
BSE 14:29 | 20 Aug 381.00 -14.25
(-3.61%)
OPEN

399.00

HIGH

399.00

LOW

380.00

NSE 05:30 | 01 Jan Mangalam Organics Ltd
OPEN 399.00
PREVIOUS CLOSE 395.25
VOLUME 17020
52-Week high 414.50
52-Week low 73.10
P/E 13.62
Mkt Cap.(Rs cr) 326
Buy Price 380.10
Buy Qty 7.00
Sell Price 381.00
Sell Qty 18.00
OPEN 399.00
CLOSE 395.25
VOLUME 17020
52-Week high 414.50
52-Week low 73.10
P/E 13.62
Mkt Cap.(Rs cr) 326
Buy Price 380.10
Buy Qty 7.00
Sell Price 381.00
Sell Qty 18.00

Mangalam Organics Ltd. (MANGALAMORGANIC) - Auditors Report

Company auditors report

To the Members of

Mangalam Organics Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Mangalam Organics Limitedwhich comprise the Balance Sheet as at 31st March 2017 and the Statement of Profit andLoss and Cash Flow Statement for the year then ended and a summary of significantaccounting policies and other explanatory information.

Management's Responsibility for the 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 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 of 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 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 there under.

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 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 theauditor considers 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 the 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 financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

a) In the case of the Balance Sheet of the state of affairs of the Company as at March31 2017;

b) In the case of the Profit and Loss Account of the profit for the year ended on thatdate; and

c) In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate

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 the paragraphs3 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 purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.

c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial Statement comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the CompaniesAccounts (Rules) 2014 ;

e) On the basis of written representations received from the directors as on 31stMarch 2017 and 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" ; and

g) With respect to the other matters included in the Auditor's Report and to the bestof our information and according to explanation given to us:

1. The Company has disclosed the impact of pending litigation on its financial positionin its financial statement- Refer Note 27 of the financial statements.

2. The Company does not have any long-term contracts including derivatives contractsfor which there are no material foreseeable losses.

3. During the current year there is no amount which needs to be transferred to theInvestor Education and Protection Fund by the Company.

4. The Company has provided requisite disclosures in its financial statements as toholding as well as dealings in Specified Bank Notes during the period from November 82016 to December 31 2016 and these are in accordance with the books of accountsmaintained by the Company. (Refer Note 35)

For NGST & Associates
Chartered Accountants
(Registration No. 135159W)
(Bhupendra Gandhi)
Place: Mumbai Partner
Date: 6th May 2017 Membership No. 122296

ANNEXURE-A TO THE AUDITOR'S REPORT

(Referred to our report of even date)

Annexure referred to in our Auditors' Report of even date to the members of the Companyon the Financial Statement of Mangalam Organics Limited for the year ended as on March 312017 we report that :

i) (a) The Company has not maintained proper records showing full particularsincluding quantitative details and situation of fixed assets. However the Company hasinformed us that it is in process of compilation.

(b) According to the information and explanation given to us all the fixed assets havebeen physically verified by the management during the year and we are informed that themanagement on such verification has noticed no material discrepancies. In our opinion thefrequency of verification is reasonable.

c) The title deeds of immovable properties are held in the name of the Company exceptthat they are mortgaged to bank as per the report given by the external valuer during theyear and as per the management and we have relied upon the same.

ii) (a) The management has conducted physical verification of inventory at reasonableintervals during the year.

(b) As explained to us there is no material discrepancy noticed on physicalverification of inventory as compared to book records.

iii) (a) In our opinion and according to the information and explanation given to usthe Company has not granted any secured or unsecured loans to companies firms limitedliability partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013 and therefore clause iii b and iii c are notapplicable.

iv) In our opinion and according to the information and explanation provided to us inrespect of loans investments guarantees and security the provisions of section 185and 186 of the Companies Act 2013 have been complied with.

v) In our opinion and according to the information and explanation given to us by themanagement the Company has not accepted any deposit from the public and therefore thedirectives issued by the Reserve Bank of India and the provisions of sections 73 to 76 orany other relevant provisions of the Act and the rules framed there under are notapplicable.

vi) The Central Government has prescribed maintenance of the cost records under subsection (1) of section 148 of the Companies Act 2013 in respect to the Company'sproducts. We have broadly reviewed the books of accounts & records maintained by theCompany in this connection and are of the opinion that prima facie the prescribedaccounts and records have been made & maintained. We have however not made a detailedexamination of the records with a view to determining whether they are accurate orcomplete.

vii) (a) According to the records of the Company undisputed statutory duesincluding provident fund investor education and protection fund employees stateinsurance income tax sales tax wealth tax custom duty Excise duty service tax cessand other material statutory dues applicable to it have generally been regularlydeposited with the appropriate authorities and no undisputed amounts payable in respect ofthese were outstanding at the year end for a period of more than six months from thedate they became payable.

(b) According to the information and explanation given to us there are no duesoutstanding of income-tax sales-tax wealth-tax service tax customs duty excise dutyand cess on account of any dispute except as stated below:-

Name of the statute Nature of dues Amount of demand Payment of demand Period to which the amount relate Forum where dispute is pending
The Central Excise Act 1944 Camphor Price difference Excise Duty 6452240 1112067 (our cum duty calculation as per supreme court order Feb-2004 to May-2005 CESTAT
The Central Excise Act 1944 Excise duty 109199456 NIL Apr-1999 to Aug-2003 High Court
The Central Excise Act 1944 Excise Duty 16888229 14558818 (Cum Duty) Sept-2003 to Nov-2004 High Court
The Central Excise Act 1944 Excise Duty 8144105 7001466 (Cum Duty) Dec-2004 to Sept-2005 CESTAT
The Central Excise Act 1944 Interest 16838001 16838001 July-1999 to Jan-2004 Commissioner of Central Excise and Customs (Appeals) for excess calculation of Interest of Rs. 9130615 paid under protest
The Central Excise Act 1944 Interest 22073762 22074070 Sept-2003 to Nov-2004 CESTAT

viii) According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of dues to financialinstitutions or banks. Further the Company has not issued any debenture.

ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments). As per the information and explanation given tous by the management term loans were applied for the purpose for which the loans wereobtained.

x) During the course of our examination of the books and records of the Company andaccording to the information and explanation given to us we have neither come across anyinstances of fraud on or by the Company or any fraud on the Company by its officers oremployees which has been noticed or reported during the current year nor we have beeninformed of such case by the management.

xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

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 applicableaccounting standards.

xiv) This clause is not applicable since the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review.

xv) The Company has not entered into non-cash transactions with Directors or personsconnected with him. Accordingly paragraph 3(xv) of the order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the order is not applicable.

For NGST & Associates
Chartered Accountants
(Registration No. 135159W)
(Bhupendra Gandhi)
Partner
Membership No. 122296
Place: Mumbai
Date: 6th May 2017.

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (I) of Sub-Section 143 of theCompanies Act 2013 ("The Act")

We have audited the internal financial controls over financial reporting of MangalamOrganics Limited ('the Company') as of 31st March 2017 in connection with our audit ofthe 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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat 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 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 extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 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 judgment 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. Company's internal financial control over financialreporting includes those policies and procedures that:

(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) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of 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) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial 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 31st March 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 Institute of CharteredAccountants of India.

For NGST & Associates
Chartered Accountants
(Registration No. 135159W)
sd/
(Bhupendra Gandhi)
Partner
Membership No. 122296
Place: Mumbai
Date: 6th May 2017