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Mangalore Chemicals & Fertilizers Ltd.

BSE: 530011 Sector: Agri and agri inputs
NSE: MANGCHEFER ISIN Code: INE558B01017
BSE 00:00 | 17 Aug 55.35 -0.05
(-0.09%)
OPEN

56.90

HIGH

56.90

LOW

55.25

NSE 00:00 | 17 Aug 55.50 -0.55
(-0.98%)
OPEN

55.60

HIGH

57.60

LOW

55.25

OPEN 56.90
PREVIOUS CLOSE 55.40
VOLUME 3263
52-Week high 89.20
52-Week low 52.05
P/E 10.96
Mkt Cap.(Rs cr) 656
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 56.90
CLOSE 55.40
VOLUME 3263
52-Week high 89.20
52-Week low 52.05
P/E 10.96
Mkt Cap.(Rs cr) 656
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mangalore Chemicals & Fertilizers Ltd. (MANGCHEFER) - Auditors Report

Company auditors report

To

THE MEMBERS OF MANGALORE CHEMICALS AND FERTILIZERS LIMITED

Report on the Financial Statements

We have audited the accompanying Ind AS financial statements of Mangalore Chemicalsand Fertilizers Limited ("the Company") which comprise the Balance Sheet asat March 31 2017 the Statement of Profit and Loss the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "Ind AS financial statements")

Management's Responsibility for the Standalone 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 flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified underSection 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand 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 Ind AS 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 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 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 Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall 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 the Ind AS of the financialposition of the Company as at March 31 2017 and its financial performance TotalComprehensive Income (Comprising Profit and other Comprehensive Income for the period)its cash flows and the changes in equity for the year ended on that date.

Other matter

As explained in note no 39 to the Ind AS Financial Statements the investments made bythe Company in the Preference Shares of Bangalore Beverages Ltd and Advances made toUnited Breweries Holdings Ltd have been fully provided for in the year 2015-16.

Pursuant to the directions from the Audit Committee a Forensic Investigation wascarried out into the above transactions which indicate that there may be irregularitiesand elements of mismanagement in the above transactions in respect of which we are unableto comment on the impact if any on the these financial statements in the absence offurther information in this regard.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

A. 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 of theAct we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the said Order.

B. 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 Statement andthe Statement of changes in equity dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid Ind AS financial statements comply with the AccountingStandards specified under Section 133 of the Act read with relevant rule issuedthereunder;

e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct.

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 2" and

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 explanation given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements - Refer Note 30B to the Ind AS financialstatements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Notes 17 to the Ind AS financial statements.

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

iv. The Company has provided requisite disclosures in its Ind AS financial statementsas to holdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016 and these are in accordance with the books ofaccounts maintained by the Company. Refer note no 33 of notes to Ind AS financialstatements.

For K. P. Rao & Co.

Chartered Accountants

Firm Regn. No.
003135S
(Desmond J Rebello)
Place : Gurugram

Partner

Date : May 18 2017 Membership No. 015140

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF MANGALORE CHEMICALS AND FERTILIZERS LIMITED

We report that;

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

b) The Fixed Assets have been physically verified by the Management at reasonableintervals and no material discrepancies were noticed on such physical verification.

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

2. The inventories have been physically verified by the Management during the year. Inour opinion the frequency of such verification is reasonable. No material discrepancieswere noticed on such physical verification.

3. The Company has not granted any loans whether secured or unsecured to companiesfirms Limited Liability Partnerships or other parties covered in the Register maintainedunder Section 189 of the Act. Accordingly reporting under clause (iii) of the paragraph 3of the Order is not applicable.

4. In our opinion and according to the information and explanations given to us theprovisions of Section 185 and 186 of the Act to the extent applicable have been compliedwith in respect of loans investments guarantees and security.

5. In our opinion and according to the information and explanation given to us theCompany has not accepted deposits. Accordingly reporting under clause (v) of paragraph 3of the Order is not applicable.

6. The Company has maintained the books of account relating to utilisation ofmaterials labour and other items pursuant to the Rules made by the Central Governmentfor the maintenance of cost records prescribed under Sub-section 1 of Section 148 of theAct.

7. a. The Company is regular in depositing undisputed statutory dues includingProvident Fund Employees'State Insurance Income Tax Sales Tax Wealth Tax Service TaxDuty of Customs Duty of Excise Value Added Tax Cess and other statutory dues applicableto it with the appropriate authorities.

b. According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Wealth Tax Service Tax Duty of Customs Duty of Excise ValueAdded Tax or Cess which have not been deposited on account of any dispute.

Name of the Statute Nature of the dues Amount (Rs. Lakhs) Forum in which dispute is pending
Customs Act 1962 Custom Duty 90.60 CESTAT

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowing to the financial institutionbank or Government.

9. The Company has not raised any monies during the reporting period by way ofinitial public offer or further public offer. The monies raised by the Company by way ofterm loans have been applied for the purposes for which they were raised.

10. According to the information and explanations given to us no fraud by or by itsofficers or employees on the Company has been noticed or reported during the year.

11. In our opinion and according to the information and explanations given to usmanagerial remuneration paid or provided to the whole-time director is in accordance withprovisions of Schedule V to the Act.

12. The Company is not a Nidhi Company. Accordingly reporting under clause (xii) ofparagraph 3 of the Order is not applicable.

13. All the transactions with the related parties are in compliance with Section 177and Section 188 of the Act where applicable and are disclosed in the Ind AS financialstatements as required by the applicable accounting standard.

14. The Company has not made any preferential allotment or private placement of sharesor convertible debentures during the reporting period. Accordingly reporting under clause(xiv) of paragraph 3 of the Order is not applicable.

15. In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with any directors or personsconnected with him. Accordingly reporting under clause (xv) of paragraph 3 of the Orderis not applicable.

16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For K. P. Rao & Co.

Chartered Accountants

Firm Regn. No.
003135S
(Desmond J Rebello)
Place : Gurugram

Partner

Date : May 18 2017 Membership No. 015140

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF MANGALORE CHEMICALS AND FERTILIZERS 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 MangaloreChemicals and Fertilizers Limited ("the Company") as of March 31 2017 inconjunction with our audit of the Ind AS 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 FinancialReporting issued by the Institute of Chartered Accountants of India". Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required 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 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 obtaininganunderstanding of internal financial controls over financial reporting 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 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 Ind AS financial statements for external purposes. A company's internalfinancial control over financial reporting 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 Ind AS financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance 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 Ind AS 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 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 on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India".

For K. P. Rao & Co.

Chartered Accountants

Firm Regn. No.
003135S
(Desmond J Rebello)
Place : Gurugram

Partner

Date : May 18 2017 Membership No. 015140