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Orient Abrasives Ltd.

BSE: 504879 Sector: Engineering
NSE: ORIENTABRA ISIN Code: INE569C01020
BSE 00:00 | 15 Feb 22.50 -0.20
(-0.88%)
OPEN

22.25

HIGH

22.55

LOW

22.20

NSE 00:00 | 15 Feb 22.55 -0.15
(-0.66%)
OPEN

22.75

HIGH

22.80

LOW

22.00

OPEN 22.25
PREVIOUS CLOSE 22.70
VOLUME 3293
52-Week high 49.00
52-Week low 21.60
P/E 15.00
Mkt Cap.(Rs cr) 269
Buy Price 22.50
Buy Qty 400.00
Sell Price 24.90
Sell Qty 1000.00
OPEN 22.25
CLOSE 22.70
VOLUME 3293
52-Week high 49.00
52-Week low 21.60
P/E 15.00
Mkt Cap.(Rs cr) 269
Buy Price 22.50
Buy Qty 400.00
Sell Price 24.90
Sell Qty 1000.00

Orient Abrasives Ltd. (ORIENTABRA) - Auditors Report

Company auditors report

To

The Members of ORIENT ABRASIVES LIMITED

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Orient AbrasivesLimited ("the Company") which comprise the Balance Sheet as at 31 March 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies 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 to give a true and fair view of the financial positionfinancial performance (including other comprehensive income) cash flows and changes inthe equity of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards specified in the Companies (IndianAccounting Standards) Rules 2015 under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

Auditors' 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 and the rules madethereunder including the accounting and auditing standards and matters which are requiredto be included in the audit report under the provisions of the Act and the Rules madethereunder and the Order issued under section 143(11) of the Act.

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 whetherthese 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 theauditors' 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 auditors consider internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation 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 of the state of affairs of the Companyas at 31 March 2018 and of the profit (including other comprehensive income) its cashflows and changes in equity for the year ended on that date.

Other Matters

The financial information of the Company for the year ended 31 March 2017 and thetransition date opening balance sheet as at 1 April 2016 included in these Ind ASfinancial statements are based on the previously issued financial statements for the yearsended 31 March 2017 and 31 March 2016 prepared in accordance with the Companies(Accounting Standards) Rules as applicable which were audited by the predecessorauditors on which they had expressed their unmodified opinion dated 30 May 2017 andunmodified opinion dated 26May 2016 respectively. The adjustments to those financialstatements for the differences in the accounting principles adopted by the Company ontransition to the Ind AS have been audited by us. Our opinion is not modified in respectof 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 terms of sub section (11) of section 143 of theAct we give in the Annexure – A a statement on the matters specified in clause 3and 4 of the Order to the extent possible.

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 it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

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 written representations received from the directors as on 31 March2018 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31 March 2018 from being appointed as a director in terms section 164(2) of theAct;

f) With respect to the adequacy of internal financial controls over financial reportingof the Company and operating effectiveness of such controls our separate report inannexure – B may be referred;

g) With respect to the other matters to be included in the Auditors' 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 under note no. 28;

ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses;

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

For SANGHAVI & COMPANY

Chartered Accountants FRN: 109099W

Sd/-

MANOJ GANATRA

Partner

Membership No. 043485

Place :Mumbai

Date : May 22 2018

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT

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

On the basis of such checks as we considered appropriate and in terms of informationand explanations given to us we state that:

1 In respect of fixed assets:

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

b. The fixed assets were physically verified by the management at reasonable intervalsin a phased manner in accordance with a programme of physical verification. Nodiscrepancies were noticed on such verification.

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

2 The inventories were physically verified by the management at reasonable intervalsduring the year. No material discrepancies were noticed on such physical verificationcarried out by the Company.

3 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 Act.

4 The Company has complied with provisions of Section 185 and 186 of the Act in respectof loans investments guarantees and security to the extent applicable.

5 The Company has not accepted any deposits within the meaning of the provisions ofsection 73 to 76 or any other relevant provisions of the Act and the rules framedthereunder with regard to the deposits accepted from the public. No order has been passedby the Company Law Board or National Company Law Tribunal or Reserve Bank of India or anycourt or any other tribunal.

6 We have broadly reviewed the cost records maintained by the Company pursuant toSection 148(1) of the Companies Act 2013 and are of the opinion that prima facie theprescribed cost records have been maintained. We have however not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

7 In respect of statutory and other dues:

a. The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees State Insurance Income Tax Sales Tax Service Tax CustomDuty Excise Duty Value Added Tax Cess GST and other statutory dues to the extentapplicable with the appropriate authorities during the year. There are no undisputedstatutory dues outstanding for a period of more than six months from the date they becamepayable.

b. There are no statutory dues which have not been deposited on account of disputeexcept for the followings:

Name of the statute Nature of dues Amount (in lakhs) ` Forum where dispute is pending
Customs Act 1962 Differential custom duty on account of misclassification on import of coal. 54.51 Commissioner of Customs (Appeals)
Customs Act 1962 Redemption fine in lieu of confiscation u/s 125 of the Act 1.59 Additional Commissioner of Customs
Income Tax Act 1961 Penalty proceedings for error made in the return filed by the Company for the assessment year 2009-10 47.49 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Disallowance of various expenses/deductions (under section 80IA) claimed by the Company for the year 2008-09 2010-11 2011-12 2012-13 and 2013-14 along with the penalty proceedings of the same for the year 2008-09 775.38 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Disallowance of various deductions (under section 80IA) claimed by the Company for the year 2014-15 76.28 Assessing Officer

8 The Company has not defaulted in repayment of loans or borrowing to banks. TheCompany has not obtained any borrowings from any financial institutions or government orby way of debentures.

9 Term loans obtained by the Company have been applied for the purpose for which theywere obtained. The Company has not raised any money during the year by way of publicoffer (including debt instruments).

10 To the best of our knowledge and belief and according to the information andexplanations given to us no fraud on or by the Company or on the Company by its officersor employees was noticed or reported during the year.

11 Managerial remuneration paid or provided by the Company during the year is inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

12 Since the Company is not a Nidhi Company the provisions of clause 3 (xii) of theOrder are not applicable to the Company.

13 All transactions with the related parties are in compliance with Section 177 and 188of the Act and the details have been disclosed in the Ind AS financial statements asrequired by the applicable accounting standards.

14 The Company has complied with provisions of section 42 of the Companies Act 2013 inrespect of the preferential allotment of share warrants issued during the year. (refernote no. 41) The amounts so raised have been used for the purposes for which it wasraised.

15 The Company has not entered into any non-cash transactions during the year withdirectors or persons concerned with him.

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

For SANGHAVI & COMPANY

Chartered Accountants FRN: 109099W

Sd/-

MANOJ GANATRA

Partner

Membership No. 043485

Mumbai May 22 2018

ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

We have audited the internal financial controls over financial reporting of OrientAbrasives Limited ("the Company") as of 31 March 2018 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for the Internal Financial Statements

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 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 auditors' judgement 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. A 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 authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 31 March 2018 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 SANGHAVI & COMPANY

Chartered Accountants FRN: 109099W

Sd/-

MANOJ GANATRA

Partner

Membership No. 043485

Mumbai May 22 2018