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Orient Abrasives Ltd.

BSE: 504879 Sector: Engineering
NSE: ORIENTABRA ISIN Code: INE569C01020
BSE 00:00 | 13 Jul 18.45 0
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19.00

HIGH

19.00

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18.35

NSE 00:00 | 13 Jul 18.40 -0.15
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18.70

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OPEN 19.00
PREVIOUS CLOSE 18.45
VOLUME 927
52-Week high 23.10
52-Week low 10.10
P/E 10.25
Mkt Cap.(Rs cr) 221
Buy Price 18.30
Buy Qty 300.00
Sell Price 20.75
Sell Qty 100.00
OPEN 19.00
CLOSE 18.45
VOLUME 927
52-Week high 23.10
52-Week low 10.10
P/E 10.25
Mkt Cap.(Rs cr) 221
Buy Price 18.30
Buy Qty 300.00
Sell Price 20.75
Sell Qty 100.00

Orient Abrasives Ltd. (ORIENTABRA) - Auditors Report

Company auditors report

To

The Members of

ORIENT ABRASIVES LIMITED

Report on the Audit ofthe Financial Statements

Opinion

We have audited the accompanyingfinancial statements of OrientAbrasives Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2019 the statement of profit and loss (including other comprehensive income) thestatement of changes in equity and the statement of cash flows for the year then ended andnotes to the financial statements including a summary of the significant accountingpolicies and other explanatory information(hereinafter referred to as "thefinancialstatements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ('Ind AS") and the other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2019 of its profit and totalcomprehensive income its changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) specified under Section 143(10) of the Act. Ourresponsibilities under those standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouropinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in our forming our opinion thereon and we do not provide a separate opinion onthese matters. We have the matters described below to be the key audit matters to becommunicated in our report:

Key audit matters How our audit addressed the key audit matter
Advance given to mining contractors pending adjustment
The Company extracts raw bauxite from the mines taken on lease from the regulatory authorities. The Company gives the contracts to various sub-contractors which include extraction sizing sorting truck loading activities etc. at various mines. Our audit procedures included the following:
The Company accounts for the inventories of raw bauxite in the books when all the activities to be performed by the sub- contractors are complete. • We have verified the transaction movement occurred during the year.
Against the contracted activities which are currently in progress the Company has outstanding advance of Rs.699.75 lacs as at reporting date paid to sub-contractors towards excavation sizing sorting truck loading etc. at various mines. • We have obtained the confirmation received from the sub- contractor for the balance outstanding as at March 31 2019 which also mentions mining activities are in progress.
Treatment of amount paid to sub-contractor as an advance was determined to be key matter in our audit of the financial statements. • Per contractors confirmation and management representation at the reporting year end as mining activities are in progress the amount paid to the contractors are treated as advances since the mining services obligations are not yet completed.

Information Other than the Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theBoard's Report including Annexures to Board's Report Management Discussion and AnalysisCorporate Governance Report Shareholder's Information but does not include the financialstatements and auditor's report thereon. The Board's Report and other information areexpected to be made available to us after the date of this auditor's report.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained during the course of our audit orotherwise appears to be materially misstated.

When we read the aforesaid reports and information if we conclude thatthere is material misstatement therein we are required to communicate the matter to thosecharged with governance.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Actwith respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance and cashflows of the Company in accordance with the Ind AS and accounting principles generallyaccepted in India.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 ofthefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concerns and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditors' Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis high level of assurance but is not a guarantee that audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatements of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of theinternal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(I) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosure and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 subsection (11)of section 143 of the Act we give in the Annexure - A a statement on the mattersspecified in clause 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 explanationswhich to the best of 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 beenkept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

d) In our opinion the aforesaid financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e) On the basis of written representations received from the directorsas on 31st March 2019 none of the directors is disqualified as on 31st March 2019 frombeing appointed as a director in terms section 164(2) of the Act;

f) With respect to the adequacy of internal financial controls overfinancial reporting of the Company and operating effectiveness of such controls ourseparate report in annexure - B may be referred;

g) In our opinion and to the best of our information and according tothe explanations given to us remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanation given tous:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements;

ii. The Company did not have any long-term contracts includingderivatives contracts for which there were any material foreseeable losses;

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

For SANGHAVI & CO.
Chartered Accountants
FRN: 109099W
Mumbai MANOJ GANATRA
May 14 2019 Partner
Membership No. 043485

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)

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

1 In respect of fixed assets: a. The Company has maintained properrecords showing full particulars including quantitative details and situation of fixedassets.

b. All fixed assets were not physically verified by the managementduring the year. However there is a regular programme of verification in a phased mannerwhich in our opinion is reasonable having regard to the size of the Company and thenature its assets. No material discrepancies were noticed on such verification.

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

2 The inventories were physically verified by the management atreasonable intervals during the year. No material discrepancies were noticed on suchphysical verification carried out by the Company.

3 The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Act.Accordingly the provisions of clause 3(iii)(a)(b) and (c) of the Order are not applicable to the Company.

4 There are no loans investments guarantees and securities in respectof which provisions of section 185 and 186 of the Act are applicable.

5 The Company has not accepted any deposits within the meaning of theprovisions of section 73 to 76 or any other relevant provisions of the Act and the rulesframed thereunder with regard to the deposits accepted from the public. Accordingly theprovisions of clause 3(v) of the Order are not applicable.

6 We have broadly reviewed the cost records maintained by the Companypursuant to Section 148(1) of the Companies Act 2013 and are of the opinion that primafacie the prescribed cost records have been maintained. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

7 In respect of statutory and other dues:

a. The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees State Insurance Income Tax CessGoods & Service Tax and other material statutory dues to the extent applicable withthe appropriate authorities during the year. There are no undisputed statutory duesoutstanding for a period of more than six months from the date they became payable.

b. There are no statutory dues which have not been deposited onaccount of dispute except for the followings:

Name of the statute Nature of dues Rs. In lacs 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 47.49 Income Tax Appellate Tribunal
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 Income Tax Appellate Tribunal
Income Tax Act 1961 Disallowance of various deductions (under section 80IA) claimed by the Company for the year 2014-15 76.28 Income Tax Appellate Tribunal

8 The Company has not defaulted in repayment of loans or borrowing tobanks. The Company has not obtained any borrowings from any financial institutions orgovernment or by way of debentures.

9 Terms loans obtained by the Company have been applied for the purposefor which they were obtained. The Company has not raised any money during the year byway of public offer (including debt instruments).

10 To the best of our knowledge and belief and according to theinformation and explanations given to us no fraud on or by the Company or on the Companyby its officers or employees was noticed or reported during the year.

11 Managerial remuneration paid or provided by the Company during theyear is in accordance with the requisite approvals mandated by the provisions of Section197 read with Schedule V to the Act.

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

13 All transactions with the related parties are in compliance withSection 177 and 188 of the Act and the details have been disclosed in the financialstatements as required by the applicable accounting standards.

14 The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview.

15 The Company has not entered into any non-cash transactions duringthe year with directors or persons concerned with him.

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

For SANGHAVI & CO.
Chartered Accountants
FRN: 109099W
Mumbai MANOJ GANATRA
May 14 2019 Partner
Membership No. 043485

ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT

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

We have audited the internal financial controls over financialreporting of Orient Abrasives Limited ("the Company") as of 31stMarch 2019 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based onthe internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting ("the Guidance Note") issued by the Institute of CharteredAccountants of India ("the ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note and the Standards on Auditing issued by ICAI andprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit toobtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors' judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that -

(1) Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) Provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) Provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31stMarch 2019 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.

For SANGHAVI & CO.
Chartered Accountants
FRN: 109099W
Mumbai MANOJ GANATRA
May 14 2019 Partner
Membership No. 043485