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Oriental Carbon & Chemicals Ltd.

BSE: 506579 Sector: Industrials
NSE: OCCL ISIN Code: INE321D01016
BSE 00:00 | 10 Jul 783.40 -13.25
(-1.66%)
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791.50

HIGH

796.50

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777.20

NSE 00:00 | 10 Jul 782.60 -15.40
(-1.93%)
OPEN

788.00

HIGH

797.95

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OPEN 791.50
PREVIOUS CLOSE 796.65
VOLUME 1029
52-Week high 1178.00
52-Week low 470.00
P/E 11.28
Mkt Cap.(Rs cr) 807
Buy Price 772.55
Buy Qty 1.00
Sell Price 835.00
Sell Qty 100.00
OPEN 791.50
CLOSE 796.65
VOLUME 1029
52-Week high 1178.00
52-Week low 470.00
P/E 11.28
Mkt Cap.(Rs cr) 807
Buy Price 772.55
Buy Qty 1.00
Sell Price 835.00
Sell Qty 100.00

Oriental Carbon & Chemicals Ltd. (OCCL) - Auditors Report

Company auditors report

To

The Members

Oriental Carbon & Chemicals Limited

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Oriental Carbon& Chemicals Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2019 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "standalonefinancial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone 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 Standard prescribed under section133 of the Act read with the Companies (Indian Accounting Standard) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key Audit Matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Company'sannual report particularly with respect to the Management Discussion and Analysis Board'sReport including Annexures to Board's Report Corporate Governance and Shareholder'sInformation but does not include the standalone financial statements and our auditor'sreport thereon. The other information is expected to be made available to us after thedate of this auditor's report.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

When we read the other information identified above If we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance.

Responsibility of Management and Those Charged with Governance for the StandaloneFinancial Statements.

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including Ind AS. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern 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 are responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial 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 internalcontrol.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

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 inparagraphs 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 andobtained all the information and explanations which to the best of our knowledge andbelief 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 Statement of Cash Flow and Statement of Change in Equity dealt with by thisreport are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone financial statements comply with theIndian Accounting Standards specified under section 133 of the Act read with relevantrule issued thereunder.

(e) On the basis of written representations received from the directors as on March 312019 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2019 from being appointed as a director in terms of sub-section 2 of section164 of the Act.

(f) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

(g) 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 (Rs) With respect to the other matters tobe included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone financial statements – Refer Note 28 to the standalonefinancial statements.

ii. The Company has made adequate provision as required under the law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts.

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

For S S KOTHARI MEHTA & COMPANY
Chartered Accountants
Firm Registration Number: 000756N
Place: Noida NAVEEN AGGARWAL
Date: May 10 2019 Membership Number: 094380

"Annexure A" to the Independent Auditors' Report

The Annexure as referred in paragraph (1) ‘Report on Other Legal and RegulatoryRequirements of our Independent Auditors' Report to the members of Oriental Carbon &Chemicals Limited on the standalone financial statements for the year ended March 312019 we report that: i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management according toprogramme of periodical verification in phased manner which in our opinion is reasonablehaving regard to the size of the Company and the nature of its Fixed Assets. Thediscrepancies if any noticed on such physical verification have been properly dealt within the books of accounts.

(c) The title deeds of immovable properties are held in the name of the Company exceptin the following case:

Particular No. of Cases Gross Book Value (Rs in lakhs) Net Book Value
(Rs in lakhs)
Building * 1 3501.99 3376.11

*Also refer Note No. 2(ii)

ii. The inventory has been physically verified except stock lying with third parties bythe management at reasonable interval during the year. As far as we could ascertain andaccordingly to the information and explanations given to us no material discrepancieswere noticed between the physical stock and book records. iii. The Company has grantedunsecured loan to a company covered in the register maintained under section 189 of theCompanies Act 2013 (‘the Act'). However The Company has not granted any loans toFirms Limited Liability Partnership Firms or other parties covered in the registermaintained under Section 189 of the Companies Act 2013.

(a) In our opinion the terms and conditions of the grant of such loan are notprejudicial to the interest of the Company.

(b) The Company has stipulated schedule of repayment of principal and payment ofinterest and repayment of the principal amount and receipt of interest are not due atbalance sheet date. iv. According to the information and explanations given to us theCompany has complied with the provisions of section 185 and section 186 of the CompaniesAct 2013 with respect to the loans investments guarantees and security provided.

v. The Company has complied with the directives issued by the Reserve Bank of India andthe provisions of the section 73 to 76 of the Companies Act 2013 and the rules framedthereunder as applicable. We are informed by the management that no order has been passedby the Company Law Board or National Company Law Tribunal or Reserve Bank of India or anyother authority. vi. We have broadly reviewed the books of account maintained by theCompany pursuant to the rules prescribed by the Central Government of India for themaintenance of cost records under sub-section 1 of Section 148 of the Companies Act 2013in respect of the manufacture of Insoluble Sulphur and chemicals and are of the opinionthat prima facie the prescribed records and accounts have been made and maintained.However we have not carried out a detailed examination of such records with a view todetermining whether they are accurate or complete. vii. (a) According to the informationand explanations given to us and on the basis of examination of the records of theCompany the Company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income tax Goods and Service Taxcustom duty Cess and other material statutory dues with the appropriate authorities tothe extent applicable and further there are no undisputed statutory dues payable for aperiod of more than six months from the date they become payable as at March 31 2019.

(b) According to the records and information and explanations given to us there are nodues in respect of income tax sales tax service tax duty of excise duty of customvalue added tax or Goods and Service Tax which have not been deposited on account of anydispute except as given below:

Name of Statute Nature of Dues Period (Assessment Year) Amount (Rs in lakhs) Forum where dispute pending
Income Income 2011-12 32.30 ITAT Kolkata
Tax Act 1961 Tax

viii. In our opinion on the basis of audit procedures and according to the informationand explanations given to us the Company has not defaulted in repayment of loan orborrowing to any banks or Financial Institutions. The Company has not obtained any loansfrom government and no dues is outstanding to debenture holders.

ix. According to the information and explanation given to us the Company has notraised moneys by way of initial public offer (IPO) or further public offer (including debtinstruments) during the year. The term loans were applied for the purposes for which theyare raised.

x. During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India we have neithercome across any instance of fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of such case bythe management.

xi. According to the information and explanations given 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 theinformation and explanations given to us the Company is not a Nidhi Company. Accordinglyparagraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on ourexamination of the record of the Company transactions with the related parties are incompliance with provision of section 177 & 188 of the Act where applicable and detailsof such transactions have been disclosed in the financial statements as required by theapplicable accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly clause 3(xiv) of the Order is not applicable.

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 paragraph 3(xv) ofthe Order is not applicable. xvi. The Company is not required to be registered underSection 45-IA of the Reserve Bank of India Act 1934. Accordingly clause 3(xvi) of theOrder is not applicable.

For S S KOTHARI MEHTA & COMPANY
Chartered Accountants
Firm Registration Number: 000756N
NAVEEN AGGARWAL
Place: Noida Partner
Date: May 10 2019 Membership Number: 094380

"Annexure B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of Oriental Carbon & Chemicals Limited.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") as referred to in paragraph 2(f) of‘Report on Other Legal and Regulatory Requirements'

We have audited the internal financial controls over financial reporting of OrientalCarbon & Chemicals Limited ("the Company") as of March 31 2019 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 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 auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material 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 March 31 2019 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 S S KOTHARI MEHTA & COMPANY
Chartered Accountants
Firm Registration Number: 000756N
NAVEEN AGGARWAL
Place: Noida Partner
Date: May 10 2019 Membership Number: 094380