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Phillips Carbon Black Ltd.

BSE: 506590 Sector: Industrials
NSE: PHILIPCARB ISIN Code: INE602A01023
BSE 15:09 | 20 Jul 200.10 -2.05
(-1.01%)
OPEN

202.10

HIGH

205.70

LOW

197.30

NSE 14:59 | 20 Jul 199.50 -2.45
(-1.21%)
OPEN

203.00

HIGH

205.80

LOW

197.30

OPEN 202.10
PREVIOUS CLOSE 202.15
VOLUME 48760
52-Week high 318.98
52-Week low 108.96
P/E 15.01
Mkt Cap.(Rs cr) 3,449
Buy Price 199.60
Buy Qty 137.00
Sell Price 200.00
Sell Qty 25.00
OPEN 202.10
CLOSE 202.15
VOLUME 48760
52-Week high 318.98
52-Week low 108.96
P/E 15.01
Mkt Cap.(Rs cr) 3,449
Buy Price 199.60
Buy Qty 137.00
Sell Price 200.00
Sell Qty 25.00

Phillips Carbon Black Ltd. (PHILIPCARB) - Auditors Report

Company auditors report

TO THE MEMBERS OF PHILLIPS CARBON BLACK LIMITED

REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS financial statements of PhillipsCarbon Black Limited (“the Company”) which comprise the Balance Sheet as atMarch 31 2018 the

Statement of Profit and Loss including the statement of Other

Comprehensive Income the Cash Flow Statement and the Statement of Changes in Equityfor the year then ended and a summary of significant accounting policies.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE 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 standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance 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 the design implementation and maintenance of adequateinternal financial control 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 standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing issued by the Institute of Chartered Accountants of India as 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 anddisclosures in the financial statements.

The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the standalone Ind AS financial statements whetherdue to fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation of the standalone Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany's Directors as well as evaluating the overall presentation of the standalone IndAS financial statements. We believe that the audit evidence we have obtained is provide abasis for our audit opinion on the standalone Ind AS financial statements.

OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone 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 March 31 2018 its profit including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.

OTHER MATTER

The Ind AS financial statements of the Company for the year ended March 31 2017included in these standalone Ind AS financial statements have been audited by thepredecessor auditor who expressed an unmodified opinion on those statements on 10 August2017.

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 1” a statement on the matters specified inparagraphs 3 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 it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive

Income the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under section 133 of the Act read with

Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of section 164 (2) ofthe 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 ourseparate Report in “Annexure 2” to this report;

(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 explanations given to us: i. TheCompany has disclosed the impact of pending litigations on its financial position in itsstandalone Ind AS financial statements Refer Note 10 and 23 to the standalone Ind ASfinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection

Fund by the Company.

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Kamal Agarwal

Partner

Membership No.: 058652

Kolkata

May 4 2018

ANNEXURE 1 TO INDEPENDENT AUDITOR'S REPORT

Annexure 1 referred to in paragraph 1 of the section on “Report on other legal andregulatory requirements” of our even report on the even date

To the Members of Phillips Carbon Black Limited

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

(b) All fixed management during the year but there is a r been physically verified bythe egular programme of verifying them once in three years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the company except leasehold land at Chennai aggregating ` 2521.08 lakhs as atMarch 31 2018 for which title deed is yet to be executed in favour of the Company.

2. The inventory has been physically verified by the management during the year. In ouropinion the frequency of verification is reasonable. No material discrepancies werenoticed on such physical verification. Inventories lying with third parties have beenconfirmed by them as at March 31 2018 and no material discrepancies were noticed inrespect of such confirmations.

3. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firmsLimited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Order arenot applicable to the Company and hence not commented upon.

4. In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the company.

5. The Company has not accepted any deposits within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 related to the manufacture manufacturing and sale ofcarbon black and sale of power and are of the opinion that prima facie the specifiedaccounts and records have been made and maintained. We have not however made a detailedexamination of the same.

(a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of custom duty of excise value added tax goodsand service tax cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and service tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.

(c) According to the records of the Company the dues of income-tax sales-tax servicetax duty of custom duty of excise and value added tax on account of any dispute are asfollows:

Name of the statute Nature of Dues Amount ( ` in lakhs) Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Excise Duty 6463.80 1999-00 to 2016-17 Customs Excise and Service Tax Appellate Tribunal
663.40 1997-98 to 1998-99 2003-04 to 2016-17 Commissioner (Appeals)
3.08 2009-10 Ministry of Finance
26.85 2005-06 to 2006-07 Supreme Court
Service Tax 602.06 2012-13 Customs Excise and Service Tax Appellate Tribunal
Customs Act 1962 Customs Duty 8.70 2009-10 and 2012-13 Customs Excise and Service Tax Appellate Tribunal
38.30 2006-07 to 2010-11 Deputy Commissioner of Custom
11.80 2008-09 to 2009-10 Supreme Court
Finance Act 1994 Service Tax 299.44 2008-09 to 2014-15 Customs Excise and Service Tax Appellate Tribunal
Central Sales Tax Act 1956 Central Sales Tax 138.61 2007-08 Senior Joint Commissioner Commercial Taxes
109.13 2010-11 2012-13 to 2014-15 Dy. Commissioner of Commercial Taxes
458.13 1999-00 1994-95 to 1995-96 and 2000-01 High Court at Calcutta
634.52 2003-04 to 2006-07 2011-12 to 2012-13 and 2014-15 West Bengal Commercial Taxes Appellate & Revisional Board
Gujarat Value Added Tax Act 2006 Value Added Tax 22.57 2006-07 Gujarat Value Added Tax Tribunal
The Kerala Value Added Tax Act 2003 Value Added Tax 86.33 2007-08 to 2009-10 2011-12 and 2013-14 to 2015-16 Deputy Commissioner of Commercial Taxes
West Bengal Sales Tax Act 1994 Sales Tax 67.46 2003-04 West Bengal Commercial Taxes Appellate & Revisional Board
92.72 1999-00 1994-95 to 1995-96 2000-01 and 2004-05 West Bengal Taxation Tribunal
West Bengal Value Added Tax Act 2003 Value Added Tax 78.31 2007-08 Senior Joint Commissioner Commercial Taxes.
4.41 2014-15 West Bengal Commercial Taxes Appellate & Revisional Board
28.16 2005-06 and 2014-15 West Bengal Taxation Tribunal
Income-tax Act 1961 Income Tax 94.55 1993-94 Commissioner (Appeals)

7. In our opinion and according to the information explanations given by themanagement the Company has not defaulted in repayment of loans or borrowings to afinancial institution or bank. There are no dues from government or dues to debentureholders during the year and hence not commented upon.

8. In our opinion and according to the information and explanations given by themanagement the Company has utilized the monies raised by way of term loans for thepurposes for which they were raised.

9. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no material fraud onthe company by the officers and employees of the Company has been noticed or reportedduring the year.

10. According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

11. In our opinion the Company is not a nidhi Company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

12. According to the information and explanations given by the management transactionswith the related parties are in compliance with section 177 and 188 of Companies Act and2013 where applicable and the details have been disclosed in the notes to the financialstatements as required by the applicable accounting standards.

13. According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.

14. According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withthem as referred to in section 192 of Companies Act 2013.

15. According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company

For S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Kamal Agarwal

Partner

Membership No.: 058652

Kolkata

May 4 2018

ANNEXURE 2 TO INDEPENDENT AUDITOR'S REPORT

ANNEXURE 2 TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF PHILLIPS CARBON BLACK LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (“the Act”)

To the Members of Phillips Carbon Black Limited

We have audited the internal financial controls over financial reporting of PhillipsCarbon Black Limited (“the Company”) as of March 31 2018 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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. 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 the

Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

AUDITOR'S 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 as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of

India. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the 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 reporting tofuture periods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance 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 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 S.R. Batliboi & Co. LLP

Chartered Accountants

ICAI Firm Registration Number: 301003E/E300005

per Kamal Agarwal

Partner

Membership No.: 058652

Kolkata

May 4 2018