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Clariant Chemicals India

BSE: 506390|NSE: CLNINDIA|ISIN: INE492A01029|SECTOR: Dyes & Pigments
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Auditor's Report (Clariant Chemicals India) Year End : Mar '16

1. We have audited the accompanying financial statements of Clariant Chemicals (India) Limited (the Company), which comprise
the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss for the 15 months period from January 1, 2015 to March
31, 2016 (the period), the Cash Flow Statement for the period then ended, and a summary of the significant accounting policies
and other explanatory information.

Management''s Responsibility for the Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the
Act) with respect to the preparation of these financial statements to give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India,
including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made there under including the accounting standards and
matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other
applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and
pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial
statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view, in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the
financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on
the financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial
statements give the information required by the Act in the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its
profit and its cash flows for the period ended on that date.


Report on Other Legal and Regulatory Requirements

9. As required by ''the Companies (Auditor''s Report) Order, 2015'', issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act (hereinafter referred to as the Order), and on the basis of such checks of the books
and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in
the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. 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 best of our knowledge and belief were necessary
for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books, except that the back up of the books of accounts and other books and papers maintained in electronic
mode has not been maintained on servers physically located in India.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement
with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164
(2) of the Act.

(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our comment in
Paragraph 10(b) above that the backup of the books of accounts and other books and papers maintained in electronic mode has not
been maintained on servers physically located in India.

(g) 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, in our opinion and to the best of our knowledge and belief and according to the information and
explanations given to us:

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2016 on its financial position in its
financial statements - Refer Note 30;

ii. The Company has made provision as at March 31, 2016, as required under the applicable law or accounting standards, for
material foreseeable losses, if any, on long-term contracts. The Company did not have any derivative contracts as at March
31,2016.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund
by the Company during the 15 months period ended March 31,2016.

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed
assets.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items
over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its
assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the
period and no material discrepancies have been noticed on such verification.

ii. (a) The inventory excluding stocks with third parties has been physically verified by the Management during the period. In
respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the Management are reasonable and adequate
in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of
inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register
maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a) and (iii)(b) of the said Order are
not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, having regard to the explanation that, except
for certain items of inventory which are of special nature for which suitable alternative sources do not exist, there is an
adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of
inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the
rules framed there under to the extent notified.

vi. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules
made by the Central Government of India, the maintenance of cost records has been specified under sub- section (1) of Section 148
of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have
not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion,
except for service tax dues during the period in respect of the matter stated below, the Company is regular in depositing
undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales tax, wealth tax, duty of
customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate
authorities. The extent of the arrears of statutory dues outstanding as at March 31, 2016, for a period of more than six months
from the date they became payable are as follows:

Name Nature of Amount Period to Due DATE Date of
of the dues (Rs, Lakhs) which the payment
statute amount
relates

Service Service Tax 102.20 October Various 07-May-16
Tax under including 2014- dates
Finance interest and September
Act, 1994 penalty 2014

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of
dues of income tax, sales tax, service tax, excise duty and value added tax as at March 31, 2016 which have not been deposited on
account of a dispute, are as follows:

Name Nature of Amount Period to Forum where the
of the dues (Rs, Lakhs) which the dispute is pending
statute amount
relates

Central Sales Tax 2.27 1996-97 to High Court of Tamil
Sales Tax including 1998-99 Nadu
Act and interest and 1788 1999_00 Sa]es Tax Appellate
Local penalty, as Tribunals of
Sales Tax applicable Maharashtra

13356.73 1992-93 to Appellate
2011-12 Authority - up to
Commissioner''s
level

The Excise duty 437.58 1999-00 to Tribunal of various
Central including 2008-09 states
Excide interest and 324.98 1994-95 to Appellate
Act, 1944 penalty, as 1997-9^ Authority - up to
applicable 2000-01, and Commissioner''s
level
2010-11 to
2013-14

Service Service Tax 123.95 2005-06 to Tribunal of various
Tax under including 2010-11 states
Finance interest and ~ 2002-03to Appellate
Act, 1994 penalty, as 2004-05, Authority - up to
applicable 2007-08 to Commissioner''s
level
2012-13

Income Income Tax 438.25 1982-83 to Income Tax
Tax Act including 1986-87, Appellate Tribunal
1961 interest and 1989-90
penalty, as 1991-92,
applicable 1993-94,
1995-96,
1997-98 to
2004-05 and
2006-07
77.60 2001-02, Appellate
2011-12 to Authority - up
to 2012-13 Commissioner''s
level

655.50 2007-08 to Deputy
2014-15 Commissioner of
Income Tax (TDS)

(c) The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated
time in accordance with the provisions of the Companies Act, 1956 and the rules made there under.

viii. The Company has no accumulated losses as at the end of the period and it has not incurred any cash losses in the period
ended on that date or in the immediately preceding financial year.

ix. As the Company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the
balance sheet date, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for
loans taken by others from banks or financial institutions during the period. Accordingly, the provisions of Clause 3(x) of the
Order are not applicable to the Company.

xi. The Company has not raised any term loans. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the
Company.

xii. During the course of our examination of the books and records of the Company, carried out in accordance with the generally
accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across
any instance of material fraud on or by the Company, noticed or reported during the period, nor have we been informed of any such
case by the Management.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/ N500016


Arvind Daga

Partner

Membership Number: 108290

Place: Mumbai

Date: May 20, 2016

Source : Dion Global Solutions Limited
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