We have audited the accompanying standalone financial statements of
KANORIA CHEMICALS & INDUSTRIES LIMITED (the Company), which comprise
the Balance Sheet as at 31 st March, 2015, the Statement of Profit and
Loss, the Cash Flow Statement for the yearthen ended, and a summary of
the significant accounting policies and otherexplanatory information.
Management''s Responsibility for the Standalone Financial Statements
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 standalone financial statements that 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 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 orerror.
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards 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.
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 auditor''s 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 whetherthe Company has in place an adequate internal
financial controls system overfinancial 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.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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 31 st March, 2015, and its profit and its cash flows fortheyearended
on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015 (the
Order) issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we reportthat:
a) we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
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
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 standalone financial statements comply
with the applicable 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 31 st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 st March,
2015 from being appointed as a director in terms of Section 164 (2) of
f) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. the Company has disclosed the impact of pending litigation on its
financial position in its financial statements - Refer Note 29 to the
ii. The Company has long-term contracts including derivative contracts
as at 31st March, 2015 for which there were no material foreseeable
iii. there has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company, exceptforRs. 0.31 million which is held in abeyance due to
pending legal cases.
Annexure referred to in paragraph 1 under the heading Report on other
legal and regulatory requirements of our report of even date
Re: Kanoria Chemicals & Industries Limited (the Company)
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of Fixed
(b) As perthe information and explanations given to us, physical
verification of fixed assets has been carried out in terms of the
phased program of verification of its fixed assets adopted by the
Company and no material discrepancies were noticed on such
verification. In our opinion, the frequency of verification is
reasonable having regard to size of the Company and nature of its
II. (a) The inventories have been physically verified at reasonable
intervals during the year by the management except materials lying with
where confirmations are obtained.
(b) In our opinion, the procedure of physical verification of
inventories followed by the management is reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) The Company has maintained proper records of inventories. The
discrepancies between the physical stocks and book stocks, which are
not significant, have been properly dealt with in the books of account.
III. The Company has not granted any loans, secured or unsecured to
companies, firms or other parties listed in the register maintained
under Section 189 ofthe Companies Act, 2013.
IV. On the basis of checks carried out during the course of audit and
as per explanations given to us, we are of the opinion that there is
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 records ofthe Company and according
to the information and explanation given to us, no major weakness has
been noticed or reported in the internal controls system.
V. The Company has not accepted any depositfrom the public.
VI. We have broadly reviewed the books of accounts maintained by
Company in respect of product, where pursuant to the rule made by the
Central Government of India the maintenance of cost records has been
prescribed under section 148 (1) of the Companies Act 2013 and are of
the opinion that, prima facie, the prescribed records have been
maintained. We have not, however, made a detailed examination of the
records with a view to determine whetherthey are accurate or complete.
VII. (a) According to the information and explanations given to us and
on the basis of our examination ofthe books of account, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other
statutory dues with the appropriate authorities. According to the
information and explanations given to us and the records of the Company
examined by us, no undisputed statutory dues as above were outstanding
as at 31 st March, 2015 for a period of more than six months from the
date they became payable.
(b) According to the information and explanation given to us, the dues
of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty, Service
Tax and Cess which have not been deposited on account of any dispute
and the forum where the dispute is pending as on 31 st March, 2015 are
Name of the statute Nature of Dues Amount Period to which
the amount relate
The Service Tax under Service Tax Demand 6.60 Apr-2009 to Aug-2012
the Finance Act, 1994
The Central Excise Excise Duty 0.55 Jul-2012 to May-2013
The IncomeTaxAct, 1961 IncomeTax Demand 42.91 A Y 2012-13
The Indian Stamp Act, Stamp Duty Demand 3.19 2011-12
Name of the Statute Forum where dispute is pending
The Service Tax under Commissioner (A)- Central Excise
the Finance Act, 1994
The Central Excise Act 1994 CESTAT - Central Excise
The IncomeTaxAct, 1961 C.l.T. (A)
The Indian Stamp Act, 1899 Rajasthan High Court
(c) According to the information and explanations given to us the
amounts which were required to be transferred to the investor education
and protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules there under has been
transferred to such fund within time, except Rs. 0.31 million which is
held in abeyance due to pending legal cases.
VIII. The Company does not have any accumulated losses at the end of
the financial year and has not incurred cash losses in the financial
year and in the immediately preceding financial year.
IX. The Company has not defaulted in repayment of dues to Banks during
the year. There were no debentures outstanding during the year.
X. The company has given the corporate guarantee amounting of Rs. 1377
million to Export-Import Bank of India for securing loan to its
subsidiary company, Kanoria Africa Textiles PLC, Ethiopia and Rs.
270.04 million to Ceskoslovenska obchodni banka for securing loan to
its Subsidiary CompanyAPAGEIektroniks.ro., Czech Republic. The terms
and conditions of which, primafacie, are not prejudicial to the
interest of the company.
XI. Based on our audit procedures and according to the information and
explanations given to us, the Company has not obtained any term loans
during the year and hence, this clause is not applicable.
XII. In our opinion and according to the information and explanations
given to us, no fraud by the Company and no material fraud on the
Company have been noticed or reported during the course of the audit.
For SINGHI & CO.
Chartered Accountants Firm Registration NO.302049E
Place : New Delhi (Partner)
Dated : the 27th day of May, 2015 Membership No. 53518