| We have audited the accompanying Standalone Financial Statements of
Borax Morarji Limited (`the Company'), which comprise the Balance
Sheet as at March 31, 2015, the Statement of Profit and Loss and the
Cash Flow Statement, and a summary of significant accounting policies
and other explanatory information for the nine months period then
ended.
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 standalone financial position, standalone
financial performance and standalone 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 Standalone
Financial Statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error. .
Auditor's Responsibility
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
there under.
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 Standalone 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 whether the Company has in place an adequate internal
financial control 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.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion on the
Standalone Financial Statements.
Basis for Qualified Opinion
1 Long Term Loans and Advances include amounts of $ 28 Lakhs deposited
against disputed custom duty of 44.60 Lakhs levied by the Collector of
Customs. Though the Company is hopeful of recovery of this amount in
the absence of appropriate audit evidence we are unable to determine
the extent of recovery possible in this case.
2 No provision has been made against the overdue trade receivables (net
of advances) which are outstanding for more than 2 years amounting to
Rs. 119.25 Lakhs.
Qualified Opinion
In our opinion, except for the possible effects of the matters
described in the Basis for qualified opinion paragraph and to the best
of our information and according to the explanations given to us, the
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 March 31, 2015 and its
Loss and its Cash Flows for the nine months period ended on that date.
Report on Other Legal and Regulatory Requirements
1) 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 Companies Act, we enclose in the annexure a
statement on the matters specified in paragraphs 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 best of our knowledge and belief were necessary for the
purposes of our audit.
b) In our opinion proper books of accounts as required by law have been
kept by the Company so far as appears from our examination of those
books.;
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 Accounting Standards specified under section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of written representations received from the Directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the Directors is disqualified as on March 31, 2015, from being
appointed as a Director in terms of section 164(2) of the Act:
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 litigations on its
financial position in its Standalone Financial Statements - Refer Note
29 to the Standalone Financial Statements;
ii The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO THE AUDITORS' REPORT
Referred to in Paragraph 1 on Report on Other Legal and Regulatory
Requirements of our report.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets, however the particulars regarding the location of some of the
fixed assets of Chemical Division transferred to new manufacturing
facility at Dahej, Gujarat, needs to be updated in the fixed asset
register.
(b) A substantial portion of the fixed assets have been physically
verified by the management during the period under the audit. In our
opinion the frequency of verification is reasonable having regard to
the size of the Company and the nature of its assets. No material
discrepancies were noticed on such verification.
(ii) (a) The inventories have been physically verified by the
management at reasonable intervals during the period under audit. In
our opinion, the frequency of verification is reasonable.
(b) 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) In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of inventory.
The discrepancy noticed on verification between physical stock and the
book records were not material and have been properly dealt with in the
books of account.
(iii) The Company has not granted any loans, secured or unsecured to
the companies, firm and other parties covered in the register
maintained under section 189 of the Companies Act, Hence the provision
of clause (iii) (a) & (b) are not applicable to the Company.
(iv) In our opinion and according to the information and explanation
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business, with
regards to purchases of inventory, fixed assets and with regard to the
sale of goods and services. During the course of our audit, no major
weaknesses have been noticed in the internal control.
(v) The Company had accepted deposits prior to the commencement of
Companies Act, 2013 (Earlier deposits) which have remained unpaid as at
year end amounting to Rs. 152.47 Lacs and interest due thereon of Rs.
0.72 Lacs. We are informed that these earlier deposits will be repaid
on the respective due dates as per the terms of acceptance of the same,
in terms of explanation to Rule 19 of the Companies (Acceptance of
Deposits) Rules, 2014.
The Company has not accepted any deposits during the year to which the
provisions of section 73 to 76 of the Companies Act, 2013 and Companies
(Acceptance of deposits) Rules, 2014 apply.
(vi) We have broadly reviewed the books of account maintained by the
Company pursuant to the order made by the Central Government of India,
for the maintenance of cost records in respect of boric add under
sub-section (I) of section 148 of the Companies Act and are of the
opinion that prima facie, the prescribed accounts and records have been
maintained. We have, however not made a detailed examination of the
records with a view to determine whether they are accurate or complete.
(vii) (a) According to the records of the Company and based on our Audit
Procedures and according to the information and explanation given to us,
the Company is generally regular in depositing undisputed statutory dues
including provident fund, employees' state insurance, income-tax,
sales-tax, wealth tax, service tax, duty of customs, duty of excise,
value added tax, cess and any other statutory dues applicable to it have
been generally regularly deposited during the period under audit with
the appropriate authorities. According to the information and
explanation given to us, no disputed amounts payable in respect of above
were in arrears, as at 31sl March,2015 for a period of more than six
months from the date on which they became payable.
(b) According to the records of the Company, there are no dues of Sales
tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty and
cess which have not been deposited on account of any disputes except in
the case of the following :
Nature of dues Year Amount Forum where dispute
(Rs. In Lacs) is pending
Excise Duty 2003-04 to Customs Excise and
2005-06 12.65 Service Tax Appellate
Tribunal
Customs Duty 2002-03 16.60 Collector of Customs
(c) The amount required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made there under has been
transferred to such fund within time.
(viii) The Company has accumulated losses at the end of the nine months
period ended 31st March, 2015 are more than fifty percent of the net
worth as on the said date. The Company has incurred cash losses during
the under audit and also in the immediately preceding financial year.
(ix) In our opinion and according to the information and explanation
given to us, we are of the opinion that the Company has not defaulted
in repayment of dues to any financial institution and bank. The Company
has not issued any debentures.
(x) The Company has not given any guarantee for loans taken by others
from banks or financial institutions.
(xi) In our opinion, the term loans have been applied for the purpose
for which the loans were obtained.
(xii) To the best of our knowledge and belief and according to the
information and explanation given to us, we report that no fraud on or
by the Company has been noticed or reported during the year.
For K. S. Aiyar & Co,
Chartered Accountants
Registration No: 100186W
Rajesh S. Joshi
Place: Mumbai Partner
Date : May 29, 2015 Membership No.: 38526
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