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Cera Sanitaryware Ltd.

BSE: 532443 Sector: Consumer
NSE: CERA ISIN Code: INE739E01017
BSE LIVE 13:51 | 18 Aug 2824.90 24.90
(0.89%)
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NSE 13:45 | 18 Aug 2810.00 7.00
(0.25%)
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OPEN 2825.90
PREVIOUS CLOSE 2800.00
VOLUME 53
52-Week high 3225.00
52-Week low 1853.15
P/E 36.69
Mkt Cap.(Rs cr) 3,672
Buy Price 2810.00
Buy Qty 2.00
Sell Price 2824.80
Sell Qty 2.00
OPEN 2825.90
CLOSE 2800.00
VOLUME 53
52-Week high 3225.00
52-Week low 1853.15
P/E 36.69
Mkt Cap.(Rs cr) 3,672
Buy Price 2810.00
Buy Qty 2.00
Sell Price 2824.80
Sell Qty 2.00

Cera Sanitaryware Ltd. (CERA) - Auditors Report

Company auditors report

To

The Members of Cera Sanitaryware Limited

We have audited the accompanying standalone financial statements of CERASANITARYWARE LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2017 the Statement of Profit and Loss the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the 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 financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. 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 design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe 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 financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing 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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

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

Opinion

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 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 31st March 2017 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to the following matter in the Notes to the financial statements:

Note 44 to the financial statements which states that the company has changed method ofvaluing closing stock of Raw-materials Packing Materials Stores Chemicals and TradedGoods as at 31-3-2017 to "Cost or Net Realisable Value Whichever is lower"following Weighted Average Method which was earlier FIFO method. The change in the methodof inventory valuation has resulted in increase of Rs. 5286385/-in the consumption anddecrease of profits by Rs. 5286385/-.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Companies Act 2015 we give in the Annexure - A a statement on the matters specifiedin paragraph 3 and 4 of the Order to the extent applicable.

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 purposes 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards 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 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the 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 to ourseparate report in "Annexure B"; and

(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. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 35 to the financial statements.

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

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

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management.

For H. V. Vasa & Co.
Chartered Accountants
Firm Reg. No. 131054W
Tushar H. Vasa
Place : Ahmedabad (Proprietor)
Date : 4th May 2017 Membership No. 16831

The Annexure – A referred to in "Report on Legal and Other RegulatoryRequirements" paragraph 1 of the Our Report of even date to the members of CERASANITARYWARE LIMITED on the accounts of the company for the year ended 31st March 2017.

On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:

1. In respect of its fixed assets :

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

(b) As explained to us fixed assets have been physically verified by the management atreasonable intervals in a phased periodical manner which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies between the book records and the physical inventory have been noticed inrespect of the assets physically verified.

(c) The title deeds of immovable properties are held in the name of the company.

2. As explained to us inventories have been physically verified by the management atreasonable intervals during the year. As per the explanations given to us there was nomaterial discrepancies noticed on physical verification of inventories as compared to bookrecords.

3. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has granted loan unsecured to itssubsidiary company covered in the register maintained under Section 189 of the CompaniesAct 2013 and with respect to the same :

a) In our opinion the terms and conditions of grant of such loan are not prima facieprejudicial to the Company's interest.

b) The schedule of repayment of principal and payment of interest has been stipulatedand the repayment of the principal amount and interest are regular.

c) There is no overdue amount in respect of loans granted to such companies.

4. According to the information and explanations given to us the company has compliedwith the provisions of Section 185 and 186 wherever applicable in respect of loansinvestments guarantees and securities given by the company.

5. In our opinion and according to the information and explanations given to us theCompany has complied with the directives issued by the Reserve Bank of India and theprovisions of Section 73 to 76 or any other relevant provisions of the Companies Act 2013and rules framed thereunder where applicable. According to the information andexplanations given to us in this regard no order under the aforesaid sections has beenpassed by the Company Law Board or National Company Law Tribunal or Reserve Bank of Indiaor any Court or any other Tribunal on the company.

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 of the Companies Act related to the maintenance of manufacture of certain productsand are of the opinion that prima facie the prescribed accounts and records have beenmade and maintained.

7. (a) According to the records of the company undisputed statutory dues includingProvident Fund Employees' State Insurance Income-tax Sales-tax Service Tax duty ofCustoms duty of Excise value added tax cess and other statutory dues have beengenerally regularly deposited with the appropriate authorities. According to theinformation and explanations given to us no undisputed amounts payable in respect of theaforesaid dues were outstanding as at 31st of March 2017 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanations given to us following disputedstatutory dues have not been deposited on account of disputed matters pending beforeappropriate authorities are as under :

Sr. No. Name of Statute Nature of Dues Amount Rs. (Lacs) Period to which the amount relates (F.Y) Forum where dispute is Pending
1 Income-tax Act 1961 Income-tax 4.43 2004-05 Hon'ble Gujarat High Court
2 Income-tax Act 1961 Income-tax 95.03 2010-11 Commissioner of Income-tax (Appeals) & Income-tax Appellate Tribunal
3 Income-tax Act 1961 Income-tax 81.20 2011-12 Commissioner of Income-tax (Appeals)
4 Income-tax Act 1961 Income-tax 8.68 2012-13 Commissioner of Income-tax (Appeals)

8. The company has not defaulted in repayment of loans or borrowing to a financialinstitution bank government or dues to debenture holders if any.

9. In our opinion and according to the information and explanations given to us theterm loans have been applied for the purpose for which they were raised. The Company hasnot raised any money during the year by way of initial or further public offer.

10. In our opinion and according to the information and explanations given to us nofraud on or by the Company by its officers or employees has been noticed or reportedduring the year.

11. According to the information and explanations given to us the managerialremuneration has been paid or provided in accordance with the requisite approval mandatedby the provisions of section 197 read with schedule V to the Companies Act 2013.

12. The Company is not a Nidhi Company and hence clause 3 (xii) of the Companies(Auditor's Report) Order 2016 is not applicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with section 177 and 188 of the Companies Act 2013 where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

14. 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.

15. 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 any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For H. V. Vasa & Co.
Chartered Accountants
Firm Reg. No. 131054W
Tushar H. Vasa
Place : Ahmedabad (Proprietor)
Date : 4th May 2017 Membership No. 16831

The Annexure – B referred to in "Report on Legal and Other RegulatoryRequirements" of the Our Report of even date to the members of CERA SANITARYWARELIMITED on the accounts of the company for the year ended 31st March 2017.

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

We have audited the internal financial controls over financial reporting of CeraSanitaryware Limited ("the Company") as of March 31 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

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 (the "Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required 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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to and 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 ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain evidence about the adequacy of theinternal financial controls system over financial reporting and their operatingeffectiveness. Our audit 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 procedureselected depend on the auditor's judgment 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 Company's internal financial controls systemover financial 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 details 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 authorities ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 2017 based on theinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

For H. V. Vasa & Co.
Chartered Accountants
Firm Reg. No. 131054W
Tushar H. Vasa
Place : Ahmedabad (Proprietor)
Date : 4th May 2017 Membership No. 16831