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DCM Shriram Industries Ltd.

BSE: 523369 Sector: Agri and agri inputs
NSE: DCMSRMIND ISIN Code: INE843D01019
BSE LIVE 15:40 | 18 Oct 337.45 -1.15
(-0.34%)
OPEN

337.00

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342.25

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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 337.00
PREVIOUS CLOSE 338.60
VOLUME 5294
52-Week high 385.00
52-Week low 186.20
P/E 4.89
Mkt Cap.(Rs cr) 587
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 337.00
CLOSE 338.60
VOLUME 5294
52-Week high 385.00
52-Week low 186.20
P/E 4.89
Mkt Cap.(Rs cr) 587
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

DCM Shriram Industries Ltd. (DCMSRMIND) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

DCM SHRIRAM INDUSTRIES LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of DCM SHRIRAMINDuSTRIES LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2017 the Statement of Profit and Loss and the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone 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 Standardsprescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial 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 financial statementsbased on our audit.

In conducting 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 conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone 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 March 31 2017 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit we report to theextent applicable 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 standalone financial statements comply with theAccounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March312017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) of theAct.

(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 A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.

(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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 32 and 33(a) to (c) and 33(e)of the standalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses- Refer Note 34(b) to the standalonefinancial statements.

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 standalone financialstatements as regards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated the 8th November 2016 of the Ministry of Finance duringthe period from 8th November 2016 to 30th December 2016. Based on the audit proceduresperformed and the representations provided to us by the management we report that thedisclosures are in accordance with the books of account maintained by the Company and asproduced to us by the Management-Refer Note 46 to the standalone financial statements.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in "AnnexureB" a statement on the matters specified in paragraphs 3 and 4 of the Order.

For A. F. Ferguson & Co.
Chartered Accountants
(Firm's Registration No. 112066W)
Jaideep Bhargava
Place : New Delhi Partner
Date : May 23 2017 (Membership No. 90295)

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of DCMsHRIRAM Industries Limited ("the Company") as of March 31 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that 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 responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting were established and maintained and if such controlsoperated 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 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 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 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India".

For A. F. Ferguson & Co.
Chartered Accountants
(Firm's Registration No. 112066W)
Jaideep Bhargava
Place : New Delhi Partner
Date : May 23 2017 (Membership No. 90295)

ANNEXuRE "B" to the independent auditors' report

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(i) In respect of its fixed assets:

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

(b) As explained to us the Company has a programme of physically verifying all itsfixed assets over a period of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its fixed assets. In accordance withthis programme some of the fixed assets were physically verified by the management duringthe year. The discrepancies noticed on such verification between the physical balances andthe fixed assets records were not material and have been properly dealt with in the booksof account.

(c) According to the information and explanations given to us and the records examinedby us and based on the confirmation obtained by the Company from the custodian of theCompany with whom the title deeds are deposited as security for loans and the examinationof the registered sale deed/transfer deed /conveyance deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the balance sheet date except thefollowing:

(Rs./Lakhs)
Particulars of the land Amount as on 31-03-2017 Remarks
Land situated at Daurala Uttar Pradesh 88.37 Vested pursuant to a Scheme of Arrangement of erstwhile DCM Limited are yet to be endorsed in the name of the Company.
Land Situated at Daurala Uttar Pradesh 44.95 The title deeds are in the name of Daurala Organics Limited erstwhile company that was merged with the Company under section 391 to 394 of the Companies Act 1956 in terms of the approval of the Honorable High court of judicature.

In respect of immovable properties of land that have been taken on lease and disclosedas fixed asset in the financial statements the lease agreements are in the name of theCompany where the Company is the lessee in the agreement except the following.

(Rs./Lakhs)
Particulars of the land Amount as on 31-03-2017 Remarks
Land situated at Kota Rajasthan 0.58 Acquired pursuant to a Scheme of Arrangement of erstwhile DCM Limited are yet to be endorsed in the name of the Company.

(ii) As explained to us the inventories were physically verified during the year bythe management at reasonable intervals other than for stock lying with third parties and/or goods in transit for which confirmations have been obtained and subsequent receiptshave been verified in most of the cases. The discrepancies noticed on physicalverification of inventories as compared to book records were not material and have beenproperly dealt with in the books of account.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under Section 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules2014 as amended with regard to the deposits accepted. According to the information andexplanations given to us no order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government under Section 148(1) of the Companies Act 2013 and are of the opinionthat prima facie the prescribed cost records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.

(vii) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Entry Tax Income tax Tax deductedat source Sales Tax Service Tax Purchase Tax Customs Duty Excise Duty Value AddedTax Works Contract Tax Cess and other material statutory dues applicable to it with theappropriate authorities. There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Entry Tax Income-tax Tax deducted at source SalesTax Service Tax Purchase Tax Customs Duty Excise Duty Value Added Tax Works ContractTax Cess and other material statutory dues in arrears as at March 31 2017 for a periodof more than six months from the date they became payable.

(b) Details of dues of Excise Duty Service Tax Income-tax and Sales Tax matters whichhave not been deposited as on March 312017 by the Company on account of disputes aregiven below:

Name of the Statute Nature of dues Forum where dispute is pending Period to which the amount relates (various years covering the period) Amount involved * (Rs. lakhs) Amount paid under protest (Rs. lakhs)
Central Excise Act 1944 Excise Duty Additional Commissioner (Appeals) 2011-12 2013-14 48.50 -
Modvat Credit Commissioner (Appeals) 1995-96 November ‘04 to December ‘08 31.79
Service Tax Laws- Finance Act 1994 Service Tax Customs Excise & Service Tax Appellate Tribunal July ‘12 to March ‘14 and 2011-12 360.02 16.19
Commissioner (Appeals) March ‘12 to February ‘13 January ‘14 to December ‘14 April ‘14 to May ‘15 306.71
Income Tax Act 1961 Income Tax Income Tax Appellate Tribunal 2003-06 1708.75 1708.75
Sales Tax Laws Sales Tax Additional Commissioner (Appeal) 2004-05 2013-14 7.85 0.88

* amount as per demand orders including interest and penalty wherever indicated in thedemand.

Further in respect of following matters the concerned authority is in appeal againstfavorable orders received by the Company:

Name of the statute Nature of dues Forum where department has preferred appeal Period to which the amount relates (various years covering the period) Amount involved * (Rs. lakhs) Amount paid under protest (Rs. lakhs)
Central Excise Act 1944 Excise duty Customs Excise & Service Tax Appellate Tribunal 2005-06 12.08 -
High Court 1998-99 3.54 -
Modvat Credit High Court 1995-96 15.15 -
Service Tax Laws- Finance Act 1994 Service Tax Customs Excise & Service Tax Appellate Tribunal 2009-14 59.60 1.54
Sales Tax Laws Sales Tax High Court 1976-77 1978-80 1984-85 1989-901992-93 1995-96 1997-98 and 2008-11 133.10 -
Sales Tax Laws Sales Tax Commercial tax Tribunal 2011-13 14.16 -

* amount as per demand orders including interest and penalty wherever indicated in thedemand.

We have been further informed that there are no dues in respect of Customs Duty andValue Added Tax which have not been deposited as on March 312017 on account of anydispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of dues to banks and financialinstitutions. The Company has neither taken any loans or borrowings from government norhas issued any debentures during the year.

(ix) In our opinion and according to the information and explanations given to usmoney raised by way of the term loans have been applied by the Company during the year forthe purposes for which they were raised. The Company has not raised moneys by way ofinitial public offer or further public offer (including debt instruments).

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding subsidiary or associate company or personsconnected with them and hence provisions of section 192 of the Companies Act 2013 are notapplicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For A. F. Ferguson & Co.
Chartered Accountants
(Firm's Registration No. 112066W)
Jaideep Bhargava
Place : New Delhi Partner
Date : May 23 2017 (Membership No. 90295)