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India Cements Ltd.

BSE: 530005 Sector: Industrials
NSE: INDIACEM ISIN Code: INE383A01012
BSE LIVE 13:23 | 26 Sep 171.85 4.20
(2.51%)
OPEN

168.05

HIGH

172.10

LOW

167.45

NSE 13:10 | 26 Sep 172.00 4.50
(2.69%)
OPEN

168.05

HIGH

172.20

LOW

167.25

OPEN 168.05
PREVIOUS CLOSE 167.65
VOLUME 256531
52-Week high 226.00
52-Week low 104.65
P/E 34.44
Mkt Cap.(Rs cr) 5,296
Buy Price 171.60
Buy Qty 967.00
Sell Price 171.85
Sell Qty 1044.00
OPEN 168.05
CLOSE 167.65
VOLUME 256531
52-Week high 226.00
52-Week low 104.65
P/E 34.44
Mkt Cap.(Rs cr) 5,296
Buy Price 171.60
Buy Qty 967.00
Sell Price 171.85
Sell Qty 1044.00

India Cements Ltd. (INDIACEM) - Auditors Report

Company auditors report

To The Members of The India Cements Limited Report on the Standalone FinancialStatements

We have audited the accompanying financial statements of THE INDIA CEMENTS LIMITED("the Company") which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditors' 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 there under.

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. Based on the procedures and evaluations referred above webelieve that the audit evidence we have obtained is sufficient and appropriate to providea 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 financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

a) As explained in Note No. 33.16 to the Standalone financial statements regarding theorder of attachment issued under Prevention of Money laundering Act through which certainassets of the company amounting to Rs.12034.18 lakhs have been attached vide provisionalattachment Order dated 25th February 2015 which the company is disputing before legalforums. The company has been legally advised that it has strong grounds to defend itsposition pending the outcome of the proceedings the impact if any is not ascertainable atthis stage

b) As explained in Note No. 33.22 to the Standalone financial statements the Companydealt with incremental depreciation on account of revaluation of fixed assets by drawingsimilar amount from Revaluation Reserves being a permitted practice under Guidance noteissued by ICAI during 1982 amounting to Rs.4583 lakhs for the year ending 31st March2016. The guidance note was withdrawn during the financial year however the company viewedthat the implications arising on account of withdrawal of Guidance Note on the financialstatements are to be reckoned on a prospective basis.

Our opinion is not qualified in respect of the Emphasis of Matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure - A a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.

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 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 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 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".

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 No. 33.2 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring the amounts required to be transferred tothe Investor education and protection fund by the Company.

For P. S. SUBRAMANIA IYER & Co. For BRAHMAYYA & Co.
Chartered Accountants Chartered Accountants
Firm Registration No: 004104S Firm Registration No. 000511S
V.SWAMINATHAN N.SRI KRISHNA
Partner Partner
Membership No. 22276 Membership No. 26575

Place : Chennai

Date : 26th May 2016

Annexure - A to the Auditors' Report

The Annexure referred to in paragraph 1 under the heading of "Report on OtherLegal and Regulatory Requirements" of our Report of even date to the members of THEINDIA CEMENTS LIMITED on the accounts of the company for the year ended 31st March 2016we report that:

1. a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets. b) The company has a program ofverification of fixed assets to cover all the items of Fixed assets in phased manner overa period of three years which in our opinion is reasonable having regard to the size ofthe company and nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification. c)According to the information and explanations given to us and the records examined by usand based on examination of such records comprising the registered sale deed/transferdeeds/conveyance deeds/ evidencing title provided to us we report that the title deedscomprising all the immovable properties of land (including mining lands) and buildingswhich are freehold are held in the name of the company as at the balance sheet dateexcept the following: (Amount in INR)

Value as at 31.03.2016 Remarks
Particulars of Land & Building Gross Block Net Block No. of Cases
Apartment at Delhi 1193454 1193454 1 Title is not in the name of the company
Freehold Land - Malkapur 97740207 97740207 71 The title deeds are in the names of erstwhile companies that merged with the company under Sections 391 to 394 of the Companies Act 1956 pursuant to schemes of amalgamation and arrangement approved by Honourable High Courts
Freehold Land at Chilamkur 445223 445223 3 The title deeds are in the names of erstwhile companies or owners where the process of mutation/ registration is under progress.
Freehold Land and Buildings at Yerraguntla 495851993 495851993 Land and buildings acquired from erstwhile owners along with cement plant assets are registered in favour of company however the same is pending release of documents on account of claims relating to additional stamp duty.
Freehold Land at Various Locations 5065673 5065673 59 Cases where the legal title is not with the company

Immovable properties of land and buildings wherever title deeds have been pledged assecurities towards loans guarantees etc. availed by the company are stated to have beenheld in the name of the company (the lenders have also accepted those assets as securityfor creating mortgages) and are pending direct confirmations from lenders.

2. As explained to us and according to information and explanations given to us theinventories were physically verified during the year by the management at reasonableintervals and no material discrepancies were noticed on physical verification.

3. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms or other parties listed in the register maintained underSection 189 of the Companies Act 2013.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees as applicable and the companyhas not granted any security in terms of sections 185 and 186 of the companies act 2013.

5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year however in regard tothe unclaimed deposits the company has complied with the provisions of Section 73 to 76 orany other relevant provisions of the Companies Act and the rules framed there under.

6. The maintenance of cost records has been specified by the central government undersection 148(1) of Companies act 2013. We have broadly reviewed the cost records maintainedby the company pursuant to companies cost records and audit rules 2014 as amendedprescribed by the central government under sub-section (1) of section 148 of CompaniesAct 2013 and are opinion that prima facie the prescribed cost records have been made and maintained. We have however not made a detailed examination of the said records witha view to determine whether they are accurate or complete.

7. According to the information and explanations given to us and on the basis of ourexamination of the books of account in respect of statutory dues

a) The company has generally been regular in depositing undisputed statutory duesbarring few instances of considerable delays in making payment towards Provident Fund Employees' State Insurance Income-tax Service Tax sales tax duty of customs duty ofexcise value added tax cess and any other statutory dues to the appropriate authorities.There were no undisputed amounts payable towards Provident Fund Employees' StateInsurance Income-tax Service Tax sales tax duty of customs duty of excise valueadded tax cess and any other statutory dues as on 31st of March 2016 for a period ofmore than six months from the date they became payable.

b) Details of dues of Sales tax Income tax Service tax Customs Duty Excise dutyVAT and cess which have not been deposited as on 31st March 2016 on account of anydispute and the forum where disputes are pending is given in Annexure - I.

8. According to the information and explanations given to us and on the basis of ourexamination of the books of account and based on explanations given by the management weare of the opinion that as at the balance sheet date the Company has not defaulted inrepayment of instalments due to financial institutions government banks or debentureholders. In our opinion and according to the information and explanations given to usduring the year the term loans have generally been applied by the company for purposes forwhich they were raised and the company has not raised monies by way of initial public orfurther public offers (including debt instruments).

9. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the company by its officers oremployees has been noticed or reported during the year..

10. In our opinion and according to the information and explanations give to us andrelying on a legal advice obtained by the company we are of the opinion that the Companyhas paid/provided for managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Act.

11. The company is not a Nidhi company and hence reporting under Para 3 clauses (XII)of CARO 2016 order is not applicable. In our opinion and according to the information andexplanations given to us and based on our examination of the records of the Company thecompany is in compliance with sections 177 and 188 of the Act where applicable for alltransactions with related parties and the details of such transactions have been disclosedin the financial statements as required by the applicable accounting standards.

12. During the year the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underPara (xiv) of CARO 2016 is not applicable to the company. In our opinion and according tothe information and explanations given to us and based on our examination of the recordsof the Company during the year the Company has not entered into any non-cash transactionswith its directors or directors of its holding subsidiary or associate company or personsconnected with them hence the provisions of section 192 of the Companies Act 2013 are notapplicable.

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

For P. S. SUBRAMANIA IYER & Co. For BRAHMAYYA & Co.
Chartered Accountants Chartered Accountants
Firm Registration No: 004104S Firm Registration No. 000511S
V.SWAMINATHAN N.SRI KRISHNA
Partner Partner
Membership No. 22276 Membership No. 26575
Place : Chennai
Date : 26th May 2016

Annexure B to the Auditors' Report

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 The IndiaCements Ltd ("the Company") as of 31 March 2016 in conjunction with our audit ofthe standalone financial statements of the Company for the year 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 ('ICAI'). 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.

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 on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.

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 31 March 2016 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For P. S. SUBRAMANIA IYER & Co. For BRAHMAYYA & Co.
Chartered Accountants Chartered Accountants
Firm Registration No: 004104S Firm Registration No. 000511S
V.SWAMINATHAN N.SRI KRISHNA
Partner Partner
Membership No. 22276 Membership No. 26575
Place : Chennai
Date : 26th May 2016

Annexure - I to the Independent Auditors Report as mentioned in Paragraph 3(vii)(b) ofCARO 2016

Sl. No. Name of Statute Nature of Dues Amount (Rs. in lakhs) Period to which amount relates Forum where disputes pending
1 Central Excise Act 1944 Excise duty and Service Tax 21011.44 Various pendings from 1988-89 to 2015-16 CESTAT
2573.05 Various pendings from 1995-96 to 2015-16 Commissioner (Appeals)
1634.14 Various pendings from 1994-95 to 2009-10 High Court
281.23 Various pendings from 1995-96 to 2008-09 Supreme Court
Sub Total 25499.86
2 Central Sales Tax Sales tax/ VAT 259.78 2008-09 and 2013-14 Additional Commissioner [Rev.Petition]
Act 1956 and sales tax 14.60 2012-13 & 2013-14 Commissioner (Appeals)
of various states 1705.15 Various pendings from 1969-70 to 2012-13 Appeal To High Court
57.17 2013-14 Assessing Authority
5.21 1997-98 2005-06 and 2007-08 D.C.Appeals
10.11 2014-15 Joint Commissioner [Rev.Petition]
108.21 Various pendings from 1989-90 to 2008-09 Sales Tax Appellate Tribunal
Sub Total 2160.23
3 Customs act 1962 Customs Duty 5683.33 2013-14 & 2014-15 CESTAT
Sub Total 5683.33
4 Income Tax Act 1961 Income Tax 4055.40 2012-13 CIT (Appeals)
810.65 1996-97 Supreme Court
363.83 Various periods from 1982-83 to 1986-87 High Court
5.31 1991-1992 Income Tax Appellate Tribunal
Sub Total 5235.19
Grand Total 38578.61

 

For P. S. SUBRAMANIA IYER & Co. For BRAHMAYYA & Co.
Chartered Accountants Chartered Accountants
Firm Registration No: 004104S Firm Registration No. 000511S
V.SWAMINATHAN N.SRI KRISHNA
Partner Partner
Membership No. 22276 Membership No. 26575
Place : Chennai
Date : 26th May 2016