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Shiva Cement Ltd.

BSE: 532323 Sector: Industrials
NSE: N.A. ISIN Code: INE555C01029
BSE 00:00 | 19 Apr 27.60 0
(0.00%)
OPEN

27.90

HIGH

28.40

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27.40

NSE 05:30 | 01 Jan Shiva Cement Ltd
OPEN 27.90
PREVIOUS CLOSE 27.60
VOLUME 272082
52-Week high 41.40
52-Week low 18.25
P/E
Mkt Cap.(Rs cr) 538
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 27.90
CLOSE 27.60
VOLUME 272082
52-Week high 41.40
52-Week low 18.25
P/E
Mkt Cap.(Rs cr) 538
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shiva Cement Ltd. (SHIVACEMENT) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT

To The Members of

SHIVA CEMENT LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying financial statements of Shiva Cement Limited("the Company") which comprise the Balance Sheet as at 31st March 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

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 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 standalone financial statementsbased on our audit.

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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments; the auditorconsiders 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 appropriatein the circumstances but not for the purpose of expressing an opinionon whether the Company has in place an adequate internal financial controls system overfinancial reporting and the operating effectiveness of such controls. 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 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.

Basis for Qualified Opinion

1) The company is prima facie not eligible to accept public deposits under theCompanies Act2013 and the Companies (Acceptance of Deposit) Rules 2014 and has notcomplied with all provisions thereof. In the previous years the company had obtainedexpert opinion pertaining to net worth criteria for accepting holding& renewingdeposits; that does not hold good in this year considering net-worth erosion. Howeverthere is no overdue as on 31st March-2017. Management informed that there will be nofurther renewal and entire deposits will be refunded on due dates.

2) The Company has defaulted in the repayment of installments relating to redemption ofpreference shares of Rs. 54.40 lacs. We have been informed that the management hasapproached the preference shareholders for deferment of overdue installments.

3) The Company has defaulted in the repayment of term loan installments and interest ofRs.662.91lacs due to banks and financial institutions.It includes the term loan of CanaraBank amounting to Rs.490.41 Lakhs which due to default in repayment has been treated asNon-performing Assets by the Bank and has been recalled. We have been informed that themanagement has approached the Bankers for reschedulement/settlement of their dues and thesame is under consideration with Bank. The Company has provided interest at the documentrate after becoming NPA from June 2016 to March 2017 amounting to Rs.51.87 Lakhs.

4) The Company has changed the basis of Amortization of deferred revenue expenses andwritten off entire amount of opening balance of Rs.39.62 lakhs. The expenses ofnon-revenue nature incurred during the year amounting to Rs.364.00 Lakhs has been chargedto profit & loss account.

5) The Company had already written off dues amounting to Rs.422.09 Lakhs of ACC Ltd dueto ongoing claims and disputes with them during the 3rd quarter after discussion at Boardlevel.However the representative of new management disagreed with the same and has writtenback during the last quarter of the year in the accounts.

6) The interest on statutory dues provided during the year amounting to Rs.182.14 lakhsrelating to prior period up to FY 2015-16 has been reflected as Prior period items in theProfit & Loss account.

7) The company was irregular in deposit of statutory dues during the year. Statutorydues amounting to Rs. 352.23lacs were outstanding for more than six months as at 31stMarch 2017.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2017 its profit and its cash flows for the yearended on that date.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order") asamended issued by the Central Government of India in terms of sub-section (11) of section143 of the Act we give in the "Annexure A" a statement on the matters specifiedin paragraphs 3 and 4 of the Order.

As required by Section143(3) of the Act we report that:

We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit; In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books.

The Balance Sheet the Profit and Loss Statement and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014; On the basis of the written representations receivedfrom the directors as on March 31 2017 taken on record by the Board of Directors noneof the directors is disqualified as on March 31 2017 from being appointed as a directorin terms of Section 164(2) of the Act. With respect to the adequacy of the internalfinancial controls over financial reporting of the Company and the operating effectivenessof such controls refer to our separate Report in "Annexure B"; With respect tothe other matters to be included in the Auditors' Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us: The Company has disclosed theimpact of pending litigations if any on its financial position in its financialstatements- Refer Note 28(1) to the financial statements; The Company did not have anylong-term contracts including derivative contracts for which there were any materialforeseeable losses; There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

For M.K. THEBARIA & ASSOCIATES
Chartered Accountants
F.R.N: 321180E
Sd/-
Rourkela - 769 004 (M K THEBARIA)
The 22nd day of April 2017 Partner
M. No. : 074746

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT FOR 2016-17 of SHIVA CEMENT LIMITED

Referred to in paragraph 1 under the heading 'Report on Other Legal & RegulatoryRequirement' of our report of even date to the financial statements of the Company for theyear ended March 31 2017:

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

(b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

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

(2) (a) The inventories have been physically verified during the year by the managementat reasonable intervals. In our opinion the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and nature of its business.

(c) The Company has maintained proper records of inventories and the discrepanciesnoticed on physical verification were not material and the same have been properly dealtwith in the books of account.

(3) The company has not granted any loans secured or unsecured to companies firmslimited liability partnership or other parties covered in the register maintained undersection 189 of the act. Hence provisions of clause 3 (iii) (a) to (c) are not applicableto the company for the year under the report

(4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section185and 186 of the Companies Act 2013in respect of loans investments guarantees and security.

(5) The company had accepted public deposits during the year and the company is incompliance with the directives issued by the Reserve Bank of India and the provisions ofsections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed thereunder subject to our observation as mentioned in the Audit report.

(6) The Central Government has prescribed maintenance of Cost Records under sub-Section(1) of Section 148 of the Companies Act 2013 in respect of cement manufacturingactivities of the company. We have broadly reviewed the accounts and records of thecompany in this connection and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have however not made a detailedexamination of the said records with a view to determine whether they are accurate orcomplete.

(7) (a) The company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance sales-tax wealth tax duty ofcustoms duty of excise cess and any other statutory dues with the appropriateauthorities except the following dues which were outstanding for a period of more thansix months as at the balance sheet date

NATURE OF DUES AMOUNT IN LAKH
Excise Duty Payable 130.00
Value Added Tax 221.60
Cess Duty payable 0.63
Total 352.23

As per information and explanation given to us and records examined there are no duesof provident fund employees' state insurance Income tax Service tax duty of customsduty of excise and cess which have not been deposited on account of any dispute exceptthe following:

Name of the Statue Nature of Dues Amount Under Dispute (Rs. Lakh) Period to which the amount relates From where the dispute is pending
Orissa Sales Tax Act Sales Tax 126.72 1992-93 to 2004-05 Appellate Authority up to
Commissioner's level
Orissa Sales Tax Act Sales Tax 47.25 1995-96 High Court
Orissa Sales Tax Act Sales Tax 5.63 2008-11 Additional Commissioner
Sales Tax Sambalpur
Central Sales Tax Act CST 3.28 1998-99 to 2004-05 Appellate Authority up to
Commissioner's level
Orissa Entry Tax Entry Tax 6.38 1990-00 to 2004-05 Appellate Authority up to
Commissioner's level
Orissa Entry Tax Entry Tax 2.94 2008-11 do
Central Excise Excise 19.60 2005-10 CESTAT
Central Excise Excise 3.62 2012-13 Commissioner Appeals
Central Excise- Bhubaneswar
Service Tax Service Tax 9.61 2005-06 CESTAT
Income Tax Income Tax 466.32 2014-15 Appellate Authority up to
Commissioner's level

(8) In our opinion and according to the information and explanations given to us theCompany has defaulted in the repayment of dues to the following banks& financialinstitutions.The Company has not issued any debentures.

Banks/Financial Institution Period of Default Amount in Lakh
Canara Bank Recalled 490.41
Tata Capital Financial Services Limited Overdue 172.50
Total 662.91

(9) The company has raised new term loans during the year and the term loansoutstanding at the beginning of the year were applied for the purposes for which they wereraised. Further the company has not raised moneys by way initial or further public offer(including debt instruments).

10) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.

11)Based upon the audit procedures performed and the information and explanations givenby the management the managerial remuneration has been paid or provided in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Companies Act;

12) Based upon our observation the company has provided the requisite disclosure withregard to holding as well as dealings in specified Bank Notes (SBN) during the period from8th November 2016 to 30th December 2016 and are in accordance with the books of accountsmaintained by the Company.

13) In our opinion the company is not a Nidhi Company. Thereforethe provisions ofclause 4(xii) of the order are not applicable to the company.

14) In our opinion all transactions with the related parties are in compliance withsections 177 and 188 of Companies Act2013 and as required by applicable accountingstandard.

15) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has made preferential allotment or private placementof shares or fully or partly convertible debentures during the year under review and therequirement of section 42 of the Companies Act 2013 have been complied with and theamount raised have been used for the purposes for which the funds were raised.

16) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.

17) In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.

For M.K. THEBARIA & ASSOCIATES
Chartered Accountants
F.R.N: 321180E
Sd/-
Rourkela - 769 004 (M K THEBARIA)
The 22nd day of April 2017 Partner
M. No. : 074746

"Annexure B"to the Independent Auditor's Report of even date on theStandalone Financial Statements of Shiva Cement Limited Report on the Internal FinancialControls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls over financial reporting of ShivaCement Limited ("the Company") as of March 312017 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility forInternal 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 Corporation considering 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 responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and timely preparation of reliable financial information as required under theCompanies 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 auditin 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 ofinternal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includesobtaining an understanding of internal financial controls over financial reportingassessing risk that a material weakness exists and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of 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 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 in herent 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 in adequate because of changes inconditions or thatthe degree of compliance with 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 over financial reporting criteria established by the Corporationconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For M.K. THEBARIA & ASSOCIATES
Chartered Accountants
F.R.N: 321180E
Sd/-
Rourkela - 769 004
(M K THEBARIA)
The 22nd day of April 2017
Partner
M. No. : 074746