THE MEMBERS OF
SOMANY CERAMICS LIMITED
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Somany CeramicsLimited ("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary 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 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 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 standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
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 standalone financial statements are free from material 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.
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.
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 subsection (11) of section 143 ofthe Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to usduring the course of audit we give in the Annexure A' a statement on the mattersspecified in the 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 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 specified under Section 133 of the Act read with Rule 7 of theCompanies (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) As required by section 143(3)(i) of the Companies Act 2013 and based on thechecking of the books and records of the Company as we considered appropriate andaccording to the information and explanations given to us our report on the InternalFinancial Controls over Financial Reporting is as per Annexure B'.
(h) 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. TheCompany has disclosed the impact of pending litigations on its financial position in itsstandalone financial statements Refer Note no. 28.1 28.2 28.3 to the standalonefinancial statements.
ii. The Company has made provision as required under the applicable law or accountingstandard 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 to theInvestor Education and Protection Fund by the Company.
iv. The company has provided requisite disclosures in its standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 08th November 2016 to 30th December 2016 and these are in accordance with the booksof accounts maintained by the company. (Refer Note no. - 28.30 to the standalone financialstatements).
For LODHA & CO.
Firm Registration Number: 301051E
Membership No: 85155
Date: 24th May 2017
Annexure-A referred to in paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date on the Standalone FinancialStatements of Somany Ceramics Limited for the year ended 31st March 2017
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management according to theprogramme of periodical verification in phased manner which in our opinion is reasonablehaving regard to the size of the Company and the nature of its fixed assets. Thediscrepancies noticed on such physical verification were not material.
(c) As per the records and information and explanations given to us title deeds ofimmovable properties are in the name of the Company.
2. The inventories of the Company (except stock in transit which has been verifiedfrom receipt of material) have been physically verified by the management at reasonableintervals and the procedures of physical verification of inventory followed by theManagement are reasonable in relation to the size of the Company and nature of itsbusiness. The discrepancies noticed on such physical verification of inventory as comparedto book records were not material.
3. According to the records and information and explanations made available to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. Accordingly the provisions of paragraph 3(iii) (a) (b)& (c) of the order are not applicable.
4. According to the information explanations and representations provided by themanagement and based upon audit procedures performed we are of the opinion that inrespect of loans investments guarantees and security the company has complied with theprovisions of the Section 185 and 186 of the Act.
5. The company has not accepted any deposits from public covered under section 73 to 76of the Act. Accordingly paragraph 3(v) of the Order is not applicable.
6. The maintenance of cost records has not been prescribed by the Central Governmentunder the section 148(1) of the Act read with companies (Cost Records and Audit) Rules2014 for the goods/ product manufactured by the Company.
7. (a) According to the records of the Company the Company is regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax custom duty excise duty value added tax entry tax cessand other material statutory dues with the appropriate authorities to the extentapplicable and there are no undisputed statutory dues payable for a period of more thansix months from the date they become payable as at 31st March 2017.
(b) According to the records and information & explanations given to us thedetails of disputed dues in respect of income tax sales tax duty of custom service taxentry tax excise duty and value added tax that have not been deposited with theappropriate authority on account of dispute and the forum where the dispute is pending aregiven below: -
|Name of Statue ||Nature of Dues ||Period to which it ||Amount ||Forum where dispute is pending |
| || ||relates ||(C in Lakhs) || |
|Custom Act ||Custom Duty ||1997-1999 ||5.91 ||Deputy Commissioner of Customs (Import) Tughlakabad |
|Central Excise Duty ||Excise Duty ||2005-2007 ||13.04 ||CESTAT New Delhi |
| || ||1996-2000 ||9.33 ||CCE Appeals Ahmedabad |
| || ||1994-1995 ||0.07 ||Asst. Commissioner Kalol |
|Sales Tax Act ||Local Area Development Tax ||2002-2003 ||5.15 ||Haryana Tax Tribunal Chandigarh |
| || ||2006-2007 ||60.12 ||Supreme Court of India |
| || ||2007-2008 ||76.40 ||Supreme Court of India |
| || ||2008-2009 ||89.27 ||Supreme Court of India |
| || ||2009-2010 ||93.56 ||Supreme Court of India |
| || ||2010-2011 ||59.62 ||Supreme Court of India |
| || ||2011-2012 ||60.16 ||Supreme Court of India |
| || ||2012-2013 ||73.54 ||Supreme Court of India |
| || ||2013-2014 ||85.48 ||Supreme Court of India |
| || ||2014-2015 ||72.77 ||Supreme Court of India |
| || ||2015-2016 ||55.45 ||Supreme Court of India |
| || ||2016-2017 ||64.47 ||Supreme Court of India |
| ||Entry Tax ||2013-2017 ||38.88 ||High Court of Kolkata |
| ||Turnover Tax ||1990-1993 ||45.83 ||Maharashtra Sales Tax Tribunal Mumbai |
| || ||2006-2007 ||52.61 ||Asst. Commissioner Ahmedabad |
| || ||2007-2008 ||28.76 ||Joint. Commissioner Commercial Taxes Ahmedabad |
| || ||2011-2012 ||27.77 ||Deputy Commissioner Commercial Taxes Ahmedabad |
| || ||2012-2013 ||31.69 ||Deputy Commissioner Commercial Taxes Ahmedabad |
| || ||2012-2013 ||83.99 ||Maharashtra Sales Tax Tribunal Mumbai |
|Finance Act ||Service Tax ||2007-2009 ||2.80 ||Asstt. Commissioner Rohtak |
8. In our opinion on the basis of audit procedures and according to the informationand explanations given to us the Company has not defaulted in repayment of loans andborrowings to financial institutions banks government (both State and Central).Thecompany did not have any outstanding debentures during the year.
9. On the basis of information and explanations given to us term loans have beenapplied for the purposes for which they were obtained. The company did not raise any moneyby way of initial / further public offer. 10. Based on the audit procedure performed andon the basis of information and explanations provided by the management no fraud by theCompany and no fraud on the Company by its office rs or employees has been noticed orreported during the course of the audit.
11. On the basis of records and information and explanations made available and basedon our examination of the records of the company the company has paid/ providedmanagerial remuneration in accordance with the requisite approvals mandated under Section197 read with Schedule V of the Act (refer note no. 28.29). 12. The Company is not a nidhicompany therefore the provisions of paragraph 3 (xii) of the said Order are notapplicable to the Company hence we are not offering any comment.
13. As per the information and explanations and records made available by themanagement of the Company and audit procedure performed for the related partiestransactions entered during the year the Company has complied with the provisions ofSection 177 and 188 of the Act where applicable. As explained and as per records /details the related parties transactions have been disclosed as per the applicableaccounting standards.
14. According to the information and explanations given to us the company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Accordingly we are not offering any comment with respect tocompliance of requirement of section 42 of the Act and utilization of the money. (Refernote no. 28.5).
15. On the basis of records made available to us and according to information andexplanations given to us the Company has not entered into non-cash transactions with thedirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable.
16. The company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934 as the provision of section is not applicable to the Company.
|For LODHA & CO. |
|Chartered Accountants |
|Firm Registration Number: 301051E |
|N.K. LODHA |
|Membership No: 85155 |
|Place: Chandigarh |
|Date: 24th May 2017 |
ANNEXURE B' TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF SOMANY CERAMICS LIMITED
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 SOMANYCERAMICS LIMITED ("the Company") as of March 31 2017 in conjunction with ouraudit 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 (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.
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 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 judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
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 standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial 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.
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 Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For LODHA & CO. |
|Chartered Accountants |
|Firm Registration Number: 301051E |
|N.K. LODHA |
|Membership No: 85155 |
|Place: Chandigarh |
|Date: 24th May 2017 |