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UltraTech Cement Ltd.

BSE: 532538 Sector: Industrials
NSE: ULTRACEMCO ISIN Code: INE481G01011
BSE LIVE 15:40 | 21 Nov 4161.60 -31.30
(-0.75%)
OPEN

4181.00

HIGH

4210.70

LOW

4125.85

NSE 15:30 | 21 Nov 4163.40 -17.90
(-0.43%)
OPEN

4191.00

HIGH

4210.60

LOW

4128.05

OPEN 4181.00
PREVIOUS CLOSE 4192.90
VOLUME 17995
52-Week high 4531.00
52-Week low 3052.00
P/E 44.23
Mkt Cap.(Rs cr) 114,257
Buy Price 4170.00
Buy Qty 2.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4181.00
CLOSE 4192.90
VOLUME 17995
52-Week high 4531.00
52-Week low 3052.00
P/E 44.23
Mkt Cap.(Rs cr) 114,257
Buy Price 4170.00
Buy Qty 2.00
Sell Price 0.00
Sell Qty 0.00

UltraTech Cement Ltd. (ULTRACEMCO) - Auditors Report

Company auditors report

To the Members of

UltraTech Cement Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS financial statements of UltraTechCement Limited ("the Company") which comprise the Balance Sheet as at 31 March2017 and the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of the significantaccounting policies and other explanatory information (hereinafter referred to as "Standalone Ind AS financial statements").

Management's Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act read with relevant rules issued thereunder.

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; the selection andapplication of appropriate accounting policies; making judgments and the estimates thatare reasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS financialstatements based 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 thereunder.

We conducted our audit of the Standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the Standalone Ind ASfinancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31 March 2017 and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Emphasis of Matters

We draw attention to Note 32(b) of the Standalone Ind AS financial statements whichdescribes the following matters:

a) In terms of order dated 31 August 2016 the Competition Commission of India(‘CCI') has imposed penalty of Rs. 1175.49 crore for alleged contravention of theprovisions of the Competition Act 2002 by the Company. The Company had filed an appealagainst CCI Order before the Competition Appellate Tribunal (‘COMPAT'). COMPAT hasgranted stay on the CCI Order on the condition that the Company deposits 10% of thepenalty amounting to Rs. 117.56 crore which has since been deposited. Based on a legalopinion and considering the uncertainty relating to the outcome of this matter noprovision has been made.

b) In terms of order dated 19 January 2017 the CCI has imposed penalty of Rs. 68.30crore pursuant to a reference filed by the Government of Haryana for alleged contraventionof the provisions of the Competition Act 2002 in August 2012 by the Company. The Companyhas filed an appeal before COMPAT and received the stay order dated 10 April 2017. TheCompany believes it has a good case and considering the uncertainty relating to theoutcome of this matter no provision has been made. Our opinion is not modified in respectof the above matters.

Other Matter

The comparative financial information of the Company for the year ended 31 March 2016and the transition date opening Balance Sheet as at 1 April 2015 included in theseStandalone Ind AS financial statements are based on the previously issued statutoryStandalone financial statements prepared in accordance with the Companies (AccountingStandards) Rules 2006 audited by B S R & Co. LLP. Chartered Accountants (one of thejoint auditors) and G. P. Kapadia & Co. Chartered Accountants (predecessor jointauditor) for the year ended 31 March 2016 and G. P. Kapadia & Co. CharteredAccountants and Deloitte Haskins & Sells LLP Chartered Accountants (predecessor jointauditors) for the year ended 31 March 2015 whose reports dated 25 April 2016 and 25 April2015 respectively expressed an unmodified opinion on those Standalone financialstatements as adjusted for the differences in the accounting principles adopted by theCompany on transition to the Ind AS which have been audited by us. Our opinion is notmodified in respect of this 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 Section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified in paragraphs 3 and 4of 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 the Cash Flow Statement andthe Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid Standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 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 Auditors' 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 the financialposition in its Standalone Ind AS financial statements Refer Note 32 (a) to the StandaloneInd AS financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on derivative contracts. The Companydid not have any other long-term contracts for which there were any material foreseeablelosses.

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

Fund by the Company; and iv. The Company has provided requisite disclosures in theStandalone Ind AS financial statements as to holdings as well as dealings in SpecifiedBank Notes during the period from 8 November 2016 to 30 December 2016. Based on auditprocedures and relying on the management representation we report that the disclosuresare in accordance with books of account maintained by the Company and as produced to us bythe Management- Refer Note 53 to the Standalone Ind AS financial statements.

For B S R & Co. LLP For Khimji Kunverji & Co.
Chartered Accountants Chartered Accountants
Firm's Registration No: 101248W/W-100022 Firm's Registration No: 105146W
Vijay Mathur Ketan Vikamsey
Partner Partner
Membership No: 046476 Membership No: 044000
Mumbai Mumbai
24 April 2017 24 April 2017

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified by the Management during the year.

In our opinion and according to the information and explanations given to us nomaterial discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company except for the following which are not heldin the name of the Company:

(Rs. in Crore)

Particulars

Leasehold Land

Freehold Land

Buildings

Gross block as at 31 March 2017

84.74

679.92

28.77

Net block as at 31 March 2017

76.71

679.92

25.60

Total number of cases

388

2072

30

ii. The inventory except for goods-in-transit and stocks lying with third parties hasbeen physically verified by the management at reasonable intervals during the year. In ouropinion the frequency of such verification is reasonable. For stocks lying with thirdparties at the year-end written confirmations have been obtained and in respect ofgoods-in-transit subsequent goods receipts have been verified or confirmations have beenobtained from the parties. The discrepancies noticed on verification between the physicalstocks and the book records were not material.

iii. In our opinion and according to the information and explanations given 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 Act. Accordingly paragraph 3(iii) of the Order is not applicable to theCompany.

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 Act with respectto the loans given investments made guarantees given and security provided.

v. 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 in terms of theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.

vi. We have broadly reviewed the books of account maintained by the Company asspecified under Section 148(1) of the Act for maintenance of cost records in respect ofproducts manufactured by the Company and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. However we have not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Sales-tax Service tax Duty of Customs Duty of Excise Valueadded tax Cess and other material statutory dues have been regularly deposited during theyear by the Company with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income-tax Sales-tax Service tax Duty of Customs Duty ofExcise Value added tax Cess and other material statutory dues were in arrears as at 31March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company details of dues of Income-tax Sales-taxService tax Duty of Customs Duty of Excise and Value added tax which have not beendeposited as on 31 March 2017 on account of disputes are given below:

Name of the Statute Nature of the Dues Forum where dispute is pending

Period to which amount relates (Assessment Year)

Amount* (Rs. in Crore)

Sales Tax / Value Added Tax (VAT) Sales Tax VAT Interest and Penalty Supreme Court

2000 to 2006

177.93

High Court

1988 to 2017

17.87

Tribunal(s)

1985 to 2017

160.42

Appellate Authorities

1992 to 2016

53.51

Assessing Officers

1997 to 2014

3.57

Customs Act 1962 Custom Duty Interest and Penalty High Court

2002 to 2006

44.67

Tribunal(s)

2000 to 2014

185.19

Appellate Authorities

2003 to 2015

0.10

Central Excise Act 1944 Excise Duty Interest and Penalty Supreme Court

1994 to 2011

60.03

High Court

1998 to 2008

31.74

Tribunal(s)

1994 to 2016

844.31

Appellate Authorities

2003 to 2016

67.36

Finance Act 1994 Service Tax Interest and Penalty Supreme Court

2004 to 2008

19.18

High Court

2005 to 2010

15.86

Tribunal(s)

2003 to 2017

192.87

Appellate Authorities

2004 to 2017

36.69

Income Tax Act 1961 Income Tax Interest High Court

2001 to 2006

1.25

* net of amounts paid under protest.

viii. According to the information and explanations given to us and based on therecords of the Company the Company has not defaulted in the repayment of loans orborrowings to financial institutions banks government and dues to debenture holders

ix. According to the information and explanations given to us the term loans have beenapplied by the Company during the year for the purposes for which they were obtained. TheCompany did not raise money by way of initial public offer or further public offer(including debt instruments) during the year.

x. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

xi. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

xiii. 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 Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone Ind AS financial statements as requiredby the applicable accounting standards.

xiv. 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. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

xv. 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 non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

xvi. According to the information and explanations given to us the Company is notrequired to be registered under section 45 IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP For Khimji Kunverji & Co.
Chartered Accountants Chartered Accountants
Firm's Registration No: 101248W/W-100022 Firm's Registration No: 105146W
Vijay Mathur Ketan Vikamsey
Partner Partner
Membership No: 046476 Membership No: 044000
Mumbai Mumbai
24 April 2017 24 April 2017

Annexure B to the Independent Auditors' Report of even date on the Standalone

Ind AS financial statements of UltraTech Cement Limited 31 March

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act We have audited the internal financial controls over financialreporting ofUltraTech Cement Limited ("the Company") as at 31 March 2017 in conjunction withour audit of the Standalone Ind AS financial statements of the Company for the year endedon 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"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

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 Act to the extent applicable to an audit ofinternal financial controls both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 obtainingan understanding of internal financial controls over financial reporting assessing therisk that a material weakness 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 Standalone Ind AS 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 financialstatements for external purposes in accordance with generally accepted reporting and thepreparation of accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures

(a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(b) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and directors of the Company; and

(c) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial 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 improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the 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 31 March 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 ICAI.

For B S R & Co. LLP For Khimji Kunverji & Co.
Chartered Accountants Chartered Accountants
Firm's Registration No: 101248W/W-100022 Firm's Registration No: 105146W
Vijay Mathur Ketan Vikamsey
Partner Partner
Membership No: 046476 Membership No: 044000
Mumbai Mumbai
24 April 2017 24 April 2017