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CEAT Ltd.

BSE: 500878 Sector: Auto
NSE: CEATLTD ISIN Code: INE482A01020
BSE 00:00 | 25 Mar 1087.65 -27.60
(-2.47%)
OPEN

1115.25

HIGH

1115.25

LOW

1080.00

NSE 00:00 | 25 Mar 1085.60 -28.45
(-2.55%)
OPEN

1104.00

HIGH

1105.00

LOW

1082.40

OPEN 1115.25
PREVIOUS CLOSE 1115.25
VOLUME 26491
52-Week high 1666.00
52-Week low 983.80
P/E 13.92
Mkt Cap.(Rs cr) 4,400
Buy Price 1080.00
Buy Qty 13.00
Sell Price 1087.65
Sell Qty 12.00
OPEN 1115.25
CLOSE 1115.25
VOLUME 26491
52-Week high 1666.00
52-Week low 983.80
P/E 13.92
Mkt Cap.(Rs cr) 4,400
Buy Price 1080.00
Buy Qty 13.00
Sell Price 1087.65
Sell Qty 12.00

CEAT Ltd. (CEATLTD) - Auditors Report

Company auditors report

To the Members of CEAT Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statementsof CEAT Limited ("the Company") which comprise the Balance Sheet as at March31 2018 the Statement of Profit and Loss including the statement of Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these standalone Ind AS financial statements that give a true and fairview of the financial position financial performance including other comprehensiveincome cash flows and changes in equity of the Company in accordance with accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)specified under section 133 of the Act. read with the Companies (Indian AccountingStandards) Rules 2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based on our audit. We have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and the Rules made thereunder. Weconducted our audit of the standalone Ind AS financial statements in accordance with theStandards on Auditing issued by the Institute of Chartered Accountants of India asspecified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the financial statements. The procedures selected depend onthe 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 statementsthat give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by theCompany's Board of Directors as well as evaluating the overall presentation of thestandalone Ind AS financial statements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thestandalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the 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 of the state of affairs of theCompany as at March 31 2018 its profit including other comprehensive income its cashflows and the changes in equity 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 sub-section(11) of section 143 of the Act we give in the Annexure 1 a statement on the mattersspecified in 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 explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Accounting Standards specified under section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of written representations received from the directorsas on March 31 2018 and taken on record by the Board of Directors none of the directorsis disqualified as on March 31 2018 from being appointed as a director in terms ofsection 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2" to this report;

(g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone Ind AS financial statements – Refer Note 22 andNote 42(b) to the standalone Ind AS financial statements;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts – Refer Note 21 to the standalone Ind ASfinancial statements;

iii. Following are the instances of delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Companyduring the year ended.

Due date

Date of payment

Amount of payment

Average delay days

Jul' 17 to Mar' 18

Oct' 17 and April' 18

320875

113

For S R B C & CO LLP Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Vinayak Pujare

Partner

Membership Number: 101143 Place of Signature: Mumbai Date: April 302018

Annexure 1 referred to in paragraph 1 under the heading ‘Report onOther Legal and Regulatory Requirements' of our report of even date

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by themanagement the title deeds of immovable properties other than self-constructed buildingsincluded in property plant and equipment are held in the name of the company.

(ii) The management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies were noticed on suchphysical verification. Inventories lying with third parties have been confirmed by them asat March 31 2018 and no material discrepancies were noticed in respect of suchconfirmations.

(iii) (a) The Company has granted loan to a subsidiary company coveredin the register maintained under section 189 of the Companies Act 2013. In our opinionand according to the information and explanations given to us the terms and conditions ofthe grant of such loans are not prejudicial to the company's interest.

(b) In respect of the loan granted to the subsidiary company covered inthe register maintained under Section 189 of the Companies Act 2013 the schedule ofrepayment of principal and payment of interest has been stipulated and these payments areregular. The company has also granted another loan to the subsidiary company which isrepayable on demand. We are informed that the amount of interest and principal demanded bythe company has been paid during the year. Thus in respect of these loan there has beenno default on part of the subsidiary company to which the money was lent.

(c) There are no amounts of loans granted to subsidiary company listedin the register maintained under section 189 of the Companies Act 2013 which are overduefor more than ninety days.

(iv) In our opinion and according to the information and explanationsgiven to us provisions of section 185 and 186 of the Companies Act 2013 in respect ofloans to directors including entities in which they are interested and in respect of loansand advances given investments made and guarantees and securities given have beencomplied with by the company.

(v) In respect of deposits accepted in our opinion and according tothe information and explanations given to us directives issued by the Reserve Bank ofIndia and the provisions of section 73 to 76 or any other relevant provisions of theCompanies Act 2013 and the rules framed there under to the extent applicable have beencomplied with. We are informed by the management that no order in this regard has beenpassed by the Company Law Board National Company Law Tribunal or Reserve Bank of India orany court or any other Tribunal.

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Companies Act 2013 related to the manufacture ofrubber tyres tubes and _aps for all types of vehicles and are of the opinion that primafacie the specified accounts and records have been made and maintained. We have nothowever made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fundemployees' state insurance income-tax sales-tax service tax duty of customs dutyof excise value added tax goods and service tax cess and other statutory dues havegenerally been regularly deposited with the appropriate authorities though there has beena slight delay in a few cases.

(b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax service tax sales-tax duty of custom duty of excise value added tax goodsand service tax cess and other statutory dues were outstanding at the year end for aperiod of more than six months from the date they became payable.

(c) According to the records of the Company the dues of income-taxsales-tax service tax duty of custom duty of excise value added tax and cess onaccount of any dispute are as follows:

(` in Lacs)

Name of the statute

Period to which the amounts relates

Commission- erate

Appellate authorities and Tribunal

High Court

Supreme Court

Deposit

Net Amount

Central Excise Act/ Customs Act

1995 to 2016

8

5842

92

-

168

5774

(Tax/Interest/ Penalty)

2005 to 2015

78

2871

51

-

81

2919

Service Tax under the Finance
Act 1994 (Tax/Interest/ Penalty)

1985 to 2015

205

-

160

-

142

223

Income Tax Act (Tax/ Interest/ Penalty)

1987 to 2015

5899

68

1

-

816

5152

Sales Tax VAT CST (Tax/ Interest/ Penalty)

2002-03

-

7

-

-

-

7

Wealth Tax (Tax)

6190

8788

304

-

1207

14075

(viii) In our opinion and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans or borrowingto a financial institution bank or government or dues to debenture holders.

(ix) In our opinion and according to the information and explanationsgiven by the management the term loans were applied for the purpose for which the loanswere obtained.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that no fraud by thecompany or no fraud on the company by the officers and employees of the Company has beennoticed or reported during the year.

(xi) According to the information and explanations given by themanagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

(xii) In our opinion the Company is not a Nidhi company. Thereforethe provisions of clause 3(xii) of the order are not applicable to the Company and hencenot commented upon.

(xiii) According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and onan overall examination of the balance sheet the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under clause 3(xiv) are notapplicable to the company and hence not commented upon.

(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with him as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

For S R B C & CO LLP Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Vinayak Pujare

Partner

Membership Number: 101143 Place of Signature: Mumbai Date: April 302018

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

We have audited the internal financial controls over financialreporting of CEAT Limited ("the Company") as of March 31 2018 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing asspecified under section 143(10) of the Companies Act 2013 to the extent applicable to anaudit of internal financial controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that 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 adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2018 basedon the internal control over financial reporting criteria established by the Companyconsidering 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 S R B C & CO LLP Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Vinayak Pujare

Partner

Membership Number: 101143 Place of Signature: Mumbai Date: April 302018