The Members of Cera Sanitaryware Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of CERASANITARYWARE LIMITED (the "Company") which comprise the Balance Sheet as at 31stMarch 2018 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 significant accounting policies and other explanatory information.
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 the stateof affairs (financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
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 these 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 controlsrelevant 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 these Standalone Ind AS financial statements.
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 specifiedunder Section 133 of the Act of the state of affairs (financial position) of the Companyas at 31st March 2018 its profit (financial performance including othercomprehensive income) its cash flows and the changes in equity for the year ended on thatdate.
The Company had prepared separate sets of statutory financial statements for the yearended 31st March 2017 and 31st March 2016 in accordance with theAccounting Standards prescribed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 (as amended) on which predecessor auditors issued theirauditor's reports to the shareholders of the Company dated 04.05.2017 and 03.05.2016respectively. These financial statements have been adjusted for the differences in theaccounting principles adopted by the Company on transition to Ind AS which have beenaudited by us.
Our opinion is not modified 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 and onthe basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of thesaid 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 (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
(d) In our opinion the aforesaid Standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.
(e) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors of theCompany is disqualified as on 31st March 2018 from being appointed as adirector in terms of Section 164(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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:
[i] The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS financial statements. Refer Note 45 to the financialstatements.
[ii] According to the information and explanations provided to us the Company did nothave any long term contracts including derivative contracts for which there were anymaterial foreseeable losses.
[iii] There has been no delay in transferring amounts required to be transferredduring the year to the Investor Education and Protection Fund by the Company.
| ||FOR N. M. NAGRI & CO. |
| ||Chartered Accountants |
| ||Firm Regn. No.106792W |
| ||N. M. NAGRI |
|Place : Ahmedabad ||PROPRIETOR |
|Date : 3rd May 2018 ||Membership No. 016992 |
Annexure - A
Annexure - A to the Independent Auditor's Report of even date to the members of CeraSanitaryware Limited on the Standalone Ind AS financial statements for the year ended 31stMarch 2018.
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(1) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assetsunder which fixed assets are verified in a phased manner which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies were noticed on such verification.
(c) The title deeds of all the immovable properties (which are included under the headProperty Plant and Equipment') are held in the name of the Company.
(2) In our opinion the management has conducted physically verification of inventoryat reasonable intervals during the year. No material discrepancies were noticed on suchverification.
(3) As informed to us the Company has granted unsecured loans to its subsidiarycompany covered in the register maintained under Section 189 of the Companies Act 2013.In respect of such loans we have been informed that:
(a) the terms and conditions of the grant of such loans are not prima facieprejudicial to the Company's interest.
(b) the schedule of repayment of principle and payment of interest has been stipulatedand the repayment of the principle amount and interest are regular.
(c) there is no overdue amount in respect of loans granted to such companies.
(4) I n our opinion the Company has complied with the provisions of Sections 185 and186 of the Act in respect of loans and investments. The Company has not given anyguarantee or provided security during the year.
(5) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended).
(6) We have broadly reviewed the accounts and records maintained by the Companypursuant to the rules made by the Central Government for the maintenance of the costrecords under Section 148 of the Companies Act related to the maintenance of manufactureof certain products and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained.
(7) (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales tax value added tax dutyof customs duty of excise service tax cess and any other statutory dues including GSTas applicable to the appropriate authorities. Further no undisputed amounts payable inrespect thereof were outstanding at the year end for a period of more than six months fromthe date they became payable.
(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute matters pending areas follows:
|Name of Statute ||Nature of Dues ||Amount ' (Lakhs) ||Period to which the amount relates (F.Y.) ||Forum where dispute is Pending |
|Income Tax Act 1961 ||Income Tax ||4.43 ||2004-05 ||High Court - Gujarat |
|Income Tax Act 1961 ||Income Tax ||48.39 ||2007-08 ||ITAT |
|Income Tax Act 1961 ||Income Tax ||25.17 ||2011-12 ||CIT Appeals |
|Income Tax Act 1961 ||Income Tax ||9.62 ||2012-13 ||CIT Appeals |
|Central Excise Act 1944 ||Central Excise ||2.77 ||1991-92 ||Supreme Court |
(8) The Company has not defaulted in repayment of loans or borrowings to any bank orfinancial institution or government or dues to debenture holders if any.
(9) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) or term loans during the year.
(10) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period course of our audit.
(11) Managerial remuneration has been paid and provided by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Companies Act 2013.
(12) The Company is not a Nidhi Company. Accordingly provisions of clause 3(xii) ofthe Order are not applicable.
(13) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of the Companies Act2013 where applicable and the requisitedetails have been disclosed in the financial statements etc. as required by theapplicable Ind AS.
(14) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(15) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the CompaniesAct 2013.
(16) The Company is not required to be registered under Section 45-IAof the ReserveBank of India Act 1934.
FOR N. M. NAGRI & CO.
Firm Regn. No.106792W
N. M. NAGRI
Membership No. 016992
Place : Ahmedabad
Date : 3rd May 2018
ANNEXURE-B TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
In conjunction with our audit of the standalone financial statements of CERASANITARYWARE LIMITED (the Company') as of and for the year ended 31 March 2018 wehave audited the internal financial controls over financial reporting of the Company as ofthat 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 Company's policies the safeguarding ofits 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 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 over financial reporting. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 overfinancial reporting includedobtaining an understanding of internal financial controls overfinancial 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 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;
(2) 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 authorizations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 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 31st March 2018based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal controls stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India.
FOR N. M. NAGRI & CO.
N. M. NAGRI
Membership No. 016992
Place : Ahmedabad
Date : 3rd May 2018