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India Cements Ltd.

BSE: 530005 Sector: Industrials
NSE: INDIACEM ISIN Code: INE383A01012
BSE 00:00 | 19 Feb 74.50 2.80
(3.91%)
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72.50

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74.90

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72.30

NSE 00:00 | 19 Feb 74.50 2.80
(3.91%)
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72.10

HIGH

74.90

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OPEN 72.50
PREVIOUS CLOSE 71.70
VOLUME 160898
52-Week high 116.90
52-Week low 67.90
P/E 19.35
Mkt Cap.(Rs cr) 2,309
Buy Price 74.50
Buy Qty 6.00
Sell Price 74.50
Sell Qty 208.00
OPEN 72.50
CLOSE 71.70
VOLUME 160898
52-Week high 116.90
52-Week low 67.90
P/E 19.35
Mkt Cap.(Rs cr) 2,309
Buy Price 74.50
Buy Qty 6.00
Sell Price 74.50
Sell Qty 208.00

India Cements Ltd. (INDIACEM) - Auditors Report

Company auditors report

To the Members of The India Cements Limited

Report on the Audit of the Standalone Ind AS Financial Statements Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of The IndiaCements Limited ("the Company") which comprise the Balance sheet as at 31stMarch 2019 the statement of Profit and Loss (Including Other Comprehensive Income) theCash Flow Statements and the Statement of Changes in Equity for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

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 Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 312019its profit including other comprehensive income its cash flows and the changes in equityfor the year ended on that date.

Basis for Opinion

We conducted our audit of standalone Ind AS financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Standalone Ind AS Financial Statements' section ofour report. We are independent of the Company in accordance with the ‘Code of Ethics'issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the standalone Ind AS financial statementsunder the provisions of the Companies Act 2013 and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone Ind AS financialstatements.

Emphasis of Matter

Without qualifying our report we draw attention to

(a) Note No.40.4 of the Standalone Ind AS Financial Statements regarding the order ofattachment issued under Prevention of Money laundering Act through which certain assets ofthe company amounting to Rs. 120.34 Crores have been attached vide provisional attachmentOrder dated 25th February 2015 which the company is disputing before legalforums. The company has been legally advised that it has strong grounds to defend itsposition pending the outcome of the proceedings the impact if any is not ascertainable atthis stage.

(b) Note No.40.2(f) of the Standalone Ind AS Financial Statements relating to the orderof the Competition Commission of India (CCI) concerning alleged contravention of theprovisions of Competition Act 2002 and imposing a penalty of Rs. 187.48 Crores on theCompany. On Company's appeal National Company Law Appellate Tribunal (NCLAT) in itsOrder passed on 25th July 2018 has reportedly upheld the CCI's Order. Thecompany appealed against the order before Supreme Court and the Supreme Court vide itsOrder dated 05th October 2018 admitted the Company's appeal and directed thatthe interim order passed by the Tribunal in the matter will continue. Pending theoutcome no adjustments have been made in the Standalone Ind AS Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 312019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report. For eachmatter below our description of how our audit addressed the matter is provided in thatcontext.

1. Revenue recognition:

Discounts Incentives and Rebates etc.:

Reasons why the matter was determined to be a key audit matter Auditor's Response
(i) Revenue is measured net of discounts incentives and rebates earned by customers on the Company's sales. Our procedures included:
(ii) The Company has its presence across different marketing regions within the country and operates in competitive business environment. • Assessing the appropriateness of the Company's revenue recognition accounting policies including those relating to discounts incentives and rebates by comparing with applicable accounting standards.
• Testing the effectiveness of the Company's controls over the calculation of discounts incentives and rebates based on commitments made.
The company recognises discounts incentives and rebates at the time of sale. The assessment of discounts incentives and rebate schemes recognised on sales made during the year is material and considered to be complex and dependent on various performance obligations and market conditions. There is a risk of revenue being affected as a result of variations in assessment of discounts incentives and rebates recognised on sales. Given the complexity involved in the assessment of provisions required for discounts incentives and rebates the same is considered as key audit matter. • Obtaining management's assessment of its obligations towards discounts incentives and rebates accruals under applicable schemes and compared the accruals made with the approved schemes on sample basis.
• Examined on a sample basis all the supporting documentation required for computing the company's obligation towards discounts incentives and rebates recorded and disbursed during the year including credit notes issued after the year end date to determine whether these were recorded appropriately.
• The management's assessment of discounts incentives and rebates recorded for the current year have been compared with past practices of payments and reversal of such discounts and incentives and rebates to assess the adequacy of provisions made during the current year.
• Examining the manual journals posted to discounts rebates and incentives to identify unusual or irregular items.

2. Litigations and Contingencies

Reasons why the matter was determined to be a key audit matter Auditor's Response
The Company is subject to a large number of legal and tax related claims which have been disclosed / provided for in the financial statements based on the facts and circumstances of each case in view of its operations spread across various regions within India. Our audit procedures included the following: -
Taxation and litigation exposures have been identified as a key audit matter due to the timescales involved for resolution and the potential financial impact arising out of these on the financial statements given the inherent complexity and magnitude of potential exposures across the Company and the judgement necessary to estimate the amount of provisions required or to determine required disclosures. Further significant management judgement is involved in assessing the exposure of each case and eventual obligation on the company and thus there is a risk that such cases may not be adequately provided for or disclosed. • Gained an understanding of the process of identification of claims litigations and contingent liabilities and identified key controls in the process. For selected controls we have performed tests of such controls.
• Obtained the summary of Company's legal and tax cases and critically assessed management's position through discussions with the Legal Counsel and operational management on both the probability of success in significant cases and the magnitude of any potential loss.
• Inspected external legal opinions (where considered necessary) and other evidence to corroborate management's assessment of the risk profile in respect of pending legal claims and disputes.
• Engaged with legal experts to technically appraise the legal positions taken by management with respect to local tax issues.
These estimates could change substantially over time as new facts emerge and each legal case progress and subsequent judicial guidance emerges or statutory amendments if any with retrospective effects are enacted. (Refer note 40.2 & 40.4 to the standalone Ind AS financial statements). • Assessed whether management assessment of similar cases is consistent across the divisions or that differences in positions are adequately justified.
• Assessed the relevant disclosures made within the financial statements to address whether they appropriately reflect the facts and circumstances of the respective tax and legal exposures and the requirements of relevant accounting standards.

3. Allowance for Receivables:

Reasons why the matter was determined to be a key audit matter Auditor's Response
Trade receivables of the company comprise mainly receivables in relation to the company's receivables from its customers towards sale of cement and other cement related products and shipping and infrastructure development business. The operating environment in the cement industry and other businesses the company operates has the inherent risks of default on receivables from the company's customers. In particular in the event of financial stress at the customers end the company is exposed to potential risk of financial loss when the customers fail to meet their payment obligations in accordance with the agreed credit terms. We have performed the following procedures in relation to the recoverability of trade receivables:
• Tested the accuracy of aging of trade receivables at year end on a sample basis;
The recoverable amount was estimated by management based on their specific recoverability assessment on individual debtor with reference to the aging profile historical payment pattern and the past record of default of the customer. Management would make specific provision against individual balances with reference to the recoverable amount. For the purpose of determination of provision requirement significant judgements and assumptions including the credit risks of customers the timing and amount of realisation of these receivables are required for the identification of impairment events and the determination of the provision to be made towards the receivables. • Obtained a list of outstanding receivables along confirmation of balances on a sample basis as per the auditing standards and identified any debtors with financial difficulty through discussion with management.
• Assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management's assessment with reference to the credit profile of the customers historical payment pattern of customers publicly available information if any and latest correspondence with customers and to consider if any additional provision should be made; and
• Tested subsequent settlement of trade receivables after the balance sheet date on a sample basis if any.

Other Information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board Report but does not includethe standalone Ind AS financial statements and our auditors' report thereon

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whetherthe other information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone Ind AS FinancialStatements that give a true and fair view of the financial position financial performanceincluding Other Comprehensive Income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (IND AS) specified under section 133 of the Act read withrelevant rules issued thereunder. 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 the estimates that are reasonable and prudent; and the designimplementation 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 Standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditors' report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditors' report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS financialstatements of the financial year ended March 312019 and are therefore the key auditmatters. We describe these matters in our auditors' report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the OrdeR')issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 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 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 accounts.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theInd AS specified under Section 133 of the Act read with read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure B" to this report.

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 as amended inour opinion and 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 its financialposition in its standalone Ind AS financial statements - Refer Note 40.2 & 40.4 tostandalone Ind AS financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

3. As required by the section 197(16) of the Act in our opinion and to the best of ourinformation and according to the explanations given to us the remuneration paid/providedby the company to its directors during the year is in accordance with the provisions ofsection 197 of the Act.

For K.S. RAO & CO. For S. VISWANATHAN LLP.
Chartered Accountants Chartered Accountants
Firm Regn No: 003109s Firm Regn No: 004770S/S200025
m. Krishna chaithanya chella k. srinivasan
Partner Partner
Membership No.231282 Membership No.023305
Place : Chennai
Date : 25th May 2019

ANNEXURE ‘A' TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in paragraph 1 under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date

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 fixed assets are verified in a phased manner over a period of three years. Pursuantto the programme certain fixed assets were physically verified by the management duringthe year and according to the information and explanations given to us no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets.

(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. In regard to Immovable properties of land and buildingswherever title deeds have been pledged as securities towards loans guarantees etc availedby the company the same are stated to have been held in the name of the company and areconfirmed by the lenders as on the reporting date.

(INR in Lakhs)
Particulars of Land & Building

Value as at 31.03.2019

Gross Block Net Block No of Cases
Building - Apartment at Delhi 5.70 4.88 1

Freehold land includes land transferred pursuant merger pending mutation in the nameof the company.

ii) According to information and explanations given to us the inventories werephysically verified during the year by the management at reasonable intervals and nomaterial discrepancies were noticed on physical verification.

iii) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act in respect tothe 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. However in regardto the unclaimed deposits the company has complied with the provisions of Section 73 to 76or any other relevant provisions of the Companies Act and the rules framed there under.

vi) The maintenance of cost records has been specified by the central government undersection 148(1) of Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the company pursuant to Companies (Cost Records and Audit) Rules 2014 asamended prescribed by the central government under sub-section (1) of section 148 ofCompanies Act 2013 and are opinion that prima facie the prescribed cost records havebeen made and maintained. We have however not made a detailed examination of the saidrecords with a view to determine whether they are accurate or complete and we have reliedon the reports of cost auditors in this regard.

vii) According to the information and explanations given to us and on the basis of ourexamination of the books of account in respect of statutory dues:

a) The company has generally been regular in depositing undisputed statutory duesbarring few instances of delays in making payment towards Provident Fund Employees' StateInsurance Income-tax Goods and Service Tax Duty of Customs Value Added Tax Cess andany other Statutory Dues to the appropriate authorities. There were no undisputed amountspayable towards Provident Fund Employees' State Insurance Income-tax Goods and ServiceTax Duty of Customs Cess and any other Statutory Dues as on 31st of March2019 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 Sales tax Income taxService tax Customs Duty Excise duty VAT and Cess which have not been deposited as on31st March 2019 on account of any dispute and the forum where disputes arepending is given in Annexure - I.

viii) Based on the audit procedure and according to the information given to us we areof the opinion that the company has not defaulted in repayment of loans from financialinstitutions banks government or dues to debenture holders.

ix) In our opinion and according to the information and explanations given to us andbased on the records produced for our perusal during the year the term loans have beenapplied by the company for purposes for which they were raised and the company has notraised monies by way of initial public offer or further public offer (including debtinstruments).

x) According to the information and explanations given to us no materialfraud by the Company or on the Company by its officers or employees has been noticed orreported during the course of our audit.

xi) In our opinion and according to the information and explanations give to us we areof the opinion that the Company has paid/provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith 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.

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 give 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.

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 him. Accordingly paragraph 3(xv)of the Order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For K.S. RAO & CO. For S. VISWANATHAN LLP.
Chartered Accountants Chartered Accountants
Firm Regn No: 003109s Firm Regn No: 004770S/S200025
m. Krishna chaithanya chella k. srinivasan
Partner Partner
Membership No.231282 Membership No.023305
Place : Chennai
Date : 25th May 2019

Annexure - B to the Independent Auditors' 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 Ind AS Financial Statements of theCompany as of and for the year ended March 312019 we have audited the internal financialcontrols over financial reporting of The India Cements Limited ("the Company")as of 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 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.

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 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 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 the 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 authorizations ofmanagement and directors of the company; and (3) Provide reasonable assurance regardingprevention or timely detection of unauthorized 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 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.

Opinion

In our opinion and to the best of our information and according to the explanationgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For K.S. RAO & CO. For S. VISWANATHAN LLP.
Chartered Accountants Chartered Accountants
Firm Regn No: 003109s Firm Regn No: 004770S/S200025
m. Krishna chaithanya chella k. srinivasan
Partner Partner
Membership No.231282 Membership No.023305
Place : Chennai
Date : 25th May 2019

ANNEXURE - I TO THE INDEPENDENT AUDITORS' REPORT AS MENTIONED IN PARAGRAPH 3 (VII) (B)OF CARO 2016

Sl. No. Nature of the Statute Nature of Dues Amount (Rs.) Period to which amount relates Forum where dispute is pending
1 Central Excise Act 1944 Excise Duty and Service Tax 149617635 Various Periods from 1995-96 to 2008-09 Supreme Court
213053878 Various Periods from 1994-95 to 2013-14 High Court
1933917660 Various Periods from 1988-89 to 2017-18 CESTAT
145221538 Various Periods from 1995-96 to 2017-18 Commissioner / Commissioner (Appeals)
Sub Total 2441810711
2 Central Sales Tax Act 1956 and Sales Tax of Various States Sales Tax / VAT 25977554 2008-09 & 2013-14 Additional Commissioner (Rev. Petition)
207365414 Various pendings from 1969-70 to 2013-14 Appeal to high Court
5853451 1997-982005-06 and 2007-08 Deputy Commissioner (Appeals)
1522444 2014-15 Joint Commissioner (Rev. Petition)
12884480 Various pendings from 1989-90 to 2008-09 Sales Tax Apellate Tribunal
4756000 2013-14 Commissioner (Appeals)
Sub Total 258359343
3 Customs Duty 1962 Customs Duty 640246258 2013-14 & 2014-15 CESTAT
2711742 2017-18 Additional Commissioner of Customs
Sub Total 642958000
4 Income Tax Act 1961 Income Tax 81064938 1996-1997 Supreme Court
36383000 Various periods from 1982-83 to 1986-87 high Court
531000 1991-1992 Income Tax Apellate Tribunal
9902394 2016-2017 Deputy Commissioner of Income Tax
796048116 2015-2016 CIT Appeals
Sub Total 923929448
Grand Total 4267057502

 

For K.S. RAO & CO. For S. VISWANATHAN LLP.
Chartered Accountants Chartered Accountants
Firm Regn No: 003109S Firm Regn No: 004770S/S200025
m. Krishna chaithanya chella k. srinivasan
Partner Partner
Membership No.231282 Membership No.023305
Place : Chennai
Date : 25th May 2019