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Morganite Crucible (India) Ltd.

BSE: 523160 Sector: Engineering
NSE: N.A. ISIN Code: INE599F01012
BSE 15:58 | 16 Aug 1686.00 -0.80
(-0.05%)
OPEN

1680.00

HIGH

1725.00

LOW

1680.00

NSE 05:30 | 01 Jan Morganite Crucible (India) Ltd
OPEN 1680.00
PREVIOUS CLOSE 1686.80
VOLUME 672
52-Week high 1725.00
52-Week low 860.05
P/E 28.99
Mkt Cap.(Rs cr) 472
Buy Price 1698.80
Buy Qty 6.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1680.00
CLOSE 1686.80
VOLUME 672
52-Week high 1725.00
52-Week low 860.05
P/E 28.99
Mkt Cap.(Rs cr) 472
Buy Price 1698.80
Buy Qty 6.00
Sell Price 0.00
Sell Qty 0.00

Morganite Crucible (India) Ltd. (MORGANITECRUCIB) - Auditors Report

Company auditors report

To the Members of

Morganite Crucible (India) Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Morganite Crucible(India) Limited ("the Company") which comprise the Balance Sheet as at 31 March2017 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required

to be included in the audit report under the provisions of the Act and the Rules madethereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for ouraudit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to usthe aforesaid standalone financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2017 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 37 to the standalone financial statements which more fullyexplains that during the previous year the Company had paid managerial remuneration toLate Hitesh Saiwal - Managing Director amounting to Rs. 10207067 which was in excess ofthe limits specified in section 197 read with Schedule V of the Act by Rs. 7300563. TheCompany had made an application to the Central Government for approval of excessremuneration paid. The Central Government had directed the Company to file an applicationfor waiver of such excess remuneration paid along with the approval from the BoardNomination and Remuneration Committee and members of the Company. The Company has obtainedthe approval from the Board Nomination and Remuneration Committee and members of theCompany and accordingly application has been made to the Central Government. Our opinionis not qualified 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 sub-section (11) of section 143 ofthe Act we give in "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 andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears

from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 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 our separate Report in"Annexure B"; and

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 in our opinionand to the best of our information and according to the explanations given to us : i. TheCompany has disclosed the impact of pending litigations on its financial position in itsstandalone financial statements – Refer Note 26 to the standalone financialstatements.

ii. The Company did not have any material foreseeable losses on long-term contractsincluding derivative contracts.

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

iv. The Company has provided requisite disclosures in the standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016. Based on audit procedures and relying on themanagement representation we report that the disclosures are in accordance with books ofaccount maintained by the Company and as produced to us by the Management -Refer note 45to the standalone financial statements.

For B S R & Co. LLP

Chartered Accountants

Firm Registration No: 101248W/ W-100022

Swapnil Dakshindas

Partner

Membership No:113896

Place Mumbai
Date 25 May 2017

Annexure A to the Independent Auditors' Report – 31 March 2017

With reference to the Annexure referred to in paragraph 1 in Report on Other Legal andRegulatory Requirements of the Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2017 we report that:

i) (a) The Company has maintained proper records showing full particulars includingquantitative details and

situation of fixed assets.

(b) The Company carries out physical verification of its fixed assets every year. Inour opinion this periodicity of

physical verification is reasonable having regard to the size of the Company and thenature of its fixed assets.

Accordingly all fixed assets were physically verified by the management during theyear and no material

discrepancies were noticed on such verification.

(c) The title deeds of the immovable properties are held in the name of the Company.

(ii) The inventory except goods-in-transit has been physically verified by themanagement during the year. In our opinion the frequency of such verification isreasonable and adequate in relation to the size of the Company and the nature of itsbusiness. The discrepancies noticed on verification between physical stocks and bookrecords were not material.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act. Accordingly paragraph 3(iii) of the Order is not applicable tothe Company.

(iv) According to the information and explanations given to us the Company has notgranted any loans made any investments or provided any guarantees or security to whichthe provisions of section 185 and 186 of the Act apply. Accordingly paragraph 3(iv) ofthe Order is not applicable to the Company.

(v) The Company has not accepted any deposits in accordance with the provisions ofsections 73 to 76 of the Act and the rules made there under.

(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the goods manufactured by the Company.

(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 value added tax duty of customs duty ofexcise and any other statutory dues have generally been regularly deposited during theyear by the Company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax service taxsales tax value added tax duty of customs duty of excise and other statutory dues werein arrears as at 31 March 2017 for a period of more than six months from the date theybecame payable.

(b) According to the information and explanations given to us there are no dues ofincome-tax sales tax value added tax service tax duty of customs and duty of excisewhich have not been deposited with the appropriate authorities on account of any disputeexcept as disclosed below.

Name of the Statute Nature of dues Amount* Amount paid under protest Period to which amount relates Forum where dispute is pending
Central Excise Act 1944 Excise duty 1896472 - 2005-06 to 2009-10 Commissioner of Central Excise and Service Tax
Central Excise Act 1944 Excise duty 412331 - April 2013 to September 2015 Commissioner of Central Excise and Service Tax (Appeal)# Assistant
Finance Act 1994 Service tax 346039 - April 2012 to August 2014 Commissioner of Central Excise and Service Tax audit Assistant
Finance Act 1994 Service tax 956090 - April 2013 to August 2015 Commissioner of Central Excise and Service Tax audit
Income Tax Act 1961 Income tax 15342967 1000000 2011-12 Income Tax Appellate Tribunal Commissioner of
Income Tax Act 1961 Income tax 11046142 7834070 ** 2012-13 Income Tax (Appeals)

(*excluding interest and penalty)

(**includes amount of advance tax of Rs. 7247070 adjusted against demand order)

# Company is in process of filing the appeal

(viii) In our opinion and according to the information and explanations given to usthe Company did not have any

outstanding dues to any financial institution banks government or any debenturesduring the year.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) or term loans during the year.

(x) According to the information and explanations given to us no fraud by or on theCompany by its officers or employees hasbeen noticed or reported during the year.

(xi) According to the information and explanations given 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 of the Act. However during the previous year the Companyhad paid managerial remuneration to Late Hitesh Saiwal- Managing Director amounting to Rs.10207067 which was in excess of the limits specified in section 197 read with Schedule Vof the Act by Rs. 7300563. The Company had made an application to the Central Governmentfor waiver of excess remuneration paid and pending approval has treated the excessremuneration paid as a recoverable. Refer note 37 to the standalone financial statements.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi

Company as per the Act.

(xiii) In our opinion and according to the information and explanations given to usall transactions with related parties

are in compliance with section 177 and 188 of the Act and the details as required bythe applicable accounting standards have been disclosed in the financial statements.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partiallyconvertible debentures during the year.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with themduring the year.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to register under section 45-IA of the Reserve Bank of India1934.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/ W-100022
Swapnil Dakshindas
Partner
Membership No:113896

 

Place Mumbai
Date 25 May 2017

Annexure B to the Independent Auditors' Report

Referred to in paragraph 2(f) in Report on Other Legal and Regulatory Requirements ofthe Independent Auditors' Report to the members of the Morganite Crucible (India) Limitedon the standalone financial statements for the year ended 31 March 2017.

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 financial reporting of MorganiteCrucible (India) Limited ("the Company") as of 31 March 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's 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 judgement 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 system over financial reporting.

Meaning of Internal Financial Control 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 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 Control 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 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 Institute of CharteredAccountants of India.

For B S R & Co. LLP
Chartered Accountants
Firm Registration No: 101248W/ W-100022
Swapnil Dakshindas
Partner
Membership No:113896

 

Place Mumbai
Date 25 May 2017