You are here » Home » Companies » Company Overview » Morganite Crucible (India) Ltd

Morganite Crucible (India) Ltd.

BSE: 523160 Sector: Engineering
NSE: N.A. ISIN Code: INE599F01012
BSE 10:54 | 20 Feb 1350.00 -10.00
(-0.74%)
OPEN

1350.00

HIGH

1350.00

LOW

1350.00

NSE 05:30 | 01 Jan Morganite Crucible (India) Ltd
OPEN 1350.00
PREVIOUS CLOSE 1360.00
VOLUME 17
52-Week high 2329.00
52-Week low 966.50
P/E 21.64
Mkt Cap.(Rs cr) 378
Buy Price 1340.00
Buy Qty 1.00
Sell Price 1350.00
Sell Qty 33.00
OPEN 1350.00
CLOSE 1360.00
VOLUME 17
52-Week high 2329.00
52-Week low 966.50
P/E 21.64
Mkt Cap.(Rs cr) 378
Buy Price 1340.00
Buy Qty 1.00
Sell Price 1350.00
Sell Qty 33.00

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

Company auditors report

Independent Auditor's Report

To the Members of

Morganite Crucible (India) Limited

Report on the Audit of Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of Morganite Crucible(India) Limited ("the Company") which comprise the Balance Sheet as at 31March 2018 the Statement of Profit and Loss the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and summary of the significant accountingpolicies and other explanatory information.

Management's Responsibility for the 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 Ind AS financial statements that give a true and fair view of the state of affairsprofit / loss and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) prescribed under Section 133 of theAct.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon 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 Ind AS financial statements in accordance with the Standardson Auditing specified under Section 143(10) of the Act. Those Standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the Ind AS financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS 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 Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.

We are also responsible to conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the entity's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in the auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify the opinion. Our conclusions are based on the audit evidenceobtained up to the date of the auditor's report. However future events or conditions maycause an entity to cease to continue as a going concern.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS 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 2018 and its profit and other comprehensive income the changes in equityand its cash flows for the year ended on that date.

Emphasis of Matter

During an earlier year the Company had paid managerial remuneration to Late HiteshSaiwal- Managing Director amounting to

Rs. 102.07 lakhs which was in excess of the limits specified in section 197 read withSchedule V of the Act by Rs. 73.01 lakhs. The Company had made an application to theCentral Government for waiver of such excess remuneration paid. During the year ended 31March 2018 the Central Government has rejected the said application by its Order dated 11August 2017. Further based on the management's evaluation of the response received fromlegal heirs of Late Hitesh Saiwal to the notice sent for recovery of such excessremuneration the Company has filed the application with the Central Government toreconsider its aforesaid Order.

Our opinion is not modified in respect of this matter.

Other Matter

The comparative financial information of the Company for the year ended 31 March 2017and the transition date opening balance sheet as at 1 April 2016 included in these Ind ASfinancial statements are based on the previously issued statutory financial statementsprepared in accordance with the Companies (Accounting Standards) Rules 2006 audited bythe predecessor auditor whose report for the year ended 31 March 2017 and 31 March 2016dated 25 May 2017 and 30 May 2016 respectively expressed an unmodified opinion on thosefinancial statements as adjusted for the differences in the accounting principles adoptedby the Company on transition to the Ind AS which have been audited 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 we givein the "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.

2. As required by Section 143 (3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit. b) In ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books c) The Balance Sheet the Statement ofProfit and Loss the Statement of Cash Flows and the Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account. d) In our opinion theaforesaid Ind AS financial statements comply with the Indian Accounting Standardsprescribed under Section 133 of the Act. e) On the basis of the written representationsreceived from the directors as on 31 March 2018 taken on record by the Board ofDirectors none of the directors is disqualified as on 31 March 2018 from being appointedas a director in terms of Section 164 (2) of the Act. f) With respect to the adequacy ofthe internal financial controls with reference to financial statements of the Company andthe 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 Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements – Refer note 30 to the Ind AS 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 to theInvestor Education and Protection Fund by the Company.

iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made since they do not pertain to the financial year ended 31 March 2018. Howeveramounts as appearing in the audited financial statements for the period ended 31 March2017 have been disclosed.

For B S R & Associates LLP
Chartered Accountants
Firm Registration No: 116231W/ W-100024
Shiraz Vastani
Place: Pune Partner
Date: 24 May 2018 Membership No.: 103334

Annexure A to the Independent Auditor's Report - 31 March 2018

With reference to the Annexure referred to in paragraph 1 in Report on Other Legal andRegulatory Requirements of the Independent Auditor's Report to the members of the Companyon the Ind AS financial statements for the year ended 31 March 2018 we report that: (i)(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 assets bywhich its fixed assets are verified every year. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its fixed assets. In accordance with this program all fixed assets werephysically verified by the management during the year and no material discrepancies werenoticed on such verification.

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

(ii) The inventory except good-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 Goods and services tax and any other statutory dues have generally been regularlydeposited during the year 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 Goods and services tax andany other statutory dues were in arrears as at 31 March 2018 for a period of more thansix months from the date they became 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 Duty of Excise andGoods and services tax which have not been deposited with the appropriate authorities onaccount of any dispute except as disclosed below.

( Rs. In lakhs)
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 18.96 - 2005-06 to 2009-10 Central Excise Appellate Tribunal
Central Excise Act 1944 Excise duty 4.12 - April 2013 to S e p t e m b e r 2015 Commissioner of Central Excise and Service Tax (Appeal)
Finance Act 1994 Service Tax 13.02 - April 2012 to August 2015 Assistant Commissioner of Central Excise and Service Tax audit
Income Tax Act 1961 Income tax 153.42 20.00 2011-12 Income Tax Appellate Tribunal
Income Tax Act 1961 Income tax 110.46 80.30** 2012-13 Commissioner of Income Tax (Appeal)
Income Tax Act 1961 Income tax 15.92## 15.92 2008-09 Income Tax Appellate Tribunal
Income Tax Act 1961 Income tax 7.20## 1.08 2010-11 Commissioner of Income Tax (Appeal)
Income Tax Act 1961 Income tax 36.95## 36.95 2010-11 to 2011-12 Income Tax Appellate Tribunal
Income Tax Act 1961 Income tax 119.18## 117.51 2012-13 to 2014-15 Commissioner of Income Tax (Appeal)

(*excluding interest and penalty)

(**includes amount of advance tax of Rs. 72.47 lakhs adjusted against demand order)

(##pertains to erstwhile Diamond Crucible Company Limited which has been amalgamatedwith the Company)

(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 banksgovernment or any debentures during 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 the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(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 in an earlier year the Company hadpaid managerial remuneration to Late Hitesh Saiwal- Managing Director amounting to Rs.102.07 lakhs which was in excess of the limits specified in section 197 read with ScheduleV of the Act by Rs. 73.01 lakhs. The Company had made an application to the CentralGovernment for waiver of such excess remuneration paid. During the year ended 31 March2018 the Central Government has rejected the said application by its Order dated 11August 2017. Further based on the management's evaluation of the response received fromlegal heirs of Late Hitesh Saiwal to the notice sent for recovery of such excessremuneration the Company has filed the application with the Central Government toreconsider its aforesaid Order. Refer note 40 to the Ind AS 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 theAct and the details as required by the applicable accounting standards have beendisclosed 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 & Associates LLP
Chartered Accountants
Firm Registration No: 116231W/ W-100024
Shiraz Vastani
Place: Pune Partner
Date: 24 May 2018 Membership No.: 103334

Annexure B to the Independent Auditor's Report - 31 March 2018

Referred to in paragraph 2(f) in Report on Other Legal and Regulatory Requirements ofthe Independent Auditor's Report to the members of Morganite Crucible (India) Limited onthe Ind AS financial statements for the year ended 31 March 2018.

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 with reference to financial statementsof Morganite Crucible (India) Limited ("the Company") as of 31 March 2018 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.

Management's Responsibility for the Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal financial controls with reference to financialstatements 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(‘ICAI'). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding 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's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both 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 with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the Ind ASfinancial 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess 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 controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation ofInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASfinancial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 with referenceto financial statements to future periods are subject to the risk that the internalfinancial controls with reference to financial statements may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as at31 March 2018 based on the internal controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

For B S R & Associates LLP
Chartered Accountants
Firm Registration No: 116231W/ W-100024
Shiraz Vastani
Place: Pune Partner
Date: 24 May 2018 Membership No.: 103334