You are here » Home » Companies » Company Overview » Murudeshwar Ceramics Ltd

Murudeshwar Ceramics Ltd.

BSE: 515037 Sector: Consumer
NSE: MURUDCERA ISIN Code: INE692B01014
BSE 00:00 | 12 May 21.50 0.15
(0.70%)
OPEN

21.50

HIGH

22.45

LOW

21.25

NSE 00:00 | 12 May 21.40 0.15
(0.71%)
OPEN

21.25

HIGH

22.40

LOW

21.25

OPEN 21.50
PREVIOUS CLOSE 21.35
VOLUME 19441
52-Week high 25.85
52-Week low 11.28
P/E
Mkt Cap.(Rs cr) 113
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 21.50
CLOSE 21.35
VOLUME 19441
52-Week high 25.85
52-Week low 11.28
P/E
Mkt Cap.(Rs cr) 113
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Murudeshwar Ceramics Ltd. (MURUDCERA) - Auditors Report

Company auditors report

Report on the Audit of Standalone Ind AS Financial Statement Opinion:

We have audited the standalone Ind AS financial statements of Murudeshwar CeramicsLimited ("the Company") which comprise the Balance Sheet as at 31 March2020 and the Statement of Profit and Loss (including other comprehensive income)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the standalone Ind AS financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the 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 financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2020 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion:

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone Ind ASfinancial statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone Ind AS financial statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion on the StandaloneFinancial Statements.

Key Audit Matters:

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the Key Audit matters to be communicatedin our report.

Key Audit Matters Auditor's Response
1. Inventory : The Value of inventory as at 31.03.2020 is 9972.38 lakhs which is 21.1% of total asset value given the size of the inventory balance relative to the total asset size of the company the valuation of inventory required significant audit attention. As disclosed in the notes forming part of statement of accounts inventories are held at the lower of cost or net realisable value determined using weighted average cost. The determination of valuation of inventory requires management to exercise qualitative judgments and apply assumptions We have performed the following procedures w.r.t valuation of the inventory and assessment of procedures of physical verification of inventory during the period to ensure accuracy of inventory reporting on a sample basis we tested the net realisable value of inventory to recent selling prices. We have also considered the stock audit report by stock auditors engaged by the lending bank to ensure that there are no inconsistencies in reporting. At the year end the valuation of inventory is reviewed by management and cost of inventory is revalued where inventory is forecast to be sold below cost.
In the view of the management basic raw material used is clay for manufacturing of tiles and the same being a natural resources does not have any depletion in value over the passage of time.
2. Property Plant and Equipment :
Additions to Fixed assets during the year were 1763.66 lakhs (including CWIP of the previous year). inappropriate timing of capitalization of project/ inappropriate classification of categories of the items of PPE could result in material misstatement of CWIP/ PPE with consequent impact on depreciation charge and results for the year Our audit procedures included testing the design implantation and operating effectiveness of controls in respect of review of capitalization of assets particularly in respect of timing of the capitalization and recording of additions to items of various categories of PPE with source documentation substantive testing of appropriateness of cut- off date considered for project capitalization. We tested the source documentation to determine whether the expenditure is of capital nature and has been approved and segregated into appropriate categories. We reviewed operating expenses to determine the appropriateness of accounting.

Information Other than the Financial Statements and Auditor's Report Thereon:

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Corporate Governance andShareholder's Information but does not include the standalone financial statements andour auditor's report thereon. Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information; we are required to report that fact. We have nothing to reportin this regard.

Management's Responsibility for the Standalone Ind AS financial statements:

The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the state of affairs profit /loss changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India Including Indian Accounting Standard (Ind AS)specified under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended.. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and 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.

In preparing the standalone Ind AS financial statements management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so. The Board of Directorsis also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind AS 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 auditor's 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 therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error design and perform audit procedures responsive to those risks andobtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error as fraud may involve collusion forgery intentionalomissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to standalone Ind AS financialstatements in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 auditor's report to the related disclosures inthe standalone Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors' report. However future events or conditions may cause the Companyto cease to continue as a going concern.

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

Materiality:

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

Communication with those charged with governance:

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 financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements:

1. As required by Section 143(3) of the Act based on our audit 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 relating to preparationof the aforesaid Ind AS financial statements have been kept by the Company so far as itappears from our examination of those books;

(c) The balance sheet the statement of profit and loss (including other comprehensiveincome) the statement of cash flows dealt with by this Report are in agreement with thebooks of account maintained for the purpose of preparation of the Ind AS financialstatements;

(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rule issuedthere under.

(e) On the basis of the written representations received from the Directors of theCompany as on 31 March 2020 taken on record by the Board of Directors of the Company noneof the directors is disqualified as on 31 March 2020 from being appointed as a director interms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting and the operating effectiveness of such controls refer to our separate reportin "Annexure A" which is based on the auditors' report of the company.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

(h) 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. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

2. 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 B a statement on the matters specified in the paragraph 3 and 4 ofthe order.

For K G RAO & CO.

Chartered Accountants ICAI FIRM REGN. No. : 010463S

KRISHNARAJ K

Partner (Membership No : 217422) UDIN : 20217422AAAAAP6517

Place : Bengaluru

Date : 26-06-2020

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal & RegulatoryRequirement' of our report to the members of Murudeshwar Ceramics Limited of even date)Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013 ("the Act") of Murudeshwar Ceramics Limited.

We have audited the internal financial controls over financial reporting of MurudeshwarCeramics Limited ("the Company") as of 31 March 2020 in conjunction with ouraudit of the Ind AS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls :

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria 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 (‘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.

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 and the Standards on Auditing prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. The Guidance Note and those Standards 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 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 authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised 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.

Opinion:

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the ICAI.

For K G RAO & CO.

Chartered Accountants ICAI FIRM REGN. No. : 010463S

KRISHNARAJ K

Partner (Membership No : 217422) UDIN : 20217422AAAAAP6517

Place : Bengaluru

Date : 26-06-2020

(Referred to in paragraph 2 under ‘Report on Other Legal & RegulatoryRequirement' of our report to the members of Murudeshwar Ceramics Limited of even date)

i. In respect of the Company's Property Plant and Equipment:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment;

(b) The property plant and equipment were physically verified by the management inaccordance with a regular program of verification which in our opinion provides forphysical verification of fixed assets at regular intervals.

According to the information and explanations given to us no material discrepanciesbetween the books records and the physical fixed assets have been noticed.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the conveyance deed provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the company as at the balance sheet date. In respect ofimmovable properties of land and building that have been taken on lease and disclosed asfixed assets in the standalone financial statements the lease agreements are in the nameof the Company

ii. As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalverification of the inventory.

iii. According to the information and explanations given to us. the company has notgranted the loans/advances secured or unsecured to the Companies or other partiescovered in the register maintained under Section 189 of the Companies Act2013 andaccordingly clause 3(III) (a) to (c) are not applicable to the company and hence notcommented there upon.

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 Companies Act 2013in respect of loans investments guarantees and securities as applicable.

v. The Company has not accepted any deposits from the public during the year and hencethe directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76or any other relevant provisions of the Act and the Companies (Acceptance of Deposit)Rules 2015 with regard to the deposits accepted from the public are not applicable.

vi. The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013 for the business activities carried out bythe Company. Thus reporting under clause 3(vi) of the order is not applicable to theCompany.

vii. According to the information and explanations given to us in respect of statutorydues :

a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods & Service TaxDuty of Customs Cess and other material statutory dues applicable to it with theappropriate authorities.

b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods & Service Tax Duty of Customs Cess and othermaterial statutory dues in arrears as at March 31 2020 for a period of more than sixmonths from the date they became payable.

c) Details of dues of income tax excise duty and custom duty which have not beendeposited as at 31.03.2020 on account of dispute are as under:

Nature of the statute Nature of dues Forum where Dispute is Pending Period to which Relates Remarks
The Income Tax Act 1961 Income Tax Appellate Tribunal AY 2007-2008 to 2015-16 Disallowances of some expenses however Company having Carry forward loss hence no tax demand arises
The Income Tax Act 1961 Income Tax CIT Appeals AY 2006-2007 Disallowances of some expenses resulted to additions to income Tax is paid under MAT no additional demand

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks or financial institutions. TheCompany has not issued any debentures.

ix. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments except term Loans which is applied forthe purpose for which the same is raised.

x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.

xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to the Company.

xiii. In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in the IndAS Financial Statements as required by the applicable accounting standards.

xiv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year under reviewand hence reporting under the provisions of clause 3 (xiv) of the Order is not applicableto the Company.

xv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him and hence reporting under the provisions of clause3 (xv) of the Order are not applicable to the Company .

xvi. The company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934 and hence reporting under the provisions of clause 3 (xvi) of theOrder are not applicable to the Company.

For K G RAO & CO.

Chartered Accountants ICAI FIRM REGN. No. : 010463S

KRISHNARAJ K

Partner (Membership No : 217422) UDIN : 20217422AAAAAP6517

Place : Bengaluru

Date : 26-06-2020

.