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Saurashtra Cement Ltd.

BSE: 502175 Sector: Industrials
NSE: SAURASHCEM ISIN Code: INE626A01014
BSE 00:00 | 20 Feb 37.05 0.05
(0.14%)
OPEN

36.50

HIGH

37.95

LOW

36.50

NSE 05:30 | 01 Jan Saurashtra Cement Ltd
OPEN 36.50
PREVIOUS CLOSE 37.00
VOLUME 5200
52-Week high 82.00
52-Week low 36.00
P/E 10.83
Mkt Cap.(Rs cr) 256
Buy Price 36.10
Buy Qty 50.00
Sell Price 37.75
Sell Qty 175.00
OPEN 36.50
CLOSE 37.00
VOLUME 5200
52-Week high 82.00
52-Week low 36.00
P/E 10.83
Mkt Cap.(Rs cr) 256
Buy Price 36.10
Buy Qty 50.00
Sell Price 37.75
Sell Qty 175.00

Saurashtra Cement Ltd. (SAURASHCEM) - Auditors Report

Company auditors report

ON STANDALONE FINANCIAL STATEMENTS

TO

THE MEMBERS OF

SAURASHTRA CEMENT LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of SaurashtraCement Limited ('the Company') which comprise the Balance Sheet as at March 312018 theStatement of Profit and Loss (including other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information (herein after referredto as 'standalone Ind AS financial statements').

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 preparationand presentation of these standalone Ind AS financial statements that give a true and fairview of the financial position financial performance including other comprehensiveincome cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)prescribed under Section 133 of the Act.

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 standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

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 Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including Ind AS of the stateof affairs of the Company as at March 312018 and its profit total comprehensive incomeits cash flows and the changes in equity for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended 31stMarch 2017 and the transition date opening balance sheet as at 1st April 2016included in these standalone Ind AS financial statement are based on the previouslyissued statutory financial statements prepared in accordance with the Companies(Accounting Standards) Rules 2006 audited by the predecessor auditor whose reports forthe year ended 31st March 2017 and 31st March 2016 dated 23rdMay 2017 and 23rd May 2016 respectively expressed an unmodified opinion onthose standalone financial statements which have been adjusted for the differences in theaccounting principles adopted by the Company on transition to the Ind AS which have beenaudited by us. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the AnnexureA a statement on the matters specified in the paragraphs 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 the Cash Flow Statement andthe Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March312018 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312018 from being appointed as a director in terms of Section 164 (2) of theAct.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B. Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements - Refer Note 32 to the standaloneInd AS financial statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There were no amount which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 312018.

For Manubhai & Shah LLP
Chartered Accountants
ICAI Firm Registration No. 106041W /W100136
K. C. Patel
Place: Mumbai Partner
Date: May 24 2018 Membership No. 30083

ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section of our report to the members of Saurashtra

Cement Limited of even date)

Report on the Companies (Auditor' Report) Order 2016 issued in terms of section 143(11) of the Companies Act

2013('the Act') of Saurashtra Cement Limited ('the Company')

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a program of verification to cover all the items of fixed assets ina phased manner of three years which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the program portion of thefixed assets were physically verified by the Management during the year. According toinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties otherthan self-constructed immovable properties (buildings) are held in the name of Company.The self-constructed Building having Gross book value of Rs. 2411.45 Lakhs (Net Block Rs.120.57 Lakhs) is on the land of Gujarat Maritime Board which has given license videagreement dated January 17 1997 to use the land for a period of 15 years from the date ofcompletion of construction being October 8 2000. This agreement is now pending forrenewal.

(ii) Physical verification of inventory has been conducted at reasonable intervals bythe management and no material discrepancies were noticed.

(iii) (a) According to information and explanations given to us the Company hadgranted interest-free unsecured deposit to one of its subsidiary in earlier years whichis a company covered in the register maintained under Section 189 of the Act. The Companyhas not granted any other loans secured or unsecured to firms Limited LiabilitiesPartnerships or other parties covered under Section 189 of the Act.

(b) As regards the said interest-free deposit to the subsidiary no other terms andconditions including repayment thereof have been stipulated and accordingly the questionof making any comment further regularity of the receipt of the principal or the recoveryof overdue amounts does not arise. Considering the amount involved and the fact that isgiven to a subsidiary and for the purpose of which it is given in our opinion the sameis not prima facie prejudicial to the interest of the Company.

(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 with respectto the loans and investments made. The Company has not given any guarantee or provided anysecurity in connection with the loan to any person or other body corporate andaccordingly the question of commenting on compliance with the provisions in respectthereof does not arise.

(v) The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2018 and therefore the provisions of the clause 3(v)of the Order are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof cement produced by the Company where pursuant to the rules made by the CentralGovernment of India the maintenance of cost records has been prescribed under sub-section(1) of Section 148 of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have not however made a detailedexamination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and based onrecords of the Company examined by us the Company has generally been regular indepositing undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Sales Tax Service Tax Customs Duty Excise Duty Value Added TaxCess Goods and Services Tax and other material statutory dues as applicable withappropriate authorities except Sales Tax Excise duty Service Tax Custom duty wherethere was some delay on few occasions.

According to the information and explanations given to us and the records of theCompany examined by us in our opinion no undisputed amounts payable were in arrears asat March 312018 for a period of more than six months from the date they became payable.As informed to us the provisions of the Employees' State Insurance Act are not applicableto the Company.

(b) According to the information and explanations given to us and the records of theCompany examined by us the details of disputed statutory dues of Income Tax Service TaxSales Tax Value Added Tax Excise Duty and other material statutory dues which have notbeen deposited as at March 312018 on account of dispute are as under:

Name of the Statute Nature of the Dues Amount (' In Lacs)* Year to which amount relates Forum where dispute is pending
Central Excise Act 1944 Excise Duty 174.05 2006-07 & 2007-08 High Court of Gujarat
636.31 2007-08 to 2013-14 CESTAT
16.58 2013-14 CESTAT
1.41 2013-14 & 2014-15 Assistant Commissioner Junagadh
9.24 2014-15 to 2016-17 Commissioner of Excise Appeals
405.57 2009-10 to 2013-14 CESTAT
The Finance Act 1994 Service Tax 2.10 2006-07 CESTAT
3.49 2006-07 to 2011-12 CESTAT
Customs Act 1962 Custom Duty 1022.95 2011-12 & 2012-13 CESTAT

*Amount Includes the amount of Interest to the extent provided by the Company in thebooks of account.

(viii) To the best of our knowledge and according to information and explanations givento us the Company has not defaulted in the repayment of loans to banks. The Company hasnot issued debentures. The Company has not taken any loans either from financialinstitution or Government or has not issued any debentures.

(ix) The Company has raised money by way of Term Loan from Bank and the proceeds wereapplied for the purposes for which those are raised. The Company has not raised moneys byway of initial public offer or further public offer (Including debt instruments).

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provision of Section 197 read with Schedule V to the 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 and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingrequirement under paragraph 3 (xiv) of the order is not applicable to the Company.

(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 any non-cashtransactions with Directors or persons connected to directors and hence provisions ofSection 192 of the Companies Act 2013 are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45IA of Reserve bankof India Act 1934.

For Manubhai & Shah LLP
Chartered Accountants
ICAI Firm Registration No. 106041W /W100136
K. C. Patel
Place: Mumbai Partner
Date: May 24 2018 Membership No. 30083

ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2(f) under "Report on Other Legal and RegulatoryRequirements" section of our report to the members of Saurashtra Cement Limited ofeven date)

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

In conjunction with our audit of the standalone Ind AS financial statements ofSaurashtra Cement Limited (The Company) as of and for the year ended March 312018 wehave also audited the internal financial controls over financial reporting of the Company.

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'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 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 ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 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. InherentLimitations 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 the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2018 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 Manubhai & Shah LLP
Chartered Accountants
ICAI Firm Registration No. 106041W /W100136
K. C. Patel
Place: Mumbai Partner
Date: May 24 2018 Membership No. 30083