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Saurashtra Cement Ltd.

BSE: 502175 Sector: Industrials
NSE: SAURASHCEM ISIN Code: INE626A01014
BSE 00:00 | 20 Mar 51.77 -0.22
(-0.42%)
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NSE 05:30 | 01 Jan Saurashtra Cement Ltd
OPEN 53.10
PREVIOUS CLOSE 51.99
VOLUME 36791
52-Week high 77.40
52-Week low 46.90
P/E
Mkt Cap.(Rs cr) 364
Buy Price 0.00
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Sell Price 0.00
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OPEN 53.10
CLOSE 51.99
VOLUME 36791
52-Week high 77.40
52-Week low 46.90
P/E
Mkt Cap.(Rs cr) 364
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Saurashtra Cement Ltd. (SAURASHCEM) - Auditors Report

Company auditors report

To

The Members of Saurashtra Cement Limited

Report on the Audit of Standalone Financial Statements

We have audited the accompanying standalone financial statements ofSaurashtra Cement Limited (‘the Company?) which comprise the Balance Sheet asat March 31 2022 the Statement of Profit and Loss (including other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation (herein after referred to as ‘standalone financial statements?).

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 2022 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 of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in theAuditor?s Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI?s Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the standalonefinancial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter Auditor?s Response
Recognition of Deferred Tax Assets
The Company has recognized Deferred Tax Assets on tax credit (MAT) which involves significant judgment to determine whether there will be reasonable certainty of taxable income against which the tax credit will be utilized. Our audit procedures include the following substantive procedures:
We have considered this matter to be key audit matter considering the materiality of amount of tax credit significant judgement involved in estimating future taxable income against which such assets can be realized. - Obtained details of completed tax assessments up to year ended March 31 2022 from management.
Refer Note Nos 18 and 41 to the Standalone Financial Statements. - We involved our internal experts to review management?s underlying assumptions regarding availability of tax credit in the light of the provisions of the Income Tax Act 1961.
- We evaluated the estimates of profitability made by the management on the basis of which it is considered that the company will have sufficient taxable income against which tax credit will be utilized.
- Verified that recognition of such assets is made in accordance with Ind AS 12 "Income Taxes".
Impairment of Capital Work in Progress (CWIP) Our audit procedures include the following substantive procedures:
The company has incurred the expenditure of Rs. 8107.17 Lakhs on expansion project in earlier years. - Obtained the details of assets and expenditure incurred in respect of expansion project.
The expenditure comprised of cost of imported plant & machineries (including related stores and spares) civil work and pre-operative expenses (including interest capitalized). Balance of Rs. 7892.10 Lakhs on March 31 2022 is shown under Capital Work in Progress in balance sheet. The project was suspended in the year 2005. However the company intends to install the assets at a later date depending upon the market condition. For this purpose company has got the evaluation and valuation of assets done by a project consultant. - Carried out physical verification of the assets and assessed their condition.
Based on the report of the consultant the fair value of assets is estimated at Rs. 4473.46 lakhs. This value is higher than the carrying value at Rs. 3294.32 lakhs of these assets and the company has continued provision for impairment of Rs. 4597.78 lakhs as at March 31 2022. - Discussed with senior management about their plan for utilization of the assets at a later date and relevant documents in relations thereto.
We have considered this matter to be key audit matter considering the significant judgement involved in valuation of assets for the purpose of determining impairment and materiality of amount involved . - Perused the valuation report of the valuation expert and reviewed underlying assumptions on the basis of which valuation has been made.
Refer Note No 2 to the Standalone Financial Statements. - Verified the working of the amount of provision made for impairment of the assets.
- Verified that accounting treatment / disclosure in respect of impairment of assets is in accordance with Ind AS 36 "Impairment of Assets".
Revenue recognition - Estimation of incentives to customers Our audit procedures include the following substantive
Revenue from sale of products is measured net - of discounts incentives rebates etc. given to the customers on the Company?s sales. Obtained an understanding from the management with regard to controls relating to recording of incentives and period end outstanding value of performance obligations and tested the operating effectiveness of such controls.
The Company sells its products through various channels such as dealers and commission agents; (customers) and provides incentives to them in the - form of rebate discount etc. under various marketing schemes. Tested the inputs used in the estimation of revenue in context of incentives.
As per the accounting policy of the Company the revenue is recognised upon transfer of control of goods - to the customer and net of rebate/discount/incentives based on the scheme. This requires an estimation of - the revenue taking into consideration these incentives. Ensured the completeness of liabilities recognised by evaluating the parameters for the schemes.
Therefore there is a risk of revenue being misstated as - a result of variations in the assessment of discounts incentives and rebates. Verified the authorisation for schemes for incentives.
With regard to the determination of revenue the management is required to make significant estimates in respect of the followings: Analysed past trends by comparing actuals with the estimates of earlier periods.
- The incentives linked to sales which will be given to the customers pursuant to schemes offered by the Company; Verified that accounting treatment is in accordance with Ind AS 115 "Revenue from Contracts with Customers".
- Benefits offered by the dealers to the ultimate consumers is also considered on behalf of the company.
The matter has been determined to be a key audit matter in view of volume and complexities in working as well as the involvement of significant estimates by the management.
Refer Note Nos 22 and 25 to the Standalone Financial Statements.
Acquisition of Paint Business Our audit procedures include the following substantive procedures:
The Company has purchased an undertaking of the Paint Business of M/s Snowcem Paints Private Limited for a total consideration of Rs. 5411.00 Lakhs on slump sale basis and as a going concern including its manufacturing facilities licenses & permissions various brands in India and overseas Trademarks and associated IPR distribution and supply chain network etc. by executing Definitive Agreement (DA) on April 7 2021. The purchase was effective from May 1 2021.
Accounting for the acquisition has involved judgment in order to: - Examined the terms and conditions of the Definitive
- identify and measure the fair value of the assets acquired; Agreement (DA) in connection with the acquisition of Paint Business.
- allocate the purchase consideration between assets and goodwill; - Tested the completeness and existence of the assets acquired by comparison to DA through discussions with the management.
- the identification and valuation of intangible assets acquired such as Trademark Licences and Software. - We assessed the Company?s determinations of fair values for assets acquired and the methods used to value the underlying assets by:
Business acquisition being significant event during the year and involvement of significant judgement for valuation of assets the matter is considered as key audit matter. O Reading the valuation reports prepared by the appointed external valuers.
Refer Note No. 44 to the Standalone Financial Statements. O Evaluating the competence objectivity and integrity of the appointed external valuation specialists.
O Involving our internal valuation specialists in assessing the appropriateness of the methods used to determine the fair values of the intangible assets including assumptions such as the discount rates applied.
- Evaluated the accounting treatment and appropriateness of adequate disclosures in accordance with the applicable Ind AS.

Information Other than the Financial Statements and Auditor?sReport Thereon

The Company?s Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Board?s Report including Annexures to Board?s Report andShareholder?s Information but does not include the financial statements and ourauditor?s report thereon. Our opinion on the financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management?s Responsibility for the Standalone FinancialStatements

The Company?s Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these Standalone Financial Statements that give a true and fair view ofthe financial position financial performance total comprehensive income changes inequity and cash flows of the Company in accordance with the Ind AS and accountingprinciples generally accepted in India. 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 implementation and maintenance ofaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror. In preparing the Standalone Financial Statements management is responsible forassessing the Company?s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. The Board of Directors are alsoresponsible for overseeing the Company?s financial reporting process

Auditor?s Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor?s report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Financial Statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

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

- Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management?s use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany?s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor?s report to therelated disclosures in the 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 auditor?s report. However future events or conditions may cause theCompany to cease to continue as a going concern.

- Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor?s report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. 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 Statement of Changes inEquity and the Statement of Cash Flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the IndianAccounting Standards prescribed 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 March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 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 A. Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company?s internal financial controlsover financial reporting.

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 we reportthat in our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its Managing and Executive Directorsduring the year is in accordance with the 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 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 Financial statements – Refer Note No 34 to the StandaloneFinancial statements.

(ii) The company did not have any long-term contracts including derivative contracts.

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2022.

(iv) (a) The management has represented that to the best of its knowledge and beliefno funds (which are material either individually or in the aggregate) have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the company to or in any other person or entity including foreignentity ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of thecompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

(b) The Management has represented that to the best of its knowledge and belief nofunds (which are material either individually or in the aggregate) have been received bythe Company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b) above contain any material misstatement.

(v) The final dividend proposed in the previous year declared and paid by the Companyduring the year is in accordance with Section 123 of the Act as applicable. The companyhas not declared the interim or final dividend for the current year.

2. As required by the Companies (Auditor?s Report) Order 2020("the Order") issued by the Central Government in terms of section 143 (11) ofthe Act we give in the Annexure B a statement on the matters specified in theparagraphs 3 and 4 of the order.

For Manubhai & Shah LLP
Chartered Accountants
ICAI Firm Registration No. 106041W /W100136
(K C Patel)
Partner
Place: Ahmedabad Membership No. 30083
Date: May 23 2022 UDIN: 22030083AJLQXN9586

ANNEXURE - A

TO THE INDEPENDENT AUDITOR?S REPORT

(Referred to in paragraph 1(f) under "Report on Other Legal andRegulatory Requirements" section of our report to the members of Saurashtra CementLimited of even date)

Report on the Internal Financial Controls over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

In conjunction with our audit of the Standalone Financial statements ofSaurashtra Cement Limited (‘the Company?) as of and for the year ended March 312022 we have also audited the internal financial controls over financial reporting of theCompany.

Management?s Responsibility for Internal Financial Controls

The Company?s management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting 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 andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany?s policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor?s Responsibility

Our responsibility is to express an opinion on the Company?sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in 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 ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects. Our audit involves performing procedures to obtainaudit evidence about the adequacy of the internal financial controls system over financialreporting and their operating effectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor?s judgment includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company?s internalfinancial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company?s internal financial control over financial reporting isa process 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 controlover financial reporting includes those policies and procedures that:

1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and

3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company?s assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting 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 overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial control system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2022 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For Manubhai & Shah LLP
Chartered Accountants
ICAI Firm Registration No. 106041W /W100136
(K C Patel)
Partner
Place: Ahmedabad Membership No. 30083
Date: May 23 2022 UDIN: 22030083AJLQXN9586

ANNEXURE – B

TO THE INDEPENDENT AUDITOR?S REPORT

(Referred to in paragraph 2 under "Report on Other Legal andRegulatory Requirements" section of our report to the members of Saurashtra CementLimited of even date)

Report on the Companies (Auditor? Report) Order 2020 issued interms of section 143 (11) of the Companies Act 2013(‘the Act?) of SaurashtraCement Limited(‘the Company?)

To the best information and according to the explanations provided tous by the Company and the books of account and records examined by us in the normal courseaudit we state that (i) (a)

A. The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment (PPE)Capital work in progress and relevant details of right of use Assets.

B. The Company has maintained proper records showing full particularsof Intangible Assets.

(b) The Company has a programme of verification to cover all the itemsof PPE in a phased manner of three years which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. Pursuant to the programportion of the fixed assets were physically verified by the Management during the year. Nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company provided to us we report thatthe title in respect of self-constructed buildings and title deeds of all other immovableproperties (other than properties where the company is the lessee and the lease agreementsare duly executed in favour of the lessee) disclosed in the financial statements are heldin the name of the Company as at the balance sheet date. In respect of immovableproperties that have been taken on lease and disclosed in the financial statements (asproperty plant and equipment and right-of use asset) as at the balance sheet date thelease agreements are duly executed in favour of the Company except for the following:

Description of properties Gross carrying value as at Balance Sheet date Held in name of Whether promoter director or their relative or employee Period held Reason for not being held in name of Company
Leasehold Land admeasuring 12455 sq. mt. at Gotan Dist. Nagaur Rajasthan. Rs. 122.10 Lakhs Snowcem Paints Private Limited No Less than 1 year Approval for transfer of land from District Collector Nagaur was pending. Transfer deed is executed and registered on April 21 2022.

(d) The Company has not revalued any of its property plant andequipment (including Right of Use assets) and intangible assets during the year.

(e) According to the information and explanations given to us and onthe basis of our examination of the records of the Company no proceedings have beeninitiated during the year or are pending against the Company as at 31 March 2022 forholding any benami property under the Benami Transactions (Prohibition) Act 1988 (asamended in 2016) and rules made thereunder.

(ii) (a) The inventories were physically verified during the year bythe Management at reasonable intervals. In our opinion and according to the informationand explanations given to us the coverage and procedure of such verification by theManagement is appropriate having regard to the size of the Company and the nature of itsoperations. No discrepancies of 10% or more in aggregate for each class of inventorieswere noticed on such physical verification of inventories when compared with books ofaccount.

(b) The Company has been sanctioned working capital limits in excess ofRs. 5 crores in aggregate during the year from banks on the basis of security ofcurrent assets. The Company has filed quarterly returns or statements with such bankswhich are in agreement with the books of account other than those as set out below:

Rs. in lakhs

Quarter ended Name of bank Particulars of Securities provided Amount as per books of account (Excluding Paint Division) Amount as reported in the quarter end statement Amount of difference Reason for differences as explained by the management
June 30 2021 HDFC Bank Limited Inventories and Trade Receivables 10062.88 9551.86 (511.02) i. Stock under letter of credit receivable from related party debtors for other operating revenue and outstanding debtors for more than 120 days are not considered by the bank for calculation of drawing power and hence not reported by the Company.
September 30 2021 HDFC Bank Limited Inventories and Trade Receivables 8625.81 8297.44 (328.37) ii. Change in value / amount after submission of statement to Bank due to Limited Review.
December 31 2021 HDFC Bank Limited Inventories and Trade Receivables 14321.85 10456.91 (3864.94)
March 31 2022 HDFC Bank Limited Inventories and Trade Receivables 11987.52 12041.07 53.55

Refer Note No. 19.2 of the financial statements.

(iii) During the year the Company has not made any investment inprovided any guarantee or security to companies firms limited liability partnerships orany other parties. During the year the Company has granted interest free unsecured loansto employees in respect of which:

a) (i) Aggregate amount of loan provided to subsidiary is Rs. Nil and balanceoutstanding at the balance sheet date is Rs. Nil.

(ii) During the year aggregate amount of loan provided to employees is Rs.11.86 lakhsand balance outstanding at the balance sheet date is Rs.14.64 Lakhs.

b) The investments made and the terms of the grant of all loans are not prejudicial tothe company?s interest.

The company has not provided any guarantee or given security.

c) In respect of loans granted by the Company the schedule of repayment of principalhave been stipulated and the repayments thereof have been regular as per stipulation.

d) In respect of loans granted by the Company there is no overdue amount remainingoutstanding as at the balance sheet date.

e) No loan granted by the Company which has fallen due during the year has beenrenewed or extended or fresh loans granted to settle the overdues of existing loans givento the same parties.

f) The Company has not granted any loans or advances in the nature of loans eitherrepayable on demand or without specifying any terms or period of repayment during theyear. Hence reporting under clause 3(iii)(f) of the order is not applicable.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of sections 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 or amounts which are deemed to be depositsduring the year and does not have any unclaimed deposits as at March 31 2022. Thereforethe reporting requirement under clause 3(v) of the Order is not applicable.

(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 been regular in depositingundisputed statutory dues including Provident Fund Employees? State InsuranceIncome Tax Customs Duty income tax deducted at source Goods and Service Tax and othermaterial statutory dues as applicable.

There were no undisputed amounts payable in respect of Goods and Service Tax ProvidentFund Employees? State Insurance Income Tax Sales Tax Service Tax duty ofCustoms duty of Excise Value Added Tax Cess and other material statutory dues as atMarch 31 2022 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and 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 on account of a dispute as at 31st March 2022 are as follows:

Name of statute Nature of dues Amount (Rs. in lakhs) Year to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Excise Duty 174.05 2006-07 & 2007-08 High Court of Gujarat
952.69 2007-08 to 2016-17 CESTAT
405.57 2009-10 to 2013-14 CESTAT
Customs Act 1962 Custom Duty 524.48 2011-12 & 2012-13 CESTAT
Mines and Minerals (Development and Regulation) Act 1957 Gujarat Stamp Act 1958 Royalty 15.12 2004-05 to 2006-07 High Court of Gujarat
355.83 2003-04 to 2014-15 High Court of Gujarat
Stamp Duty 28.02 2013-14 High Court of Gujarat

(viii) (a) There were no transactions relating to previously unrecorded income thatwere surrendered or disclosed as income in the tax assessments under the Income Tax Act1961 (43 of 1961) during the year.

(ix) (a) In our opinion the company has not defaulted in repayment of loans or otherborrowings or in the payment of interest thereon to any lender during the year.

(b) The Company has not been declared wilful defaulter by any bank or financialinstitution or government or any government authority.

(c) To the best of our knowledge and belief in our opinion term loans availed by theCompany were applied by the Company during the year for the purposes for which the loanswere obtained.

(d) On an overall examination of the financial statements of the Company funds raisedon short-term basis have prima facie not been used during the year for long-termpurposes by the Company.

(e) On an overall examination of the financial statements of the Company the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its subsidiary.

(f) The Company has not raised loans during the year on the pledge of securities heldin its subsidiary.

(x) (a) The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Hence reporting under clause(x)(a) of the Order is not applicable.

(b) During the year the Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully or partly or optionally). Hencereporting under clause (x)(b) of the Order is not applicable to the Company.

(xi) (a) To the best of our knowledge no fraud by the Company or on the Company isnoticed or reported during the year.

(b) To the best of our knowledge no report under sub-section (12) of section 143 ofthe Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies(Audit and Auditors) Rules 2014 with the Central Government during the year and upto thedate of this report.

(c) As represented to us by the Management there were no whistle blower complaintsreceived by the Company during the year.

(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 Sections 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) (a) In our opinion the Company has an internal audit system commensurate with thesize and the nature of its business.

(b) We have considered the internal audit reports issued to the Company during theyear and covering the period upto Month of March 2022.

(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) (a) The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.

Hence reporting under clause (xvi)(a) (b) and (c) of the Order is not applicable.

(b) The Group does not have any CIC as part of the group and accordingly reportingunder clause (xvi)(d) of the Order is not applicable.

(xvii) The Company has not incurred cash losses during the financial year covered byour audit and the immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors of theCompany during the year.

(xix) On the basis of the financial ratios ageing and expected datesof realization of financial assets and payment of financial liabilities (Asset LiabilityMaturity (ALM) pattern) other information accompanying the financial statements and ourknowledge of the Board of Directors and Management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit reportindicating that Company is not capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of one year from the balance sheetdate. We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

(xx) The Company has fully spent the required amount towards CorporateSocial Responsibility (CSR) and there are no unspent CSR amount for the year requiring atransfer to a Fund specified in Schedule VII to the Companies Act or special account incompliance with the provision of sub-section (6) of section 135 of the said Act.Accordingly reporting under clause (xx) of the Order is not applicable for the year.

For Manubhai & Shah LLP
Chartered Accountants
ICAI Firm Registration No. 106041W /W100136
(K C Patel)
Partner
Place: Ahmedabad Membership No. 30083
Date: May 23 2022 UDIN: 22030083AJLQXN9586

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