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Shree Cement Ltd.

BSE: 500387 Sector: Industrials
NSE: SHREECEM ISIN Code: INE070A01015
BSE 00:00 | 21 Jun 28173.15 140.85
(0.50%)
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28000.00

HIGH

28294.90

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27766.80

NSE 00:00 | 21 Jun 28225.35 179.55
(0.64%)
OPEN

27878.05

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28500.00

LOW

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OPEN 28000.00
PREVIOUS CLOSE 28032.30
VOLUME 579
52-Week high 32050.00
52-Week low 18214.40
P/E 43.97
Mkt Cap.(Rs cr) 101,649
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 28000.00
CLOSE 28032.30
VOLUME 579
52-Week high 32050.00
52-Week low 18214.40
P/E 43.97
Mkt Cap.(Rs cr) 101,649
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shree Cement Ltd. (SHREECEM) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OF SHREE CEMENT LIMITED

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Shree CementLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2020 the Statement of Profit and Loss the Statement of Changes in Equity andStatement of Cash Flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information.

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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2020 and its profit its cash flows and the changes in equityfor the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial 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 thefinancial statements under the provisions of the Companies Act 2013 and the rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

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.

Description of Key Audit Matters:

Key audit matters How our audit addressed the key audit matter
Revenue from sale of goods
The Company recognizes revenues when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods. Our audit procedures included the following:
• Considered the appropriateness of Company's revenue recognition policy and its compliance in. terms of Ind AS 115 'Revenue from contracts with customers';
In determining the sales price the Company considers the effects of rebates and discounts. • Assessed the design and tested the operating effectiveness of internal controls related to sales and related rebates and discounts;
The terms of sales arrangements including the timing of transfer of control the nature of discount and rebates arrangements and delivery specifications create complexity and judgment in determining sales revenues and accordingly it was determined to be a key audit matter in our audit of the standalone financial statements.
• Performed sample tests of individual sales transaction and traced to sales invoices sales orders and other related documents. In respect of the samples selected tested that the revenue has been recognized as per the sales agreements;
• Assessed the relevant disclosures made in the Standalone financial statements.
Litigation Claims and Contingent Liabilities:
The Company is exposed to a variety of different laws Our audit procedures included the following:
regulations and interpretations thereof which encompasses taxation and legal matters. In the normal course of business provisions and contingent liabilities may arise from legal proceedings including regulatory and other Governmental proceedings constructive obligations as well as investigations by authorities and commercial claims. • We understood the processes evaluated the design and implementation of controls and tested the operating effectiveness of the Company's controls over the recording and re-assessment of uncertain legal positions claims and contingent liabilities;
Based on the nature of regulatory and legal cases management applies significant judgment when considering whether and how much to provide for the potential exposure of each matter. These estimates could change substantially over time as new facts emerge as each legal case or matters progresses. • We held discussions with the person responsible for legal and compliance to obtain an understanding of the factors considered in classification of the matter as 'probable' 'possible' and 'remote';
Given the different views possible basis the interpretations complexity and the magnitude of the potential exposures and the judgment necessary to determine required disclosures this is a key audit matter. • We read the correspondence from Court authorities and considered legal opinion obtained by the Company from external law firms to challenge the basis used for provisions recognised or the disclosures made in the standalone financial statements;
• For those matters where Company concluded that no provision should be recorded we also considered the adequacy and completeness of the Company's disclosures made in relation to contingent liabilities.

Information Other than the Standalone Financial Statements and Auditors' Report thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditors' report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon. In connection with our audit of thestandalone financial statements our responsibility is to read the other information andin doing so consider whether the other information is materially inconsistent with thestandalone financial statements or our knowledge obtained during the course of our auditor otherwise appears to be materially misstated. If based on the work we have performedwe conclude that there is a material misstatement of this other information we arerequired to report that fact. We have nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) prescribed under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

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

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

• Materiality is the magnitude of misstatements in the Standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 & Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of section 143 (11) of the Act we givein the Annexure 'A' a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.

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 purpose 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 andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.

(d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards specified under section 133 of the Act read with rule 7 ofthe Companies (Accounts) Rules 2014.

(e) On the basis of written representations received from the directors as on 31stMarch 2020 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in termsof section164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure 'B'.

(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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

(h) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 34 to the standalonefinancial statements;

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

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

For Gupta & Dua
Chartered Accountants
Firm's Registration No. 003849N
Mukesh Dua
Partner
Place : New Delhi Membership No.085323
Date : 8th May 2020 UDIN: 20085323AAAABT9464

 

Annexure 'A' to the Independent Auditors' Report

(Referred to in Paragraph 1 under the heading “Report on other legal andregulatory requirements” of our report of even date)

1) In respect of its fixed assets:

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

(b) According to the information and explanations given to us fixed assets have beenphysically verified by the management in a phased periodical manner which in our opinionis reasonable having regard to the size of the Company and nature of its assets. Nomaterial discrepancies were noticed on such verification.

(c) Based upon the audit procedure performed and according to the records of theCompany the title deeds of all the immovable properties are held in the name of theCompany.

2) In respect of its inventories:

(a) The management has physically verified the inventories. In our opinion thefrequency of verification is reasonable.

(b) The discrepancies noticed on verification between the physical stocks and the bookrecords were not material and such discrepancies have been properly dealt with in thebooks of accounts.

3) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theAct.

4) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantees or security to the partiescover under section 185 of the Act. In respect of investments made by the Company theprovisions of section 186 of the Act have been complied with.

5) According to the information and explanations given to us the Company has notaccepted any deposit from the public during the year in terms of the provisions of section73 to 76 of the Act or any other relevant provisions of the Companies Act 2013 and therules made thereunder.

6) We have broadly reviewed the accounts and records maintained by the Company pursuantto the Companies (Cost Records and Audit) Rules 2014 read with Companies (Cost Recordsand Audit) Amendment Rules 2014 speci ed by the Central Government under Section 148 ofthe Act and are of the opinion that prima facie the prescribed Cost records have beenmade and maintained. We have however not made a detailed examination of the records witha view to determine whether they are accurate or complete.

7) (a) According to the information and explanations given to us the Company hasgenerally been regular in depositing with appropriate authorities undisputed statutorydues including Provident Fund Employees' State Insurance Income Tax Custom Duty CessGoods and Service Tax and other material statutory dues applicable to it. According to theinformation and explanations given to us no undisputed amounts payable in respect of theaforesaid dues were outstanding as at 31st March 2020 for a period of more than sixmonths from the date they become payable.

(b) According to the information and explanations given to us the details of disputedamount of Income Tax Value Added Tax Sales Tax Goods and Service Tax Excise DutyCustom Duty and Service Tax not deposited by the Company are as follows:

Name of the statute Nature of the dues Amount under dispute not yet deposited Period to which the amount relates Forum where dispute is pending
(` in Crore)
(A) Excise and Service Tax
Central Excise Act 1944 Cenvat credit on Inputs and capital goods 0.58 2005-06 to 2007-08 & 2013-14 Commissioner (Appeals) of Central Excise and Service Tax
Cenvat credit on capital goods 0.03 2009-10 Rajasthan High Court Jaipur
Finance Act 1994 Credit of Service Tax 1.21 2013-14 to 2017-18 Commissioner (Appeals) of Central Excise and Service Tax
Credit of Service Tax 7.20 2011-12 & 2015-16 to 2017-18 Customs Excise & Service Tax Appellate Tribunal (CESTAT) New Delhi
Total (A) 9.02
(B) Customs Duty
Customs Act 1962 Custom Duty Valuation 15.47 2008-09 to 2009-10 & 2012-13 Customs Excise & Service Tax Appellate Tribunal (CESTAT)
0.29 2009-10 Commissioner (Appeals)
Total (B) 15.76
(C) Sales Tax
Central Sales Tax Act 1956 Partial Exemption Claim including interest 2.24 1998-99 to 2000-01 Rajasthan High Court Jodhpur
Central Sales Tax Act 1956 Interest demand on CST 14.98 2007-08 Tax Board Ajmer
Rajasthan VAT Act 2003 Interest demand on VAT 7.36 2007-08 Tax Board Ajmer
Bihar VAT Act 2005 Input VAT Credit 0.12 2016-17 Joint Commissioner of Commercial Taxes (Appeals) Central Division Patna
Uttrakhand VAT Act 2005 Concessional tax diesel used for raw material transportation 0.44 2017-18 to 2018-19 Joint Commissioner of Commercial Taxes (Appeals) Haridwar
Total (C) 25.14
(D) Goods and Service Tax
Goods and Service Tax Act 2017 Input tax credit of SGST availed 0.61 2017-18 Additional Commissioner (Appeals) Patna
Total (D) 0.61
Grand Total (A+B+C+D) 50.53

8) Based on the information and explanations given to us we are of the opinion thatthe Company has not defaulted in repayment of loans and borrowings to the financialinstitutions banks or debenture holders. The Company did not have any outstanding loansand borrowings from government during the year.

9) The company has not raised any money by way of initial public offer further publicoffer (including debt instruments) during the year. In our opinion the term loans havebeen applied for the purpose for which they were obtained.

10) In our opinion and according to the information and explanations given to us nofraud on or by the Company by its officers or employees has been noticed or reportedduring the year.

11) In our opinion the managerial remuneration has been paid or provided in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV to the Act.

12) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company.

13) In our opinion all transactions with the related parties are in compliance withsections 177 and 188 of the Act where applicable and the details have been disclosed inthe Standalone Financial Statements as required by the applicable Indian accountingstandards.

14) According to the information and explanations given by the management the Companyhas complied with provisions of section 42 of the Companies Act 2013 in respect of theshares issued through Qualified Institutional Placement during the year. According to theinformation and explanations given by the management we report that the amount raisedwere not required for immediate utilization hence invested in line with interim use offund disclosed in the Placement Document. The Company did not make preferential allotment/private placement of fully or partly convertible debentures during the year.

15) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company we report that the Company has notentered into any non- cash transaction with directors or persons connected with himtherefore reporting under clause 3(xv) of the Order are not applicable.

16) In our opinion the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For Gupta & Dua
Chartered Accountants
Firm's Registration No. 003849N
Mukesh Dua
Partner
Place : New Delhi Membership No.085323
Date : 8th May 2020 UDIN: 20085323AAAABT9464

Annexure 'B' to the Independent Auditors' Report

(Referred to in Paragraph 2(f) under the heading “Report on other legal andregulatory requirements” of our report of even date)

Report on the Internal Financial Controls under clause (i) of sub section 3 of section143 of the Companies Act 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of ShreeCement Limited (“the Company”) as of 31st March 2020 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

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

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's 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.

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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020 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 Gupta & Dua
Chartered Accountants
Firm's Registration No. 003849N
Mukesh Dua
Partner
Place : New Delhi Membership No.085323
Date : 8th May 2020 UDIN: 20085323AAAABT9464