Sri Chakra Cement Ltd.
|BSE: 518053||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE827D01020|
|BSE 05:30 | 01 Jan||Sri Chakra Cement Ltd|
|NSE 05:30 | 01 Jan||Sri Chakra Cement Ltd|
|BSE: 518053||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE827D01020|
|BSE 05:30 | 01 Jan||Sri Chakra Cement Ltd|
|NSE 05:30 | 01 Jan||Sri Chakra Cement Ltd|
To The Members of Sri Chakra Cement Limited Report on the Audit of the FinancialStatements
We have audited the financial statements of M/s Sri Chakra Cement Limited ("theCompany") which comprise the Balance Sheet as at 31 March 2020 and the Statement ofProfit and Loss (including other comprehensive income) the statement of changes in equityand the statement of Cash Flows for the year then 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 financial statements give the information required by theCompanies Act 2013("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 312020 and its loss total comprehensiveincome the changes in equity and cash flows for the year ended as on that date.
Basis for opinion
We conducted our audit in accordance with the standards on auditing specified undersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards arefurther described in the auditor's responsibilities for the audit of the financialstatements section of our report. We are independent of the Company in accordance with thecode of ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the code of ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
Emphasis of Matter: We draw attention to the financial results which describes thatbased on the current indications of future economic conditions. The company expects torecover the carrying amount of all its assets and revenue recognised. The Impact of theCovid- 19 pandemic may be different from that estimated as at the date of approval ofthese financial results and the company will continue to closely monitor any materialchanges to the future economic conditions. Our opinion is not modified in respect of thismatter.
Information other than the 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 A BusinessResponsibility Report Corporate Governance and Shareholder's information but does notinclude the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the IND-AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013("the Act") with respect to the preparation ofthese Financial Statements that give a true and fair view of the financial positionfinancial performance (including other comprehensive income) Cash Flows and changes inequity of the Company in accordance with the Indian Accounting Standards (Ind- AS)prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 and Companies ( Indian Accounting Standards) Rules 2016 asamended from time to time and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial Statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The board of directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3) (i) ofthe Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that my 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 auditor'sreport. 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
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 my reasonably be though to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonable be expected to out weight the public interestbenefits of such communication.
Report on other Legal and regulatory Requirements.
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of
India in terms of sub-section(ll) of Section 143 of the Act we give in the Annexure Ba statement on the matters specified in 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 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 IND-AS Financial Statements (including other comprehensive income) Cash FlowsStatement statement of changes in equity dealt with by this report are in agreement withthe books of account.
d) In our opinion the aforesaid IND-AS Financial Statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31March 2020 and taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of 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 A" Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrol over 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 in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the company to its directors during the year is in accordance withthe provisions of section 197 of the Act: and
h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The company has disclosed the impact of pending litigations on its financialposition in its financial statements - refer Note 21 to the financial statements;
ii. The company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
"Annexure A" to the Independent Auditor's Report of even date on theIND-AS Financial Statements of Sri Chakra Cement Limited. Report on the Internal FinancialControls under Clause (i) of Sub - section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls over financial reporting of Sri ChakraCement Limited ("the Company) as of March 31 2020 in conjunction with our audit ofthe IND-AS Financial Statements of the Company for the year ended on that date.
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 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.
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 control 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 judgement including the assessment of the risks ofmaterial misstatement of the IND-AS 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 Control 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 IND-AS Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company (2) Provide reasonableassurance that transactions are recorded as necessary to permit preparation of IND-ASFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the IND-ASFinancial Statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting.
Because of the inherent limitations of financial controls over financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
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 March 31 2020 based on"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."
Annexure B" to the Independent Auditor's Report of even date to the members ofSri Chakra Cement Limited on the IND-AS Financial Statements for the year ended 31stMarch 2020
Based on the audit procedures performed for the purpose of reporting a true and fairview on the IND-AS Financial Statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit we report that:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets have been physically verified by the management during the yearwhich in our opinion is reasonable having regard to the size of the company and nature ofits business. No material discrepancies between the books records and the physical fixedassets have been noticed.
c) The title deeds of Immovable properties are held in the name of the company.
ii) a) The management has conducted physical verification of inventory at reasonableintervals.
b) The discrepancies noticed on physical verification of the inventory as compared tobooks records which has been properly dealt with in the books of account were notmaterial.
iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly the provisions of clause 3(iii)(a) and 3(iii)(b) and3(iii)(c) of the Order are not applicable to the Company and hence not commented upon.
i) In our opinion and according to the information and explanations given to us thecompany had not given any loans guarantees or security or made investments under theprovisions of Section 185 and 186 of the Companies Act 2013.
ii) The company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
iii) We have broadly reviewed the books of account maintained by the Company pursuantto the order made by the Central Government for the maintenance of cost records underSub-section (1) of section 148 of the Companies Act 2013 in respect of the products ofthe Company and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained.
a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Goods and Service tax Duty of Customs Value added Tax Cess andother statutory dues with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of the above were inarrears as at March 31 2020 for a period of more than six months from the date on whenthey become payable.
b) The dues outstanding in respect of income-tax sales-tax or service tax or duty ofcustoms or duty of excise or value added tax and cess that have not been deposited onaccount of any dispute are as follows:
v) The Company has not taken any loan either from banks financial institutions or fromthe government and has not issued any debentures. Hence any question of default inrepayment of dues does not arise.
vi) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer (including debt instruments) or term Loans. Accordingly theprovisions of clause 3(ix) of the Order are not applicable to the Company and hence notcommented upon.
vii) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
viii) In our opinion and according to the information and explanations given to us thecompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
ix) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
x) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theIND-AS Financial Statements as required by the applicable accounting standards.
xi) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
xii) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3(xv) ofthe Order are not applicable to the Company and hence not commented upon.
xiii) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.