To the Members of Star Cement Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL
We have audited the accompanying Standalone Financial Statements of Star Cement Limited(the "Company") which comprise the Balance Sheet as at 31st March 2021 theStatement of Profit and Loss (including Other Comprehensive Income) Statement of Changesin Equity and Statement of Cash Flows for the year then ended and a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2021 the profit and other comprehensive incomechanges in equity and the cash flows for the year then ended.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone 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 and the relevantprovisions of the Act and Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Emphasis of Matter
We draw your attention to Note 45 to the Statement which states that the Companyhas charged off the differential Excise duty of Rs 2931.36 Lakhs as an Exceptional item.The same was booked as income in earlier years based on an order passed by High Court ofGuwahati as per the judgement of Supreme Court. Subsequently the Apex Court reversed itsOrder and certain parties had filed review petitions pending which the Company hadtreated it as a Contingent liability. On rejection of such review petitions the Companyhas charged off the same.
Our opinion is not modified in respect of this matter.
We draw your attention to Note no. 48 to the Statement which explains theuncertainties and the management's assessment of the financial impact due to the COVID-19pandemic situation for which a definitive assessment of the impact is highly dependentupon circumstances / developments as they evolve in the subsequent periods. Our opinion isnot modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report:
|S. Key Audit Matters No. ||Auditor's Response |
|1 Revenue Recognition (Refer Note no. 27 to the Standalone Financial Statements and Note 1.20 (A) of the significant accounting policies of the Standalone Financial Statements) ||Our audit procedures to assess the appropriateness of revenue recognised included: |
|Revenue is recognised when the control of the underlying products has been transferred to customer along with the satisfaction of the Company's performance obligation under a contract with customer. ||- Obtaining an understanding of and assessing the design implementation and operating effectiveness of the Company's key internal controls over the revenue recognition process. |
|The Company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognised before completion of the performance obligation. Revenue is recognised based on the price specified in the contract net of the estimated volume discounts. ||- Assessing the appropriateness of the Company's accounting policies relating to discounts incentives rebates etc by comparing with applicable accounting standards |
|Accumulated experience is used to estimate and provide for the discounts using the expected value method and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. Due to the Company's presence across different marketing regions within the country and the competitive business environment the estimation of the various types of discounts and incentive schemes to be recognised based on sales made during the year is material and considered to be complex and judgmental. There is a risk of revenue being affected as a result of variations in assessment of discounts incentives and rebates recognised on sales. ||- Obtaining and inspecting on a sample basis supporting documentation for discounts incentives and rebates recorded and disbursed during the year as well as credit notes issued after the year end to determine whether these were recorded appropriately. |
|There is a significant risk of misstatement due to risk related to inappropriate recognition of the revenue as a result of faulty estimations over discounts incentives and rebates and hence this was determined to be a key audit matter in our audit of the Standalone financial statements ||- Examination of significant contracts entered into close to year end to ensure revenue recognition is made in the correct period. |
| ||- Obtaining management's calculations for discounts incentives and rebates accruals under applicable schemes on a sample basis and comparing the accruals made with the approved schemes. |
| ||- Comparing the historical trend of payments and reversal of discounts incentives and rebates to provisions made to determine the appropriateness of current year provisions. |
| ||- Examining manual journals posted to discounts rebates and incentives to identify unusual or irregular items. |
| ||Our testing as described above showed that revenue discount incentive and rebates have been recorded in accordance with the terms of applicable contracts and accounting policy in this area. |
|2 Related Party Transactions (Refer Note no. 46 to the Standalone Financial Statements) ||Our audit procedures in relation to the evaluation and disclosure of related party transactions included: |
|The Company operates within a conglomerate of group entities. The subsidiaries operate in the line of business as the Company. These group companies operate in the same sector and have significant transactions amongst themselves during the year. We identified the accuracy and completeness of disclosure of related party transactions as set out in respective notes to the Standalone Financial Statements as a key audit matter due to: ||- Obtaining an understanding of the Company's policies and procedures in respect of the capturing of related party transactions and how management ensures all transactions and balances with related parties have been disclosed in the Standalone Financial Statements. |
| the significance of transactions with related parties during the year ended 31st March 2021 necessitated to be at arm's length significant cash flow between parties intercompany contracts and common management amongst other things. ||- Obtaining an understanding of the Company's policies and procedures in respect of evaluating arms-length pricing and approval process by the audit committee and the board of directors. We have also reviewed the Transfer Pricing Report of the Company in this regard. |
| the fact that Related party transactions are subject to the compliance requirement under the Companies Act 2013 and SEBI (LODR) 2015. ||- Review of confirmation and reconciliation process and analytical review of various account balances and transaction balances amongst other things. |
| ||- Assessing management evaluation of compliance with the provisions of Section 177 and Section 188 of the Act and SEBI (LODR) 2015. |
| ||- Evaluating the disclosures through reading of statutory information books and records and other documents obtained during the course of our audit. |
| ||Our examination has showed that the Related Party Transactions have been evaluated and disclosed appropriately. |
|3 income Tax Provisions: ||Our audit procedures to assess the appropriateness of income tax provisions made included: |
|(Refer Note no. 7 to the Standalone Financial Statements) ||- Analysing the current and deferred tax calculations for compliance with the relevant tax legislation |
|This matter has been identified as a Key Audit Matter due to the significant level of management judgement required in the estimation of provision for income taxes including any write-back of provisions due to the following factors: ||- Evaluating management's assessment of the estimated manner in which the timing differences including the recoverability of the deferred tax assets would be realised by comparing this to evidence obtained in respect of other areas of the audit including cash flow forecasts business plans minutes of directors' meetings etc |
| The Company operates in a complex tax jurisdiction and is subject to periodic challenges by tax authorities on various matters relating to claims for tax exemptions / deductions. ||- Testing uncertain tax positions including understanding processes evaluation of design and implementation of controls and testing of operating effectiveness of the Company's controls over provision for taxation assessment of uncertain tax positions and disclosure of contingencies. |
| Significant judgement involved in determining the possible outcome of uncertain tax positions consequently having an impact on related accounting and disclosures in the financial statements. ||- Discussing with appropriate senior management personnel independently assessing management's estimate of the possible outcome of the disputed cases; and evaluating the management's underlying key assumptions in estimating the tax provisions. |
| Provision for income tax and deferred tax involves interpretation of various rules and law. It also involves consideration of on-going disputes and disclosures of related contingencies. ||- Obtained details of completed tax assessments and demands as of 31st March 2021 from the management. |
| ||- Assessing the adequacy of the Company's disclosures for income taxes in the standalone financial statements. |
| ||Our examination has showed that the provisions and disclosures are adequate. |
|4 Allowance for Receivables ||Our audit procedures to assess the appropriateness of allowance for trade receivables included: |
|(Refer Note no. 10 and 15 to the Standalone Financial Statements) ||- Testing the accuracy of aging of trade receivables at year end on a sample basis; |
|The Company has trade receivables subsidies receivable from Government agencies and advances to vendors. The Company determines the allowance for doubtful debts based on historical loss experience adjusted to reflect current and estimated future economic conditions relating to industries the Company deals with and has receivables from. We identified allowance for doubtful debts as a key audit matter because of the significance of Trade Receivables balance to the standalone financial statements and considering that the Management exercises significant judgment in estimating the allowance for doubtful debts. ||- Obtaining a list of outstanding receivables along confirmation of balances on a sample basis as per the auditing standards and identifying any debtors with financial difficulty through discussion with management. |
| ||- Obtaining understanding of the process and controls over the determination of adequacy of allowance for doubtful debts. |
| ||- Testing the design implementation and operating effectiveness of relevant internal controls relating to collection of trade receivables and the calculation of the allowance for trade receivables. |
| ||- Testing the mathematical accuracy and computation of the allowances by the Company. |
| ||- In respect of subsidies receivables we have evaluated that the period of realisation considered by the companies is in line with the past trends. |
| ||- Evaluating the appropriateness of the presentation and disclosures made in the financial statements. |
| ||Our examination has showed that the allowances are appropriate and adequate. |
|5 Litigation claims and contingent Liabilities ||Our audit procedures to assess the appropriateness of provisions and adequacy of disclosures included: |
|(Refer Note no. 44 to the Standalone Financial Statements) ||- Reviewing the outstanding litigations against the Company for consistency with the previous years. Enquiring and obtaining explanations for movement during the year. |
|The Company operates in various states within India and is exposed to different Central and State/Local laws regulations and interpretations thereof. In this regulatory environment there is an inherent risk of litigations and claims. ||- Reading the latest correspondence between the Company and the various tax/legal authorities |
|Consequently provisions and contingent liability disclosures may arise from indirect tax proceedings legal proceedings including regulatory and other government/ department proceedings as well as investigations by authorities and commercial claims. ||- Discussing the status of significant litigation with the Company's in-house Legal Counsel and other senior management personnel and assessing their responses. |
|The Company applies significant judgement in estimating the likelihood of the future outcome in each case and in determining the provisions or disclosures required for each matter. These estimates could change significantly over time as new facts emerge and each legal case progresses. ||- On sample basis examine the Company's legal expenses and read the minutes of the board meetings in order to ensure all cases have been identified. |
|The Company is involved in legal proceedings on disputed tax demands. The company's management has assessed that the probability of success of the demand is remote and accordingly has not provided for the disputed demands. ||- With respect to tax matters discussing with the Company's tax officers their views and strategies on significant cases as well as the related technical grounds relating to their conclusions based on applicable tax laws. |
|This has been considered a key audit matter in view of the uncertain outcome of the litigations and involvement of significant management judgement in assessing the probability of outflow of economic resources. ||- For those matters where management concluded that no provisions should be recorded considering the adequacy and completeness of the Company's disclosures with regard to facts and circumstances of the legal and litigation matters |
| ||On the basis of the above procedures performed we considered the management's assessment in respect of contingencies |
| ||and provision for taxes and other litigations and claims to be reasonable and disclosures to be appropriate |
information Other than the Standalone Financial Statements and Auditor's 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 CorporateGovernance Report and Shareholder's Information but does not include the StandaloneFinancial Statements and our auditor's report thereon.
Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Responsibility for Management and Those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view ofe accounting principles generally accepted in Indiaincluding the Indian Accounting Standards specified under section 133 of the Act readwith relevant rules issued thereunder.
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 the design implementation and maintenance of adequateinternal financial controls with reference to financial statements that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the Standalone Financial Statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
In preparing the Standalone Financial Statements
management is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the StandaloneFinancial 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 in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the companyhas adequate internal financial controls system with reference to financial statements inplace and the operating effectiveness 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's ability to continue as a going concern. Ifwe conclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the Standalone Financial Statements or ifsuch disclosures are inadequate to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation. 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 Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Due to COVID 19 pandemic and the consequential nationwide lockdown announced by theCentral and State Government including travel restrictions maintenance of socialdistancing etc. the audit team has performed the audit from remote location on the basisof data scanned copies documents management's estimates assumptions certificates andother information supplied electronically by the management on online platform. We haverelied on Management's assurance of the authenticity completeness and accuracy of theserecords electronically submitted to us. Further our attendance at the physical inventoryverification done by the management was impracticable under the current lockdownrestrictions imposed by the government and we have therefore relied on the relatedalternative audit procedures to audit the existence of inventory as per the guidanceprovided in SA 501 "Audit Evidence - Specific Consideration for Selected Items"and have obtained sufficient appropriate audit evidence to issue our unmodified opinion onthe Standalone Financial Statements.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by 'the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of Section 143 of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
(a) Without prejudice to the issues described under "Other matter" sectionwe have sought and obtained all the information and explanations which to the best of ourknowledge 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 including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flows dealt with by thisReport are in agreement with the books of account;
(d) In our opinion the aforesaid Standalone Financial Statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with relevantrules issued thereunder;
(e) On the basis of the written representations received from the directors as on 31stMarch 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B";
(g) 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 no.44 to the StandaloneFinancial Statements
ii. The Company did not have any long-term contracts including derivative contracts forwhich 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 during the year ended 31stMarch 2021.
3. With respect to the matter to be included in the Auditor's Report in accordance withthe requirements of Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197 (16) of the Act whichare required to be commented upon by us.
For D. K Chhajer & Co.
Chartered Accountants Firm
Registration No.: 304138E
Manoj K roongta Partner
Membership No. 057761
Place : Kolkata
Date: 09 June 2021
Corporate Overview Statutory Reports Financial Statements
Annexure A to the Independent Auditor's Report
(Referred to under the heading "Report on Other Legal and RegulatoryRequirements" in Paragraph 1 of our Independent Auditors' Report of even date)
i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a program of physical verification to cover all the items of fixedassets in at regular intervals of time which in our opinion is reasonable having regardto the size of the Company and the nature of its assets. As per the records of the Companyexamined by us and according to the information and explanations given to us no materialdiscrepancies were noticed on such verification .
(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of all theimmovable properties are held in the name of the Company.
ii. The inventory except goods in transit has been physically verified by theManagement at reasonable intervals during the year by the Management. In respect of goodsin transit subsequent goods receipts have been verified. The discrepancies noticed onverification between the physical stock and the book records have been properly dealt within the books of account.
in. According to the information and explanations given to us and based on the auditprocedures conducted by us the Company has not granted any loans secured or unsecuredto companies limited liability partnership firm firms or other parties covered in theregister maintained under Section 189 of the Act. Therefore the provisions of Clause3(iii)[(a) (b) and (c)] of the said Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us andbased on the audit procedures conducted by us the Company has not granted any loans orprovided any guarantees or security to the parties covered under Section 185 of the Act.In respect of loans investments and guarantees made by the Company the provisions ofSection 186 of the Act have been complied with.
v. The Company has not accepted any deposits from the public during the year within themeaning of Sections 73 to 76 of the Act and the rules framed there under. Therefore theprovision of clause 3(v) of the order is not applicable to the Company.
vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain Cost Records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
vii. (a) The Company is generally regular in depositing
the undisputed statutory dues including provident fund Employees' State InsuranceIncome tax Goods and Service tax Customs Duty cess and any other statutory dues asapplicable with the appropriate authorities. In our opinion and according to theinformation and explanations given to us no undisputed amounts payable in respect of theaforesaid dues were outstanding as at 31 st March 2021 for a period of more than sixmonths from the date of becoming payable.
b) According to the information and explanations given to us the details of dues ofExcise Duty Cess and Royalty VAT/ GST/MEPRF on Coal not deposited by the Company onaccount of dispute are given below:
|Name of the statute ||Nature of dues ||Amount (Rs in Lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|The Central Excise Act 1944 ||Excise Duty ||51.42 ||2009-10 to 2013-14 ||CESTAT |
|The Central Excise Act 1944 ||Excise Duty ||9.50 ||Jan-'05 to Sep-'05 ||CESTAT |
|The Central Excise Act 1944 ||Excise Duty ||8.99 ||Oct-'05 to Jul-'06 ||CESTAT |
|The Central Excise Act 1944 ||Excise Duty ||1.48 ||Aug-'06 to Oct-'06 ||CESTAT |
|The Central Excise Act 1944 ||Excise Duty ||566.05 ||Dec-'04 to Jan'13 ||Meghalaya High Court |
|MMDR GST & VAT Act ||Royalty MEPRF GST/ VAT ||4184.06 ||2014-15 to 2018-19 ||Supreme Court |
|The Finance Act'1994 ||Service Tax ||383.19 ||AprRs 2016 to JuneRs 2017 ||Joint Commissioner CGST Shillong |
Star Cement Limited
|Name of the statute ||Nature of dues ||Amount (Rs in Lakhs) ||period to which the amount relates ||Forum where the dispute is pending |
|Customs Act 1962 ||Custom Duty ||22.51 ||2012-13 ||Additional Commissioner of Customs (preventive) Bhubaneswar |
|The Finance Act'1994 ||Service Tax ||216.58 ||Oct'14 to June'17 ||Additional Commisiioner of Central Tax & Central Excise CGST Commisiionerate Guwahati Assam |
|Central Goods and Services Tax Act 2017 ||Transistional Credit ||16.29 ||upto June'17 ||Assistant Commissioner Guwahati Division-II |
|Income Tax act1961 ||Demand Payable ||49.61 ||A.Y-2017-18 ||Additional Commissioner of Income Tax/ Income-tax Officer National e-Assessment Centre Delhi |
viii. The Company has not defaulted in repayment of loans or borrowings to banks. TheCompany has not taken any loan from financial institutions or Government and has notissued any debentures.
ix. 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.
x. In our opinion and according to the information and explanations given to us nofraud by the Company or on the Company by its officers or employees has been noticed orreported during the year. However there was a cash theft of Rs. 50 Lakhs by ancontractual employee during the year against which insurance claim has been filed by theCompany ( Refer Note 15 to the standalone financial statements)
xi. According to the information and explanation given to us and the records of theCompany examined by us the Company has paid/provided managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.
xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to the Company.
xiii. In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with Section 177 and
188 of the Act where applicable and the details have been disclosed in the notes to theStandalone Financial Statements as required by the applicable Indian accountingstandards.
xiv. During the year the Company has not made any preferential allotment/privateplacements of shares/ fully/partly convertible debentures and hence reporting under clause3 (xiv) of the Order is not applicable to the Company.
xv. According to the information and explanation given to us and the records of theCompany examined by us the Company has not entered into any non-cash transactions withits directors or person connected with them. Accordingly clause 3(xv) of the Order is notapplicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provision of clause 3(xvi) is not applicable tothe Company.
For D. K Chhajer & Co.
Chartered Accountants Firm Registration No.: 304138E
Manoj K Roongta
Membership No. 057761 UDIN: 21057761AAAAAQ6080
Place : Kolkata Date: 09 June 2021
Annexure B to the independent Auditor's Report
(Referred to under the heading "Report on Other Legal and RegulatoryRequirements" in Paragraph 2(f) of our independent Auditors' report of even date)
Report on the internal Financial Controls with reference to the standalone financialstatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013
We have audited the Internal Financial Controls with reference to the standalonefinancial statements of Star Cement Limited ("the Company") as at 31st March2021 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the year ended on that date. Management's Responsibility for internal FinancialControls The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India (ICAI). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating 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 ("the Act").
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") and the Standards onAuditing issued by ICAI and deemed to be prescribed under section 143(10) of the Act 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 controlswith reference to financial statements was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of internal financialcontrols with reference to financial statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thestandalone 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 systemwith reference to standalone financial statements.
Meaning of internal Financial Controls with reference to financial statements
A Company's internal financial control with reference to financial statements is aprocess 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 control withreference to financial statements includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the Company are being made only in accordance with authorisation ofthe management and directors of the Company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorised acquisition use or dispositionof the Company's assets that could have a material effect on the financial statements.inherent Limitations of internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.
In our opinion the Company has in all material respects read with impact of COVID-19 stated in Emphasis of Matter paragraph in Independent Auditor's Report an adequateinternal financial controls system with reference to standalone financial statements andsuch internal financial controls with reference to financial statements were operatingeffectively as at 31st March 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the ICAI.
For D. K Chhajer & Co.
Chartered Accountants Firm
Registration No.: 304138E
Manoj K Roongta
Partner Membership No. 057761
Place : Kolkata
Date: 09 June 2021