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Auditor Report of Chettinad Cement Corporation Ltd. Company
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Auditor Report of Chettinad Cement Corporation Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of M/s Chettinad Cement Corporation Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

The Company had not used jute bags in packing cement in accordance with Jute Packing Materials (Compulsory Use in the Packing Commodities) Act, 1987 as referred to in Note No.42 of the Financial Statements. Accordingly, no provision has been made for any liability that may arise for such non- compliance, the impact of which is not quantifiable by the management.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Companies Act, 1956, we report that:

a) We have obtained all the information and explanations which to the best of 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 the Company so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act;

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Annexure to the Independent Auditors'' Report

Referred to in Paragraph 1 under ‘Report on Other Legal and Regulatory Requirements'' section of our Report of even date

i. a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of Fixed Assets.

b) These Fixed Assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

c) No substantial parts of fixed assets of the company have been disposed of during the year.

ii. a) Inventories have been physically verified at reasonable intervals by the management.

b) The procedures of physical verification of Inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and discrepancies on physical verification as compared to book records were not material and have been dealt properly in the books of account.

iii. a) The Company has not given any loans, secured or unsecured to parties referred to Section 301 of the Companies Act, 1956.

b) The Company has taken unsecured inter corporate deposits from Companies appearing in the register maintained by the Company under Section 301 of the Companies Act, 1956. The total number of parties involved was 1 (one), the maximum amounts outstanding at any point of time during the year was Rs.140 Crores and the closing balance at the end of the year is Rs. 50 Crores.

c) In our opinion, the rate of interest and other terms and conditions of the Deposit are not, prima facie, prejudicial to the interest of the company.

d) The Company is regular in payment of interest and the repayment of the principal during the year ended 31st March, 2014.

iv. In our opinion, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. We have not come across any continuing failure to correct major weaknesses in the Internal Control System.

v According to the information and explanations furnished by the company there are no contracts or arrangements referred to in Section 301 of the Companies Act, 1956, entered into by the company except the inter corporate deposit referred in item (iii) above which has been entered into the register maintained under section 301 of the Companies Act, 1956.

vi. According to the information and explanations given to us, the Company has not accepted any deposit from the public.

vii. In our opinion, the company has an Internal Audit System commensurate with the size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the company relating to manufacture of cement pursuant to the order made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been maintained. We, however, have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. The company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax/ Value Added Taxes, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, Entry Tax and other statutory dues with the appropriate authorities in India.

There are no arrears of outstanding statutory dues as on 31.3.2014 for a period of more than six months from the date they became payable.

At the end of the financial year there were no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have not been deposited on account of any dispute except as follows:

Name of the Statute Nature of Dues Amount (Rs In Lakhs)

Sales Tax Act Tax Amount * 1.27 Tax and Penalty ** 427.52 Tax Amount 53.16

Income Tax Act Tax Amount 2420.61

Customs Act Duty & Penalty 4865.13

Central Excise Act Duty & Penalty 342.39 Duty & Penalty 6761.79

Total 14871.87

Name of the Statute Period to which Forum where the amount relates dispute Is pending

Sales Tax Act 1990-91 High Court 2005-06 to 2013-14 Joint/Deputy Commissioner 2010-11 Appeal yet to be filed

Income Tax Act 2010-11 Commissioner of Income Tax (Appeals) Customs Act 2012-13 Commissioner of Customs

Central Excise Act 2008-09 to 2013-14 Commissioner Appeals 2006-07 to 2011-12 CESTAT

* Net of Amount paid under protest Rs 0.33 lakhs

** Net of Amount paid under protest Rs 224.14 lakhs

x. The company did not have any accumulated losses at the end of the financial year, nor had it incurred any cash loss during the financial year or in the immediately preceding financial year.

xi. According to the records produced, the company has not defaulted in repayment of its dues to any financial institution or bank or debenture holders during the year.

xii. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The provisions of any special statute applicable to chit fund/ nidhi / mutual benefit fund / societies are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments.

xv. According to the information given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. On the basis of review of utilization of funds on an overall basis, in our opinion, the term loan taken by the company were applied for the purposes for which the loans were obtained.

xvii. On the basis of review of utilization of funds on an overall basis, in our opinion, the funds raised on short term basis have not been used for the long term investment or vice versa during the year.

xviii. The company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures.

xx. The Company has not raised any money by public issue during the year.

xxi. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have not come across any instance of fraud on or by the company nor have we been informed by the management of any such instance being noticed or reported during the year.

For P.B.Vijayaraghavan & Co., For V.Soundararajan & Co., Chartered Accountants Chartered Accountants Firm Regn.No.004721S Firm Regn.No.003943S P.B.Srinivasan V.S.Ravikumar Partner Partner (Membership No. 203774) (Membership No. 018030)

For Krishaan & Co., Chartered Accountants Firm Regn.No.001453S K.Sundar Rajan Partner (Membership No. 208431)

Place : Chennai Date : 30.07.2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of M/s Chettinad Cement Corporation Limited ("the Company"), which comprise the Balance Sheet as at March 31,2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Managements responsible for the preparation of these financial Statements that give true and Fairview of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about The amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.

Basis for Qualified Opinion

The Company had not used jute bags in packing cement in accordance with Jute Packaging Materials (Compulsory Use in the Pocking Commodities) Act, 7987 as referred to in Note No.59 of the Financial Statements. Accordingly, no provision has been made for any liability that may arise for such non- compliance, the impact of which is not quantifiable by the management.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2013;

b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central

Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure

a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of 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 the Company so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of section 211 of the Act.

e) On the basis of written representations received from the directors as on March 31,2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as directory terms of clause(g)of sub-section (i) of section 274 of the Act.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

i. a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of Fixed Assets.

b) These Fixed Assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

c) No substantial parts of fixed assets of the company have been disposed of during the year.

ii. a) Inventories have been physically verified at reasonable intervals by the management.

b) The procedures of physical verification of Inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventory and discrepancies on physical verification as compared to book records were not material and have been dealt properly in the books of account.

iii. r) The Company has taken an unsecured inter corporate deposits from Companies appearing in the register maintained by the Company under Section 301 of the Companies Act, 1956. The total number of parties involved were 5 (five), the maximum amounts outstanding at any point of time during the year was Rs.633 Crores and the closing balance at the end of the year is Rs. 137 Crores

b) In our opinion, the rate of interest and other terms and conditions of the Deposit are not, prima facie, prejudicial to the interest of the company.

c) The Company is regular in payment of interest and the repayment of the principal during the year ended 31" March, 2013. ¦

d) The Company has not given any loans, secured or unsecured to parties referred to Section 301 of the Companies Act, 1956.

iv. In our opinion, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit no major weakness has been observed in the internal control system,

v. According to the information and explanations furnished by the company there are no contracts or arrangements referred to in Section 301 of the Companies Act 1956, entered into by the company except the inter corporate deposit referred in item (iii) above which has been entered into the register maintained under section 301 of the Companies Act, 1956.

vi. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of section 58A and 58AA and the rules framed there under with regard to the deposits accepted from the public.

vii. In our opinion, the company has an Internal Audit System commensurate with the size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the company relating to manufacture of cement pursuant to the order made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been maintained. We, however, have not made a detailed examination of the records with a view to determining whether they are accurate or compete.

ix. The company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax/ Value Added Taxes, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, Entry Tax and other statutory dues with the appropriate authorities in indi3.

There are no arrears of outstanding statutory dues as on 31.3.2013 for a period of more than six months from the date they became payable,

At the end of the financial year there were no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise, Duty and Cess, which have not been deposited on account of any dispute except as follows:

NAME OF THE STATUTE NATURE OF DUES AMOUNT FORUM WHERE (Rs. IN LAKHS) DISPUTE IS PENDING

TNGST ACT,1959 Sales Tax and Penalty 1.27 Sales Tax Appellate Tribunal

Central Excise Act, 1944 Duty &r Penalty 6,727.36 CESTAT

Central Excise Act, 1944 Duty & Penalty 145.91 Honourable Supreme Court of Indiabythe Central Excise Dept.

Income Tax Act,1961 Income Tax Demand Income Tax

incl. Interest 335-35 Appellate Tribunal

Income Tax Act, 1961 Income Tax Demand 321.19 Commissioner of incl. Interest Income Tax (Appeals)

x. The company did not have any accumulated losses at the end of the financial year, nor had it incurred any cash loss during the financial year or in the immediately preceding financial year.

xi. According to the records produced, the company has not defaulted in repayment of its dues to any '' financial institution or bank or debenture holders during the year.

xii. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The provisions of any special statute applicable to chit fund/ nidhi / mutual benefit fund / societies are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments.

xv. According to the information given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. On the basis of review of utilization of funds on an overall basis, in our opinion, the term loan taken by the company were applied forthe purposes for which the loans were obtained.

xvii. On the basis of review of utilization of funds on an overall basis, in our opinion, the funds raised on short-term basis have not been used for the long-term investment during the year.

xviii. The company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures.

xx. The Company has not raised any money by public issue during the year.

xxi. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have not come across any instance of fraud on or by the company nor have we been informed by the management of any such instance being noticed or reported during the year.

For P.B.Vijaya raghavan & Co., For V.Soundararajan & Co., For Krishaan Co.,

Chartered Accountants Chartered Accountants Chartered Accountants

Firm Regn. No.00472ns Firm Regn,No.oo3943S Firm Regn.No.001453s

P.B.Srinivasan V.S.Ravikumar K.Sundar Rajan

Partner Partner Partner

(Membership No. 203774) (Membership No. 018030) (Membership No. 208431)

Place : Chennai

Date : 28.05.2013


Mar 31, 2012

We have audited the attached Balance Sheet of Chettinad Cement Corporation Limited (the Company) as at 31st March 2012 and the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1) As required by the Companies (Auditor's Report) Order, 2003 (the Order) as amended by the Companies (Auditor's Report) (Amendment) Order 2004 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2) Further to our comments in the annexure referred to above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the company, so far as appears from examination of those books.

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in section 211 (3C) of the Companies Act, 1956, to the extent applicable.

e) On the basis of written representations received from the directors and taken on record by the Board of Directors, we report that none of the directors as on 31st March 2012 is disqualified from being appointed as a director in the company in terms Section 274 (1) (g) of the Companies Act, 1956 on the said date.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with schedules and subject to Note no.38 regarding the liability, if any under the provisions of Jute packaging materials (Compulsory use in the Packing Commodities) Act, 1987 and other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India.

(i) In the case of the Balance Sheet, of the state of affairs of the company as at March 31, 2012.

(ii) In the case of the Statement of Profit and Loss, of the Profit for the year ended on that date, and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

i. a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of Fixed Assets.

b) These Fixed Assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

c) No substantial parts of fixed assets of the company have been disposed of during the year. ii. a) Inventories have been physically verified at reasonable intervals by the management.

b) The procedures of physical verification of Inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company is maintaining proper records of inventories and discrepancies on physical verification as compared to book records were not material and have been dealt properly in the books of account.

iii. a) The Company has taken unsecured Inter-Corporate Deposits from Companies, register maintained by the Company under section 301 of the Companies Act, 1956, the maximum amount outstanding at any time during the year was Rs. 417 crores and the year end balance is Rs. 410 crores.

In our opinion, the rate of interest and other terms and conditions of the Deposit are not, prima facie, prejudicial to the interest of the Company.

The Company is regular in payment of interest and the repayment of the principal during the year ended 31st March 2012.

b) The Company has not given any loans secured or unsecured to parties referred to Section 301 of the Companies Act, 1956.

iv. In our opinion, there is an adequate internal control system commensurate with the size of the company and the nature of its business for the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit no major weakness has been observed in the internal control system.

v. According to the information furnished by the Company and the explanations provided to us, there are no contracts or arrangements referred to in Section 301 of the Companies Act 1956, entered into by the Company except the Inter-Corporate Deposits referred in item (iii) above which has been entered into the register maintained under section 301 of the Companies Act, 1956.

vi. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of section 58A and 58AA and the rules framed there under with regard to the deposits accepted from the public.

vii. In our opinion, the company has an Internal Audit System commensurate with the size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the company relating to manufacture of cement pursuant to the order made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Companies Act 1956 and we are of the opinion that prima facie the prescribed accounts and records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. The company has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Value Added Taxes, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities in India.

There are no arrears of outstanding statutory dues as on 31.3.2012 for a period of more than six months from the date they became payable.

At the end of the financial year there were no dues of Sales Tax, Value Added Taxes, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have not been deposited on account of any dispute except as follows:

NAME OF THE STATUTE NATURE OF DUES AMOUNT FORUM WHERE (Rs. IN LAKHS) DISPUTE IS PENDING

TNGST Act, 1959 Sales Tax and Penalty 1.27 Sales Tax Appellate Tribunal, Chennai.

x. The company did not have any accumulated losses at the end of the financial year, nor had it incurred any cash loss during the financial year or in the immediately preceding financial year.

xi. According to the records produced, the company has not defaulted in repayment of its dues to any financial institution or bank or debenture holders during the year.

xii. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The provisions of any special statute applicable to chit fund/ nidhi / mutual benefit fund / societies are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments.

xv. According to the information given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. On the basis of review of utilization of funds on an overall basis, in our opinion, the term loan taken by the company were applied for the purposes for which the loans were obtained.

xvii.On the basis of review of utilization of funds on an overall basis, in our opinion, the funds raised on short term basis have not been used for the long term investment during the year.

xviii.The company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures.

xx. The Company has not raised any money by public issue during the year.

xxi. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have not come across any instance of fraud on or by the company nor have we been informed by the management of any such instance being noticed or reported during the year.

For P.B.Vijayaraghavan & Co., For V.Soundararajan& Co., For Krishaan & Co.,

Chartered Accountants Chartered Accountants Chartered Accountants Firm Regn.No.004721S Firm Regn.No.003943S Firm Regn. No.001453S

P.B.Srinivasan V.S.Ravikumar V.Krishnan

Partner Partner Partner

(Membership No. 203774) (Membership No. 018030) (Membership No.010970)

Place : Chennai Date : 29.05.2012


Mar 31, 2010

We have audited the attached Balance Sheet of Chettinad Cement Corporation Ltd (the Company) as 31st March, 2010 and the Profit and Loss account and cash flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted ouraudit in accordance with the auditing standards generally accepted in India. Those Standards req uire that we plan and perform the audiito obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidences jpporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion,

1) As required by the Companies (Auditors Report) Order, 2003 (the Order) as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

a) Further to our comments in the annexure referred to above, we report that:

a) We ha ve obta I ned a 111 he I nf or matlo n and explan ati ons, which to t he best of 0 j r knowledge a nd belief were necessary for the purposes of our audit.

b) In our opinion, proper books of accounts as required by law have been kept by the company, so far as appears from examination of those books.

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are

In agreement with the books of account,

d) Inouropinion, the Balace Sheet, Prof it and Loss account a nd Cas h Flow State ment dea It with by this report comply with the accounting standards referred 10 in section 211 (3C)of the Companies Act, 1956, to the extent applicable.

e) On the basis of written repres enIat ions rectived from the di rectors a n d ta ken on record by th e Board of Directors, wereport that none of the directors as on 31st March,20l0 is disqualified from being appoinied as a director in the company in terms of Section 274 (1) (g) of the Companies Act, 1956 on the said date.

f) In our opinion and to the best of our information and according to the explanations given to us, the Said accounts read together with schedules and subject to Note Wo, 5 regarding the liability, if any under the provisions of jute Packaging Materials (Compulsory use in the Packing Commodities) Act, toS/and other notes thereon jive the information required by the Companies Act 1956 in the manner so required and give a true and fair view, in conformity with the accounting principles generally accepted in India.

(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March ,2010;

(ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flow forthe year ended on that date.

ANNEXURE TO AUDITORS REPORT REFERRED TO IN PARAGRAPH 10F OUR REPORT OF EVEN DATE

i. a) The Company is maintaining proper records showing full particulars, incl uding quantitative detail sand situation of Fixed Assets,

b) These Fixed Assets have been physically verified by the management at reasonable intervals

and no material discrepancies were noticed on such verification.

c) No substantial part of fixed assets of the company have been disposed of duringtheyear.

ii. a) lnvento ry h a s been physica I ly verified at rea sona ble in te rvaIs by the man ageme nt.

b)The procedures of physical verification of lnventory followedby the managementarereasonable and adeq uate in relat ion to the size of the company and the nature of its busin ess,

c) Thecompany ismaintaining properreconds of inventory anddiscrepancies on physical verification as compared to book records were not material and have been dealt properly in the books of account.

iii. The Company has taken an unsecured Intercorporate deposit of Rs.5.00 Crores frpm Chettoad Morimura Semi Conductor Materials Pvt Ltd in witch two Directors this Company are Directors. The maximum amount due during the year was Ts.5.00 Crores and the year end blance of Deposittaken was Rs.5.00 Crores.

In our opinion, the rate of interest and other terms and cond itions of the Depositare not, prima f a cie, p reju dieia to the interest of t he company.

The Company is regular in pay men 10 finterest and the repay ment of the prindpa Aamount has not fallen dueduringthe yearended 31st March ,2010.

The Company has not given any loans secured or unsecured to parties referred to in Section 301 of the Com pa nies Act, 1956.

iv. In our opinion, there is an adequate internal control system commensurate with the size of the

company and the nature of its bus in ess for the purchase of in ventory and f ixed assets and for the sale of goods and services. During thecourse of our audit no major weakness has been observed in the internal control system,

v. Accordingto the explanation and information furnished" by the company there are no contracts or arrangements referred to in Section 301 of the Companies Act, 1956, entered into by the company except the inter corporate deposit referred in item (iii) above which has been entered into the register maintained under Section 301 of the Companies Act, 1956,

vi. Inouropinion, and according to the information and explanations given to us, theCompany has complied with the provisions of section 58A and 58 AA and the rules framed there under with regard to the deposits accepted from the public,

vii. In ourop inion, the company has an lnternal Adit System commensurate with the size and natu re of its business,

vi i i. We have b road ly reviewed the books of acco u nt m a inta i ned by the compa ny relati ng to ma nuf acture of cement pursuant to the order made by the Central Government for the maintenance of cost records under Section 209 (i)(d) of the Companies Act, 1956 and we are of the opinion that pri m a facie the prescribed accou n ts a nd reco rds ha ve bee n ma i n ta i n ed. We ha ve n 01 h 0 we ver made a detailed examination of the records with a viewto determining whether they are accurate or complete,

ix. Thecompany has been generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education^nd Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the ap pro priate a uthorities in India.

There are no arrears of outstanding statutory duesas on 31.3.2010 for a period of more than six months from the date they became payable.

Attheend of the financial year there were no dues of Sales Tax, Income Tax, Customs Duty, Wea Ith Ta x, S ervice Tax, Excise Duty and Cess, wh ich h a ve not been de posited on accou n t of anyd is pute except as f01 lows;

NAME OFTHE STATUTE NATURE OF DUES AMOUNT FORUM WHERE

(RS.IN DISPUTE LAKHS) IS PENDING

TNGST Act, 1959 Sales Taxand Penalty 1.27 Honble High Court

of Madras, Madras,

x. The company did not have any accumulated losses at the end of the financial year, nor had it incurred anycash lossduringthefinancialyearorinthe immediately preceding financial year.

xi. Accordingto the records produced, the company has not defaulted in repayment of its duesto any financial institution or bank or debenture holdersduring the year.

xii. The company has not granted any loans and advanceson the basis of security by way of pledge of shares, debentures and other securities,

xiii,The provisions of any special statute applicableto chitfund/nidhi/mutualbenefitfund/societies are not applicable to the Company.

xi v, In our opinion and accordingto the information and explanations given to us, the company is not a dealer or trader in shares, securities, debentures and other investments.

xv. Accordingto the information given to us, the company has not given any guarantee for loanstaken by others rom banks or financial institutions.

xvi. On the basisof review of utilization off undson an overall basis, in ouropinion, theterm loantaken bythecompanywereappliedforthepurposesforwhichtheloanswereobtained.

xvii. On the basis of review of utilization of funds on an overall basis, in ouropinion, the funds raised on short term basis have not been used forthe long term investment during the year.

xviil. The company has not made any preferential allotment of shares during the yearto partiesand companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures.

xx. The Company has notra ised any money by public issue during the year.

xxi. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have not come acros$any instance of fraud on or by the company nor have we been informed by the management of any such instance being noticed or reported during the year.

for P.B. Vijayaraghavan & Co, for V.Soundararajan & Co for Krishaan &r Co. Chartered Accountants Chartered Accountants Chartered Accountants

Firm Regn.No.D04721S Firm Regn.N 0.0 03943 5 Firm Regn.No. 001453S

P.B. Srinivasan V. S. Ravikumar V. Krishnan

Partner Partner Partner

(M. No. 203774) (M. No. 018030) (M. No. 010970)

Place : Chcnna

Date ; 17.07.1010



 
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