We have audited the accompanying standalone financial statements of DCM
SHRIRAM LIMITED (the Company), which comprise the Balance Sheet as at
March 31, 2016, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (the Act) with respect
to the preparation of these standalone 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 principles
generally accepted in India, including the Accounting Standards
prescribed under section 133 of the Act, as applicable. This
responsibility also includes maintenance of adequate accounting records
in accordance with the provisions of the Act for safeguarding the
assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error. Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing specified under Section
143(10) of the Act. 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 the 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 financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, 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 audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as
at March 31, 2016, and its profit and its cash flows for the year ended
on that date. Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards prescribed under section 133 of the Act,
as applicable.
e) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
from being appointed as a director in terms of Section 164 (2) of the
Act.
f) With respect to the adequacy of the internal financial controls over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in Annexure A. Our report
expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting.
g) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and 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
financial position in its financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 (the
Order) issued by the Central Government in terms of Section 143(11) of
the Act, we give in Annexure B a statement on the matters specified
in paragraphs 3 and 4 of the Order.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The Company has a program of verification of fixed assets to cover
all the items in a phased manner over a period of three years which, in
our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. Pursuant to the program, certain fixed assets
were physically verified by the Management during the year. According
to the information and explanations given to us, no material
discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deeds and lease agreements provided to us, we report that, the
title deeds, comprising the immovable properties of land (freehold and
leasehold) and buildings, are held in the name of the Company and in
case where such immovable properties has been transferred pursuant to
the scheme of amalgamation under Section 391 to 394 of the Companies
Act, 1956, the transfer is through the order of the Hon''ble High
Courts. Further, lands located at Rajasthan measuring 808.70 Bighas
amounting to Rs 13.03 Crores, land located at Hyderabad measuring 5.03
acres amounting to Rs.1.56 Crores and lands located at Uttar Pradesh
measuring 7.79 hectares amounting to Rs 0.70 Crores, are pending for
registration in favour of the Company.
(ii) As explained to us, the inventories were physically verified
during the year by the Management at reasonable intervals except for
inventory lying with third parties at the end of the year for which
confirmations have been obtained in most of the cases and no material
discrepancies were noticed on physical verification.
(iii) According to the information and explanations given to us, the
Company has, during the year, granted unsecured loans aggregating to
Rs.26.93 Crores to five wholly owned subsidiaries covered in the
register maintained under section 189 of the Companies Act, 2013. At
the year end, the loans granted to six subsidiaries aggregate to
Rs.157.11 Crores (net of provision of Rs.7.01 Crores). These loans
include interest free loan of Rs.30.78 Crores made to a wholly owned
subsidiary, which, as explained to us, have been made for setting up
new projects. In respect of these loans:
(a) The terms and conditions of the grant of such loans are, in our
opinion, prima facie, not prejudicial to the Company''s interest after
considering the purpose for which loans have been granted as indicated
above.
(b) The schedule of repayment of principal and payment of interest has
been stipulated and repayments or receipts of principal amounts and
interest have been regular as per stipulations.
(c) There is no overdue amount remaining outstanding as at the year-end
for more than 90 days.
The reporting under clauses (iii)(b) and (c) above has been done
without considering the loans against which provision have been made in
earlier years.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans and
making investments.
(v) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
73 to 76 or any other relevant provisions of the Companies Act, 2013
and the Companies (Acceptance of Deposits) Rules, 2014, as amended,
with regard to the deposits accepted. According to the information and
explanations given to us, no order has been passed by the Company Law
Board or the National Company Law Tribunal or the Reserve Bank of India
or any Court or any other Tribunal in respect of contravention of the
above said sections and the relevant rules.
(vi) The maintenance of cost records has been specified by the Central
Government under section 148(1) of the Companies Act, 2013 in respect
of Sugar, Cement, Fertilizer, Chemicals, PVC Resin, UPVC doors and
windows businesses. We have broadly reviewed the cost records
maintained by the Company pursuant to the Companies (Cost Records and
Audit) Rules, 2014, as amended prescribed by the Central Government
under sub-section (1) of Section 148 of the Companies Act, 2013, and
are of the opinion that, prima facie, the prescribed cost records have
been made and maintained. We have, however, not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value
Added Tax, cess and other material statutory dues applicable to it to
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance, Income- tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax, cess and other material
statutory dues in arrears as at March 31, 201 6 for a period of more
than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax/ Value Added Tax, Service
Tax, Customs Duty and Excise Duty which have not been deposited as on
March 31, 2016 on account of disputes are given below:
Name of Nature of Forum where Dispute Period to which
the Amount Relates
Statute Dues is Pending
Central Excise Excise Duty Appellate Authority 2005-06, 2006-07,
2007-08,
Law upto Commissioner''s 2008-09,2009-10,
2010-11,
level 2011-12,2012-13
Customs, Excise and 1997-98, 2004-05,
2005-06,
Service Tax Appellate 2006-07, 2007-08,
2008-09,
Tribunal 2009-10, 2010-11,
2011-12, 2012-13
Finance Act, Service Tax Customs, Excise and 2005-06, 2007-08,
2008-09,
1994 Service Tax Appellate 2009-10,2010-11,
2011-12,2012-13
Tribunal
Income-tax Income-tax Appellate Authority 2010-11,2011-12
Act, 1961 upto Commissioner''s
level
Income Tax Appellate 2009-10
Tribunal
Customs Act, Customs Duty Customs, Excise and 2012-13
1962 Service Tax Appellate
Tribunal
Sales Tax Sales Tax Appellate Authority 1983-84,2001-02,
2005-06,
Laws upto Commissioner''s 2006-07,2007-08,
2010-11,
level 2011-12
Appellate Tribunal 1994-95, 2009-10
Name of Statute Amount Amount paid Amount
Involved * under protest Unpaid
(Rs.in Crores) (Rs.in Crores) (Rs.in Crores)
Central Excise Law 3728 5705 3.23
5747 1.02 4.45
Finance Act, 1994 31.94 31.71 0.22
Income-tax Act, 1961 5.71 5.71 -
2.21 2.21 -
Customs Act, 1962 5.38 0.54 4.84
Sales Tax 1.89 0.41 1.48
2.39 0.95 1.44
*Amount as per demand orders including interest and penalty wherever
indicated in the order.
The following matter has been decided in favour of the Company although
the department has preferred appeal at higher levels:
Name of
Statute Nature of
Dues Forum where
Dispute is
Pending Period to which
the Amount Relates Amount
Involved
(Rs.in
Crores)
Sales Tax
Laws Value Added
Tax Rajasthan Tax
Board 2008-09,2009-10,
2010-11,2011-12 3.65
High Court 2001-02 1.31
Income-
tax Act,
1961 Income-tax Income Tax
Appellate
Tribunal 2009-10 0.45
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions, banks and government and dues to debenture
holders.
(ix) The Company has not raised moneys by way of initial public offer
or further public offer. Further, during the year, the Company has
raised money by way of debt instruments including commercial papers. In
our opinion and according to the information and explanation given to
us, money raised by way of debt instruments and term loans have been
applied by the Company during the year for the purposes for which they
were raised.
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company by its officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid/provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us the Company is in compliance with Section 1 88 and 1 77 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the year the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence reporting under clause (xiv) of CARO 2016 is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any non-
cash transactions with its directors or persons connected with him and
hence provisions of section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under section 45-IA
of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm''s Registration No. 015125N)
Vijay Agarwal
Place : New Delhi Partner
Date : May 10, 2016 (Membership No.094468)