CEAT Ltd

BSE: 500878 | NSE: CEATLTD | ISIN: INE482A01020 
Market Cap: [Rs.Cr.] 3,256.54 | Face Value: [Rs.] 10
Industry: Tyres

Auditor's Report
Independent Auditors

To the Members of CEAT Limited

Report on the Financial Statements

We have audited the accompanying financial statements of CEAT Limited (“theCompany”), which comprise the Balance Sheet as at March 31, 2014, and the Statementof Profit and Loss and Cash Flow Statement for the year then ended, accounting andsummaryofsignificant policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position, financial performance and cash flows of theCompany in accordance with accounting principles generally accepted in India, includingthe Accounting Standards notified under the Companies Act, 1956, read with GeneralCircular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs. Thisresponsibility includes the design, implementation and maintenance of internal controlrelevant to the preparation and presentation of the financial statements that give a trueand 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 financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement ofthe 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 fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by management, as well as evaluating the overall presentation of thefinancial statements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us, the financial statements give the information required by the Companies Act,1956 (“the Act”) in the manner so required and give a true and fair view inconformity 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 atMarch 31, 2014;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2003 (“theOrder”) issued by the Central Government of India in terms of sub-section (4A) ofsection 227 of the Act, we give in the Annexure a statement on the matters specified inparagraphs 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 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 appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the CashFlow Statement comply with the Accounting Standards notified under the Companies Act,1956, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry ofCorporate Affairs;

(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 disqualifiedas on March 31, 2014, from being appointed as a director in terms of clause (g) ofsub-section (1) of section 274 of the Companies Act, 1956.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W
per Sudhir Soni
Place of Signature: Mumbai Partner
Date: April 29, 2014 Membership Number: 41870

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT ON EVEN DATE

Re: CEAT Limited (‘the Company’)

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

(i) (b) All fixed assets have not been physically verified during the year bymanagement, but there is a regular programme of verification which, in our opinion, isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies werenoticedonsuchverification.

(i) (c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) The management has conducted physical inventory at reasonable intervalsverification during the year.

(ii) (b) The procedures verificationof physical inventory followed by themanagement are reasonable and adequate in relation to the size of the Company and thenature of its business.

(ii) (c) The Company is maintaining proper records of inventory. Discrepancies noted onphysical inventories were not material, and verification have been properly dealt with inthe books of account.

(iii) (a) According to the information and explanations given to us, the Company hasnot granted any loans, secured or unsecured to companies, firms or other parties coveredin the register maintained under section 301 of the Companies Act, 1956. Accordingly, theprovisions of clause (iii)(a) to (d) of the said Order are not applicable to the Companyand hence not commented upon.

(iii) (b) According to information and explanations given to us, the Company has nottaken any loans, secured or unsecured, from companies, firmsor other parties covered inthe register maintained under section 301 of the Companies Act, 1956. Accordingly, theprovisions of clause (iii)(e) to (g) of the said Order are not applicable to the Companyand hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us,there is an adequate internal control system commensurate with the size of the Company andthe nature of its business, for the purchase of inventory and fixed assets and for thesale of goods and services. During the course of our audit, we have not observed any majorweakness or continuing failure to correct any major weakness in the internal controlsystem of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, weare of the opinion that the particulars of contracts or arrangements referred to insection 301 of the Companies Act, 1956 that need to be entered into the registermaintained under section 301 have been so entered.

(v) (b) In our opinion and according to the information and explanations given to us,the transactions made in pursuance of such contracts or arrangements and exceeding thevalue of Rupees five lakhs have been entered into during the financial year at priceswhich are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In respect of deposits accepted, in our opinion and according to the informationand explanations given to us, directives issued by the Reserve Bank of India and theprovisions of sections 58A, 58AA or any other relevant provisions of the Companies Act,1956, and the rules framed there under, to the extent applicable, have been complied with.We are informed by the management that no order has been passed by the Company Law Board,National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with thesize of the Company and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 209(1)(d) of the Companies Act, 1956, related to the manufacture of automotivetyres, tubes and flaps and are of the opinion that prima facie, the prescribed accountsand records have been made and maintained. We have not, however, made a detailedexamination of the same.

(ix) (a) Undisputed statutory dues including provident fund, investor education andprotection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax,service tax, customs duty, excise duty, cess and other material statutory dues havegenerally been regularly deposited with the appropriate authorities.

(ix) (b) According to the information and explanations given to us, undisputed dues inrespect of provident fund, investor education and protection fund, employees’ stateinsurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty cessand other material statutory dues which were outstanding, at the year end, for a period ofmore than six months from the date they became payable, are as follows:

Name of the statute Nature of the Dues Amount Period to which amount relates Due Date Date of Payment
Finance Act 2012 Service Tax 0.80 2013-14 April 2013 to September 2013 21-04-2014
Income Tax Act,1961 TDS Section 195 ( witholding Tax) 4.63 2013-14 30-04-2013 05-04-2014
Income Tax Act,1961 TDS Section 195 ( witholding Tax) 0.71 2013-14 30-05-2013 05-04-2014

(ix) (c) According to the records of the Company, the dues outstanding of income-tax,sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of anydispute, are as follows: ( Rs in Lacs)

Department Period to which the amounts relates Commi- ssionerate Appellate authorities and Tribunal High Court Supreme Court Deposit Amount Net Amount
Central Excise Act 1978-2006 - 15,20.60 - 5,19.00 - 20,39.60
Income Tax Act 1985-2009 15.62 125,90.35 1,65.65 - - 127,71.62
Sales Tax 1987-2014 10,53.26 24,31.88 - - 2,11.02 32,74.12
Service Tax 1996-2013 - 21,11.05 25.69 - - 21,36.74
Wealth Tax 2002-2003 - 6.73 - - - 6.73
Grand Total 10,68.88 186,60.61 1,91.34 5,19.00 2,11.02 202,28.81

(x) The Company has no accumulated losses at the end of the financial year and it hasnot incurred cash losses in thecurrentandimmediatelyprecedingfinancial

(xi) Based on our audit procedures and as per the information and explanations given bythe management, we are of the opinion that the Company has not defaulted in repayment ofdues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us and based on thedocuments and records produced before us, the Company has not granted loans and advanceson the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefitfund /society. Therefore, the provisions of clause (xiii) of the said order are not applicableto the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities,debentures and other investments. Accordingly, the provisions of clause (xiv) of the saidorder are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has givenguarantee for loans taken by its subsidiary Company from banks, the terms and conditionswhereof, in our opinion, are prima-facie not prejudicial to the interest of the Company.According to the information and explanations given to us, the Company has not given anyguarantee for loans taken by others from financial institutions

(xvi) Based on the information and explanations given to us by the management, termloans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on anoverall examination of the balance sheet of the Company, we report that no funds raised onshort-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties orcompanies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company did not raise money by public issue during the year.

(xxi) We have been informed by the management of the Company that there were certaininstances of frauds it detected, and investigations relating to which have been completed,involving misappropriation of funds and theft of inventory of finished goods by employeesof Company, to the tune of Rs 10.00 lacs and Rs 26.00 lacs respectively, and theft ofinventory of finished goods by an agent of the Company, aggregating Rs 28.73 lacs.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W
per Sudhir Soni
Place of Signature: Mumbai Partner
Date: April 29, 2014 Membership Number: 41870
   
Futures & Options Quote
Future Data Not present
Key Information

Key Executives:

H V Goenka , Vice Chairman

Paras K Chowdhary , Director

Anant Vardhan Goenka , Managing Director

Vinay Bansal , Director


Company Head Office / Quarters:

463 Dr Annie Besant Road,
Worli,
Mumbai,
Maharashtra-400030
Phone : Maharashtra-91-22-24930621 / Maharashtra-
Fax : Maharashtra-91-22-66606039 / Maharashtra-
E-mail : investors@ceat.in
Web : http://www.ceattyres.in

Registrars:

TSR Darashaw Ltd
6-10 Haji Moosa ,Patrawala Ind.Estate,DrEMoses Rd Mahalaxm,Mumbai - 400 011

 
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