Mar 31, 2015
We have audited the accompanying financial statements of BKV INDUSTRIES
LIMITED ("the Company"), which comprise the Balance Sheet as at 31st
March, 2015, the Statement of Profit and Loss, 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 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 specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for
safeguarding of 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 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.
We conducted our audit 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, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial control system over financial reporting and the operating
effectiveness of such controls. 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 financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 31st March, 2015, and its loss and its cash flows for the year ended
on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the
financial statements:
3 a) Note 36 to the financial statements which, describes the
uncertainty related to the outcome of the lawsuit filed relating to the
Non- Agricultural Tax appeal by the Govemment/farms.
b) Note 32 in the financial statements which indicates that the Company
has accumulated losses and its net worth has been substantially eroded,
the Company has incurred a net loss during the current year and a
marginal profit due to exceptional items in the previous year(s) and,
the Company's current liabilities exceeded its current assets as at the
balance sheet date. These conditions indicate the existence of a
material uncertainty that may cast significant doubt about the Company's
ability to continue as a going concern. However, as the Company has got
consistant operating lease income the accounts have been drawn up on
going concern basis.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2015, issued by
the Central Government of India in term of sub-section (11) of section
143 of the Companies Act,2013, we give in the Annexure a statement on
the matters specified in the paragraphs 3 and 4 of the Order, to the
extent applicable.
As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the infonnation 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 specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) The going concern matter described in sub-paragraph (b) under the
Emphasis of Matters paragraph above, in our opinion, may have an effect
on the functioning of the Company.
(f) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(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 - Refer Note 26 to the
financial statements;
ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
and 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.
Annexure to the Auditors' Report
The Annexure referred to in our report to the members of BKV Industries
Limited, ('the Company') for the year Ended on 31st March, 2015. We
report
that:
1) In respect of Fixed Assets
a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b) We have been informed that all the fixed assets have been physically
verified by the management during the year and to the best of our
knowledge no serious discrepancies have been noticed on such
verification.
2) The company has given its farm on long term lease and carrying on no
other operations hence, no inventory is maintained by the company,
hence the question of physical verification of inventory in the
reasonable intervals does not arise and hence the clause is not
applicable.
3) The company has not granted any loans to companies, firms or other
parties listed in the register maintained under section 189 of the
Companies Act, 2013. Accordingly sub-clauses (a) and (b) of this order
are not applicable.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the company and the nature of its business with regard
to the purchases of inventory, fixed assets and for the sale of goods
and services. During the course of audit, we have not observed any
continuing failure to correct major weakness in internal control
system.
5) According to the information and explanations given to us the
company has not accepted any fixed deposits from the public within the
meaning of section 73 to 76 of the Companies Act, 2013 and the
Companies (Acceptance of Deposits) Rules, 2014. Further, no Order has
been passed by Company Law Board or National Company Law Tribunal or
Reserve Bank of India or any court or any other tribunal. Hence, the
provisions of this are not applicable.
6) We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 148(1) of the
Companies Act, 2013 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
7) a) According to the information and explanations given to us, in our
opinion, the company is regular in depositing undisputed statutory dues
Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, Cess and other material statutory dues applicable to it. According
to information and explanations given to us and the opinion sought by
the management, the Provident Fund and ESI are not applicable to this
company. According to the information and explanations given to us, no
undisputed amounts payable in respect of Income-tax, Sales Tax, Wealth
Tax, Service Tax, P.F and ESI, Customs Duty, Excise Duty, and Cess were
in arrears, as at 31st March, 2015 for a period of more than six months
from the date they became payable.
b) According to the information and explanations given to us, there are
no dues of Sales Tax. Income-Tax, Customs Duty, Wealth Tax, Excise,
Service Tax Duty which have not been deposited on account of dispute
and in the case of levy of Non-Agricultural Lands Assessment under
Andhra Pradesh Non-Agricultural Land Assessment Act, the matter is
pending before courts and an amount of Rs. 59.07 lakhs is shown under
contingent liability.
c) The amounts due to Investor Education & Protection Fund for a period
exceeding six months as at 31sl Match, 2015 does not arise as the
company has not declared dividends to the shareholders since its
inception. Hence, this sub-clause is not applicable.
8) The Company has accumulated losses to the extent of Rs. 342.75 lakhs
and the Company reported a cash profit of Rs. 0.69 lakhs during the
financial year 2014-15 and made a cash profit of Rs. 1.76 lakhs during
the financial year 2013-14.
9) The company has no loans from banks or financial institutions nor
issued debentures during the year, hence in our opinion and according
to the information and explanations given to us, this clause is not
applicable to the company.
10) In our opinion and according to the explanations given to us, the
company has not given any guarantees for loans taken by others from
bank and financial institutions. Hence, this clause is not applicable
to the company.
11) In our opinion and according to information and explanations given
to us, the company has not raised any term loans during the year.
Hence, this clause is not applicable to the company.
12) Based on the audit procedures performed for the purposes of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the company has been noticed or reported during
the course of our audit.
For Garlapati & Co,
Chartered Accountants
Firm Regn. No. 000892S
Place: Guntur.
Date : 29th May, 2015 G. Satyanarayana
Partner
M.No:022101
Mar 31, 2014
We have audited the accompanying financial statements of M/s. BKV
Industries Limited, ''and reduced'' (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.
Managements'' Responsibility for the Financial Statements:
The Company''s 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 flow of the Company in
accordance with the Accounting Standards notified under the Companies
Act., 1956 (the Act) read with the General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013 and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
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 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 misstatements.
An audit involves performing procedures to obtain evidence about the
amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment'', including the assessment of
the risk of material misstatements 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 circumstance, but not for the
purpose of expressing an opinion on the effectiveness of the Company''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 audit opinion.
Opinion:
As shrimp farm has given for operating lease, the company has not
carried out the operations on its own after giving farm lease.
However, the accounts are prepared on going concern basis in view of
the lease income from operating lease and the company propose to
undertake operations after expiry of operating lease.
Subject to above, in our opinion and to the best of our information and
according to the explanations given to us, the aforesaid 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 31st March, 2014;
(b) in the case of Statement of Profit & Loss, of the loss of the
Company for the year ended on that date;
and
(c) in the case of Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report of 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 Section
227(4A) 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:
(i) 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.
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appear from our examination of those
books.
(iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statements dealt with by this report are in agreement with the books of
account.
(iv) In our opinion, the Balance Sheet, the Statement of Profit & Loss
and Cash Flow Statement comply with the Accounting Standards notified
under the Act read with General Circular 15/2013 dated 13th September,
2013 of Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013.
(v) On the basis of written representations received from the
directors, as on March 31, 2014 taken on record by the Board of
Directors, none of the director is disqualified as on March 31, 2014
from being appointed as a director in terms of Section 274(1) (g) of
the Act.
ANNEXURE TO THE AUDITOR''S REPORT
Annexure to the auditor''s report of M/s. BKV Industries Limited, ''and
reduced'' for the year ending 31st March, 2014 referred to paragraph (3)
there of:
1) In respect of Fixed Assets
a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b) We have been informed that all the fixed assets have been physically
verified by the management during the year and to the best of our
knowledge no serious discrepancies have been noticed on such
verification.
c) During the year, the company has disposed off the unutilized assets
as company was given on lease, however in view of lease income from
farm property and operations will be undertaken after expiry of
operating lease, the going concern concept is not affected.
2) a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us the procedure of physical verification of inventories
followed by the management is reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanations
given to us the company has maintained proper records of inventories
and there was no material discrepancies noticed on physical
verification as compared to the book records.
3) a) The company has not granted any loans to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of
this order are not applicable.
e) The company has taken interest free unsecured loan from a director
and the maximum amount involved during the year was Rs. 22.85 lakhs and
the year end balance taken from the director was Rs. 10.90 lakhs.
f) In our opinion and according to the information and explanations
given to us, loans taken from the individual, firms, companies and
other parties listed in the register maintained under section 301 of
the Companies Act, 1956 are not prejudicial to the interest of the
company.
g) Unsecured loans taken from the parties are payable on demand. During
the year certain payments are made on demand , hence the question of
irregularity does not arise.
h) There is no overdue amount of loans taken from the companies, firms
or other parties listed in the register maintained u/s 301 of the
Companies Act, 1956.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of it''s
business with regard to the purchases of inventory and fixed assets and
for the sale of goods. During the course of audit, we have not observed
any major weakness in internal control systems.
5) The company has not entered into contracts or arrangements referred
to in section 301 of the Act. Accordingly, the provisions of clause
4(v) of the Order are not applicable.
6) According to the information and explanations given to us the
company has not accepted any fixed deposits from the public within the
meaning of section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975. Hence, the provisions
of clause 4 (vi) are not applicable.
7) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8) We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209 (1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
9) a) According to the information and explanations given to us, in our
opinion, the company is regular in depositing undisputed statutory dues
including Investor Education & Protection Fund, Income-tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it. According to information and
explanations given to us and the opinion sought by the management, the
Provident Fund and ESI are not applicable to this company.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Investor Education &
Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, P.F
and ESI, Customs Duty, Excise Duty, and Cess were in arrears, as at
31st March, 2014 for a period of more than six months from the date
they became payable. The amounts due to Investor Education & Protection
Fund for a period exceeding six months as at 31st Match, 2014 does not
arise as the company has not declared dividends to the shareholders
since its inception.
c) According to the information and explanations given to us, there are
no dues of Sales Tax. Income-Tax, Customs Duty, Wealth Tax, Excise Duty
which have not been deposited on account of dispute and in the case of
levy of Non-Agricultural Lands Assessment under Andhra Pradesh
Non-Agricultural Land Assessment Act, the matter is pending before
courts and an amount of Rs. 56.36 lakhs is shown under contingent
liability.
10) The Company has accumulated losses to the extent of Rs.342.18 lakhs
and the Company reported a cash profit of Rs. 1.76 lakhs during the
financial year 2013-14 and made a cash profit of Rs.93.47 lakhs during
the financial year 2012-13.
11) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
financial institutions, banks or debenture holders during the financial
year under consideration.
12) In our opinion and according to the explanations given to us, no
loans and advances have been granted by the company on the basis of
security by way of pledge of shares, debentures and other securities.
13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual
Benefit Fund / Society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order 2003 are not applicable to the
company.
14) The company has not dealt or traded in shares, securities,
debentures or other investments during the year.
15) In our opinion and according to the explanations given to us, the
company has not given any guarantees for loans taken by others from
bank and financial institutions.
16) In our opinion and according to information and explanations given
to us, the company has not raised any term loans during the year.
17) According to the information and explanations given to us, and on
an overall examination of the balance sheet of the company, we are of
the opinion that no funds raised on short term basis have been used for
long term investment.
18) During the year the company has not issued any preferential shares,
hence the clause (XVIII) is not applicable to the company.
19) According to the information and explanations given to us, during
the year covered by our audit report, the company has not issued any
debentures.
20) The company has not raised any monies by way of public issue during
the year.
21) Based on the audit procedures performed for the purposes of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the company has been noticed or reported during
the course of our audit.
for GARLAPATI & Co,
Firm Regn. No. 000892S
Chartered Accountants
Place: Guntur GARLAPATI SATYANARAYANA
Date : 24.05.2014 Partner, M.No. 22101
Mar 31, 2013
Report on the Financial Statements:
We have audited the accompanying financial statements of M/s. BKV
Industries Limited. "and reduced" ("the Company") which comprise the
Balance Sheet as at 31 March, 2013, the Statement of Profit & Loss and
the Cash Flow Statement for the year ended and a summary of significant
accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements:
Management is responsible for the preparation of these financial
statements and give a true and fair view of the financial position,
financial performance and cash flows of the company in accordance with
accounting principles generally accepted in India including the
Accounting Standards referred in Section 211(3)© of the Companies Act,
1956 ("the Act"). This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatements, 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 misstatements.
An audit involves performing procedures to obtain evidence about the
amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment'', including the assessment of
the risk of material misstatements 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 audit opinion.
Opinion :
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 31 March, 2013;
b) in the case of Statement of Profit & Loss of the profit for the year
ended on that date; and
c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date. Report of 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 Section
227(4A) 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 :
(i) 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;
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appear from our examination of those
books;
(iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statements dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet & Statement of Profit & Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Section 211 (3C) of the Act.
(v) On the basis of written representations received from the
directors, as on 31 March, 2013 and taken on record by the Board of
Directors, we report that none of the director is disqualified as on 31
March, 2013 from being appointed as a director in terms of Section
274(1)(g) of the Act.
ANNEXURE TO THE AUDITOR''S REPORT
Annexure to the auditor''s report of BKV Industries Limited, ''and
reduced'' for the year ending 31 March, 2013 referred to paragraph (3)
there of:
1) In respect of Fixes Assets
a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b) We have been informed that all the fixed assets have been physically
verified by the management during the year and to the best of our
knowledge no serious discrepancies have been noticed on such
verification.
c) During the year, the company has disposed off the Hatchery property
in as is where is condition, however in view of farm property and other
operations of the company, the going concern concept is not effected.
2) a ) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us the procedure of physical verification of inventories
followed by the management is reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanations
given to us the company has maintained proper records of inventories
and there was no material discrepancies noticed on physical
verification as compared to the book records.
3) a) The company has not granted any loans to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of
this order are not applicable.
e) The company has taken interest free unsecured loan from a director
and a company in which directors are interested and the maximum amount
involved during the year was Rs. 54.11 lakhs and the year end balance
taken from the director and the Company was Rs. 11.45 lakhs.
f) In our opinion and according to the information and explanations
given to us, loans taken from the individual, firms, companies and
other parties listed in the register maintained under section 301 of
the Companies Act, 1956 are not prejudicial to the interest of the
company.
g) Unsecured loans taken from the parties are payable on demand. During
the year certain payments are made on demand from the parties, hence
the question of irregularities does not arise.
h) There is no overdue amount of loans taken from the companies, firms
or other parties listed in the register maintained u/s 301 of the
Companies Act, 1956
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of it''s
business with regard to the purchases of inventory and fixed assets and
for the sale of goods. During the course of audit, we have not observed
any major weakness in internal control systems.
5) The company has not entered into contracts or arrangements referred
to in section 301 of the Act. Accordingly, the provisions of clause
4(v) of the Order are not applicable.
6) According to the information and explanations given to us the
company has not accepted any fixed deposits from the public with in the
meaning of section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975. Hence, the provisions
of clause 4 (vi) are not applicable.
7) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8) We have broadly reviewed the Cost Records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
Prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
9) a) According to the information and explanations given to us, in our
opinion, the company is regular in depositing undisputed statutory dues
including Investor Education & Protection Fund, Income-tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it. According to information and
explanations given to us and the opinion sought by the management, the
Provident Fund and ESI are not applicable to this company.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Investor Education &
Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax, P.F
and ESI, Customs Duty, Excise Duty, and Cess were in arrears, as at 31
March, 2013 for a period of more than six months from the date they
became payable. The amounts due to Investor Education & Protection Fund
for a period exceeding six months as at 31 Match, 2013 does not arise
as the company has not declared dividends to the shareholders since its
inception.
c) According to the information and explanations given to us, there are
no dues of Sales Tax. Income-Tax, Customs Duty, Wealth Tax, Excise Duty
which have not been deposited on account of dispute and in the case of
levy of Non-Agricultural Lands Assessment under Andhra Pradesh
Non-Agricultural Land Assessment Act, the matter is pending before
courts and an amount of Rs. 53.65 lakhs is shown under contingent
liability.
10) The company has accumulated losses to the extent of Rs. 341.22
lakhs and the company reported cash profit of Rs. 93.47 lakhs during
the financial year 2012-2013 and made a cash profit of Rs. 13.19 lakhs
during the financial year 2011-2012.
11) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
financial institutions, banks or debenture holders during the financial
year under consideration.
12) In our opinion and according to the explanations given to us, no
loans and advances have been granted by the company on the basis of
security by way of pledge of shares, debentures and other securities.
13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual
Benefit Fund / Society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order 2003 are not applicable to the
company.
14) The company has not dealt or traded in shares, securities,
debentures or other investments during the year.
15) In our opinion and according to the explanations given to us, the
company has not given any guarantees for loans taken by others from
bank and financial institutions.
16) In our opinion and according to information and explanations given
to us, the company has not raised any term loans during the year.
17) According to the information and explanations given to us, and on
an overall examination of the balance sheet of the company, we are of
the opinion that no funds raised on short term basis have been used for
long term investment.
18) During the year the company has not issued any preferential shares,
hence the clause (XVIII) is not applicable to the company.
19) According to the information and explanations given to us, during
the year covered by our audit report, the company has not issued any
debentures.
20) The company has not raised any monies by way of public issue during
the year.
21) Based on the audit procedures performed for the purposes of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the company has been noticed or reported during
the course of our audit.
For Garlapati & Co,
Firm Regn. No. 000892S
Chartered Accountants
Place : Guntur
Date: 29th May, 2013
G.Satyanarayana
Partner, M.No. 22101
Mar 31, 2012
01) We have audited the attached Balance Sheet of BKV Industries Ltd,
'and reduced' as at 31st March, 2012, the Statement of Profit & Loss
and also the 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.
02) 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 from material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the financial principles used and significant estimates made
by management, as well as evaluating the over all financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
03) As required by the Companies (Auditor's Report) Order, 2003, and as
amended by the Companies (Auditors Report) (Amendment) Order 2004
(together the 'order') issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we
annex here to a statement on matters specified in paragraphs 4 and 5 of
the said order.
04) Further to our comments in the Annexure referred to above, we
report that:
(i) 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;
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appear from our examination of those
books;
(iii) The said Balance Sheet, Statement of Profit & Loss and Cash Flow
Statements dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet & Statement of Profit & Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March, 2012 and taken on record by the Board of
Directors, we report that none of the director is disqualified as on
31st March, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together, with the
Significant Accounting Policies and notes there on 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 :
a) in the case of the Balance sheet, of the state of affairs of the
company as at 31st March, 2012;
b) in the case of Statement of Profit & Loss of the profit for the year
ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
Annexure to the auditor's report of BKV Industries Limited, 'and
reduced' for the year ending 31st March, 2012 referred to paragraph (3)
there of:
1) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) We have been informed that all the fixed,assets have been physically
verified by the management during the year and to the best of our
knowledge no serious discrepancies have been noticed on such
verification.
c) During the year, the company has received an advance for sale of the
Hatchery property in 'as is where is condition' however in view of farm
property given on lease, the going concern concept is not affected.
2) a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable.
b) In our opinion and according to the information and explanation
given to us the procedure of physical verification of inventories
followed by the management is reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanation
given to us the company has maintained proper records of inventories
and there was no material discrepancies noticed on physical
verification as compared to the book records.
3) a) The company has not granted any loans to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of
this order are not applicable.
e) The company has taken interest free unsecured loan from a director
and a company in which directors are interested and the maximum amount
involved during the year was Rs. 1,61.61 lakhs and the year end balance
taken from the director and the Company was Rs. 54.11 lakhs.
f) In our opinion and according to the information and explanations
given to us, loans taken from the individual, firms, companies and
other parties listed in the register maintained under section 301 of
the Companies Act, 1956 are not prejudicial to the interest of the
company.
g) Unsecured loans taken from the two parties are payable on demand.
Since no demand for payment is received during the year, irregularity
of payment does not arise.
h) There is no overdue amount of loans taken from the companies, firms
or other parties listed in the register maintained u/s 301 of the
Companies Act, 1956
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of it's
business with regard to the purchases of inventory and fixed assets and
for the sale of goods. During the course of audit, we have not observed
any major weakness in internal control systems.
5) The company has not entered into contracts or arrangements referred
to in section 301 of the Act. Accordingly, the provisions of clause
4(v) of the Order are not applicable.
6) According to the information and explanations given to us the
company has not accepted any fixed deposits from the public with in the
meaning of section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975, hence the provisions
of clause 4 (vi) are not applicable.
7) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8) Maintenance of cost records under section 209 (1)(d) of the
Companies Act, 1956 has not been prescribed in respect of this company.
9) a) According to the information and explanations given to us, in our
opinion, the company is regular in depositing undisputed statutory dues
including Investor Education & Protection Fund, Income-tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it. According to information and
explanations given to us and the opinion sought by the management, the
Provident Fund Act is not applicable to this company.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Investor Education &
Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, and Cess were in arrears, as at 31st March,
2012 for a period of more than six months from the date they became
payable. The amounts due to Investor Education & Protection Fund for a
period exceeding six months as at 31st Match, 2012 does not arise as
the company has not declared dividends to the shareholders since its
inception.
c) According to the information and explanations given to us, there are
no dues of Sales Tax, Income-Tax, Customs Duty, Wealth Tax, Excise Duty
which have not been deposited on account of dispute and in the case of
levy of Non-Agricultural Lands Assessment under Andhra Pradesh
Non-Agricultural Land Assessment Act, the matter is pending at courts
and an amount of Rs. 50.94 lakhs is shown under contingent liability.
10) The company was incorporated during the financial year 1993-94 and
the net worth of the company is totally eroded. The company has
reported a cash profit of Rs. 6.90 lakhs during the financial years
2010-11 and made a cash profit of 13.19 lakhs during the financial
year 2011-12.
11) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
financial institutions, banks or debenture holders during the financial
year under consideration.
12) In our opinion and according to the explanations given to us, no
loans and advances have been granted by the company on the basis of
security by way of pledge of shares, debentures and other securities.
13) In our opinion, the company is not a Chit Fund or a Nidhi/Mutual
Benefit Fund/Society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor's Report) Order 2003 are not applicable to the
company.
14) The company has not dealt or traded in shares, securities,
debentures or other investments during the year.
15) In our opinion and according to the explanations given to us, the
company has not given any guarantees for loans taken by others from
bank and financial institutions.
16) In our opinion and according to information and explanations given
to us, the company has not raised, any term loans during the year.
17) According to the information and explanations given to us, and on
an overall examination of the balance sheet of the company, we are of
the opinion that no funds raised on short term basis have been used for
long tern investment.
18) During the year the company has not issued any preferential shares,
hence the clause (XVIII) is not applicable to the company.
19) According to the information and explanations given to us, during
the year covered by our audit report, the company has not issued any
debentures.
20) The company has not raised any monies by way of public issue during
the year.
21) Based on the audit procedures performed for the purposes of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the company has been noticed or reported during
the course of our audit.
For Garlapati & Co,
Chartered Accountants
(Firm -Regn.No. 000892S)
G. Satyanarayana
Partner - Membership No. 22101
Place : Guntur
Date : 04-08-2012
Mar 31, 2011
01) We have audited the attached Balance Sheet of BKV Industries Ltd as
at 31st March, 2011, the Profit & Loss Account and also the 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.
02) 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 from material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the financial principles used and significant estimates made
by management, as well as evaluating the over all financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
03) As required by the Companies (Auditor's Report) Order, 2003, and as
amended by the Companies (Auditors Report) (Amendment) Order 2004
(together the 'order') issued by the Central Government of India in
terms of sub-section (4A) of Section 227of the Companies Act, 1956, we
annex here to a statement on matters specified in paragraphs 4 and 5 of
the said order.
04) Further to our comments in the annexure referred to above, we
report that:
(i) 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;
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appear from our examination of those
books;
(iii) The said Balance Sheet, Profit & Loss Account and Cash Flow
Statements dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet & Profit & Loss account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March, 2011 and taken on record by the Board of
Directors, we report that none of the director is disqualified as on
31st March, 2011 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with the
Significant Accounting Policies and notes there on 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 :
a) in the case of the Balance sheet, of the state of affairs of the
company as at 31st March, 2011;
b) in the case of Profit & Loss account of the loss for the year ended
on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
Annexure to the auditor's report of BKV Industries Limited for the year
ending 31st March, 2011 referred to paragraph (3) there of:
1) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) We have been informed that all the fixed assets have been physically
verified by the management during the year and to the best of our
knowledge no serious discrepancies have been noticed on such
verification.
c) During the year, the company has not disposed off any substantial
part of fixed assets.
2) a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanation
given to us the procedure of physical verification of inventories
followed by the management is reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanation
given to us the company has maintained proper records of inventories
and there was no material discrepancies noticed on physical
verification as compared to the book records.
3) a) The company has not granted any loans to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of
this order are not applicable.
e) The company has taken interest free unsecured loan from a director
and a company in which directors are insterested and the maximum amount
involved during the year was Rs.171.61 lakhs and the year end balance
taken from the director and the Company was Rs. 161.61 lakhs.
f) In our opinion and according to the information and explanations
given to us, loans taken from the individual, firms, companies and
other parties listed in the register maintained under section 301 of
the Companies Act, 1956 are not prejudicial to the interest of the
company.
g) Unsecured loans taken from the two parties are not payable during
the year under consideration since these are payable on demand. Hence
stipulation regarding regularity in payment does not arise.
h) There is no overdue amount of loans taken from the companies, firms
or other parties listed in the register maintained u/s 301 of the
Companies Act, 1956
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of it's
business with regard to the purchases of inventory and fixed assets and
for the sale of goods. During the course of audit, we have not observed
any major weakness in internal control systems.
5) The company has not entered into contracts or arrangements referred
to in section 301 of the Act. Accordingly, the provisions of clause
4(v) of the Order are not applicable.
6) According to the information and explanations given to us the
company has not accepted any fixed deposits from the public with in the
meaning of section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975.
7) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
8) Maintenance of cost records under section 209 (1) (d) of the
Companies Act, 1956 has not been prescribed in respect of this company.
9) a) According to the information and explanations given to us, in our
opinion, the company is regular in depositing undisputed statutory dues
including Investor Education & Protection Fund, Income-tax, Sales Tax
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory due applicable to it. According to information and
explanations given to us and the opinion sought by the management, the
Provident Fund Act is not applicable to this company.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Investor Education &
Protection Fund, Income-tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, and Cess were in arrears, as at 31st March,
2011 for a period of more than six months from the date they became
payable. The amounts due to Investor Education & Protection Fund for a
period exceeding six months as at 31st Match, 2011 does not arise as
the company has not declared dividends to the shareholders since its
inception.
c) According to the information and explanations given to us, there are
no dues of Sales Tax. Income-Tax, Customs Duty, Wealth Tax, Excise Duty
which have not been deposited on account of dispute and in the case of
levy of Non-Agricultural Lands Assessment under Andhra Pradesh
Non-Agricultural Land Assessment Act, the matter is pending at courts
and an amount of Rs. 48.23 lakhs is shown under contingent liability.
10) The company was incorporated during the financial year 1993-94 and
the net worth of the company is eroded. The company has reported a cash
loss of Rs.7.56 lakhs during the financial years 2009 -'10 and made a
cash profit of Rs. 6.90 lakhs during the financial year 2010 -'11. .
11) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
financial institutions, banks or debenture holders during the financial
year under consideration.
12) In our opinion and according to the explanations given to us, no
loans and advances have been granted by the company on the basis of
security by way of pledge of shares, debentures and other securities.
13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual
Benefit Fund / Society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor's Report) Order 2003 are not applicable to the
company.
14) The company has not dealt or traded in shares, securities,
debentures or other investments during the year.
15) In our opinion and according to the explanations given to us, the
company has not given any guarantees for loans taken by others from
bank and financial institutions.
16) In our opinion and according to information and explanations given
to us, the company has not raised any term loans during the year.
17) According to the information and explanations given to us, and on
an overall examination of the balance sheet of the company, we are of
the opinion that no funds raised on short term basis have been used for
long tern investment.
18) During the year the company has not issued any preferential shares,
hence the clause (XVIII) is not applicable to the company.
19) According to the information and explanations given to us, during
the year covered by our audit report, the company has not issued any
debentures.
20) The company has not raised any monies by way of public issue during
the year.
21) Based on the audit procedures performed for the purposes of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the company has been noticed or reported during
the course of our audit.
For Garlapati & Co,
Firm Regn. No. 000892S
Chartered Accountants
Place : Guntur
Date : 13/08/2011 G.Satyanarayana
Partner, M.No. 22101
Mar 31, 2010
01) We have audited the attached Balance Sheet of BKV Industries Ltd as
at 31st March, 2010, the Profit & Loss Account and also the 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.
02) 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 from material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the financial principles used and significant estimates made
by management, as well as evaluating the over all financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
03) As required by the Companies (Auditors Report) Order, 2003 as
amended by the companies (Auditors Report) (Amendment) order, 2004
(together the Ãorder) issued by the Central Government of India in
terms of sub- section (4A) of Section 227of the Companies Act, 1956, we
annex here to a statement on matters specified in paragraphs 4 and 5 of
the said order.
04) Further to our comments in the annexure referred to above, we
report that:
(i) 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.
(ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appear from our examination of those
books.
(iii) The said Balance Sheet, Profit & Loss Account and Cash Flow
statements dealt with by this report are in agreement with books of
account.
(iv) In our opinion, the Balance Sheet & Profit & Loss account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the
companies Act, 1956.
(v) On the basis of written representations received from the
directors, as on 31st March, 2010 and taken on record by the Board of
Directors, we report that none of the director is disqualified as on
31st March, 2010 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
Due to notice received from the State Government for not to undertake
operations in prawn farming in Coastal Regulatory Zone pronounced by
Supreme Court, no operations were carried out in farm and the seed
production was also stopped in the hatchery due to paucity of working
capital. However accounts are prepared on a going concern basis for the
year ended 31st March, 2010 in view of culture in ponds situated at
Hatchery site.
With out qualifying our opinion, we draw your attention to note No. "Q"
in Schedule No.13 after implementation of the Scheme of Arrangement for
reorganization of capital under Sections 391 to 394 read with Sections
78, 100 to 104 of the Companies Act, 1956, the capital reduction of Rs.
5,65,14,600 was deducted from the accumulated losses in the Profit &
Loss account, Secured Loans of Rs. 3,03,50,000/- were converted in to
share capital of Rs. 91,69,184 (Face value of Re.1/- each) and share
premium of Rs. 2,11,80,815/- as per the ÃDiscovered New Share Issue
Price".
Subject to the above, the said accounts in our opinion and to the best
of our information and according to the explanations given to us, 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 :
a) in the case of the Balance sheet, of the state of affairs of the
company as at 31st March, 2010;
b) in the case of Profit & Loss account of the loss for the year ended
on that date
and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Annexure to the auditors report of BKV Industries Limited for the year
ending 31st March, 2010 referred to paragraph (3) there of:
1) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed assets.
b) We have been informed that all the fixed assets have been physically
verified by the management during the year and to the best of our
knowledge no serious discrepancies have been noticed on such
verification.
c) During the year, the company has not disposed off any substantial
part of fixed assets.
2) a) The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable.
b) In our opinion and according to the information and explanation
given to us the procedure of physical verification of inventories
followed by the management is reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion and according to the information and explanation
given to us the company has maintained proper records of inventories
and there were no material discrepancies noticed on physical
verification as compared to the book records.
3) a) The company has not granted any loans to companies, firms or
other parties listed in the register maintained under section 301 of
the Companies Act, 1956. Accordingly sub-clauses (b), (c) and (d) of
this order are not applicable.
b) The company has taken interest free unsecured loans from four
parties (including three directors who had paid the dues as guarantors
to the Vysya Bank Ltd) by operation of law as per the register
maintained under section 301 of the Companies Act, 1956 and the maximum
amount involved during the year was Rs. 474.31 lakhs (previous year
470.51 lakhs) and the year end balance of loans taken from such parties
was Rs. 169.61 lakhs. (previous year 470.51 lakhs)
c) In our opinion and according to the explanation given to us, loans
taken from the individuals, firms, companies and other parties listed
in the register maintained under section 301 of the Comapnies Act, 1956
are not prejudicial to the interest of the company.
d) Un secured loans taken from two parties are not payble during the
year under consideration since these are payable on demand. Hence
stipulation regarding regularity in payment does not arise. The Secured
loans taken from Directors of Rs. 3,03,50,000/- were converted in to
share capital of Rs. 91,69,184 (face value of Re. 1/- each per share)
and share premium of Rs. 2,11,80,815 (share premium of Rs. 2.31 per
share) as per the "Discovered New Share Issue Price" of the Scheme of
Arrangement regarding reorganization of share capital approved by the
Honble High Court of Andhra Pradesh.
e) These is no overdue amount of loans taken from the companies, firms
or other parties listed in the register maintained u/s 301 of the
Companies Act, 1956.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to the purchase of inventory, fixed assets and of
the sale of goods and services. During the course of audit, we have not
observed any major weakness in internal controls.
5) The company has not entered into contracts or arrangements referred
to in section 301 of the Act. Accordingly, the provisions of clause
4(v) of the Order are not applicable.
6) According to the information and explanations given to us the
company has not accepted any fixed deposits from the public with in the
meaning of section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975.
7) In our opinion, the company has an internal audit system
commensurate with the size and nature of business.
8) Maintenance of cost records under section 209 (1) (d) of the
Companies Act, 1956 has not been prescribed in respect of this company.
9) a) According to the information and explanations given to us, in our
opinion, the company is regular in depositing undisputed statutory dues
including Investor Education & Protection Fund, income tax, wealth tax,
customs duty, excise duty, cess and other material statutory dues
applicable to it. According to information and explanation and the
opinion sought by the management, the Provident Fund Act is not
applicable to this company.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty, excise duty and cess were in arrears, as at 31st
March, 2010 for a period of more than six months from the date they
became payable.
c) According to the information and explanations given to us, there are
no dues of sales tax. Income tax, customs duty, wealth tax, excise duty
which have not been deposited on account of dispute and in the case of
levy of Non-Agricultural Lands Assessment under Andhra Pradesh
Non-Agricultural Land Assessment Act, the matter is pending at High
court and an amount of Rs. 45.52 lakhs is shown under contingent
liability.
10) The company was incorporated during the financial year 1993-94 and
the net worth of the company is eroded. The company has reported a cash
profit of Rs. 169.85 lakhs during the financial years 2008-09 and made
a cash loss of Rs. 7.56 lakhs during the financial year 2009-10. .
11) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to
financial institutions, banks or debenture holders during the financial
year under consideration.
12) In our opinion and according to the explanations given to us, no
loans and advances have been granted by the company on the basis of
security by way of pledge of shares, debentures and other securities.
13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual
Benefit Fund / Society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditors Report) Order 2003 are not applicable to the
company.
14) The company has not dealt or traded in shares, securities,
debentures or other investments during the year.
15) In our opinion and according to the explanations given to us, the
company has not given any guarantees for loans taken by others from
bank and financial institutions.
16) In our opinion and according to information and explanations given
to us, the company has not raised any term loans during the year.
17) According to the information and explanations given to us, and on
an overall examination of the balance sheet of the company, we are of
the opinion that no funds raised on short term basis have been used for
long tern investment.
18) According to the information and explanations given to us, the
company has made 91, 69,184 preferential allotment of Equity shares to
parties and companies in the register maintained under section 301 of
the Act during the year as per the High Court order dated 13/ 02 /2009
as part of the Scheme of Arrangement sanctioned.
19) According to the information and explanations given to us, during
the year covered by our audit report, the company has not issued any
debentures.
20) The company has not raised any money by way of public issue during
the year.
21) Based on the audit procedures performed for the purposes of
reporting the true and fair view of the financial statements and as per
the information and explanations given by the management, we report
that no fraud on or by the company has been noticed or reported during
the course of our audit.
For Garlapati & Co,
Firm Regn. No. 000892S
Chartered Accountants
Place : Guntur G.Satyanarayana
Date: 30-08-2010 Partner, M.No. 22101
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