Mar 31, 2019
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Kakatiya Cement Sugar and Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2019, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and Statement of Cash Flows for the year then ended, including a summary of significant accounting policies and other explanatory information.
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 Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the [Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2019, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Sr. No. |
Key Audit Matter |
Auditorâs Response |
|
1 |
Evaluation of uncertain tax positions The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer Notes.32 to the Financial Statements |
Principal Audit Procedures - Obtained details of completed tax assessments and demands for the year ended March 31, 2019 from management. We involved our internal experts to challenge the managementâs underlying assumptions in estimating the tax provision and the possible outcome of the disputes. - Our internal experts also considered legal precedence and other rulings in evaluating managementâs position on these uncertain tax positions. Additionally, we considered the effect of new information in respect of uncertain tax positions as at April 1, 2018 to evaluate whether any change was required to managementâs position on these uncertainties. |
|
2. |
Net Realizable Value of Finished Goods |
Principal Audit Procedures |
|
Finished goods inventory are valued at lower of |
- Obtained an understanding of the |
||
cost and net realizable value (estimated selling |
determination of the net realizable values |
||
price less estimated cost to sell). Considering |
of the commodities and assessed and |
||
that there is always volatility in the selling price |
tested the reasonableness of the significant |
||
of sugar (âcommodityâ) which is dependent |
judgements applied by the management. |
||
upon various market conditions, determination |
- Evaluated the design of internal controls |
||
of the net realizable value involves significant |
relating to the valuation of finished goods |
||
management judgement and therefore has been |
(including commodities) and also tested |
||
considered as a key audit matter. |
the operating effectiveness of the aforesaid |
||
The total value of finished goods of sugar |
controls. |
||
(âcommodityâ) as at 31st March, 2019 is |
- Compared the actual realization after the |
||
Rs.5831.85 lakhs. |
year end / latest realization to assess the reasonableness of the net realisable value |
||
Also refer to Note 2.8 for the accounting policy |
that was estimated and considered by the |
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on valuation of finished goods. |
management. - Compared the actual costs incurred to sell after the year end / based on the latest sale transaction to assess the reasonableness of the cost to sell that was estimated and considered by the management. - Compared the cost of the finished goods with the estimated net realisable value and checked if the finished goods were recorded at net realisable value where the cost was higher than the net realisable value. - Assessed the appropriateness of the disclosure in the financial statements in accordance with the applicable financial reporting framework. |
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Basis for Opinion
We conducted our audit of the financial statement in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significant in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
Other Information
The Companyâs Board of Directors are responsible for the other information. The other information comprises the information included in the Directors Report, Corporate Governance Report but does not include the financial statements and our auditorâs report thereon.
Our opinion on the financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 of the Act. 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 implementation and maintenance of 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.
In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern.If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
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 including other comprehensive income, Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act read with Rule 7 of Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 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 âAnnexure Aâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid/provided by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditorâs 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.32);
ii. The Company did not have any longterm contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016, (âthe Orderâ) issued by the Central Government in terms of Section 143 (11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
Annexure âAâ to the Independent Auditorâs Report
(Referred to in paragraph 1(f) under âReport on Other Legal Regulatory Requirementsâ section of our report to the Members of the Company of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Kakatiya Cement Sugar and Industries Limited (âthe Companyâ) as of 31 March 2019 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Annexure âBâ to the Independent Auditorâs Report
With reference to Paragraph 2 under âReport on Other Legal Regulatory Requirementsâ section of our report to the Members of the Company, we report that
(i) (a) The Company is in the process of updating proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets have been physically verified by the management in a periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its business. No material discrepancies were noticed on such physical verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) The inventories have been physically verified during the year by the management.The discrepancies noticed on verification between the physical stocks and book records were not material.
(iii) The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, paragraph 3 (iii) (a) to (c) of the said Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to loans, investments, guarantees and securities made.
(v) The company has not accepted deposits within the meaning of Sections 73 to 76 of the Act and the rules framed there under. Paragraph 3 (v) of the said Order is not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the Company as prescribed under subsection (1) of section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, the Company is regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, value added tax, wealth tax, service tax, customs duty, excise duty, cess and goods and service tax and any other statutory dues as applicable with the appropriate authorities and there were no arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and records of the Company examined by us, the particulars of income tax, sales tax, valued added tax, wealth tax, service tax, customs duty, excise duty or cess as at 31st March, 2019 which have not been deposited on account of any dispute pending, are as under:
Name of the Statute |
Nature of dues |
Amount (Rs. in Lakhs) |
Period to which the amount relates |
Forum where dispute is pending |
Income-Tax Act, 1961 |
Income Tax |
12.42 |
Assessment Years 1999-2000 2000-2001 |
High Court of Judicature at Hyderabad for the State of Telanga-na and the State of Andhra Pradesh |
Income-Tax Act, 1961 |
Income Tax |
969.26 |
Assessment Year 2016-17 |
CIT(A), Hyderabad |
VAT Act, 2005 |
Sales Tax |
29.53 |
Financial Year 2012-13 |
Appellate Tribunal, Hyderabad |
VAT Act, 2005 |
Sales Tax |
27.52 |
Financial Year 2013-14 |
Appellate Tribunal, Hyderabad |
VAT Act ,2005 |
Sales Tax |
173.33 |
Financial Year 2014-15 |
Additional Joint Commissioner Hyderabad |
Customs Act, 1962 |
Customs Duty |
65.77 |
Financial year 2012-2013 |
Additional Commissioner Customs |
(viii) The Company has not defaulted in repayment of loans or borrowing to financial institutions, banks, Governments and dues to debenture holders.
(ix) The Company did not raised any money by way of initial public offer or further public offer during the year. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which the loans were obtained other than amounts temporarily invested pending utilization of the funds for the intended use.
(x) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3 (xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3 (xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3 (xv) of the Order is not applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3 (xv) of the Order is not applicable to the Company.
For Ramanatham & Rao
Chartered Accountants
(Firm Registration No.S-2934)
V. Narasimha Phani
Place: Secunderabad Partner
Date: 11th May, 2019 M. No.204332
Mar 31, 2018
Report on the Indian Accounting Standards (Ind AS) Financial Statements
We have audited the accompanying financial statements of Kakatiya Cement, Sugar and Industries limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these Ind AS 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 Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs 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 there under.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs 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 Companyâs preparation of the Ind AS 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 Companyâs Directors, as well as evaluating the overall presentation of the Ind AS 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 Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS 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, 2018, and its total comprehensive income (comprising of profit and other comprehensive income) its cash flows and the changes in equity for the year ended on that date.
Other Matter
The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the years (Accounting Standards) Rules, 2006 (as amended) which were audited by the predecessor auditor who expressed an unmodified opinion vide reports dated 26th May 2017 and 25th May 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. 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 (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31st March, 201 8 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 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 âAnnexure Bâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i) The Company has disclosed the impact of pending litigations on its financial position in its Ind AS financial statements - Refer Note 32 to the Ind AS financial statements;
ii) The Company did not have any longterm 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.
iv) The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.
Annexure - A to the Auditorsâ Report
The Annexure referred to in our report to the members of the Company for the year ended on 31st March, 2018. We report that:
(i) (a) The Company is in the process of updating proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets have been physically verified by the management in a periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its business. No material discrepancies were noticed on such physical verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) The inventories have been physically verified during the year by the management. The discrepancies noticed on verification between the physical stocks and book records were not material.
(iii) The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, paragraph 3 (iii) (a) to (c) of the said Order is not applicable to the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to loans, investments, guarantees and securities made.
(v) The company has not accepted deposits within the meaning of Sections 73 to 76 of the Act and the rules framed there under paragraph 3 (v) of the said Order is not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the Company as prescribed under sub-section (1) of section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, the Company is regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, value added tax, wealth tax, service tax, customs duty, excise duty, cess and goods and service tax with effect from July 1, 2017 and any other statutory dues as applicable with the appropriate authorities and there were no arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and records of the Company examined by us, the particulars of income tax, sales tax, valued added tax, wealth tax, service tax, customs duty, excise duty or cess as at 31st March, 2018 which have not been deposited on account of any dispute pending, are as under:
Name of the Statute |
Nature of dues |
Amount (RS. in Lakhs) |
Period to which the amount relates |
Forum where dispute is pending |
|
Income-Tax Act, 1961 |
Income Tax |
12.42 |
Assessment Years 1999-2000 2000-2001 2001-2002 |
High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh |
|
VAT Act, 2005 |
Sales Tax |
29.53 |
Financial Year 2012-13 |
Appellate Tribunal, Hyderabad |
|
VAT Act, 2005 |
Sales Tax |
27.52 |
Financial Year 2013-14 |
Appellate Tribunal, Hyderabad |
|
Customs Act, 1962 |
Customs Duty |
65.77 |
Financial year 2012-2013 |
Additional Commissioner Customs |
(viii) The Company has not defaulted in repayment of loans or borrowing to a financial institution, banks, Governments and dues to debenture holders.
(ix) The Company did not raise any money by way of initial public offer or further public offer during the year. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which the loans were obtained other than amounts temporarily invested pending utilization of the funds for the intended use.
(x) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3 (xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3 (xiv) of the Order is not applicable.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3 (xv) of the Order is not applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3 (xv) of the Order is not applicable to the Company.
Annexure - B to the Auditorsâ Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Kakatiya Cement, Sugar and Industries limited (âthe Companyâ) as of 31st March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date. Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Ramanatham & Rao
Chartered Accountants
(Firmâs Registration No S-2934)
V. Narasimha Phani
Place : Secunderabad Partner
Date: 25th May, 2018 M. No.204332
Mar 31, 2016
To
The Members of
Kakatiya Cement Sugar and Industries Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Kakatiya Cement Sugar and Industries limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, 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 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 and presentation 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 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 there under.
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 controls 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, 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 the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. 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 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) On the basis of the written representations received from the Directors as on 31st March, 2016 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 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 B".
(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 30 to the 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.
ANNEXURE - A TO THE AUDITORS'' REPORT
The Annexure referred to in our report to the members of the Company for the year ended on 31st March, 2016. We report that:
(i) (a) The Company is in the process of updating proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As explained to us, the fixed assets have been physically verified by the management in a periodical manner, which in our opinion is reasonable, having regard to the size of the Company and the nature of its business. No material discrepancies were noticed on such physical verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) The inventories have been physically verified during the year by the management. The discrepancies noticed on verification between the physical stocks and book records were not material.
(iii) The company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, paragraph 3 (iii) (a) to (c) of the Order is not applicable.
(iv) In our opinion and according to the information and explanations given to us, the Company has not granted loans, has not made investments, has not given guarantees and securities and hence paragraph (iv) of the Order is not applicable.
(v) The Company has not accepted deposits within the meaning of the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under.
(vi) We have broadly reviewed the cost records maintained by the company prescribed by the Central Government under sub-section (1) of section 148 of the Act. However, we have not made a detailed examination of cost records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, the Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, value added tax, wealth tax, service tax, customs duty, excise duty, cess and any other statutory dues as applicable with the appropriate authorities and there were no arrears of outstanding statutory dues as at the last day of the financial year concerned for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us and records of the Company examined by us, the particulars of income tax, sales tax, valued added tax, wealth tax, service tax, customs duty, excise duty or cess as at 31st March, 2016 which have not been deposited on account of any dispute pending, are as under:
Name of the Statute |
Nature of dues |
Amount (in Lacs) |
Period to which the amount relates |
Forum where the Dispute is pending |
Income-Tax Act, 1961 |
Income-tax |
12.42 |
Assessment years 1999-2000 2000-2001 2001-2002 |
High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh |
Income-Tax Act, 1961 |
Income-tax |
64.45 |
Assessment year 2011-12 |
CIT (Appeals) |
Income-Tax Act, 1961 |
Income-tax |
120.68 |
Assessment year 2012-13 |
CIT (Appeals) |
(viii) The Company has not defaulted in repayment of loans or borrowing to a financial institution, banks and Governments.
(ix) The Company did not raise any money by way of initial public offer or further public offer during the year. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which the loans were obtained other than amounts temporarily invested pending utilization of the funds for the intended use.
(x) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3 (xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with Directors or persons connected with him. Accordingly, paragraph 3 (xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
ANNEXURE - B TO THE AUDITORS'' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Kakatiya Cement Sugar and Industries Limited ("the Company") as of 31 March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
for M. ANANDAM & CO.
CHARTERED ACCOUNTANTS
(Firm Regn.No.000125S)
A.V. Sadasiva
Place : Hyderabad PARTNER
Date : 25th May 2016 M. No. 018404
Mar 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of Kakatiya
Cement Sugar and Industries Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2014, the Statement of Profit and Loss
and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of thefinancial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"), read with general circular
8/2014, dated 4th April, 2014 issued by Ministry of Corporate Affairs.
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 misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our auditopinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956 read with
general circular 8/2014, dated 4th April, 2014 issued by Ministry of
Corporate 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 disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE
RE: KAKATIYA CEMENT SUGAR AND INDUSTRIES LIMITED
REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING OF "REPORT ON OTHER LEGAL
AND REGULATORY
REQUIREMENTS" OF OUR REPORT OF EVEN DATE
i. a. The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The fixed assets have been physically verified by the management in
a phased periodical manner, which in our opinion is reasonable, having
regard to the size of the company and the nature of its business. No
material discrepancies were noticed on such physical verification.
c. The Company has not disposed off any substantial part of its fixed
assets so as to affect its going concern status.
ii. a. The inventories have been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b. The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company has maintained proper records of its inventories. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
iii. 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.
b. The Company has taken unsecured loans from one party covered in the
register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was ` 350 Lakhs and the year-
end balance of loans taken is ` 350 Lakhs.
c. In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from the parties covered in the register
maintained under section 301 of the Companies Act, 1956 are not, prima
facie prejudicial to the interest of the Company.
d. The Company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest.
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 and the nature of its business, for the
purchase of inventory, fixed assets and for the sale of goods. During
the course of our audit, no major weakness has been noticed in the
internal control system in respect of these areas.
v. a. According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
vi. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. We have broadly reviewed the 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.
ix. a. According to the information and explanations given to us and
the records of the company examined by us, the Company is regular in
depositing undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales tax, custom duty, excise duty, cess and
other statutory dues as applicable with the appropriate authorities and
there were no arrears of outstanding statutory dues as at the last day
of the financial year concerned for a period of more than six months
from the date they became payable.
b. According to the information and explanations given to us and
records of the Company examined by us, the particulars of sales tax,
income tax, customs duty, excise duty, service tax and wealth tax, as
at 31st March, 2014 which have not been deposited on account of dispute
pending, are as under:
Name of the Nature of dues Amount Period to which Forum where
Statute (in
Lakhs) the amount the Dispute
is
relates pending
Income-Tax
Act, 1961 Income-tax 12.42 Assessment
years High Court of
1999-2000 Andhra
Pradesh
2000-2001
2001-2002
Income-Tax
Act, 1961 Income-tax 52.97 Assessment
year CIT (Appeals)
2010-11
Income-Tax
Act, 1961 Income-tax 64.45 Assessment
year CIT (Appeals)
2011-12
x. The company has no accumulated losses and it has not incurred any
cash losses during the financial year covered by our audit or in the
immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institution, bank or debenture holders.
xii. According to information and explanations given to us and based on
the documents and records produced to us, the Company has not granted
any loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Accordingly the provisions of clause 4(xiii) if
the Companies (Auditors'' Report) Order, 2003 are not applicable to the
Company.
xiv. In our opinion and according to the information and explanation
given to us, the Company is not dealing in shares, securities,
debentures and other investments. Accordingly, the provisions of clause
4(xiv) of the Companies (Auditors'' Report) Order, 2003 are not
applicable to the Company.
xv. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loan taken by
others from banks or financial institutions. Accordingly, the
provisions of clause 4(xv) of the Companies (Auditors'' Report) Order,
2003 are not applicable to the Company.
xvi. The company has not raised any new term loans during the year.
xvii. In our opinion and according to the information and explanation
to us, and on an overall examination of the Balance sheet of the
Company, we report that no funds raised on short-term basis have been
used for long term investments.
xviii. The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
xix. The Company has not issued any debentures during the year.
xx. The Company has not raised any funds on public issue and hence
disclosure on the end use of money raised by the public issue is not
applicable to the Company.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
for M. ANANDAM & CO.
CHARTERED ACCOUNTANTS
(Firm Regn.No.000125S)
Place : Hyderabad A.V. Sadasiva
Date : 26th May 2014 PARTNER
M. No. 018404
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Kakatiya
Cement Sugar and Industries Limited ("the Company"), which comprise the
Balance Sheet as at March 31, 2013, the Statement of Profit and Loss
and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of thefinancial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and 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 misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our auditopinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with theAccounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE
RE: KAKATIYA CEMENT SUGAR AND INDUSTRIES LIMITED
REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING OF "REPORT ON OTHER LEGAL
AND REGULATORY
REQUIREMENTS" OF OUR REPORT OF EVEN DATE
i. a. The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The fixed assets have been physically verified by the management in
a phased periodical manner, which in our opinion is reasonable, having
regard to the size of the company and the nature of its business. No
material discrepancies were noticed on such physical verification.
c. The Company has not disposed off any substantial part of its fixed
assets so as to affect its going concern status.
ii. a. The inventories have been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b. The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company has maintained proper records of its inventories. The
discrepancies noticed on verification between the physical stocks and
the book records were not material.
iii. 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.
b. The Company has taken unsecured loans from two parties covered in
the register maintained under section 301 of the Companies Act, 1956.
The maximum amount involved during the year was RS. 150 Lakhs and the
year-end balance of loans taken is RS. 30 Lakhs.
c. In our opinion, the rate of interest and other terms and conditions
on which loans have been taken from the parties covered in the register
maintained under section 301 of the Companies Act, 1956 are not, prima
facie prejudicial to the interest of the Company.
d. The Company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest.
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 and the nature of its business, for the
purchase of inventory, fixed assets and for the sale of goods. During
the course of our audit, no major weakness has been noticed in the
internal control system in respect of these areas.
v. a. According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have
been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
vi. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
viii. We have broadly reviewed the 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.
ix. a. According to the information and explanations given to us and
the records of the company examined by us, the Company is regular in
depositing undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales tax, custom duty, excise duty, cess and
other statutory dues as applicable with the appropriate authorities and
there were no arrears of outstanding statutory dues as at the last day
of the financial year concerned for a period of more than six months
from the date they became payable.
x. The company has no accumulated losses and it has not incurred any
cash losses during the financial year covered by our audit or in the
immediately preceding financial year.
xi. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institution, bank or debenture holders.
xii. According to information and explanations given to us and based on
the documents and records produced to us, the Company has not granted
any loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Accordingly the provisions of clause 4(xiii) if
the Companies (Auditors'' Report) Order, 2003 are not applicable to the
Company.
xiv. In our opinion and according to the information and explanation
given to us, the Company is not dealing in shares, securities,
debentures and other investments. Accordingly, the provisions of clause
4(xiv) of the Companies (Auditors'' Report) Order, 2003 are not
applicable to the Company.
xv. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loan taken by
others from banks or financial institutions. Accordingly, the
provisions of clause 4(xv) of the Companies (Auditors'' Report) Order,
2003 are not applicable to the Company.
xvi. The company has not raised any new term loans during the year.
xvii. In our opinion and according to the information and explanation
to us, and on an overall examination of the Balance sheet of the
Company, we report that no funds raised on short-term basis have been
used for long term investments.
xviii. The Company has not made any preferential allotment of shares
during the year to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
ix. The Company has not issued any debentures during the year.
xx. The Company has not raised any funds on public issue and hence
disclosure on the end use of money raised by the public issue is not
applicable to the Company.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
was noticed or reported during the year.
for M. ANANDAM & CO.
CHARTERED ACCOUNTANTS
(Firm Regn.No.000125S)
Place : Hyderabad A.V. Sadasiva
Date : 27.05.2013 PARTNER
M. No. 018404
Mar 31, 2012
1. We have audited the attached Balance Sheet of Kakatiya Cement Sugar
& Industries Limited, as at 31st March, 2012 and the Statement of
Profit & Loss and Cash Flow statement for the year ended on that date
annexed there to. 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.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 issued
by the Company Law Board in terms of Section 227(4A) of the Companies
Act, 1956, we annex hereto a statement on the matters specified in
paragraphs 4 & 5 of the said Order.
4. Further to our comments in the annexure referred to in paragraph 3
above.
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief are necessary for the purpose of our
audit.
b) In our opinion, proper books of accounts as required by law have
been kept by the Company so far as appears from our examination of such
books.
c) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statements dealt with by this report are in agreement with the books of
accounts.
d) 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 to the extent applicable, except that the
provision for leave encashment cash basis instead of actuarial
valuation (Refer Note 1 (viii) (c) of the finanancial statements).
e) On the basis of written representations received from the Directors
of the Company, as on 31st March, 2012 and taken on record by the Board
of Directors, we report that none of the Director is disqualified as at
31st March, 2012 from being appointed as a Director in terms of Clause
(g) of the Sub-Section (1) Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, they said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India.
i. In the case of Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2012;
ii. In the case of the Statement of Profit & Loss, of the Profit of
the Company for the year ended on that date; and
iii. In the case of the Cash Flow Statements, of the Cash Flows for the
year ended on that date.
1) a. The company has maintained proper records showing full
particulars including quantitative details, and situation of fixed
assets.
b. The management has physically verified most of the fixed assets of
the company and no material discrepancies were noticed on such physical
verification.
c. No substantial part of the fixed assets has been disposed off
during the year.
2) a. The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b. The procedures of physical verification of inventories followed by
the management are reasonable and adequate commensurate with the size
of the company and nature of its business.
c. On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3) a. The Company has not granted any loans to the parties covered
under section 301 of the Companies Act,1956.
b. The company has taken an unsecured loan from one party covered in
the register maintained under Section 301 of the Companies Act, 1956.
The maximum amount involved during the year is Rs. 2.30 Crore and closing
balance outstanding is Rs.30 Lakh. The Company has not granted loans to
Companies, firms etc., listed in the register maintained under Section
301 of the Act.
c. The rate of interest and the terms and conditions of loan taken are
prima facie not prejudicial to the interest of the Company. The payment
of the principal amount and the interest are also regular.
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 for the purchase of inventory, fixed assets and also for the
sale of goods. Further, on the basis of our examinations and according
to the information and explanations given to us, we have neither come
across nor have been informed of any instance of major weaknesses in
the aforesaid internal control systems.
5) a. According to the information and explanations given to us, we are
of the opinion that the transactions that need to be entered into the
register maintained under section 301 of the Companies Act, 1956, have
been so entered.
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements with companies, firms or other parties listed in the
Register maintained under Section 301 of the Act do not exceed Rs.5 lakhs
in value, and the transactions made are at the prices which are
reasonable and having regard to the prevailing market prices at the
relevant time.
6) The company has complied with the provisions of Sections 58A and
58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from the
public.
7) In our opinion, the internal audit system of the Company is
commensurate with its 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 records of the Company, the undisputed statutory
dues including Provident Fund, Employees State Insurance, service tax,
excise duty, sales tax and cess have been generally regularly deposited
with the appropriate authorities. According to the information and
explanations given to us, no undisputed amounts payable in respect of
the aforesaid dues were outstanding as at 31st March, 2012 for a period
of more than six months from the date they become payable.
b. According to the records of the company examined, there are no dues
of Customs tax, Wealth tax, Excise duty / Cess, except in case of
Income tax the details of which are given below:
Name of the Nature of dues Amount Period to
which Forum where
Statute (in Lakhs) the amount the Dispute is
relates pending
Income Tax
Act, Disallowance
of unabsorbed Rs. 12.42 Assessment
Years High Court of
1961 depreciation/
business
losses. 1999-2000 Andhra Pradesh
2000-2001
2001-2002
Income
Tax Act, Disallowance
U/S 80 IA
Exemption Rs. 456.45 Assessment
Year CIT
1961 2009-2010 (Appeals)
10) The company has no accumulated losses and has not incurred any cash
losses during the financial year covered by our audit or in the
immediately preceding financial year.
11) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the company has
not defaulted in repayment of dues to financial institutions & banks.
12) During the year, the company has not granted loans and advances 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, clause 4(xiii) of the Companies
(Auditor's Report) Order, 2003 is not applicable to the company.
14) In our opinion and according to the information and explanations
given to us, the company is not dealing in shares, securities,
debentures and other investments. Accordingly the provisions of clause
4(xiv) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the company.
15) The company has not given any guarantee for loans taken by others
from banks or financial institutions.
16) The company has not raised new term loans during the year. The term
loans outstanding were applied for the purposes for which they were
taken.
17) According to the information and explanation given to us and on
overall examination of balance sheet of the company, we are of the
opinion that there are no funds raised for short term basis that have
been used for long term investment.
18) During the year, the Company has not made any preferential
allotment of shares to the parties and Companies covered in the
register maintained under Section 301 of the Companies Act, 1956.
19) The Company has not raised any money by way of issue of Debentures
during the year, hence paragraph (xix) of the order is not applicable
to the company.
20) According to the information and explanations given to us during
the year the company has not raised any funds on public issue and hence
this clause is not applicable to the company.
21) According to the information and explanations given to us no fraud
on or by the company has been noticed or reported during the course of
our audit.
for M. ANANDAM & CO.
CHARTERED ACCOUNTANTS
(Firm Regn.No.000125S)
A.V. Sadasiva
Place : Hyderabad PARTNER
Date : 20.08.2012 M. No. 18404
Mar 31, 2011
We have audited the attached Balance Sheet of M/s. Kakatiya Cement
Sugar & Industries Limited, as at 31st March, 2011 and the Profit &
Loss Account for the year ended on that date annexed thereto and Cash
Flow Statement for the year ended on that date. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
1. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the annexure hereto a statement on the matters
specified in paragraphs 4 and 5 of the said order.
2. Further to our Comments in the annexure referred to in paragraph 1
above, we report that
a. We have obtained all the information and explanations, which, to
the best of our knowledge and belief were necessary for the purposes of
our audit.
b. In our opinion, the Company has kept proper books of account as
required by law, so far as appears from our examination of those books.
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d. In our opinion, the Balance Sheet, Profit and 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, to the extent applicable, except that the
provision for gratuity has been arrived on accrual basis and leave
encashment on cash basis instead of actuarial valuation (Refer Note.1
(vii) of Schedule XII).
e. On the basis of written representations received from the Directors
of the company, as on 31st March, 2011 and taken on record by the board
of directors, wherever applicable we report that none of the directors
is disqualified as at 31st March, 2011 from being appointed as a
director of the Company in terms of clause (g) of sub-section (1)
Section 274 of the Companies Act, 1956.
f. In our opinion, and to the best of our information and according to
the explanations given to us, the said financial statements read
together with the significant Accounting Policies and other 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:
i) In the case of the Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2011;
ii) In the case of the Profit & Loss account, of the Profit of the
Company for the year ended on that date; and
iii) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(Statement referred to in paragraph 1 of our Report of even date)
i) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) The management has physically verified most of the fixed assets of
the company and no material discrepancies were noticed on such physical
verification.
c) No substantial part of the fixed assets has been disposed off during
the year.
ii) a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) a) The company has taken unsecured loans from persons listed in
the register maintained under Section 301. Maximum outstanding during
the year was Rs 2.30crores and closing outstanding is Rs 2.30 crores. The
Company has not granted loans to Companies, firms etc., listed in the
register maintained under Section 301 of the Act.
b) The terms and conditions of loan taken are prima facie not
prejudicial to the interest of the company.
iv) 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 purchase of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, no major
weakness has been noticed in the internal controls.
v) a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the transactions that need to be entered into the register
maintained under section 301 have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements with companies, firms or other parties listed in the
Register maintained under Section 301 of the Act do not exceed Rs 5
lakhs in value, and the transactions made are at the prices which are
reasonable and having regard to the prevailing market prices at the
relevant time.
vi) The company has complied with the provisions of Sections 58A and
58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from the
public.
vii) The company has an internal audit system commensurate with the
size and nature of its business.
viii) The company, in our opinion and according to the information and
explanations given to us, has made and maintained accounts and records
prescribed by the Central Government under section 209(1)(d) of the
Companies Act, 1956 in respect of cement and power divisions. We have
not examined the contents of these accounts and records.
ix) a) According to the records of the company, the company is regular
in depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund,
income-tax, sales- tax, wealth-tax, custom duty, excise-duty, service
tax, Cess and other statutory dues applicable to it and there were no
arrears of outstanding statutory dues as at the last day of the
financial year concerned for a period of more than six months from the
date they became payable.
b) According to the information and explanations given to us the
following are the particulars of disputed dues and amounts not paid
thereon on account of sales tax, income tax and Central Excise:
Name of the Nature of dues Amount Period to which Forum where
Statute (in Lakhs) the amount the Dispute
is
relates pending
Income Tax
Act, Disallowance of
unabsorbed Rs 12.42 Assessment Years High Court
of
1961 depreciation/
business
losses. 1999-2000 Andhra
Pradesh
2000-2001
2001-2002
Income Tax
Act, Disallowance U/S
80 IA Exemption Rs 436.18 Assessment Year ITAT,
1961 2007-2008 Hyderabad
Income Tax
Act, Disallowance U/S
80 IA Exemption Rs 319.92 Assessment Year CIT
(Appeals)
1961 2008-09
x) The company has no accumulated losses and it has not incurred any
cash losses in the financial year ended on that date or in the
immediately preceding financial year.
xi) The company has not defaulted in repayment of dues to financial
institutions, banks or debenture holders.
xii) During the year, the company has not granted loans and advances on
the basis of security by way of pledge of shares, debentures and other
securities.
xiii) The company is not a chit fund or a nidhi or 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.
xiv) The company is not a dealer or trader in shares, securities,
debentures and other investment.
xv) The company has not given any guarantee for loans taken by others
from banks or financial institutions.
xvi) According to the information and explanations given to us, the
term loans were applied for the purpose for which they were obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the cash flow statement and the Balance Sheet
of the Company, in our opinion the funds raised on short term basis
have prima facie not been used for long term investment.
xviii) According to the information and explanations given to us,
during the year the Company has not made preferential allotment of
shares to parties and companies covered in the register maintained
under Section 301 of the Companies Act, 1956.
xix) According to the information and explanations given to us, the
Company has not raised any money by way of issue of debentures during
the year.
xx) According to the information and explanations given to us, the
Company has not raised any money by way of public issue during the
year. Accordingly, the provisions of clause 4 (xx) of the Companies
(Auditor's Report) Order, 2003 are not applicable to the company.
xxi) During the course of audit, based upon the audit procedures
performed and information and explanations given by the management, no
instance of fraud on or by the company has been noticed or reported
during the course of our audit.
for M. ANANDAM & CO.
CHARTERED ACCOUNTANTS
(Firm Regn.No.000125S)
A.V. SADASIVA
Place : Hyderabad PARTNER
Date : 24th August, 2011 M. No. 18404
Mar 31, 2010
We have audited the attached Balance Sheet of M/s. Kakatiya Cement
Sugar & Industries Limited, as at 31st March, 2010 and the Profit &
Loss Account for the year ended on that date annexed thereto and Cash
Flow Statement for the year ended on that date. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
presentation. We believe that our audit provides a reasonable basis for
our opinion.
1. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the annexure hereto a statement on the matters
specified in paragraphs 4 and 5 of the said order.
2. Further to our Comments in the annexure referred to in paragraph 1
above, we report that
a. We have obtained all the information and explanations, which, to
the best of our knowledge and belief were necessary for the purposes of
our audit.
b. In our opinion, the Company has kept proper books of account as
required by law, so far as appears from our examination of those books.
c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d. In our opinion, the Balance Sheet, Profit and 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, to the extent applicable, except that the
provision for gratuity has been arrived on accrual basis and leave
encashment on cash basis instead of actuarial valuation (Refer Note.1
(vii) of Schedule XII).
e. On the basis of written representations received from the Directors
of the company, as on 31st March, 2010 and taken on record by the board
of directors, wherever applicable we report that none of the directors
is disqualified as at 31st March, 2010 from being appointed as a
director of the Company in terms of clause (g) of sub-section (1)
Section 274 of the Companies Act, 1956.
f. In our opinion, and to the best of our information and according to
the explanations given to us, the said financial statements read
together with the significant Accounting Policies and other 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:
i) In the case of the Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2010;
ii) In the case of the Profit & Loss account, of the Profit of the
Company for the year ended on that date; and
iii) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Statement referred to in paragraph 1 of our Report of even date)
i) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) The management has physically verified most of the fixed assets of
the company and no material discrepancies were noticed on such physical
verification.
c) No substantial part of the fixed assets has been disposed off during
the year.
ii) a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) a) The company has taken unsecured loans from persons listed in
the register maintained under Section 301. Maximum outstanding during
the year was Rs.2.60crores and closing outstanding is Rs.2.30 crores.
The Company has not granted loans to Companies, firms etc., listed in
the register maintained under Section 301 of the Act.
b) The terms and conditions of loan taken are prima facie not
prejudicial to the interest of the company.
iv) 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 purchase of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, no major
weakness has been noticed in the internal controls.
v) a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the transactions that need to be entered into the register
maintained under section 301 have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements with companies, firms or other parties listed in the
Register maintained under Section 301 of the Act do not exceed Rs.5
lakhs in value, and the transactions made are at the prices which are
reasonable and having regard to the prevailing market prices at the
relevant time.
vi) The company has complied with the provisions of Sections 58A and
58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from the
public.
vii) The company has an internal audit system commensurate with the
size and nature of its business.
viii) The company, in our opinion and according to the information and
explanations given to us, has made and maintained accounts and records
prescribed by the Central Government under section 209(1)(d) of the
Companies Act, 1956 in respect of cement and power divisions. We have
not examined the contents of these accounts and records.
ix) a) According to the records of the company, the company is regular
in depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund,
income-tax, sales-tax, wealth-tax, custom duty, excise-duty, service
tax, Cess and other statutory dues applicable to it.
b) According to the information and explanations given to us the
following are the particulars of disputed dues and amounts not paid
thereon on account of sales tax, income tax and Central Excise:
Name of the Nature of dues Amount
Statute (in Lakhs)
Income Tax Act, Disallowance of unabsorbed Rs.12.42
1961 depreciation/ business losses.
AP VAT Act Regarding Sales tax on Rs.11.98
Molasses Sales, Input Tax
credit on coal etc.,
Income Tax Act, Disallowance U/S 80 IA Exemption Rs.115.00
1961
Name of the Period to which Forum where
Statute the amount the Dispute is
relates pending
Income Tax Act, Assessment years High Court of
1961
1999-2000, Andhra Pradesh
2000-2001
2001-2002
AP VAT Act 2001-2002 High Court of
2002-2003 Andhra Pradesh
2005-2006
Income Tax Act, Assessment Year CIT (Appeals)
1961 2007-08
x) The company has no accumulated losses and it has not incurred any
cash losses in the financial year ended on that date or in the
immediately preceding financial year.
xi) The company has not defaulted in repayment of dues to financial
institutions, banks or debenture holders.
xii) During the year, the company has not granted loans and advances on
the basis of security by way of pledge of shares, debentures and other
securities.
xiii) The company is not a chit fund or a nidhi or mutual benefit
fund/society. Therefore, the provisions of clause 4 (xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
company.
xiv) The company is not a dealer or trader in shares, securities,
debentures and other investment.
xv) The company has not given any guarantee for loans taken by others
from banks or financial institutions.
xvi) According to the information and explanations given to us, the
term loans were applied for the purpose for which they were obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the cash flow statement and the Balance Sheet
of the Company, in our opinion the funds raised on short term basis
have prima facie not been used for long term investment.
xviii) According to the information and explanations given to us,
during the year the Company has not made preferential allotment of
shares to parties and companies covered in the register covered and
recorded in the register maintained under Section 301 of the Companies
Act, 1956.
xix) According to the information and explanations given to us, the
Company has not raised any money by way of issue of debentures during
the year.
xx) According to the information and explanations given to us, the
Company has not raised any money by way of public issue during the
year. Accordingly, the provisions of clause 4 (xx) of the Companies
(Auditors Report) Order, 2003 are not applicable to the company.
xxi) During the course of audit, based upon the audit procedures
performed and information and explanations given by the management, no
instance of fraud on or by the company has been noticed or reported
during the course of our audit.
for M. ANANDAM & CO.
CHARTERED ACCOUNTANTS
(Firm Regn.No.000125S)
A.V. SADASIVA
Place : Hyderabad PARTNER
Date :14th August, 2010 M. No. 18404