Mar 31, 2016
To
The Members of
M/s. Panyam Cements & Mineral Industries Limited
(1) Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of M/s. Panyam Cements & Minerals Industries Limited, Nandyal ("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 significant accounting policies and other explanatory information.
(2) Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (" the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of Companies Act, 2013, 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.
(3) Auditors'' Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
(4) Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;
a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2016;
b) In the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.
(5) Report on Other Legal and Regulatory Requirements
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, a statement on
the matters specified in paragraphs 3 and 4 of the Order.
As required by Section 143(3) of the Act, we further 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, 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 aforesaid standalone financial statements comply with the applicable Accounting Standards specified under section 133 of the Act, read with Rule7of the Companies (Accounts) Rules, 2014;
e) on the basis of written representations received from the Directors as on 31st March, 2016 and 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 ofthe Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and.
g) in our opinion and to the best of our information and according to the explanations given to us, we report as under 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;
(i) The company does not have any pending litigations which would impact its financial position.
(ii) The company did not have any long term contracts including derivative contracts; as such there were no material foreseeable losses thereon.
(iii) There were no amounts that require to transfer during the year by the company to the Investor Education and Protection Fund.
Re: M/s. Panyam Cements & Mineral Industries Limited.
Referred to in paragraph 5 of our report of even date;
(i) In respect of fixed assets;
a. The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. As explained to us, the company has a regular programme of physical verification of its fixed assets and has been physically verified by the management in a phased manner during the year, and 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) In respect of inventory;
The physical verification of inventory has been conducted at reasonable intervals by the management during the year and no material discrepancies were noticed on physical verification and the small discrepancies, if any, have been properly dealt with in the books of account.
(iii) The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Companies Act, 2013 (''the Act'').
a) In our opinion and according to the information and explanations given to us and as represented by the company, in respect of loans granted by the company, there are no such agreements / arrangements having the terms & conditions for grant of such loans and therefore we are unable to report whether there terms & conditions of loans are not prejudicial to the company''s interest.
b) In our opinion and according to the information and explanations given to us and as represented by the company, there are no such agreements / arrangements stipulating the schedule of repayment of principal & interest payment and therefore, we are unable to report whether the repayment or receipts of principal & interest are regular.
c) In our opinion and according to the information and explanations given to us and as represented by the company, there are no such agreements /arrangements for re-payment of principal & interest recover and therefore, we are unable to report the total amount of overdue for more than ninety days and no steps have been taken for recovery of the principal or interest.
(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 Companies Act, 2013 in respect of loans, investments, guarantees and security.
(v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public specified under the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vi) In our opinion and according to the information and explanations given to us, the Central Government has prescribed for the maintenance of Cost records under sub section (1) of Section 148 of the Companies Act, 2013 in respect of the products manufactured by the company and such accounts and records have been made and maintained by the company.
(vii) In respect of statutory dues;
a. According to the information and explanations given to us and based on the records of the company examined by us, the Company is not regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Service Tax, Sales Tax, Value Added Tax, Duty of Customs, Duty of Excise, Cess and any other statutory dues applicable to it. As explained to us, the company did not have any dues on account of Employees'' State Insurance.
According to the information and explanations given to us, the following arrears of undisputed statutory dues were outstanding as at 31st March, 2016 for a period of more than six months from the date they became payable and the due dates for payment of sales tax dues for July and August, 2012 considered as per the installments granted by the Department.
Statement of arrears of statutory dues outstanding as at 31.03.2016 for more than six months:
SI. No. |
Name of the Statute |
Nature of the Dues |
Amount Rs. Lakhs |
Period to which the amount relates |
1 |
CST Act.1956 |
Central Sales Tax |
7.22 26.81 |
2009-10 2010-11 |
2 |
A.P.VAT Act. 2005 |
Value Added Tax |
581.04 4.00 |
July 2012 to August 2013 2013-14 |
3 |
Telangana VAT Act 2014 |
VAT Tax |
5.92 |
March-2015 |
4 |
T.N.G.S.T Act |
Tamilnadu Sales Tax |
51.88 |
March 1999 to Feb 2000 |
5 |
Goa G.S.T Act, 1956 |
Goa Sales Tax |
13.87 |
Feb. 1999 to Feb 2000 |
6 |
A. P. G. S. T. Act, 1956 (Consignment Agents in Different States) |
Consignment Sales Tax |
16.82 |
1998-99 to 2003-04 |
7 |
CST Act. 1956 |
Central Sales Tax |
11.51 5.45 |
2008-09 2011-12 |
8 |
A.P. Profession Tax Act,1987 |
Profession Tax Collections |
1.13 |
October 2000 to August 2005 |
9 |
Income Tax Act, 1961 |
I.T.D.S from Interest |
14.90 |
2001-02, 2004-05, 2005-06 & 2015-16 |
10 |
Income Tax Act, 1961 |
I.T.D.S from Professionals |
1.96 |
2002-03, 2005-2006 & April 2015 to August, 2015 |
11 |
Income Tax Act, 1961 |
I.T.D.S from Contractors |
1.97 |
2000-01 & 2001-02 |
12 |
Income Tax Act, 1961 |
I.T.D.S from Contractors |
6.20 |
2004-05 & Apr 2013 to August 2013 |
|
" |
" |
7.65 |
Apr 15 to Aug 15 |
13 |
Income Tax Act, 1961 |
T.C.S. on Royalty |
29.35 |
July 2010 to August 2015 |
14 |
Income Tax Act, 1961 |
Income Tax |
11.22 |
2008-09 |
|
" |
" |
130.47 |
2011-12 |
|
" |
" |
227.18 |
2012-13 |
15 |
E.P.F Act. 1952 |
P.F. Recoveries and Contributions P.F. Penal Damages |
145.42 22.80 163.70 |
April 2005 to August 2015 March 2014 to August 2015 Up to 2005 |
16 |
The Central Excise Act,1944 |
Excise Duty & Cess |
1692.06 |
March 2015 to August 2015 |
17 |
The Finance Act.1994 |
Service Tax & Cess |
50.78 |
June 2015 to August 2015 |
18 |
A.P. Panchayat Raj Tax Act,1994 |
Property Tax |
4.62 |
2004-05 |
19 |
Mines and Minerals Act,1957 |
Royality on Limestone |
1113.12 |
2005-06 to August 2015 |
20 |
Mines and Minerals Act,1957 |
Cess on Royalty |
52.80 |
2006-07 to August 2015 |
21 |
Mines and Minerals Act,1957 |
Welfare Cess on Limestone |
4.85 |
upto August 2015 |
22 |
Revenue Act |
Non Agriculture Land Tax |
0.59 |
1999-2000 |
(b) According to the information and explanations given to us, the following are the statutory dues which have not been deposited on account of dispute:
|
|
|
Amount |
Period to |
|
SI. |
Name of the |
Nature of the Dues |
Rs. Lakhs |
Which the |
Forum where |
No. |
Statute |
(Net of Payments) |
amount relates |
dispute is pending |
|
1 |
TNGST Act, 1956 |
Tamilnadu Sales Tax |
5.56 |
1994-95 |
Remanded to Assessing Officer by the Appellate Tribunal |
2 |
The Central Excise Act, 1944 |
CENVAT credits availed on D.G.Sets disallowed by the Dept. |
232.35 |
Feb.97 to June 1999 |
Commissioner (Appeals) |
3 |
.do. |
CENVAT credit availed on refractory bricks |
4.37 |
1994-95 |
A.P. High Court |
4 |
.do. |
CENVAT credit availed on HR Coils |
56.80 |
2011-12 |
CESTAT, Hyderabad |
|
|
Plates disallowed by the Dept. |
|
|
|
5 |
.do. |
CENVAT credit availed on service tax |
24.52 |
Dec. 06 to |
Commissioner, Tirupati |
|
|
paid on outward freight |
|
Aug. 07 |
|
6 |
.do. |
CENVAT credit availed on service tax paid on outward freight |
28.54 |
Sep. 2007 to Feb. 2008 |
Commissioner, Tirupati. |
7 |
.do. |
CENVAT credit availed on service tax paid on outward freight |
12.88 |
Apr. 2007 to Feb. 2008 |
Commissioner, Tirupati. |
8 |
.do. |
Differential Duty for Supplies made to Direct parties |
40.63 |
Mar. 2007 to Feb. 2008 |
Appeal in CESTAT, Bengaluru |
9 |
The Central Excise Act, 1944 |
Duty on captive consumption |
1.46 |
2007-08 |
Appeal in CESTAT, Bengaluru |
10 |
.do. |
Duty on captive Consumption |
0.87 |
2008-09 |
Appeal in CESTAT, Bengaluru |
11 |
.do. |
Differential Duty on D.G.Set |
42.37 |
2007-08 |
Appeal in CESTAT, Bengaluru |
12 |
.do. |
Differential Duty on D.G.Set |
10.24 |
2004-05 |
AP.High Court |
13 |
.do. |
Cenvat on Capital Goods (TMT Bars) |
42.10 |
2008-09 & 2009-10 |
Appeal in CESTAT Bengaluru |
14 |
.do. |
Differential Duty on high seas imported coal |
34.32 |
August 2012 |
Addl. Commissioner, Guntur |
15 |
do. |
CENVAT on Service Tax on outward GTA |
35.18 |
Nov. 2009 to Dec. 2010 |
Addl. Commissioner, Tirupati |
16 |
.do. |
Differential Duty for Supplies made to Direct Parties |
383.80 |
Apr. 2008 to Oct. 2011 |
Appeal in CESTAT Bengaluru |
17 |
.do. |
Differential Duty for Supplies made to Direct Parties |
246.81 |
Nov. 2011 to Dec. 2013 |
Commissioner, Tirupati |
18 |
.do. |
Differential Duty for Supplies made to Direct Parties |
46.85 |
Aug. 2014 to Mar. 2015 |
Commissioner, Tirupati |
19 |
.do. |
Default in payment of Central Excise Duty |
413.38 |
2006-07 |
CESTAT Appeals, Hyderabad |
20 |
Income Tax Act, 1961 |
Capital Gains Tax on Land Development Agreements |
3281.81 |
2005-06 |
CIT Appeals, Hyderabad |
21 |
Income Tax Act, 1961 |
MAT on Book Profit of Sick Company |
979.77 |
2007-08 |
CIT Appeals, Hyderabad |
22 |
Income Tax Act, 1961 |
Capital Gain Tax on Land Development Aggrement |
1768.68 |
2012-13 |
CIT Appeals, Kumool |
23 |
AP VAT Act, |
Penal for delay in |
58.27 |
2011-12 |
Request for Waiver before |
|
2005 |
payment of Tax before Due Dates |
55.78 10.80 19.69 53.71 |
2012-13 June 2013 2014-15 2015-16 |
the Govt, of A.P. |
24 |
Mines & |
Penal Interest on |
1521.08 |
May 2006 to |
Revision application for |
|
Minerals Act. |
Royalty dues |
|
March 2016 |
waivr before the Dept./ Ministry of Mines |
25 |
The Electricty Act, 2003 |
Fuel Surcharge Aujustment (FSA) |
30.08 |
2008-09 |
Supreme Court of India |
|
|
Charges |
23.48 |
June 2009 |
High Court of A.P. Hyderabad |
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions, Banks, Government or dues to debenture holders as at 31-03-2016
(ix) In our opinion and according to the information and explanations given to us, the company did not raise any money by way of initial public offer or further public offer (including debt instrument) and term loans during the year. Accordingly paragraph 3 (ix) of the CARO 2016 is not applicable.
(x) According to the information and explanations given to us, no material fraud by the company or on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act,2013.
(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 CARO, 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements, as required by the applicable Accounting Standards.
(xiv) In our opinion and 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 under review.
The Company has made preferential issue / allotment of share warrants and issue / allotment of Secured, Rated, Listed, Non - convertible, Redeemable Debentures during the year under review. The requirements of section 42 of the Companies Act, 2013 have been compalied with and the amounts raised have been used for the purpose for which the funds were raised.
(xv) In our opinion and 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 them. Accordingly, paragraph 3(xv) of the CARO,2016 is not applicable.
(xvi) The Company is not required to be registered under section 45-I A of the Reserve Bank of India Act, 1934.
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 M/s. Panyam Cements & Minerals Industries Limited, Nandyal ("the Company") as of 31 March 2016 in conjunction with our audit of the standalone 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 Rrahmayya & Co.,
Chartered Accountants
Firm''s Registration No.000514S
Place: Nandyal (Camp) B.DAIVADHEENAM REDDY
Date 27 May, 2016 Partner
M. No.026450
Mar 31, 2015
We have audited the accompanying financial statements of M/s. Panyam
Cements & Minerals Industries Limited, Nandyal ("the Company"), which
comprise the Balance Sheet as at 31st March, 2015, the Statement of
Profit and Loss, the Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory
information.
(2) Management's Responsibility for the Stand alone Financial
Statements
The management and Board of Directors of the company are 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
stand alone 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 Companies Act, 2013, read with Rule 7 of the Companies (Accounts)
Rules, 2014. This responsibility also includes the 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; design, implementation and maintenance of
adequate internal financial controls, that are 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.
(3) Auditors' Responsibility
Our responsibility is to express an opinion on these stand alone
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 management and Board
of 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 stand alone
financial statements.
(4) Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid stand alone financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India; a) in the case of
the Balance Sheet, of the state of affairs of the Company as at 31st
March, 2015
b) in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
(5) Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2015 ("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. As required by Section 143(3) of the Act, we
further 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, 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 aforesaid stand alone financial statements
comply with the applicable Accounting Standards specified under section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014;
e) on the basis of written representations received from the Directors
as on 31st March, 2015 and taken on record by the Board of Directors,
none of the Directors is disqualified as on 31st March, 2015, from
being appointed as a director in terms of Section 164 (2) of the Act;
f) in our opinion and to the best of our information and according to
the explanations given to us, we report as under 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;
(i) The company does not have any pending litigations which
would impact its financial position.
(ii) The company did not have any long term contracts including
derivative contracts; as such there were no material
foreseeable losses thereon.
(iii) During the year under report, there are no amounts that
require to transfer to the Investor Education and Protection
Fund; therefore delay in transferring such sums does not
arise.
ANNEXURE TO AUDITOR'S REPORT Re: M/s. Panyam Cements & Mineral
Industries Limited.
Referred to in paragraph 5 of our report of even date; (i) In respect
of fixed assets;
a. The company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b. As explained to us, the company has a regular programme of physical
verification of its fixed assets and have been physically verified by
the management in a phased manner during the year, which in our
opinion, is reasonable having regard to the size of the Company and the
nature of its assets. As informed to us, no material discrepancies were
noticed on such physical verification.
(ii) In respect of inventory;
a. The physical verification of inventory has been conducted by the
management at reasonable intervals during the year. In our opinion, the
frequency of verification is reasonable.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c. The Company has maintained proper records of inventory and as
explained to us, no material discrepancies were noticed on physical
verification and the small discrepancies, if any, have been properly
dealt with in the books of account.
(iii) The Company has granted loans to companies covered in the
register maintained under Section 189 of the Companies Act, 2013 ('the
Act').
a) In our opinion and according to the information and explanations
given to us and as represented by the company, in respect of loans
granted by the company, the interest and the principal amounts are
receivable on demand and therefore the question of irregularity in
receipt of principal and the interest amounts does not arise.
b) In our opinion and according to the information and explanations
given to us and as represented by the company, these are receivable on
demand and therefore the question of over due amount does not arise.
(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 and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness in the internal control system.
(v) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
specified under the provisions of section 73 to 76 or any other
relevant provisions of the Companies Act, 2013 and the rules framed
there under. No order has been passed by the Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
any other Tribunal.
(vi) In our opinion and according to the information and explanations
given to us, the Central Government has prescribed for the maintenance
of Cost records under sub section (1) of Section 148 of the Companies
Act, 2013 in respect of the products manufactured by the company and
prime facie, the prescribed cost records have been made and maintained
by the company pursuant to the rules made there under.
(vii) In respect of statutory dues;
a. According to the information and explanations given to us and based
on the records of the company examined by us, the Company is not
regular in depositing with appropriate authorities undisputed statutory
dues including Provident Fund, Employee's State Insurance, Income Tax,
Wealth Tax, Service Tax, Sales Tax, Value Added Tax, Duty of Customs,
Duty of Excise, Cess and other statutory dues applicable to it.
According to the information and explanations given to us, the
following undisputed statutory dues were outstanding as at 31st March,
2015 for a period of more than six months from the date they became
payable and the due dates for payment of sales tax dues for July and
August, 2012 considered as per the installments granted by the
Department.
Statement of arrears of statutory dues outstanding as at 31.03.2015 for
more than six months:
Sl. Name of the Amount Period to which
Nature of the Dues
No. Statute Rs. Lakhs the amount
relates
1 CST Act,1956 Central Sales Tax 7.22 2009-10
24.92 2010-11
0.07 2013-14
2 A.P.VAT Act, 2005 Value Added Tax and
Interest 581.23 July 2012 to
August 2013
3 T.N.G.S.T Act Tamilnadu Sales Tax 51.88 March 1999 to
Feb 2000
4 Goa G.S.T Act,
1956 Goa Sales Tax 13.87 Feb.1999 to
Feb 2000
5 A.P.G.S.T.Act,
1956 Consignment Sales
Tax 16.82 1998-99 to
2003-04
(Consignment
Agents in
Different States)
6 CST Act, 1956 Central Sales Tax 11.51 2008-09
7 A.P. Profession
Tax
Act,1987 Profession Tax
Collections 1.13 Octobe2000
to August 2005
8 Income Tax
Act, 1961 I.T.D.S from
Interest 14.30 2004-05 to,
2005-06
& 2013-14
9 Income Tax
Act, 1961 I.T.D.S from
Professionals 1.08 2004-05 & April
2013
to August, 2014
10 Income Tax
Act, 1961 I.T.D.S from
Contractors 1.97 2000-01 &
2001-02
11 Income Tax
Act, 1961 I.T.D.S from
Contractors 6.20 2004-05 & Apr
2013
to August 2014
12 Income Tax
Act, 1961 T.C.S. on
Royalty 20.87 July 2010 to
August2014
13 Income Tax
Act, 1961 Income Tax 11.22 2008-09
152.47 2011-12
306.26 2012-13
14 E.P.F Act,
1952 P.F. Recoveries
and 90.00 April 2005 to
March 2014
Contributions
P.F. Recoveries
and 27.45 April 2014 to
August 2014
Contributions
P.F. Penal Damages 230.70 Up to 2005
15 The Central
Excise
Act,1944 Excise Duty & Cess 26.88 July & August
2012
16 The Finance
Act,1994 Service Tax & Cess 2.90 April 2012 to
August 2013
17 A.P. Panchayat
Raj Tax
Act,1994 Property Tax 4.62 2004-05
18 Mines and
Minerals
Act,1957 Royality on
Limestone 777.44 2005-06 to
Aug - 2014
19 Mines and
Minerals
Act,1957 Cess on Royalty 41.86 2006-07 to
Aug -2014
20 NALA Act,1963 Non Agriculture
Land Tax 0.58 1999-2000
(b) According to the information and explanations given to us, the
following are the statutory dues which have not been deposited on
account of dispute:
Amount Period to
Sl. Name of the Forum wher
Nature of
the Dues Rs.Lakhs Which the
No. Statute dispute
is pending
(Net of
Payments) amount
relates
1 TNGST Act, Tamilnadu
Sales Tax 5.56 1994-95 Remanded to
Assessing
1956 Officer by the
Appellate
Tribunal
2 The Central CENVAT credits
availed on 232.36 Feb.97 to Commissioner
(Appeals)
Excise Act,
1944 D.G.Sets dis
allowed
by the Dept. June 1999
3 .do. CENVAT credit
availed 4.37 1994-95 A.P. High
Court on
refractory
bricks
4 .do. CENVAT credit
availed on
service tax 24.52 Dec. 06 to Commissioner,
Tirupati
paid on outward
freight Aug. 07
5 .do. CENVAT credit
availed on
service tax 28.54 Sep. 07 to Commissioner,
Tirupati
paid on outward
freight Feb. 08
6 .do. CENVAT credit
availed on
service tax 12.88 Apr. 2009 to Commissioner,
Tirupati.
paid on outward
freight Oct. 2009
7 .do. Differential
Duty for Supplies 40.63 Mar. 2007 to Appeal in
CESTAT,
Bengaluru
made to Direct
parties Feb. 2008
8 The Central Duty on captive
consumption 1.46 2007-08 Appeal in
CESTAT,
Bengaluru
Excise
Act, 1944
9 .do. Duty on captive
consumption 0.87 2008-09 Appeal in
CESTAT,
Bengaluru
10 .do. Differential Duty
on D.G.Set 42.37 2007-08 Appeal in
CESTAT,
Bengaluru
11 .do. Differential Duty
on D.G.Set 10.24 2004-05 A.P.High
Court
12 .do. Cenvat on Capital
Goods 42.11 2008-09 & Appeal in
CESTAT
(TMT Bars) 2009-10 Bengaluru
13 .do. Differential Duty
on high 34.32 August 2012 Addl.
Commissioner,
seas imported coal Guntur
14 do. CENVAT on Service 35.18 Nov. 2009 to Addl.
Commissioner,
Tax on outward GTA Dec. 2010 Tirupati
15 .do. Differential Duty
for Supplies 383.80 Apr. 2008 to Appeal in
CESTAT
made to Direct
Parties Oct. 2011 Bengaluru
16 .do. Differential Duty
for Supplies 246.81 Nov. 2011 to Commissioner,
Tirupati
made to Direct
Parties Dec. 2013
17 Income
Tax Capital Gains Tax
on Land 3309.50 2005-06 CIT Appeals,
Hyderabad
Act, 1961 Development
Agreements
18 Income Tax MAT on Book
Profit
of 878.68 2007-08 CIT Appeals,
Hyderabad
Act, 1961 Sick Company
19 AP VAT Penalty for delay
in 58.27 2011-12 Request for
waiver
Act,2005 Payment of
Tax before 55.78 2012-13 before the
Govt. of A.P.
Due dates 10.80 June 2013
19.69 2004-15
20 Mines &
Mineral Penal Interest
on 1249.75 May. 2006 to Revision
application
for waiver
Act,1957 Royalty dues Mar. 2015 before the
Dept
/ Ministry
of Mines
21 The
Electricty Fuel Surcharge 30.08 2008-09 Supreme Court
of India
Act, 2003 Adjustement (FSA)
Charges 23.48 Apr.2009 to High Court
of A.P.
Jun 2009 Hyderabad
c. According to the information and explanations given to us, during
the year under report, there are no amounts which require to transfer
to the Investor Education and Protection Fund.
(viii) In our opinion, the accumulated losses of the company have
exceeded fifty percent of its net worth as at 31st March, 2015. The
company has incurred cash loss of Rs.923.03 lakhs during the financial
year covered by our audit and not incurred cash loss in the immediately
preceding financial year.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
Banks except delays in payment of interest and term loan installments
to banks and an amount of Rs.222.81 lakhs outstanding towards interest
and installments of term loans at the year end on 31.03.2015
(x) In our opinion and according to the information and explanations
given to us, the company has given guarantees for loans taken by Cheran
Cement Limited from financial institution (SIPCOT) and by M/s S.P.Y.
Agro Industries Limited from State Bank of India, State Bank of
Hyderabad; Bank of India, Syndicate Bank, Indian Overseas Bank, Central
Bank of India and Canara Bank and the terms and conditions of the
guarantees given are not prima facie, prejudicial to the interest of
the company.
(xi) In our opinion and according to the information and explanations
given to us, the term loans received during the year were applied for
the purpose for which the loans were obtained,
(xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the year.
For Brahmayya & Co.,
Chartered Accountants
Firm's Registration No.000514S
B. DAIVADHEENAM REDDY
Partner
M.No.026450
Place: Nandyal (Camp)
Dt. 30th May, 2015
Mar 31, 2014
We have audited the accompanying financial statements of M/s.Panyam
Cements & Mineral Industries Limited, Nandyal ("the Company"),
which comprise the Balance Sheet as at 31 st March, 2014, the Statement
of Profit and Loss and also the Cash Flow Statement for the year then
ended and a summary of significant accounting policies and other
explanatory information.
2) Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211
(3C) of the Companies Act, 1956 ("the Act").(which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 in
terms of General Circular 15/2013 dated 13th September, 2013 of the
Ministry of Corporate Affairs) and in accordance with the accounting
principles generally accepted in India. This responsibility includes
the design, implementation and maintenance of internal controls
relevant to the preparation and presentation of the financial
statements that give a true and fair view and free from material
misstatement, whether due to fraud or error.
3) Auditors'' 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 the
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
assessment, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Company''s internal control. An audit also
includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the
Management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
4) Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India.
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March, 2014;
b) In the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows of the
company for the year ended on that date.
5) Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A)
of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
As required by Section 227(3) of the Act, we report that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
iii) 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.
iv) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Act.(which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 in
terms of General Circular 15/2013 dated 13th September, 2013 of the
Ministry of Corporate Affairs)
v) On the basis of the written representations received from the
Directors as on 31st March, 2014 taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st March, 2014
from being appointed as a director in terms of section 274(1)(g) of the
Act.
ANNEXURE TO AUDITOR''S REPORT Re: M/s. Panyam Cements & Mineral
Industries Limited. Referred to in paragraph 3 of our report of even
date;
(i) In respect of fixed assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b) As explained to us, all the assets have not been physically verified
by the management during the year but there is a regular programme of
verification, which, in our opinion, is reasonable having regard to the
size of the company and the nature of its assets. No material
discrepancies were noticed on such verification.
(c) In our opinion, the company has disposed off vehicles under fixed
assets and land property of discontinued operations of Wire Division,
Bangalore land given for development, which is under Current Assets as
Investment in land property and the going concern status of the company
is not affected.
(ii) In respect of inventories:
(a) The inventories have been physically verified by the management at
regular intervals during the year. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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 inventories. As
explained to us, no material discrepancies were noticed on physical
verification.
(iii) (a) The company has taken interest free unsecured loans from the
companies covered in the register maintained under section 301 of the
Companies Act,1956. The maximum amount involved during the year was Rs.
4075.43 lakhs and the year end balance was Rs. 4075.43 lakhs. There are
companies covered in the register maintained under section 301 of the
Companies Act, 1956 to which the company has granted loans/advances.
The maximum amount involved during the year was Rs..6550.45 lakhs and
the year end balance of loans granted to such parties was Rs. 6550.45
lakhs.
(b) In our opinion and according to the information and explanations
given to us and as represented by the Company, the rate of interest
wherever applicable and other terms and conditions on which loans have
been taken from or granted to companies or other parties listed in the
register maintained under section 301 of the Companies Act, 1956 are
not, prima facie, prejudicial to the interest of the company.
(c) In our opinion and according to the information and explanations
given to us and as represented by the company, in respect of loans
taken/ granted by the company, the interest and the principal amounts
are repayable / receivable on demand, therefore, no irregularity in
repayment or receipt of principal and interest amounts.
(d) In our opinion and according to the explanations given to us and as
represented by the company, there is no overdue amount in respect of
loans taken from or granted to companies or other parties listed in the
register maintained under section 301 of the Companies Act,1956, since
these are repayable / receivable on demand.
(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, we have
not observed any major weaknesses in internal controls.
(v) In respect of transactions covered under Section 301 of the
Companies Act, 1956:
a) According to the information and explanations given to us, we are of
the opinion that the transactions made in pursuance of contracts or
arrangements, that need to be entered in 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 public deposits specified
under the provisions of Section 58A and 58Aa of the Companies Act, 1956
and the Companies (Acceptance of Deposits) Rules, 1975. No order has
been passed by the Company Law Board.
(vii) In our opinion, the company has an internal audit conducted by
outside professionals, which commensurate with the size and nature of
its business.
(viii) The Central Government has prescribed for the maintenance of
cost records under section 209(1)(d) of the Companies Act, 1956 in
respect of the products of the company. We have broadly reviewed the
cost records relating to materials, labour and other items of cost
maintained by the company pursuant to the Companies (Cost Accounting
Records) Rules, 2011 and we are of the opinion, that prima facie, the
prescribed cost records have been made and maintained. We have not
however, made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) In respect of statutory dues:
a) According to the records of the company, the company is not regular
in depositing with appropriate authorities undisputed statutory dues
including provident fund, employees state insurance, investor education
and protection fund, income-tax, sales tax, wealth tax, service tax
customs duty, excise duty, cess and other material statutory dues
applicable to it. There are outstanding dues as at 31.03.2014 of the
above said statutory dues.
b) According to the information and explanations given to us, the
following undisputed amounts payable in respect of income tax, wealth
tax, sales tax, service tax, customs duty and excise duty were in
arrears, as at 31st March, 2014 for a period of more than six months
from the date they became payable and the due dates for payment of
sales tax dues for July and August, 2012 considered as per the
installments granted by the Department.
Statement of arrears of statutory dues outstanding for more than six
months:
Sl. Name of the Amount
Nature of the Dues
No. Statute Rs. Lakhs
1 CST Act,1956 Central Sales Tax 7.22
1.35
1.30
0.08
2 A.P.VAT Act, 2005 Value Added Tax 492.33
3 T.N.G.S.T Act Tamilnadu Sales Tax 51.88
4 Goa G.S.T Act, 1956 Goa Sales Tax 13.87
5 A.P.G.S.T.Act, 1956 Consignment Sales Tax 16.82
(Consignment Agents in
Different States)
6 CST Act, 1956 Central Sales Tax 11.51
7 Profession Tax Act Profession Tax Collections 1.13
8 Income Tax Act, 1961 I.T.D.S from Interest 15.23
9 Income Tax Act, 1961 I.T.D.S from Professionals 4.95
10 Income Tax Act, 1961 I.T.D.S from Contractors 1.97
11 Income Tax Act, 1961 I.T.D.S from Commission 2.95
12 Income Tax Act, 1961 I.T.D.S from Contractors 8.66
13 Income Tax Act, 1961 T.C.S. on Royalty 20.84
14 Income Tax Act, 1961 Income Tax 11.22
59.18
201.44
15 E.P.F Act, 1952 P.F. Recoveries and
Contributions 54.02
19.81
16 The Central Excise
Act 1944 Excise Duty & Cess 148.59
17 The Finance Act-1994 Service Tax & Cess 95.85
Name of the Statute Period to which
the amount relates
CST Act,1956 2009- 10
2010-11
2011-12
2013-14
A.P.VAT Act, 2005 Upto August 2013
T.N.G.S.T Act March 1999 to Feb 2000
Goa G.S.T Act, 1956 Feb.1999 to Feb 2000
A.P.G.S.T.Act, 1956 1998-99 to 2003-04
(Consignment Agents in
Different States)
CST Act, 1956 2008-09
CST Act, 1956 October 2000 to August 2005
Profession Tax Act 2004-05 to, 2005-06 and April
2013 To August, 2013
Income Tax Act, 1961 2004-05 & April 2013
to August, 2013
Income Tax Act, 1961 2000-01 & 2001-02
Income Tax Act, 1961 April 2013 to August 2013
Income Tax Act, 1961 2004-05 & April 2013
to August 2013
Income Tax Act, 1961 July 2010 to August 2013
Income Tax Act, 1961 2008-09
2011-12
2012-13
Income Tax Act, 1961 April 2005 to December 2005
E.P.F Act, 1952 April 2013 to August 2013
The Central Excise Act 1944 July & August 2012
The Finance Act-1994 April 2012 to August 2013
(c) According to the information and explanations given to us, the
following are the statutory dues of sales tax, income tax, service tax,
customs duty, wealth tax, excise duty and cess which have not been
depos- ited on account of dispute.
x) In our opinion, the accumulated losses of the company are not more
than fifty percent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit and in the
immediately preceding financial year.
xi) In our opinion 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 Banks and debenture holders except interest
dues to J.M.Capital Management Private Limited of Rs.11.51 lakhs and
delays in payment of interest and term loan installments to Banks and
an amount of Rs. 288.65 lakhs outstanding towards interest and
installments of term loans at the year end on 31.03.2014.
xii) In our opinion and according to the information and explanations
given 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. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
company.
xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the company has given
guarantees for loans taken by Cheran Cement Limited from financial
institution (SIPCOT) and by M/s S.P.Y.Agro Industries Limited from
State Bank of India, State Bank of Hyderabad; Bank of India, Syndicate
Bank, Indian Overseas Bank, Central Bank of India and Canara Bank are
not prima facie, prejudicial to the interest of the company.
xvi) In our opinion, the term loans received during the year have been
applied for the purpose for which they were raised.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company as at 31st
March, 2014, we report that no funds raised on short- term basis have
been used for long-term investment. No long-term funds have been used
to finance short-term assets except permanent working capital.
xviii) According to the information and explanations given to us,
during the year under report, 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, during
the period covered by our audit report, the company has not issued any
debentures and hence creation of securities does not arise.
xx) The company has not raised any money by way of public issue during
the year.
xxi) In our opinion and 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 Brahmayya & Co.,
Chartered Accountants
Firm''s Registration No.000514S
B. DAIVADHEENAM REDDY
Place: Nandyal (Camp) Partner
Dt. 30th May, 2014 M.No.026450
Mar 31, 2013
1) Report on Financial Statements
We have audited the accompanying financial statements of M/s. Panyam
Cements & Mineral Industries Limited, Nandyal ("the Company"), which
comprise the Balance Sheet as at 31st March, 2013, the Statement of
Profit and Loss and also the Cash Flow Statement for the year then
ended and a summary of significant accounting policies and other
explanatory information.
2) Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211
(3C) of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal
controls relevant to the preparation and presentation of the financial
statements that give a true and fair view and free from material
misstatement, whether due to fraud or error.
3) Auditors'' 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 the
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
assessment, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
4) Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India.
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2013;
b) I n the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows of the
company for the year ended on that date.
5) Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the Order.
As required by Section 227(3) of the Act, we report that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books;
iii) 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.
iv) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Act.
v) On the basis of the written representations received from the
Directors as on 31st March, 2013 taken on record by the Board of
Directors, none of the Directors is disqualified as on 31st March, 2013
from being appointed as a director in terms of section 274(1)(g) of the
Act.
ANNEXURE TO AUDITOR''S REPORT Re: M/s. Panyam Cements & Mineral
Industries Limited.
Referred to in paragraph 3 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) As explained to us, all the assets have not been physically
verified by the management during the year but there is a regular
programme of verification, which, in our opinion, is reasonable having
regard to the size of the company and the nature of its assets. No
material discrepancies were noticed on such verification.
(c) During the year, the company has disposed off vehicles under fixed
assets and land property of discontinued operations of Wire Division,
Bangalore land given for development, which is under Current Assets as
Investement in land property and the going concern status of the
company is not affected.
(ii) (a) The inventories have been physically verified by the
management at regular intervels during the year. In our opinion, the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, 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 inventories. As
explained to us, the discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) (a) The company had taken interest free unsecured loans from
Associate Companies covered in the register maintained under section
301 of the Companies Act, 1956. The maximum amount involved during the
year was Rs.524.77 lakhs and the year end balance was Rs.524.77 lakhs.
There are companies covered in the register maintained under section
301 of the Companies Act, 1956 to which the company has granted
loans/advances. The maximum amount involved during the year was
Rs.8812.15 lakhs and the year end balance of loans granted to such
parties was Rs. 6230.45 lakhs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest wherever applicable and other terms
and conditions on which loans have been taken from or granted to
companies or other parties listed in the register maintained under
section 301 of the Companies Act, 1956 are not, prima facie,
prejudicial to the interest of the company.
(c) In respect of loans taken/ granted by the company, the interest and
the principal amounts are repayable / receivable on demand, therefore,
no irregularity in repayment or receipt of principal and interest
amounts.
(d) There is no overdue amount in respect of loans taken from or
granted to companies or other parties listed in the register maintained
under section 301 of the Companies Act, 1956, since these are repayable
/ receivable on demand.
(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, we have not observed any major weaknesses in internal
controls.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered in 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 public deposits specified
under the provisions of Section 58A and 58AA of the Companies Act, 1956
and the Companies (Acceptance of Deposits) Rules, 1975. No order has
been passed by the Company Law Board.
(vii) In our opinion, the company has an internal audit conducted by
outside professionals, which commensurate with the size and nature of
its business.
(viii) We have broadly reviewed the books of account and cost records
relating to materials, labour and other items of cost maintained by the
company pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(1 )(d) of the Companies
Act, 1956. We are of the opinion, that prima facie, the prescribed
accounts and records have been made and maintained. We have not
however, made a detailed examination of the cost records with a view to
/ determine whether they are accurate or complete.
(ix) (a) According to the records of the company, the company is not
regular in depositing with appropriate authorities undisputed statutory
dues including provident fund, employees state insurance, investor
education and protection fund, income-tax, sales tax, wealth tax,
service tax customs duty, excise duty, cess and other material
statutory dues applicable to it .
(b) According to the information and explanations given to us, the
following undisputed amounts payable in respect of income tax, wealth
tax, sales tax, service tax, customs duty and excise duty were in
arrears, as at 31st March, 2013 for a period of more than six months
from the date they became payable and the due dates for payment of
arrears of royalty have been considered as per the deferment sanctioned
by the Government of Andhra Pradesh as per GO.Ms.No.307 dated 24th May,
2006 and installments granted for payment of sales tax dues for July
and August, 2012.
Statement of arrears of statutory dues outstanding for more than six
months:
Sl. Name of the Amount Period to which
No. Statute Nature of the Dues Rs Lakh the amount relates
(Net of
Payments)
1 CST Act Central Sales Tax 3.08 2006-07
2 T.N.G.S.T Tamilnadu Sales Tax 51.88 March 1999 to
Feb 2000
3 Goa G.S.T Act Goa Sales Tax 13.87 Feb. 1999 to
Feb 2000
4 A.P.G.S.T Act Consignment Sales
Tax 16.82 1998-99 to 2003-04
(Consignment
Agents in
Different
States)
5 CST Act Central Sales Tax 11.50 2008-09
6 Profesion
Tax Act Profession Tax
Collections 1.13 October 2000 to
August 2005
7 Income Tax Act,
1961 I.T.D.S from Interest 18.78 2004-05 to
2005-06 &
Apr. to Aug. 2012
8 Income Tax Act,
1961 I.T.D.S from
Professionals 1.22 2004-05 & Apr.
to July 2012
9 Income Tax Act,
1961 I.T.D.S from
Contractors 1.96 2000-01 & 2001-02
10. Income Tax
Act, 1961 I.T.D.S from
Commission 3.83 Apr. to Aug.
2012
11 Income Tax
Act, 1961 I.T.D.S from
Contractors 13.91 2004 - 05 & Apr.
to August 2012
12 Income Tax
Act, 1961 T.C.S. on
Royalty 16.75 July 2010 to August
2012
13 E.PF Act P.F. Recoveries and 53.49 April 2005 to
December 2005
contributions
14 The Centeral
Excise
Act-1944 Excise Duty & Cess 264.59 July & Aug 2012
15 The Finance
Act-1994 Service Tax & Cess 46.12 Apr. to Aug 2012
(c) According to the information and explanations given to us, the
following are the statutory dues of sales tax, income tax, serive tax,
customs duty & excise duty which have not been deposited on account of
dispute.
Amount
Sl. Name of the
Nature of the Dues Rs. Lakhs
No. Statute (Net of
Payments)
1 TNGST Act Tamilnadu Sales Tax 5.56
2 Central CENVAT credits availed on 232.36
Excise Act D.G.Sets
disallowed by the Dept.
3 .do. CENVAT credit availed 4.37
on refractory bricks
4 .do. CENVAT credit availed on service tax 24.52
paid on outward freigh
5 .do. -do- 28.54
6 .do. -do- 12.88
7 .do. Differential Duty for Supplies 40.63
made to Direct parties
8 .do. Duty on captive consumption 1.46
9 .do. -do- 0.87
10 .do. Differential Duty on D.G.Set 42.37
11 .do. -do- 10.24
12 .do. Cenvat on Capital Goods 42.11
(TMT Bars)
13 .do. Irregular availment 413.38
of CENVAT Credit
14 .do. CENVAT on Service 35.18
Tax on outward GTA
15 .do. Differential Duty for Supplies 383.80
made to Direct Parties
16 .do. Differential Duty for Supplies 151.31
made to Direct Parties
17 E.PF Act PF. Penal damages for 255.39
Delay Payments
18 Income Tax Capital Gains Tax on Land 2278.48
Act, 1961 Development Agreements
19 Income Tax MAT on Book Profit of 111.22
Act, 1961 Sick Company
20 Income Tax TDS not dedected and 34.42
Act, 1961 Interest on delayed payments
21 AP VAT Act Penalty for delay in Payment 58.27
of Tax before Due dates
22 AP VAT Act Penalty for delay in Payment 55.78
of Tax before Due dates
23 Mines & Penal Interest on 650.26
Mineral Act Royalty dues
24 The Electricty Fuel Surcharge 30.08
Act, 2003 Adjustement (FSA)
Charges
23.48
Name of the Statute Period to Forum where
Which the dispute is pending
amount relates
TNGST Act 1994-95 Remanded to Assessing
Officer by the Appellate
Tribunal
Central Excise Act Feb.97 to Commissioner (Appeals)
June 1999
.do. 1994-95 A.P. High Court
.do. Dec. 06 to Commissioner, Tirupati
Aug. 07
.do. Sep. 07 to Commissioner, Tirupati
Feb. 08
.do. Apr. 2009 to Commissioner, Tirupati.
Oct. 2009
.do. Mar. 2007 to Appeal in CESTAT,
Bengaluru
Feb. 2008
.do. 2007-08 Appeal in CESTAT,
Bengaluru
.do. 2008-09 Appeal in CESTAT,
Bengaluru
.do. 2007-08 Appeal in CESTAT,
Bengaluru
.do. 2004-05 A.P.High Court
.do. 2008-09 & Appeal in CESTAT
2009-10 Bengaluru
.do. Jul. 2006 to Appeal in CESTAT
Nov. 2007 Bengaluru
.do. Dec. 2009 to Addl. Commissioner,
Dec. 2010 Tirupati
.do. Apr. 2008 to Appeal in CESTAT
Oct. 2011 Bengaluru
.do. Nov. 2011 to Commissioner, Tirupati
Mar. 2012
E.P.F Act May. 1999 to Commissioner of
Sep. 2001 Provident Fund,Kadapa
Income Tax Act,1961 2007-08 Income Tax Appellate
Tribunan, Hyderabad.
Income Tax Act,1961 2008-09 Income Tax Appellate
Tribunan, Hyderabad.
Income Tax Act,1961 2010-11 Commissioner of
Incometax (Appeals)
Hyderabad.
AP VAT Act 2011-12 Request for waiver
before the Govt. of A. P.
AP VAT Act 2012-13 Request for waiver
before the Govt. of A. P.
Mines Mineral Act May. 2006 to Revision application
for waiver
Mar. 2013 before the Dept /
Ministry of Mines
The Electricity Act,2003 2008-09 Supreme Court of India
Apr. 2009 to High Court of A. P.
Jun 2009 Hyderabad
x) In our opinion, the accumulated losses of the company are not more
than fifty percent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit and 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
Banks and debenture holders except interest dues to J.M.Capital
Management Private Limited of Rs.11.51 lakhs and delays in payment of
interest and term loan installments to Banks and an amount of Rs.
432.46 lakhs outstanding towards March 2013 interest and installments
of term loans at the year end on 31.03.2013 was paid in the subsequent
year i.e 2013-14.
xii) In our opinion and according to the information and explanations
given 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. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to the
company.
xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the company has given
guarantees for loans taken by Cheran Cement Limited from financial
institution (SIPCOT) and by M/s S.P.Y.Agro Industries Limited from
State Bank of India, State Bank of Hyderabad; Bank of India, Syndicate
Bank and Indian Overseas Bank, are not prima facie, prejudicial to the
interest of the company.
xvi) In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii) According to the information and explanations given 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
investment. No long-term funds have been used to finance short-term
assets except permanent working capital.
xviii) According to the information and explanations given to us,
during the year under report, 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, during
the period covered by our audit report, the company has not issued any
debentures and hence creation of securities does not arise.
xx) According to the information and explanations given to us, during
the year covered by our report, the company has not raised any money by
public issue.
xxi) In our opinion and 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 Brahmayya & Co.,
Chartered Accountants
Firm''s Registration No.000514S
Place: Nandyal (Camp) B.DAIVADHEENAM REDDY
Dt. 27 May, 2013 Partner
M.No.026450
Mar 31, 2012
1. We have audited the attached Balance Sheet of M/s.Panyam Cements &
Mineral Industries Limited, as at 31st March, 2012 and the Statement of
Profit and Loss and also the Cash Flow Statement for the year ended on
that date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
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 whetherthe
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 the 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 (Auditor's Report) Order, 2003
issued by the Central Government of India in terms of sub-section (4A)
of Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
iii) 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;
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956, except Accounting Standard-15, Accounting for
Retirement Benefits, regarding gratuity superannuation and Leave
encashment on actuarial valuation.
v) On the basis of written representations received from the directors,
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanations given to us, "subject to non provision of gratuity /
Superannuation / leave encashment liability on actuarial valuation in
respect of employees and the amount of liability is not ascertained by
the company," the 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:
a) In the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2012;
b) In the case of Statement of Profit and Loss, of the profit of the
company for the year ended on that date; and
c) I n the case of the cash flow statement, of the cash flows of the
company for the year ended on that date.
ANNEXURE Re: M/s. Panyam Cements & Mineral Industries Limited.
Referred to in paragraph 3 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) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification,
which, in our opinion, is reasonable having regard to the size of the
company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) During the year, the company has not disposed off substantial part
of fixed assets and the going concern status of the company is not
affected.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the 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 inventory. As
explained to us, the discrepancies noticed on verification between the
physical stocks and the book records were not material.
(iii) (a) The company had taken unsecured loans from Associate
Companies covered in the register maintained under section 301 of the
Companies Act, 1956 and the maximum amount involved during the year was
Rs.524.77 lakhs and the year end balance was Rs.524.77 lakhs. There are
companies covered in the register maintained under section 301 of the
Companies Act, 1956 to which the company has granted loans/advances.
The maximum amount involved during the year was Rs.8812.15 lakhs and
the year end balance of loans granted to such parties was Rs. 8812.15
lakhs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest wherever applicable and other terms
and conditions on which loans have been taken from/ granted to
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956 are not, prima facie,
prejudicial to the interest of the company.
(c) In respect of loans taken/granted by the company, the interest and
the principal amount is repayable/receivable on demand.
(d) There is no overdue amount in respect of loans taken from or
granted to companies, firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956, since these
are repayable/receivable on demand.
(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, we have
not observed any continuing failure to correct major weakness in
internal controls.
(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 public deposits under the
provisions of Section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975. No order has been
passed by the Company Law Board.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(1 )(d) of the Companies
Act, 1956 and we are of the opinion, that prima facie, the prescribed
accounts and records have been made and maintained. We have not
however, made a detailed examination of the same.
(ix) (a) According to the records of the company, the company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, employees state insurance,
income-tax, sales tax, wealth tax, customs duty, excise duty, cess and
other material statutory dues applicable to it except royalty and
Income-Tax deducted/collected at source.
(b) According to the information and explanations given to us, the
following undisputed amounts payable in respect of income tax, wealth
tax, sales tax, customs duty, excise duty and cess were in arrears, as
at 31st March, 2012 for a period of more than six months from the date
they became payable and the due dates for payment of arrears of royalty
and sales tax dues have been considered taking into consideration the
deferment for payment of the said dues sanctioned by the Government of
Andhra Pradesh as per GO.Ms.No.307 dated 24th May, 2006 and
installments granted for payment of sales tax dues for July and August,
2011.
Statement of arrears of statutory dues outstanding for more than six
months:
Amount
SI. Name of the Nature of the Period to which
Rs. Lakhs
No. Statute Dues (Net of
Payments) the amount relates
1 CSTAct Central Sales Tax 0.33 2006-07
2 T.N.G.S.T Tamilnadu Sales Tax 51.88 March 1999 to
Feb 2000
3 GoaG.S.TAct Goa Sales Tax 11.55 Feb.1999 to Feb2000
4 A.P.GS.TAct Consignment
Sales Tax 45.78 1998-99 to 2003-04
(Consignment
Agents in
Different States)
5 CSTAct Central Sales Tax 0.88 2009-10
6 Profesion Tax Act Profession Tax
Collections 1.13 October 2000 to
August 2005
7 Income Tax
Act, 1961 I.T.D.S from
Salaries 4.90 2003-04
8 Income Tax
Act, 1961 I.T.D.S from
Interest 25.56 2001-02,2003-04 to
2005-06
9 Income Tax
Act, 1961 I.T.D.S from
Professionals 1.24 2002-03, 2003-04
to 2005-06
10 Income Tax
Act, 1961 I.T.D.S from
Contractors 1.96 2000-01 & 2001-02
11 Income Tax
Act, 1961 I.T.D.S from
Contractors 14.14 December 1999 to
August 2005
12 Income Tax
Act, 1961 T.C.S. on Royalty 8.70 July 2010 to
August 2011
13 Non-Agricultural
Land NALA on factory land 10.19 1993-94 and from
1999-2000
Assessment Tax to June 2011
14 Mines and
Minerals Act Dead Rent/cess on
limestone 2.33 1984-85 to 1986-87
15 Mines and
Minerals Act Royalty on
limestone 262.44 Dec 2010 to August
2011
16 Mines and
Minerals Act State Cess on
Limestone 14.41 Sept 2010 to August
2011
17 Panchayat Tax Act Property Tax 4.62 1998-99 to 2006-07
18 E.P.FAct PF. Recoveries
and contributions 51.79 April 2005 to
December 2005
(c) According to the information and explanations given to us, the
following are the statutory dues of sales tax, income tax, customs
duty, wealth tax, excise duty and cess which have not been deposited on
account of dispute.
SI. Name of the Nature of the Amount
No. Statute Dues Rs. Lakhs
(Net of
Payments)
1 TNGST Act Tamilnadu Sales Tax 5.56
2 Central CENVAT credits 232.36
Excise Act availed on D.G.Sets
disallowed by the Dept.
3 .do. CENVAT credit availed 4.80
on Proclain Shovel
4 .do. CENVAT credit availed 4.37
on refractory bricks
5 .do. CENVAT credit 24.52
availed on service tax
paid on outward freight
6 .do. -do- 28.54
7 .do. -do- 12.88
8 .do. Differential Duty for 40.63
Supplies made to Direct
parties
9 .do. Duty on captive consumption 1.46
10 .do. -do- 0.87
11 .do. Differential Duty 42.37
on D.G.Set
12 .do. -do- 10.24
13 .do. Cenvat on Capital Goods 41.77
(TMT Bars)
14 .do. -do- 0.34
15 .do. Irregular availment 413.38
of CENVAT Credit
16 .do. CENVAT on Service 35.18
Tax on outward GTA
17 .do. H.R. Coils/Plates/Sheets/ 56.80
Channels and angles
18 E.P.FAct P.F. Penal damages for 277.59
Delay Payments
19 Income Tax Capital Gains Tax on Land 2278.48
Act, 1961 Development Agreements
20 Income Tax MAT on Book Profit of 177.82
Act, 1961 Sick Company
21 AP VAT Act Penalty for delay in 58.27
Payment of Tax before
Due dates
22 Mines & Penal Interest on 343.72
Mineral Act Royalty dues
Name of the Statute Period to Forum where
Which the dispute is
amount relates pending
TNGST Act 1994-95 Remanded to Assessing
Otficerby the Appellate
Tribunal
Central Excise Act Feb.97 to Commissioner
June 1999 (Appeals)
.do. 1994-95 A.P.High Court
.do. 1994-95 A.P.High Court
.do. December 06 Commissioner
to August 07 Tirupathi
.do. September 07 Commissioner,
to February 08 Tirupati.
.do. April 2009 Commissioner
to August 2009 Tirupati.
.do. March 2007 to Appeal in CESTAT,
Bengaluru
February 2008
.do. 2007-08 Appeal in CESTAT
Bangalore
.do. 2008-09 Appeal in CESTAT
Bengaluru
.do. 2007-08 Appeal in CESTAT,
Bengaluru
.do. 2004-05 A.P.High Court
.do. 2008-09 Commissioner, Tirupathi.
.do. 2009-10 Asst. Commissioner,
Kurnool
July 2006 to Commissioner, Tirupathi.
November 2007
.do. December 2009 Addl. Commissioner,
Tirupathi
to Dec. 2010
.do. Jan 2007 to Addl. Commissioner,
Tirupathi
July 2009
E P F Act May 1999 to Commissioner of
Sep 2001 Provident Fund.Kadapa
Income Tax Act,1961 2007-08 Commissioner of
Income Tax (Appeals)
Hyderabad.
Income Tax Act,1961 2008-09 Commissioner of
Income Tax (Appeals)
Hyderabad.
AP VAT Act 2011-12 Request for waiver
before the Govt, of
A. P.
Mines & Mineral Act May 2006 to Revision application
for
March 2011 waiver before the
Dept / Ministry of
Mines
x) In our opinion, the accumulated losses of the company are more than
fifty percent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit and 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
Banks, Financial Institutions and debenture holders except interest
dues to J.M.Capital Management Private Limited of Rs.11.51 lakhs and
delays in payment of interest and term loan installments to Banks and
an amount of Rs.186.48 lakhs outstanding towards March 2012 interest
and one installment of two term loans at the year end on 31.03.2012 was
paid in the subsequent year 2012-13.
xii) In our opinion and according to the information and explanations
given 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. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor's Report) Order, 2003 are not applicable to
the company.
xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor's Report)
Order, 2003 are not applicable to the Company.
xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the company has given
guarantees for loans taken by Cheran Cement Limited from financial
institution (SIPCOT) and by M/s S.P.Y.Agro Industries Limited from
State Bank of India, State Bank of Hyderabad; Bank of India, Syndicate
Bank and Indian Overseas Bank, are not prima facie, prejudicial to the
interest of the company.
xvi) In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii) According to the information and explanations given 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
investment. No long-term funds have been used to finance short-term
assets except permanent working capital.
xviii) According to the information and explanations given to us,
during the year under report, 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, during
the period covered by our audit report, the company has not issued any
debentures and hence creation of securities does not arise.
xx) According to the information and explanations given to us, during
the year covered by our report, the company has not raised any money by
public issue.
xxi) In our opinion and 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 Brahmayya & Co.,
Chartered Accountants
Firm's Registration No.000514S
B.DAIVADHEENAM REDDY
Place: Nandyal (Camp) Partner
Dt.30th May, 2012 M.No.026450
Mar 31, 2011
1. We have audited the attached Balance Sheet of M/s.Panyam Cements &
Mineral Industries Limited, as at 31st March, 2011 and the Profit and
Loss Account and also the Cash Flow Statement for the year ended on
that date annexed thereto. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
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 the 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 (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
ii) In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
iii) The Balance Sheet, Profit and Loss Account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv) 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, except Accounting Standard-15, Accounting for
Retirement Benefits, regarding gratuity on actuarial valuation.
v) On the basis of written representations received from the directors,
as on 31st March, 2011 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanations given to us, "subject to non provision of gratuity
liability on actuarial valuation in respect of employees and the a
mount of gratuity liability is not ascertained by the company," the
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:
a) In the case of the Balance Sheet, of the state of affairs of the
company as at 31st March, 2011;
b) In the case of the Profit and Loss Account, of the loss 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.
ANNEXURE
Re: M/s. Panyam Cements & Mineral Industries Limited.
Referred to in paragraph 3 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) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification,
which, in our opinion, is reasonable having regard to the size of the
company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) During the year, the company has not disposed off substantial part
of fixed assets and the going concern status of the company is not
affected.
ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the 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 inventory. As
explained to us, the discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) (a) The company had taken unsecured loans in the earlier years
from one Ex-Director (Director as on the date of loan taken) and from
Associates/parties covered in the register maintained under section 301
of the Companies Act, 1956 and the maximum amount involved during the
year was Rs.452.06 lakhs and the year end balance was Rs.435.85 lakhs.
There are companies covered in the register maintained under section
301 of the Companies Act, 1956 to which the company has granted
loans/advances. The maximum amount involved during the year was Rs.
8370.61 lakhs and the year end balance of loans granted to such parties
was Rs. 8370.61 lakhs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest wherever applicable and other terms
and conditions on which loans have been taken from/granted to
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956 are not, prima facie,
prejudicial to the interest of the company.
(c) In respect of loans taken/granted by the company, the interest and
the principal amount is repayable/receivable on demand.
(d) There is no overdue amount in respect of loans taken from or
granted to companies, firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956, since these
are repayable/receivable on demand.
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, we have
not observed any continuing failure to correct major weakness in
internal controls.
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 public deposits under the
provisions of Section 58A and 58AA of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975. No order has been
passed by the Company Law Board.
vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(1 )(d) of the Companies
Act, 1956 and we are of the opinion, that prima facie, the prescribed
accounts and records have been made and maintained. We have not
however, made a detailed examination of the same
ix) (a) According to the records of the company, the company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, employees state insurance,
income-tax, sales tax, wealth tax, customs duty, excise duty, cess and
other material statutory dues applicable to it except royalty and
Income-Tax deducted/collected at source.
According to the information and explanations given to us, the
following undisputed amounts payable in respect of income tax, wealth
tax, sales tax, customs duty, excise duty and cess were in arrears, as
at 31st March, 2011 for a period of more than six months from the date
they became payable and the due dates for payment of arrears of royalty
and sales tax dues have been considered taking into consideration the
deferment for payment of the said dues sanctioned by the Government of
Andhra Pradesh as per G.O.Ms.No.307 dated 24th May, 2006.
Statement of arrears of statutory dues outstanding for more than six
months:
Name of the Nature of Amount period to which
Statute the Dues Rs. Lakhs the amount
(Net of relates
Payment
APGST Act Andhra Pradesh 36.11 Arrears upto
Sales Tax 2005-06
CST Act Central Sales 0.33 2006-07
Tax
T.N.G.S.T.Act Tamilnadu Sales 51.88 March 1999 to
Tax Feb.2000
Goa G.S.T.Act Goa Sales Tax 11.55 Feb.1999 to
Feb.2000
A.P.G.S.T.Act Consignment 45.78 1998-99 to
(Consignment Sales Tax 2003-04
Agents in diff
-erent States)
CST Act Central Sales 0.88 2009-10
Tax
Professional Tax Profession Tax 1.13 Oct. 2000 to
Act collections Aug. 2005
Professional Tax Profession Tax 2.41 Sept. 1999 to
Act collections April 2005
Income Tax Act, I.T.D.S. from 4.90 2003-04
1961 Salaries
Income Tax Act, I.T.D.S. from 25.56 2001-02, 2003-04
1961 Interest to 2005-06
Income Tax Act, I.T.D.S. from 1.24 2002-03, 2003-04
1961 Professional to 2005-06
Income Tax Act, I.T.D.S. from 1.96 2000-01 and
1961 contractors 2001-02
Income Tax Act, I.T.D.S. from 14.14 December 1999
1961 contractors to Aug.05
Income Tax Act, T.C.S.on Royalty 5.60 2009-10 and upto
1961 Aug.2010
Non-Agricultural NALA on factory 9.29 1993-94 and from
Land 1999-2000
Assessment Tax to June 2010.
Mines and Minerals Dead Rent/cess 2.33 1984-85 to
on limestone 1986-87
Mines and Minerals Royalty on 125.69 April 2010 to
limestone August 2010
Mines and Minerals State Cess on 9.35 2006-07 to
Limestone August 2010
Panchayat Tax Act Property Tax 4.62 1998-99 to
2006-07
E.P.F.Act PF. Recoveries 51.79 April 2005 to
and contribu December 2005
-tions Period
to which
(c) According to the information and explanations given to us, the
following are the statutory dues of sales tax, income tax, customs
duty, wealth tax, excise duty and cess which have not been deposited on
account of dispute.
Name of the Nature of Amount
Statute the Dues Rs. Lakhs
(Net of
Payments
TNGST Act Tamilnadu Sales Tax 5.56
Central CENVAT credits 232.36
Excise Act availed on D.G.Sets
disallowed by the
Dept.
-do- CENVAT credit availed 4.80
on Proclain Shovel
-do- CENVAT credit availed 4.37
on refractory bricks
-do- CENVAT credit 24.52
availed on service
tax paid on outward
freight
-do- -do- 28.54
-do- -do- 12.88
-do- Differential Duty for 40.63
Supplies made to
Direct parties
-do- Duty on captive
consumption 1.46
-do- -do- 0.87
-do- Differential Duty 42.37
on D.G.Set
-do- -do- 10.24
-do- Cenvat on Capital Goods 41.77
(TMT Bars)
-do- -do- 0.34
-do- Irregular availment 413.38
0f CENVAT Credit
- CENVAT on Serive
Tax on outward GTA 20.10
P.F.Act Penal damages for 399.69
delay payments.
VAT.Act Differential tax on 92.59
Consignment Sales
Income Tax Capital Gains Tax on 2378.48
Act, 1961 land development
Agreements
Name of the Period to Forum where
Statute Which the dispute is
amount relates pending
TNGST Act 1994-95 Remanded to Assessing
Officer by the Appellate
Tribunal
Central Feb.97 to Commissioner
Excise Act June 1999 (Appeals)
-do- 1994-95 A.P.High Court
-do- 1994-95 A.P.High Court
-do- December 06 Commissioner
to August 07 Tirupathi
-do- September 07- Commissioner,
February 08 Tirupati.
-do- April 2009 Commissioner
August 2009 Tirupati.
-do- March 2007 to Appeal in CESTAT,
February 2008 Bangalore
-do- 2007-08 Appeal in CESTAT
Bangalore
-do- 2008-09 Appeal in CESTAT
Bangalore
-do- 2007-08 Appeal in CESTAT,
Bangalore
-do- 2004-05 A.P.High Court
-do- 2008-09 Commissioner,
Tirupathi.
-do- 2009-10 Asst. Commissioner,
Kurnool
-do- July 2006 to Commissioner, Tirupathi.
November 2007
-do- December 2009 Addl.Commissioner,
to April 2010 Tirupathi
P.F.Act May 1999 to Commissioner of Pro-
Sept.2001 vident Fund,Kadapa
VAT.Act 2007-08 & Appellate Deputy
2008-09 Commissioner, Kurnool
Income Tax 2007-08 Commissioner of
Act, 1961 Income Tax (Appeals)
Hyderabad.
x) In our opinion, the accumulated losses of the company are more than
fifty percent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit and 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
Banks, Financial Institutions and debenture holders except interest
dues to J.M.Capital Management Private Limited of Rs.11.51 lakhs and
there are delays in payment of interest and term loan installments to
Banks and an amount of Rs.185.41 lakhs outstanding towards interest and
term loan installments at the year end on 31.03.2011 was paid in the
subsequent year 2011-12.
xii) In our opinion and according to the information and explanations
given 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. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditor's Report) Order, 2003 are not applicable to the
company.
xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the Company.
xv) In our opinion and according to the information and explanations
given to us, the terms and conditions on which the company has given
guarantees for loans taken by others (Cheran Cement Limited and
S.P.Y.Agro Industries Limited) from banks or financial institutions
(SIPCOT in respect of Cheran Cement Ltd and State Bank of India, State
Bank of Hyderabad; Bank of India, Syndicate Bank and Indian Overseas
Bank in respect of S.P.Y.Agro Industries Limited) are not prima facie,
prejudicial to the interest of the company
xvi) In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii) According to the information and explanations given 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
investment. No long-term funds have been used to finance short-term
assets except permanent working capital.
xviii) According to the information and explanations given to us,
during the year under report, 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, during
the period covered by our audit report, the company has not issued any
debentures and hence creation of securities does not arise.
xx) According to the information and explanations given to us, during
the year covered by our report, the company has not raised any money by
public issue.
In our opinion and 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 Brahmayya & Co.,
Chartered Accountants
Firm's Registration No.000514S
B. DAIVADHEENAM REDDY
Partner
M.No.026450
Hyderabad (Camp)
Dt. 30 May, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of M/s.Panyam Cements &
Mineral Industries Limited, as at 31st March, 2010 and the Profit and
Loss Account and also the Cash Flow Statement for the year ended on
that date annexed thereto. These financial statements are the
responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
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 the 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 Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
ii) 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;
iii) The Balance Sheet, Profit and Loss Account and cash flow statement
dealt with by this report are in agreement with the books of account;
iv) 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, except Accounting Standard-15, Accounting for
Retirement Benefits, regarding gratuity on actuarial valuation.
v) On the basis of written representations received from the directors,
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2010 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
vi) In our opinion and to the best of our information and according to
the explanations given to us, "subject to non provision of gratuity
liability on actuarial valuation in respect of employees and the amount
of gratuity liability is not ascertained by the company," the 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:
a) In the case of the Balance Sheet, of the state of affairs of the
company as at 3V March, 2010;
b) In the case of the Profit and Loss Account, of the profit for the
year ended on that date; and
c) In the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE
Re: M/s. Panyam Cements & Mineral Industries Limited. Referred to in
paragraph 3 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) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification,
which, in our opinion, is reasonable having regard to the size of the
company and the nature of its assets. No material discrepancies were
noticed on such verification.
(c) During the year, the company has not disposed off substantial part
of fixed assets and the going concern status of the company is not
affected.
ii) (a) Theinventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the 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 inventory. As
explained to us, the discrepancies noticed on verification between the
physical stocks and the book records were not material.
iii) (a) The company had taken unsecured loans in the earlier years
from one Ex-Director (Director as on the date of loan taken) and during
the year from Associates/parties covered in the register maintained
under section 301 of the Companies Act, 1956 and the maximum amount
involved during the year was Rs.492.06 lakhs and the year end balance
was Rs.452.06 lakhs. There are companies covered in the register
maintained under section 301 of the Companies Act, 1956 to which the
company has granted loans/advances. The maximum amount involved during
the year was Rs.8483.77 lakhs and the year end balance of loans granted
to such parties was Rs. 7989.14 lakhs.
(b) In our opinion and according to the information and explanations
given to us, the rate of interest wherever applicable and other terms
and conditions on which loans have been taken from/granted to
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956 are not, prima facie,
prejudicial to the interest of the company.
(c) In respect of loans taken/granted by the company, the interest and
the principal amount is repayable/receivable on demand.
(d) There is no overdue amount in respect of loans taken from or
granted to companies, firms or other parties listed in the register
maintained under section 301 of the Companies Act, 1956, since these
are repayable/receivable on demand.
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, we have not observed any continuing failure to correct major
weakness in internal controls.
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 public deposits under the provisions of Section
58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance
of Deposits) Rules, 1975. No order has been passed by the Company Law
Board.
vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
viii) We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the company
pursuant to the Rules made by the Central Government for the
maintenance of cost records under section 209(1 )(d) of the Companies
Act, 1956 and we are of the opinion, that prima facie, the prescribed
accounts and records have been made and maintained. We have not
however, made a detailed examination of the same.
ix) (a) According to the records of the company, the company is
generally regular in depositing with appropriate authorities undisputed
statutory dues including provident fund, employees state insurance,
income-tax, sales tax, wealth tax, customs duty, excise duty, cess and
other material statutory dues applicable to it except royalty and
Income-Tax deducted/collected at source.
(b) According to the information and explanations given to us, the
following undisputed amounts payable in respect of income tax, wealth
tax, sales tax, customs duty, excise duty and cess were in arrears, as
at 31st March, 2010 for a period of more than six months from the date
they became payable and the due dates for payment of arrears of royalty
and sales tax dues have been considered taking into consideration the
deferment for payment of the said dues sanctioned by the Government of
Andhra Pradesh as per G.O.Ms.No.307 dated 24th May, 2006.
Statement of arrears of statutory dues outstanding for more than six
months:
Amount
Name of the Nature of Rs. Lakhs Period to Which
Statute the Dues (Net of
Payments) the amount relates
I Cement Division :
/ CAO:
APGSTAct Andhra Pradesh
Sales Tax 36.11 Arrears upto
2005-06
CSTAct Central
Sales Tax 0.33 2006-07
K.G.S.T. Act Karnataka State
Sales Tax 29.73 1998-99 to
2005-06
C.S.T.Act Karnataka State
Central
Sales Tax 2.01 1998-99 and
1999-2000
T.N.G.S.T.Act Tamilnadu
Sales Tax 51.88 March 1999 to
Feb.2000
GoaG.S.T.Act Goa Sales Tax 11.55 Feb.1999 to
Feb.2000
A.P.G.S.TAct Consignment
Sales Tax 45.78 1998-99 to
2003-04
(Consignment
Agents in
different
States)
AP VAT Act,2005 Value Added Tax 0.12 2008-09
Profession
Tax Act Profession Tax
collections 1.13 October 2000
to August 2005
Profession
Tax Act Profession Tax
collections 2.41 Sept. 1999 to
April 2005
Income Tax
Act, 1961 I.T.D.S. from
Salaries 4.90 2003-04
Income Tax
Act,1961 I.T.D.S. from
Interest 25.56 2001-02,2003-04
to 2005-06
Income Tax
Act, 1961 I.T.D.S. from
Professional 1.24 2002-03, 2003-04
to 2005-06
Income Tax
Act,1961 I.T.D.S. from
contractors 1.96 2000-01 and 2001-02
Income Tax
Act, 1961 I.T.D.S. from
contractors 14.14 December 1999
to Aug.05
Income Tax
Act, 1961 T.C.S.on Royalty 4.23 2007-08 and
2008-09 arrears.
Non-
Agricultural NALA on factory
land 8.61 1993-94 and from
1999-200
Land Assessment
Tax to June 2009.
Mines and
Minerals Dead Rent/cess
on limestone 2.33 1984-85 to 1986-87
Mines and
Minerals Royalty on
limestone 56.52 April 2009 to
August 2009
Mines and
Minerals Welfare cess
on Limestone 3.45 2001-02 and
2003-04
Mines and
Minerals State Cess on
Limestone 9.86 2006-07 to
August 2009
Panchayat
Tax Act Property Tax 4.75 1998-99 to 2006-07
E.P.FAct P.F. Recoveries
and 79.98 April 2005 to
December 2005
contributions
(c) According to the information and explanations given to us, the
following are the statutory dues of sales tax, income tax, customs
duty, wealth tax, excise duty and cess which have not been deposited on
account of dispute.
Name of the Nature of Amount
Statute the Dues Rs. Lakhs
(Net of Paymen
TNGSTAct Tamilnadu Sales Tax 5.56
I.T.Act Penalty for late
on 3.50
payment of ITDS
Central CENVAT credits 232.36
Excise Act availed on D.G.Sets
disallowed by
the Dept.
--do-- CENVAT credit availed 4.80
on Proclain Shovel
--do-- CENVAT credit availed 4.37
on refractory bricks
-do- CENVAT credit 24.52
availed on service
tax paid on outward
freight
-do- -do- 28.54
-do- -do- 12.88
-do- Differential Duty for 40.63
Supplies made to
Direct parties
-do- Duty on captive
consumption 1.46
-do- -do- 0.87
-do- -do- 0.75
-do- Differential Duty 42.37
on D.G.Set
-do- -do- 10.24
-do- Cenvat on Capital Goods 41.77
-do- Irregular availment 413.38
of CENVAT Credit
Differential duty on 3.39
gypsum quantity and
refund claim
P.F.Act Penal damages for 277.35
delay payments.
K.S.T.Act Sales Tax Dues and 415.46
interest upto 21.11.08
Name of the Period to Forum where
Statue Which the dispute is
amount relates pending
TNGST Act 1994-95 Remanded to Assessing
Officer by the Appellate Tribunal
I.T. Act 1999-00 Appellate Tribunal
2000-01
Central Feb.97 to Commissioner
Excise Act June 1999 (Appeals)
-do- 1994-95 A.P.High Court
-do- 1994-95 A.P.High Court
-do- December 06 Commissioner
to August 07 Tirupathi
-do- September 07- Commissioner,
February 08 Tirupati.
-do- April 2009 Commissioner
August 2009 Tirupati.
-do- March 2007 to Appeal in CESTAT, Bangalore
February 2008
-do- 2007-08 Appeal in CESTAT
Bangalore
-do- 2008-09 Appeal in CESTAT
Bangalore
-do- 2009-10 Asst. Commissioner, Kurnool
-do- 2007-08 Appeal in CESTAT, Bangalore
-do- 2004-05 A.P.High Court
-do- 2008-09 Commissioner, Tirupathi.
-do- July 2006 to -do-
November 2007
-do- 2009-10 Asst.Commissioner.Kurnool
P.F.Act May 1999 to Commissioner of Pro-
Sept.2001 vident Fund,Kadapa
K.S.T.Act 1997-98 to Dy.Commissioner
2000-01 of Commercial
Taxes,Bangalore
x) In our opinion, the accumulated losses of the company are more than
fifty percent of its net worth. The company has not incurred cash
losses during the financial year covered by our audit and 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
Banks, Financial Institutions and debenture holders except interest
dues to J.M.Capital Management Private Limited of Rs.11.51 lakhs and
there are delays in payment of term loan installments to Banks and an
amount of Rs.13.75 lakhs outstanding at the year end on 31.03.2010 was
paid in the subsequent year 2010-11.
xii) In our opinion and according to the information and explanations
given 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/mutua!
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
company.
xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 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 terms and conditions on which the company has given
guarantees for loans taken by others (Cheran Cement Limited and
S.P.Y.Agro Industries Limited) from banks or financial institutions
(SIPCOT and TIIC in respect of Cheran Cement Ltd and State Bank of
India, State Bank of Hyderabad; Bank of India, Syndicate Bank and
Indian Overseas Bank in respect of S.P.Y.Agro Industries Limited) are
not prima facie, prejudicial to the interest of the company.
xvi) In our opinion, the term loans have been applied for the purpose
for which they were raised.
xvii) According to the information and explanations given 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
investment. No long-term funds have been used to finance short-term
assets except permanent working capital.
xviii) According to the information and explanations given to us,
during the year under report, 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, during
the period covered by our audit report, the company has not issued any
debentures and hence creation of securities does not arise.
xx) According to the information and explanations given to us, during
the year covered by our report, the company has not raised any money by
public issue.
xxi) In our opinion and 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 Brahmayya & Co.,
Chartered Accountants
Firms Registration No.000514S
Hyderabad (Camp) B.DAIVADHEENAM REDDY
Dt. 29th May, 2010 Partner
M.No.026450