Mar 31, 2023
INDEPENDENT AUDITOR''S REPORT
To The Members of Premier Explosives Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements
of Premier Explosives Limited ("the Company"), which comprise
the Balance Sheet as at March 31,2023, and the Statement of Profit
and Loss (including Other Comprehensive Income), the Statement of
Changes in Equity and the Statement of Cash Flows for the year then
ended, and a summary of significant accounting policies and other
explanatory information (hereafter referred to as the "standalone
financial statements").
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 Companies Act, 2013
(the "Act") in the manner so required and give a true and fair view in
conformity with the Indian Accounting Standards prescribed under
section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended, ("Ind AS") and other accounting
principles generally accepted in India, of the state of affairs of the
Company as at March 31, 2023, and its profit, total comprehensive
income, the changes in equity and its cash flows for the year ended
on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing
(SAs) specified under section 143(10) of the Act. Our responsibilities
under those Standards are further described in the Auditor''s
Responsibility for the Audit of the Standalone Financial Statements
section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India (ICAI) together with the ethical requirements
that are relevant to our audit of the standalone financial statements
under the provisions of the Act and the Rules made thereunder and
we have fulfilled our other ethical responsibilities in accordance with
these requirements and the ICAI''s Code of Ethics. We believe that the
audit evidence obtained by us is sufficient and appropriate to provide
a basis for our opinion on the standalone financial statements.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial
statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on these matters. we have determined the matters described
below to be the key audit matters to be communicated in our report.
Information Other than the Financial Statements and Auditor''s
Report Thereon
⢠The Company''s Board of Directors is responsible for the other
information. The other information comprises the information
included in the Management Discussion and Analysis, Board''s
Report including Annexures to Board''s Report, Corporate
Governance and Shareholder''s Information, but does not
include the consolidated financial statements, standalone
financial statements and our auditor''s report thereon. These
reports comprising other information are expected to be made
available to us after the date of this auditor''s report.
⢠Our opinion on the standalone financial statements does not
cover the other information and will not express any form of
assurance conclusion thereon.
⢠In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the standalone financial statements
or our knowledge obtained during the course of our audit or
otherwise appears to be materially misstated.
⢠When we read the Management Discussion and Analysis, Board''s
Report including Annexures to Board''s Report, Corporate
Governance and Shareholder''s Information, if we conclude that
there is a material misstatement therein, we are required to
communicate the matter to those charged with governance as
required under SA 720 ''The Auditor''s responsibilities Relating to
Other Information''.
Management''s Responsibility for the Standalone Financial
Statements
The Company''s Board of Directors is responsible for the matters
stated in section 134(5) of the Act with respect to the preparation
of these standalone financial statements that give a true and fair
view of the financial position, financial performance including
other comprehensive income, cash flows and changes in equity of
the Company in accordance with the Ind AS and other accounting
principles generally accepted in India. 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 standalone financial statement
that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the standalone financial statements, Board of Directors is
responsible for assessing the Company''s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the
Company''s financial reporting process.
Auditor''s Responsibility for the Audit of the Standalone Financial
Statements
Our objectives are to obtain reasonable assurance about whether
the standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor''s
report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted
in accordance with SAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the
audit. We also:
⢠Identify and assess the risks of material misstatement of the
standalone financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.
⢠Obtain an understanding of internal financial control relevant
to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of
the Act, we are also responsible for expressing our opinion on
whether the Company has adequate internal financial controls
system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by the management.
⢠Conclude on the appropriateness of management''s use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt
on the Company''s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to
draw attention in our auditor''s report to the related disclosures
in the standalone financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor''s
report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the
standalone financial statements, including the disclosures, and
whether the standalone financial statements represent the
underlying transactions and events in a manner that achieves
fair presentation.
Materiality is the magnitude of misstatements in the standalone
financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable
user of the standalone financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) planning
the scope of our audit work and in evaluating the results of our work;
and (ii) to evaluate the effect of any identified misstatements in the
standalone financial statements.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships
and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the
audit of the standalone financial statements of the current period and
are therefore the key audit matters. We describe these matters in our
auditor''s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we
report that:
a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by
law have been kept by the Company so far as it appears
from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss
including Other Comprehensive Income, Statement of
Changes in Equity and the Statement of Cash Flows 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 Ind AS specified under
Section 133 of the Act.
e) On the basis of the written representations received from
the directors as on March 31,2023 taken on record by the
Board of Directors, none of the directors is disqualified as
on March 31,2023, from being appointed as a director in
terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our
separate Report in "Annexure A". Our report expresses
Unmodified opinion on the operating effectiveness of
the Company''s internal financial controls over financial
reporting.
g) With respect to the other matters to be included in the
Auditor''s Report in accordance with the requirements of
section 197(16) of the Act, as amended,
In our opinion and to the best of our information
and according to the explanations given to us, the
remuneration paid by the Company to its directors
during the year is in accordance with the provisions of
section 197 of the Act.
h) With respect to the other matters to be included in
the Auditor''s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended
in our opinion and to the best of our information and
according to the explanations given to us:
i. The company has disclosed the impact of pending
litigation on its financial position as stated in
note no 34 to the Standalone Ind AS Financial
Statements.
ii. The Company has made provision, as required
under the applicable law or accounting standards,
for material foreseeable losses, if any, on long-term
contracts, the company doesn''t have derivative
contracts;
iii. There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best
of its knowledge and belief, no funds (which are
material either individually or in the aggregate)
have been advanced or loaned or invested (either
from borrowed funds or share premium or any
other sources or kind of funds) by the Company to
or in any other person or entity, including foreign
entity ("Intermediaries"), with the understanding,
whether recorded in writing or otherwise, that the
Intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the
Company ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the
Ultimate Beneficiaries;
(b) The Management has represented, that, to
the best of its knowledge and belief, no funds
(which are material either individually or in the
aggregate) have been received by the Company
from any person or entity, including foreign entity
("Funding Parties"), with the understanding,
whether recorded in writing or otherwise, that
the Company shall, whether, directly or indirectly,
lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide
any guarantee, security or the like on behalf of the
Ultimate Beneficiaries;
(c) Based on the audit procedures that have been
considered reasonable and appropriate in the
circumstances, nothing has come to our notice that
has caused us to believe that the representations
under sub-clause (i) and (ii) of Rule 11(e), as
provided under (a) and (b) above, contain any
material misstatement.
v. As stated in Note 46 to the standalone Ind AS
financial statements
a) The dividend declared or paid during the
year by the Company is in compliance with
Section 123 of the Act.
b) The company has not issued any interim
dividend during the year.
c) The Board of Directors of the Company have
proposed final dividend for the year which
is subject to the approval of the members
at the ensuing Annual General Meeting.
The amount of dividend proposed is in
accordance with section 123 of the Act, as
applicable.
vi. As proviso to rule 3(1) of the Companies (Accounts)
Rules, 2014 is applicable for the company only
w.e.f. April 1, 2023, reporting under this clause is
not applicable.
2. As required by the Companies (Auditor''s Report) Order, 2020
("the Order") issued by the Central Government in terms of
Section 143(11) of the Act, we give in "Annexure B" a statement
on the matters specified in paragraphs 3 and 4 of the Order.
Chartered Accountants
Firm''s Registration No: 015975S
Partner
Membership No: 244172
UDIN No: 23244172BGQKYK2637
Place: Hyderabad
Date: May 16, 2023
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of PREMIER EXPLOSIVES LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143(11) of the Act.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate inthe circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2018, and its profit, total comprehensive income/ loss, its cash flows and the changes in equity for the year ended on that date.
Other Matters
a) The comparative financial information of the Company for the year ended 31st March 2017 and the transition date opening balance sheet as at 1st April 2016 included in these standalone Ind AS financial statements, are based on the statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31st March 2017 and 31st March 2016 dated May 27, 2017 and May 24, 2016 respectively expressed an unmodified opinion on those standalone financial statements, and have been restated to comply with Ind AS. Adjustments made to the previously issued said financial information prepared in accordance with the Companies (Accounting Standards) Rules, 2006 to comply with Ind AS have been audited by us.
Our opinion on the standalone Ind AS financial statements is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors of the Company as on 31st March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements; (Refer Note No.35 to the Standalone Ind AS Financial Statements).
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31st March 2018.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
(Referred to in paragraph 1(f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of PREMIER EXPLOSIVES LIMITED (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS (retain as applicable) financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on âthe 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 Indiaâ. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given to us the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on âthe criteria for internal financial control over financial reporting 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 Indiaâ.
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details except situation, of fixed assets.
(b) The fixed assets have been physically verified by the management according to the phased programme designed to cover all the fixed assets on rotation basis. In respect of fixed assets verified according to this programme, which is considered reasonable, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the investments made by it. The Company has not granted any loans or provided any guarantees or security to the parties covered under Section 185 and 186.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and 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 records with a view to determine whether they are accurate or complete.
vii(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, Goods and Service tax, cess and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of service-tax, duty of customs, duty of excise, which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, value added tax as at March 31, 2018 which have not been deposited on account of a dispute, are as follows:
Amount (Rs. in lakhs) |
Period to |
|||
Name of the |
Nature of |
which the |
Forum where |
|
Statute |
dues |
amount relates |
dispute is pending |
|
Honourable High |
||||
Central |
Sales |
151.31 |
2007-08 |
Court of Andhra |
Sales Tax |
Tax |
Pradesh and Telangana |
||
Tamil Nadu Value |
Value Added |
424.52 |
2009-10 to |
Honourable High Court of Judicature at Madras |
Added Tax |
Tax |
2015-16 |
||
Act, 2006 |
||||
The Deputy |
||||
Income |
Income tax |
Commissioner |
||
Tax Act, |
36.74 |
2013-14 |
of Income Tax, |
|
1961 |
Circle-16(2), Hyderabad |
|||
Asst. |
||||
Telangana Value |
Value Added Tax |
11.83 |
2015-16 and 2016-17 |
Commissioner (CT), Audit, |
Added Tax Act, 2005 |
Begumpet Division, Hyderabad |
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as under Indian Accounting Standard (IND AS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has made a preferential allotment and private placement of shares during the year under review, in compliance with the requirements of Section 42 of the Act. The amounts raised have been used for the purpose for which funds were raised except as described below:
Equity |
Purpose for which funds raised |
Total Amount Raised |
Amount utilized for the purpose of its raise |
Un-utilized balance as at Balance sheet date |
QIP and |
Business Expansion |
|||
Preferential |
& Working capital |
7,273.26 |
4,462.04 |
2,811.22 |
issue |
utilisation |
xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For MAJETI & CO
Chartered Accountants
Firmâs Registration Number: 015975S
Kiran Kumar Majeti
Partner
Membership Number: 220354
Place: Hyderabad
Date: May 23, 2018
Mar 31, 2015
We have audited the accompanying financial statements of Premier
Explosives Limited ("the Company"), which comprise the Balance Sheet as
at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's responsibility for the financial statements
The Company's Board of Directors is responsible for the maters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and maters 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 control system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, and its profit and its cash fows for the year
ended on that date.
Emphasis of mater
We draw attention to Note No. 29.2.8 to the fnancial statements. As
referred to in this note, the managerial remuneration paid to the
Chairman and Managing Director for the year ended 31st March, 2015 is
in excess of the limits laid down under Section 197 read with Schedule
V of the Act by Rs. 40.91 Lakhs. In this regard we have been informed by
the Management of the Company that they are in the process of seeking
approval from the Central Government in respect of the above said
amount.
Our opinion is not modified in respect of this mater.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
Sub-sexton (11) of Section 143 of the Act, we give in the Annexure a
statement on the maters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanatons
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the aforesaid financial statements comply with the
Accounting standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) With respect to the other maters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements  Refer Note No.29.2.4
to the financial statements;
ii. The Company did not have any long-term contracts with material
foreseeable losses and did not have any long-term derivate contracts as
at 31st March, 2015;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended 31st March, 2015.
Annexure to Independent Auditor's Report
Referred to in Paragraph 1 under the heading of 'Report on Other Legal
and Regulatory Requirements' of our report of even date
1 (a) The company has maintained proper records showing full
particulars including quantitative details except situation of Fixed
Assets.
(b) The fixed assets have been physically verified by the management
according to the phased programme designed to cover all the fixed
assets on rotator basis. In respect of fixed assets verified according
to this programme, which is considered reasonable, no material
discrepancies were notched on such verification.
2 (a) The inventories of the company have been physically verified at
frequent intervals during the year by the Management except stocks
lying with outside warehouses which have been verified with reference
to certificates and other relevant documents where available.
(b) The procedures of physical verification of Inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The Company has maintained proper records of inventories and the
discrepancies notched on physical verification of stocks as compared to
book records, which in our opinion were not material, have been
properly dealt with in the books of account.
3 The Company has not granted any loans, secured or unsecured, to
Companies, forms or other parts listed in the register maintained under
sexton 189 of the Companies Act, 2013 ("the Act"). Therefore, the
provisions of Clause 3(iii), (iii)(a) and (iii)(b) of the said Order
are not applicable to the Company.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to 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
continuing failure to correct major weaknesses in internal control
system with regard to purchase of inventory and fixed assets and for
the sale of goods and services.
5 The Company has not accepted any deposits from the public during the
year. The Company has complied with the provisions of Sub-section (1)
of Section 74 of the Act with regard to repayment of deposits accepted
before commencement of the Act. We are informed that, 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.
6 We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under Sub-section (1) of Section 148 of the Act and are of
the opinion that prima facie, the prescribed accounts and records have
been maintained and are being made up. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete.
7 (a) According to the records of the Company and as per the
information and explanations given to us, the Company is generally
regular in depositing undisputed statutory dues including provident
fund, employees state insurance, income tax, sales tax, wealth tax,
service tax, duty of customs, duty of excise, value added tax, cess and
any other statutory dues applicable to it with appropriate authorizes
and in respect of these statutory dues, there are no outstanding dues
as on 31st March, 2015 which are outstanding for a period of more than
six months from the date they became payable.
(b) According to the records of the Company and as per the information
and explanations given to us, there are no dues of income tax, wealth
tax, service tax, duty of customs, duty of excise, value added tax and
cess which has not been deposited on account of dispute as on 31st
March, 2015, except central sales tax the details of which are as given
below:
Name Nature Year to Amount Forum where
of the of the which it Rs. dispute is
Statute dues relates pending
Central Sales 2007-08 1,51,30,507/- Honorable
Sales Tax High Court
Tax of Andhra
Pradesh
(c) The amount required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made there under has been
transferred to such fund within time.
8 The Company has no accumulated losses as at the end of the financial
year and it has not incurred any cash losses in the financial year
ended on that date or in the immediately preceding financial year.
9 According to the records of the Company, during the year the Company
has not defaulted in repayment of dues to financial institutions or
bank. There was no amount raised by the Company through the issue of
Debentures.
10 In our opinion, and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
Accordingly, the provisions of Clause 3(x) of the Order are not
applicable to the Company.
11 In our opinion, and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
12 During the course of our examination of the books and records of the
Company carried out in accordance with the generally accepted practices
in India and according to the information and explanations given to us
we have neither come across any instance of fraud on or by the Company,
notched or reported during the year nor have we been informed of such
case by the management.
For P V R K NAGESWARA RAO & CO.
Chartered Accountants
Firm's Registrations Number: 002283S
N. ANKA RAO
HYDERABAD Partner
20.05.2015 Membership Number: 23939
Mar 31, 2014
We have audited the accompanying financial statements of PREMIER
EXPLOSIVES LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31, 2014, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards notified under the Companies Act, 1956 (" the
Act") read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of Section 133 of the
Companies Act, 2013. This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a
basis for our qualified audit opinion.
Basis for Qualified Opinion
The managerial remuneration paid to the Whole Time Directors as
detailed in Note no 30.2.7 is in excess of the limits laid down under
Section 198 and 309 read with Schedule XIII of the Companies Act, 1956
by Rs.95.47 Lakhs and is subject to the approval of Central Government
for which necessary applications have already been made by the Company.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
b. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards notified
under the Companies Act, 1956 read with the General Circular 15/2013
dated 13th September 2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013;
e. On the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure to Independent Auditor''s Report Referred to in Paragraph 1
under the heading of ''Report on Other Legal and Regulatory
Requirements'' of our report of even date
1(a) The company has maintained proper records showing full particulars
including quantitative details except situation of Fixed Assets.
(b) As explained to us, the fixed assets have been physically verified
by the management according to the phased programme designed to cover
all the fixed assets on rotation basis. In respect of fixed assets
verified according to this programme, which is considered reasonable,
no material discrepancies were noticed on such verification.
(c) The Company has not disposed off substantial part of fixed assets
during the year, which affect the going concern assumption.
2 a) As explained to us, the stock of stores, spare parts, raw
materials and finished goods of the company have been physically
verified at frequent intervals during the year by the Management except
stocks lying with outside warehouses which have been verified with
reference to certificates and other relevant documents where available.
(b) The procedures of physical verification of Inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The Company has maintained proper records of inventories and the
discrepancies noticed on physical verification of stocks as compared to
book records, which in our opinion were not material, have been
properly dealt with in the books of account.
3 (a) The Company had granted rent deposit to a company listed in the
register maintained under section 301 of the Companies Act, 1956. The
balance as on 31st March, 2014 and the maximum amount involved during
the year were Rs. Nil/- and Rs. 5,61,968/- respectively.
(b) The Company has taken unsecured loans from fourteen parties listed
in the register maintained under section 301 of the Companies Act,
1956. The balance as on 31st March, 2014 and the maximum amount
involved during the year were Rs. 3,46,96,000/- and Rs. 4,70,72,000/-
respectively.
(c) In our opinion the rate of interest and other terms and conditions
of unsecured loans taken from the parties listed in the register
maintained under section 301 of the Companies Act, 1956 are not prima
facie prejudicial to the interests of the company.
(d) The Company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system with regard to purchase of inventory, fixed assets and for the
sale of goods and services.
5 (a) According to the information and explanations given to us and as
confirmed by the company secretary of the Company, we are of the
opinion that the contracts or arrangements 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 Rs. 5,00,000/- in
respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6 According to the information and explanations given to us, the
Company has generally complied with the directives issued by the
Reserve Bank of India and provisions of Section 58A and 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under where applicable. We are informed that, 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.
7 In our opinion and according to the explanations given to us, the
Company has an internal audit system commensurate with the size and
nature of its business.
8 We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been maintained and are being made up. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9 (a) According to the records of the Company and as per the
information and explanations given to us, the Company is generally
regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees State
Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs
duty, Excise Duty, Cess and other material statutory dues applicable to
it with appropriate authorities and in respect of these statutory dues,
there are no outstanding dues as on 31.03.2014 which are outstanding
for a period of more than six months from the date they became payable.
(b) According to the records of the Company and as per the information
and explanations given to us, there are no dues of Income Tax, Customs
Duty, Wealth Tax, Service Tax, Excise Duty and Cess which has not been
deposited on account of dispute as on 31.03.2014, except Central Sales
Tax the details of which are as given below:
Name of the Statute : Central Sales Tax
Nature of the dues : Sales Tax
Year to which it relates : 2007-08
Amount Rs. : 1,51,30,507/-
Forum where dispute : Honourable High Court of
is pending Andhra Pradesh
10 As per the information and explanations given to us and on an
overall examination of the financial statements of the company for the
current and immediately preceding financial year, we report that the
Company does not have any accumulated losses at the end of the current
financial year nor incurred cash losses in the current and immediately
preceding financial year.
11 During the year the Company has not defaulted in repayment of dues
to financial institutions, bank and debenture holders.
12 As per 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 to anybody during the
year.
13 In our opinion, as the Company is not a chit fund or a nidhi or
mutual benefit fund or society, the provisions of Clause 4 (xiii) of
the Companies (Auditors'' Report) Order, 2003 are not applicable to the
Company for this year.
14 According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15 In our opinion, the terms and conditions on which the company has
given guarantees for the loans taken by others from banks or financial
institutions are not prejudicial to the interests of the Company.
16 In our opinion, the term loans have been applied for the purpose for
which they were raised.
17 As per the information and explanations given to us and on an
overall examination of the balance sheet of the company, we report that
the funds raised on short term basis have not been used for long term
investments.
18 The Company has made preferential allotment of shares to four
parties covered in the Register maintained under section 301 of the Act
during the year. In our opinion and according to the information and
explanations given to us, the price at which shares have been issued is
not prejudicial to the interests of the company.
19 As per the information and explanations given to us, the Company has
not issued any debentures during the year, which requires the creation
of security or charge.
20 During the year the Company has not made any public issues for which
the management has to disclose the end use of money raised through that
public issue.
21 During the course of our examination of the books and records of the
Company carried out in accordance with the generally accepted practices
in India and according to the information and explanations given to us
we have neither come across any instance of fraud on or by the Company,
noticed or reported during the year nor have we been informed of such
case by the management.
For P V R K Nageswara Rao & Co.,
Chartered Accountants
Firm''s Registration Number: 002283S
N. Anka Rao
Hyderabad Partner
24.05.2014 Membership Number: 23939
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of the Premier
Explosives Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 2013, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our qualified audit
opinion.
Basis for Qualified Opinion
The managerial remuneration paid to Chairman and Managing Director as
detailed in Note no 30.2.7 is in excess of the limits laid down under
Section 198 and 309 read with Schedule XIII of the Companies Act, 1956
by Rs 51.29 lakhs and is subject to the approval of Central Government.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c. in the case of the Cash Flow Statement, of the cashflows for the
year ended on that date.
Emphasis of Matter
We draw the attention of the members to Note no.30.2.17 regarding non
disclosure of company''s share of assets, liabilities, income and
expenses in the Joint ventures in view of non availability of audited /
unaudited accounts of Joint ventures. Our opinion is not qualified in
respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Companies Act, 1956;
e. On the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure to Independent Auditor''s Report Referred to in Paragraph 1
under the heading of ''Report on Other Legal and Regulatory
Requirements'' of our report of even date
1 (a) The company has maintained proper records showing full
particulars including quantitative details except situation of Fixed
Assets.
(b) As explained to us, the fixed assets have been physically verified
by the management according to the phased programme designed to cover
all the fixed assets on rotation basis. In respect of fixed assets
verified according to this programme, which is considered reasonable,
no material discrepancies were noticed on such verification.
(c) The company has not disposed off substantial part of fixed assets
during the year, which affect the going concern assumption.
2 (a) As explained to us, the stock of stores, spare parts, raw
materials and finished goods of the company have been physically
verified at frequent intervals during the year by the management except
stocks lying with outside warehouses which have been verified with
reference to certificates and other relevant documents where available.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The company has maintained proper records of inventories and the
discrepancies noticed on physical verification of stocks as compared to
book records, which in our opinion were not material, have been
properly dealt with in the books of account.
3 (a) The Company had granted unsecured loans to associate company and
rent deposit to a company listed in the register maintained under
section 301 of the Companies Act, 1956. The balance as on 31st March,
2013 and the maximum amount involved during the year were Rs.
5,23,976/- and Rs. 4,13,21,375/- respectively.
(b) In our opinion the terms and conditions of unsecured loans and
advances given to the parties listed in the register maintained under
section 301 of the Companies Act, 1956 are not prima facie prejudicial
to the interests of the company.
(c) The company is regular in receipt of principal amounts as
stipulated and re-stipulated and has been regular in receipt of
interest.
(d) The company has taken unsecured loans from thirteen parties listed
in the register maintained under section 301 of the Companies Act,
1956. The balance as on 31st March, 2013 and the maximum amount
involved during the year were Rs. 3,09,63,000/- and Rs. 3,24,63,000/-
respectively.
(e) In our opinion the rate of interest and other terms and conditions
of unsecured loans taken from the parties listed in the register
maintained under section 301 of the Companies Act, 1956 are not prima
facie prejudicial to the interests of the company.
(f) The company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system with regard to purchase of inventory, fixed assets and for the
sale of goods and services.
5 (a) According to the information and explanations given to us and as
confirmed by the company secretary of the Company, we are of the
opinion that the contracts or arrangements 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 Rs. 5,00,000/- in
respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6 According to the information and explanations given to us, the
Company has generally complied with the directives issued by the
Reserve Bank of India and provisions of Section 58A and 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under where applicable. We are informed that, 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.
7 In our opinion and according to the explanations given to us, the
company has an internal audit system commensurate with the size and
nature of its business.
8 We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of section 209 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been maintained and are being made up. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9 (a) According to the records of the company and as per the
information and explanations given to us, the company is generally
regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees State
Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs
duty, Excise Duty, Cess and other material statutory dues applicable to
it with appropriate authorities and in respect of these statutory dues,
there are no outstanding dues as on 31.03.2013 which are outstanding
for a period of more than six months from the date they became payable.
(b) According to the records of the company and as per the information
and explanations given to us, there are no dues of Customs Duty, Wealth
Tax, Service Tax, Excise Duty and Cess which have not been deposited on
account of dispute as on 31.03.2013, except Central Sales Tax and
Income Tax, the details of which are as given below:
Name of the Nature of
the dues Year Amount Forum where
Statute to which it Rs. dispute is
pending
relates
1. Central
Sales Tax Sales Tax 2007-08 1,51,30,507/- Honourable High
Court of
Andhra Pradesh
2. Income tax Income tax
and interest 2009-10 4,68,717/- Commissioner
of Income
Tax Appeals-V,
Hyderabad
10 As per the information and explanations given to us and on an
overall examination of the financial statements of the company for the
current and immediately preceding financial year, we report that the
company does not have any accumulated losses at the end of the current
financial year nor incurred cash losses in the current and immediately
preceding financial year.
11 During the year the company has not defaulted in repayment of dues
to financial institutions, bank and debenture holders.
12 As per 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 to anybody during the
year.
13 In our opinion, as the company is not a chit fund or a nidhi or
mutual benefit fund or society, the provisions of clause 4 (xiii) of
the Companies (Auditors'' Report) Order, 2003 are not applicable to the
company for this year.
14 According to the information and explanations given to us, the
company is not dealing or trading in shares, securities, debentures and
other investments.
15 In our opinion, the terms and conditions on which the company has
given guarantees for the loans taken by others from banks or financial
institutions are not prejudicial to the interests of the company.
16 In our opinion, the term loans have been applied for the purpose for
which they were raised.
17 As per the information and explanations given to us and on an
overall examination of the balance sheet of the company, we report that
the funds raised on short term basis have not been used for long term
investments.
18 As per the information and explanations given to us, during the year
the company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956.
19 As per the information and explanations given to us, the company has
not issued any debentures during the year, which requires the creation
of security or charge.
20 During the year the company has not made any public issues for which
the management has to disclose the end use of money raised through that
public issue.
21 During the course of our examination of the books and records of the
company carried out in accordance with the generally accepted practices
in India and according to the information and explanations given to us
we have neither come across any instance of fraud on or by the company,
noticed or reported during the year nor have we been informed of such
case by the management.
For P. V. R. K. Nageswara Rao & Co.,
Chartered Accountants
Firm''s Registration Number: 002283S
P. V. R. K. Nageswara Rao
Hyderabad Partner
29.05.2013 Membership Number: 18840
Mar 31, 2012
1. We have audited the attached Balance Sheet of Premier Explosives
Limited as at 31st March, 2012, 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 auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003 issued
by the Central Government of India in terms of section 227(4A) 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
these 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 in section 211 (3C) of the Companies Act,
1956 to the extent applicable except in respect of the following:
We draw the attention of the members to note no. 31.2.16 of Notes on
accounts regarding nondisclosure of company's share of assets,
liabilities, income and expenses in the Joint ventures in view of
non-availability of audited / unaudited accounts of Joint ventures.
v) On the basis of the written representations received from the
directors, as on 31.03.2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31 st March, 2012 from being appointed as 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, the said accounts read in conjunction
with the notes and accounting policies thereon 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 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 for the
year ended on that date; and
c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure referred to in Paragraph 3 of Auditors' Report of even date on
the accounts of Premier Explosives Limited for the year ended 31st
March 2012
1. (a) The company has maintained proper records showing full
particulars including quantitative details except situation of fixed
assets.
(b) As explained to us, the fixed assets have been physically verified
by the management according to the phased programme designed to cover
all the fixed assets on rotation basis. In respect of fixed assets
verified according to this programme, which is considered reasonable,
no material discrepancies were noticed on such verification. As
regards capital works in-progress, the same will be verified by the
management on completion of assets.
(c) The company has not disposed off substantial part of fixed assets
during the year, which affect the going concern assumption.
2. (a) As explained to us, the stock of stores, spare parts, raw
materials and finished goods of the company have been physically
verified at frequent intervals during the year by the management except
stocks lying with outside warehouses which have been verified with
reference to certificates and other relevant documents where available.
(b) The procedures of physical verification of Inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The company has maintained proper records of inventories and the
discrepancies noticed on physical verification of stocks as compared to
book records, which in our opinion were not material, have been
properly dealt with in the books of account.
3. (a) The company had granted unsecured loans to associate company
and rent deposit to a company, listed in the register maintained under
section 301 of the Companies Act, 1956. The balance as on 31st March,
2012 and the maximum amount involved during the year were Rs.
3,57,88,632/- and Rs.3,88,66,784/- respectively.
(b) In our opinion the terms and conditions of unsecured loans and
advances given to the parties listed in the register maintained under
section 301 of the Companies Act, 1956 are not prima facie prejudicial
to the interests of the company.
(c) The company is regular in receipt of principal amounts as
stipulated and re-stipulated and has been regular in receipt of
interest.
(d) The company has taken unsecured loans from eight parties listed in
the register maintained under section 301 of the Companies Act, 1956.
The balance as on 31st March, 2012 and the maximum amount involved
during the year were Rs. 1,96,51,000/- and Rs. 2,52,51,000/-
respectively.
(e) In our opinion the rate of interest and other terms and conditions
of unsecured loans taken from the parties listed in the register
maintained under section 301 of the Companies Act, 1956 are not prima
facie prejudicial to the interests of the company.
(f) The company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and the nature of its business with regard
to purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system with regard to purchase of inventory, fixed assets and for the
sale of goods and services.
5. (a) According to the information and explanations given to us and
as confirmed by the President (Finance) and Company Secretary of the
company, we are of the opinion that the contracts or arrangements 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 Rs. 5,00,000/- in
respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. According to the information and explanations given to us, the
company has generally complied with the directives issued by the
Reserve Bank of India and provisions of section 58A and 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under where applicable. We are informed that, 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.
7. In our opinion and according to the explanations given to us, the
company has an internal audit system commensurate with the size and
nature of its business.
8. We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of section 209 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been maintained and are being made up. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9. (a) According to the records of the company and as per the
information and explanations given to us, the company is generally
regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees State
Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs
duty, Excise Duty, Cess and other material statutory dues applicable to
it with appropriate authorities and in respect of these statutory dues,
there are no outstanding dues as on 31.03.2012 which are outstanding
for a period of more than six months from the date they became payable.
(b) According to the records of the company and as per the information
and explanations given to us, there are no dues of Customs Duty, Income
Tax, Wealth Tax, Service Tax, Excise Duty and Cess which have not been
deposited on account of dispute as on 31.03.2012, except Central Sales
Tax, the details of which are as given below:
Name of the Statute : Central Sales Tax
Nature of the dues : Tax payable on
completion of assessment
Year to which it relates : 2007-08
Amount : Rs.1,51,30,507/-
Forum where dispute is : Honourable pending High Court of
Andhra Pradesh
10. As per the information and explanations given to us and on an
overall examination of the financial statements of the company for the
current and immediately preceding financial year, we report that the
company does not have any accumulated losses at the end of the current
financial year nor incurred cash losses in the current and immediately
preceding financial year.
11. During the year the company has not defaulted in repayment of dues
to financial institutions, bank and debenture holders.
12. As per 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 to anybody during
the year.
13. In our opinion, as the company is not a chit fund or a nidhi or
mutual benefit fund or society, the provisions of clause 4 (xiii) of
the Companies (Auditors' Report) Order, 2003 are not applicable to the
company for this year.
14. According to the information and explanations given to us, the
company is not dealing or trading in shares, securities, debentures and
other investments.
15. In our opinion, the terms and conditions on which the company has
given guarantees for the loans taken by others from banks or financial
institutions are not prejudicial to the interests of the company.
16. In our opinion, as the company has not taken any term loans, the
provision of clause of (xvi) of the Companies (Auditors' Report) Order,
2003 are not applicable to the company for this year.
17. As per the information and explanations given to us and on an
overall examination of the balance sheet of the company, we report that
the funds raised on short term basis have not been used for long term
investments.
18. As per the information and explanations given to us, during the
year the company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Companies Act, 1956.
19. As per the information and explanations given to us, the company
has not issued any debentures during the year, which requires the
creation of security or charge.
20. During the year the company has not made any public issues for
which the management has to disclose the end use of money raised
through that public issue.
21 During the course of our examination of the books and records of the
company carried out in accordance with the generally accepted practices
in India and according to the information and explanations given to us
we have neither come across an instance of fraud on or by the company,
noticed or reported during the year nor have we been informed of such
case by the management.
For P. V. R. K. Nageswara Rao & Co.,
Chartered Accountants
Firm's Registration Number: 002283S
P. V. R. K. Nageswara Rao
Hyderabad Partner
23.05.2012 Membership No. 18840
Mar 31, 2010
1. We have audited the attached Balance Sheet of Premier Explosives
Limited as at 31st March, 2010, 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 auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Section 227(4A) 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
these 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 in
Section 211 (3C) of the Companies Act, 1956 to the extent applicable
except in respect of the following:
We draw the attention of the members to note 19 of Notes to Accounts
vide Schedule 26 regarding non disclosure of Companys share of Assets,
Liabilities, Income and Expenses in the Joint ventures in view of non
availability of audited/unaudited accounts of Joint ventures.
v) On the basis of the written representations received from the
directors, as on 31.03.2010, and taken on record by the Board of
Directors, we report that none of the directors are disqualified as on
31 st March, 2010 from being appointed as 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, the said accounts read in conjunction
with the notes and accounting policies thereon 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 Balance Sheet of the state of affairs of the Company
as at 31st March, 2010;
b) in the case of Profit and Loss Account of the Profit for the year
ended on that date; and
c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure referred to in Paragraph 3 of Auditors Report of even date on
the accounts of Premier Explosives Limited for the year ended 31st
March 2010
1 (a) The company has maintained proper records showing
full particulars including quantitative details except situation of
fixed assets.
(b) As explained to us, the fixed assets have been physically verified
by the management according to the phased programme designed to cover
all the fixed assets on rotation basis. In respect of fixed assets
verified according to this programme, which is considered reasonable,
no material discrepancies were noticed on such verification. As regards
capital works in-progress, the same will be verified by the management
on completion of assets.
(c) The Company has not disposed off substantial part of fixed assets
during the year, which affect the going concern assumption.
2 a) As explained to us, the stock of stores, spare parts,
raw materials and finished goods of the company have been physically
verified at frequent intervals during the year by the Management except
stocks lying with outside warehouses which have been verified with
reference to certificates and other relevant documents where available.
(b) The procedures of physical verification of Inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) The Company has maintained proper records of inventories and the
discrepancies noticed on physical verification of stocks as compared to
book records, which in our opinion were not material, have been
properly dealt with in the books of account.
3 (a) The Company had granted unsecured loans of Rs.
7,00,33,973/- to two Joint Ventures, Rs. 1,00,00,000/ - to associate
company and rent deposit of Rs. 33,34,605/- to a company listed in the
register maintained under section 301 of the Companies Act, 1956 during
earlier years. The balance as on 31st March, 2010 and the maximum
amount involved during the year were Rs. 8,47,83,640/- and Rs.
8,33,68,578/- respectively.
(b) During the year, full provision has been made in the accounts for
amounts due from Joint Ventures amounting to Rs. 7,00,33,973/- which
are considered doubtful of recovery as explained in note no. 6 of
Schedule 26. Under the circumstances, we are unable to express an
opinion. In our opinion the terms and conditions of unsecured loans
given to other parties listed in the Register maintained under section
301
of the Companies Act, 1956 are not prima facie prejudicial to the
interests of the company.
(c) The company is regular in receipt of principal amounts as
stipulated and restipulated and has been regular in receipt of interest
in respect to loans granted to associate company.
(d) The Company has taken unsecured loans aggregating to
Rs.1,90,57,000/- from nine parties listed in the register maintained
under section 301 of the Companies Act, 1956. The balance as on 31st
March, 2010 and the maximum amount involved during the year were Rs.
1,60,13,000/- and Rs. 1,78,49,000/- respectively.
(e) In our opinion the rate of interest and other terms and conditions
of unsecured loans taken from the parties listed in the register
maintained under section 301 of the Companies Act, 1956 are not prima
facie prejudicial to the interests of the company.
(f) The Company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of interest.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system with regard to purchase of inventory, fixed assets and for the
sale of goods and services.
5. (a) According to the information and explanations given
to us and as confirmed by the Vice President (Finance) and Company
Secretary of the Company, we are of the opinion that the contracts or
arrangements 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 Rs.5,00,000/- in
respect of each party have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. According to the information and explanations given to us, the
Company has generally complied with the directives issued by the
Reserve Bank of India and provisions of Section 58A and 58AA or any
other relevant provisions of the Companies Act, 1956 and the rules
framed there under where applicable. We are informed that, 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.
7 In our opinion and according to the explanations given to us, the
Company has an internal audit system commensurate with the size and
nature of its business.
8 We have broadly reviewed the books of account maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub- section (1) of Section 209 of the
Act and are of the opinion that prima facie, the prescribed accounts
and records have been maintained and are being made up. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
9 (a) According to the records of the Company and as per the
information and explanations given to us, the Company is
generally regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees State
Insurance, Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs
duty, Excise Duty, Cess and other material statutory dues applicable to
it with appropriate authorities and in respect of these statutory dues,
there are no outstanding dues as on 31.03.2010 which are outstanding
for a period of more than six months from the date they became payable.
(b) According to the records of the Company and as per the information
and explanations given to us, there are no dues of Customs Duty, Income
Tax, Wealth Tax, Service Tax, Excise Duty and Cess which has not been
deposited on account of dispute as on 31.3.2010, except Central Sales
Tax, the details of which are as given below:
Name of the Nature of the dues Year to which Amount Forum where dispute
Statute it relates Rs. is pending
Central Sales Tax payable on
Tax completion 2007-08 1,51,30,507/- Honourable High
Court of
of assessment Andhra Pradesh
10 As per the information and explanations given to us and on an
overall examination of the financial statements of the company for the
current and immediately preceding financial year, we report that the
Company does not have any accumulated losses at the end of the current
financial year nor incurred cash losses in the current and immediately
preceding financial year.
11 During the year the Company has not defaulted in repayment of dues
to financial institutions, bank and debenture holders.
12 As per 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 to any body during
the year.
13 In our opinion, as the Company is not a chit fund or a nidhi or
mutual benefit fund or society, the provisions of Clause 4 (xiii) of
the Companies (Auditors Report) Order, 2003 are not applicable to the
Company for this year.
14 According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments.
15 In our opinion, the terms and conditions on which the company has
given guarantees for the loans taken by others from banks or financial
institutions are not prejudicial to the interests of the Company.
16 According to records of the Company the term loans raised during the
year have been applied for the purposes for which they were raised.
17 As per the information and explanations given to us and on an
overall examination of the balance sheet of the
company, we report that the funds raised on short term basis have not
been used for long term investments.
18 As per the information and explanations given to us, during the year
the Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under section
301 of the Companies Act, 1956.
19 As per the information and explanations given to us, the Company has
not issued any debentures during the year, which requires the creation
of security or charge.
20 During the year the Company has not made any public issues for which
the management has to disclose the end use of money raised through that
public issue.
21 During the course of our examination of the books and records of the
Company carried out in accordance with the generally accepted practices
in India and according to the information and explanations given to us
we have neither come across an instance of fraud on or by the Company,
noticed or reported during the year nor have we been informed of such
case by the management.
For P V R K Nageswara Rao & CO.,
Chartered Accountants
Firms Registration Number: 002283S
P V R K NAGESWARA RAO
Partner
Membership No. 18840
Place : HYDERABAD
Date : 15.05.2010