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Auditor Report of Shri Keshav Cements & Infra Ltd.

Mar 31, 2023

SHRI KESHAV CEMENTS & INFRA LIMITED

Report on the Audit of the Financial Statements

Qualified Opinion

We have audited the accompanying financial statements of SHRI KESHAV CEMENTS & INFRA LIMITED (“the Company”), which comprise the Balance Sheet as at March 31, 2023, 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 notes to the financial statements, including a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give the information required by the Companies Act, 2013 (“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 March 31, 2023 and its profit and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. The company has been purchasing coal and is paying GST Compensation Cess (“coal cess”) on the said purchases. Since there is no significant sale of coal, such coal cess is accumulated over a period of time and is not been set off against the output coal cess. Such accumulated coal cess amounting to Rs.242.57 Lakhs is included as part of other current assets in the financial statements. As the company does not have sufficient stock of coal, in our view said coal cess is not recoverable. The impact of the same is not provided in the audited financial results.

2. Based on the information provided and records produced before us, the Company has made an advance payment of GST amounting to Rs. 641.52 Lakhs plus interest and penalties amounting to Rs. 218.11 Lakhs in the financial year 2020-21 & 2021-22, based on a search conducted by GST Intelligence at company premises. The GST liability was pertaining to financial year 2018-19 and 2019-20. However, as per the information and explanation provided to us as at the reporting date, the investigation by DGGI is not complete. Such amounts are included as part of other current assets in the financial statements. Since the investigation is not completed and orders are not issued, therefore we are unable to comment on the impact of the financial statements.

We conducted our audit in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and 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 we have obtained is sufficient and appropriate to provide a basis for qualified opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Sl.

No.

Key Audit Matter

Auditor’s Response

1.

Inventory Physical Verification & Valuation:

As described in Note No. S (Significant Accounting policy) and Note No.3 (Inventories) of the Financial Statement, the company carries inventory at lower of cost or net realizable value on first in first out basis (FIFO).

As at 31 March 2023 company held inventory of Rs.2837.17 Lakhs (PY Rs.2804.96 Lakhs) which includes Raw material, Finished Goods, Traded Items, Packing material, Work in Progress (WIP), Stores and Consumables, Stock-In-Trade and Goods in Transit.

Bulk quantities of inventory of the company comprises primarily of Petcoke, Clinker, Limestone & Slag which are used in the process of production. The company has laid down a policy to verify quantities of major items of inventory periodically, and ensuring all items are physically verified at least once a year. Determination of physical quantities of bulk inventory is done on volumetric measurements and involves a significant approximation in respect of volume (using measuring equipment), density etc.

As such, we determined this to be a

We obtained a detailed understanding and evaluated the design and implementation of controls that the Company has established in relation to inventory management.

We obtained assurance over the valuation of finished goods by performing the following procedures:

- Verification of the overall cost and comparison with the production quantity through the year to obtain the valuation of the finished goods;

- Recomputing the cost of sample inventory items to match the arrived cost with the books of accounts, as per the accounting policies adopted by the company.

- Verifying the value of a sample of inventory items to confirm whether they are held at the lower of cost and net realizable value, through comparison with year-end sales prices;

We obtained assurance over the quantification of inventory at the year-end by reviewing the

matter of significance to our audit due to quantum of the amount & estimation involved.

procedures of physical verification adopted by the internal auditors and performed independent test checks of physical quantities for select sample items, and assessed the adequacy of controls.

2

Property, Plant & Equipment:

Property, plant and equipment requires the management to exercise significant judgment in relation to the estimate of depreciable lives of the assets considering the technical factors which may affect the useful life expectancy of the assets and therefore could have a material impact on the depreciation expense for the year.

The management reviews the estimated depreciable lives and the residual value of property, plant and equipment annually and have revised their estimate regarding useful life of certain plant & machinery.

As a result of the degree of estimation & the valuation involved, we consider this as a Key Audit Matter.

We have obtained assurance over the property, plant & equipment and depreciation figures by performing the following audit procedures for considering the useful life other than Schedule II of Companies Act 2013 -

- Testing the controls over the management’s judgement in determining the useful life

- Benchmarking the useful life by comparing with peers in the cement industry

- Placing reliance on technical report of Chartered Engineer for the life determined for specific plant & machinery

- Reviewing the performance of plant & machinery undergoing changes in the useful life.

- Assessing the appropriateness of disclosures made in the financial statements

Other Information

The Company’s Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditor’s report thereon. The Annual Report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the applicable laws and regulations.

Management’s & Board of Director’s Responsibility for the Financial Statements

The Company’s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, Management and Board of Directors are 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial controls 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 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 financial statements or, if such disclosures are inadequate, to modify our opinion. Refer to paragraph “material uncertainty related to going concern” above in respect to our reporting in respect to going concern appropriateness. 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 financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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 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 A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. A. 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 Flow dealt with by this Report are in agreement with the relevant books of account.

d. In our opinion, the aforesaid 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 B”.

B. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as at 31 March 2023 - Refer Note 27 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. (i) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note no 32 (9) to the Financial Statements, no funds 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 persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

• directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Company, or

• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The management has represented, that, to the best of its knowledge and belief, as disclosed in the Note no 32 (10) to the Financial Statements, no funds have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall:

• directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by or on behalf of the Funding Party or

• provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries; and

(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under (i) and (ii) above contain any material misstatement.

v. There is no dividend declared or paid during the year by the Company.

C. With respect to the 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. The remuneration paid to any director is not in excess of the limit laid down under Section 197, read with Schedule V to the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For Singhi & Co.

Chartered Accountants,

(Firm’s Registration No. 302049E)

Sd/-

CA. Vijay Jain

Partner

(Membership No.077508)

UDIN: 23077508BGTPSZ6243 Date: 25th May 2023 Place: Bengaluru


Mar 31, 2018

Shri Keshav Cements and Infra Limited.

We have audited the accompanying financial statements of Shri Keshav Cements and Infra Limited (“the Company”), which comprise the Balance Sheet as at March 31,2018, Statement of Profit and Loss (including Other Comprehensive Income), Statement of changes in Equity and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “Ind AS financial statements”).

Management Responsibility for the Ind AS Financial Statement:

The Company’s Board of Directors is responsible for the matters stated in Paragraph 5 of Section 134 of the Companies Act, 2013 (“the Act”)with respect to the preparation of these 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued there under.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS 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 Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Paragraph 10 of Section 143of the Act. Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Ind AS financial statements.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind As financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company asat March 31, 2018;

b) in the case of the Statement of Profit and Loss, of the Loss for the year ended on that date;

c) in case of Statement of changes in Equity, the changes in equity for the year ended as on that date; and

d) 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, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11)of section 143 of the Act, we give in the Annexure-A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) in our opinion proper books of account as required by law have been keptby the Company so far as appears from our examination of those books;

c) the Balance Sheet, Statement of Profit and Loss including other comprehensive income,

Statement of Changes in Equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting standards specified under Section 133 of the Act read with relevant rules issued thereunder;

e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 inn “Annexure- B”;

g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

I. The Company does not have any pending litigations that will impact its financial position as on March 31, 2018;

II. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

III. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;

ANNEXURE- A

Annexure referred to in Paragraph ''1'' of the Auditors Report to members of "M/S SHRI KESHAV CEMENTS AND INFRA LIMITED" on the Ind AS financial statement for the Year ended as on March 31, 2018, we report that:

i. In respect of Fixed Assets:

(a) In our opinion and according to verification of records, the company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets;

(b) As explained to us, fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable having regard to the size and nature of its business; no material discrepancies were noticed on such verification;

(c) In our verification and according to information and explanation given to us, title deeds of immovable properties are in the name of the company;

ii. In our opinion and according to the information and explanations given to us, inventories have been physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on physical verification;

iii. (a)As explained to us, the company has not granted any Loan, secured or unsecured to companies, firms or other parties as disclosed in the Register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions stated in paragraph 3 (iii) (a), (b) and (c) of the order are not applicable;

iv. In our opinion and according to the information and explanations given to us, the company does not have any loans, investments, guarantees and security as specified in Section 185 and 186 of the Companies Act, 2013;

v. In our opinion and according to the information and explanations given to us, the company has not accepted deposits, hence the provision of the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder not applicable to the company;

vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014 (as amended) prescribed by the Central Government under Section 148 (1) of the Companies Act 2013 and are of the opinion that, prima facie, the prescribed accounts and cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete;

vii. (a) In our opinion and according to the information and explanations given to us, the company 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 with the appropriate authorities;

(b) In our opinion and according to the information and explanations given to us, dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited on account of any dispute are given below:

Sl No.

Statute

Nature of Dues

Amount Rs. In Lakhs

Relevant

Period/Financial

Year

Authority where dispute pending

1

MVAT Act

MVAT Liability, Interest and Penalty

34.95

FY 2012-13

Deputy

Commissioner of Sales Tax.

viii. In our opinion and according to information and explanation given to us, the company has not defaulted in repayment of loans or borrowings to financial institutions or bank, and the company does not have any loans or borrowing from government and debentures;

ix. In our opinion and according to the information and explanations given to us, money raised by way of the term loans were applied for the purpose for which those are raised and the company has not raised any money by initial public offer or further public offer;

x. In our opinion and according to the information and explanations given to us, there are no fraud by the company and any fraud on the company by its officers or employees were noted or reported during the year;

xi. In our opinion and according to the information available to us, the Company has paid or provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013;

xii. In our opinion and according to the information available to us, company is not a Nidhi company, hence the reporting under Paragraph 3 (xii) of the Order not applicable to the company;

xiii. In our opinion and according to the information and explanation given to us, all the transaction with related parties are in compliance with the provisions of Section 177 and 188 of Companies Act 2013 and details of related party transactions have been disclosed in the Ind AS financial statements as required by the applicable accounting standards;

xiv. In our opinion and according to the information and explanation given to us, company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review hence reporting under Paragraph 3 (xiv) of the Order is not applicable to the Company;

xv. In our opinion and according to the information and explanation given to us, the company has not entered into any non-cash transaction with directors or persons connected with him and hence reporting under clause of Paragraph 3 of the Order is not applicable to the Company;

xvi. In our opinion and according to the information and explanation given to us, the company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE- B

ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE IND AS FINANCIAL STATEMENTS OF "M/S SHRI KESHAV CEMENTS AND INFRA LIMITED”

(Referred to in Para 2(f) under ‘Report on Other Legal and Regulatory Requirements’ of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of "M/S SHRI KESHAV CEMENTS AND INFRA LIMITED" (“the Company”) as of March 31, 2018 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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 company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on “the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India”.

for Singhi & Co,

Chartered Accountants

ICAI FRN 302049E

CA Vijay Jain

Place: Bangalore Partner

Date: 28/05/2018 M No 077508


Mar 31, 2016

To,

The Members of

Shri Keshav Cements & Infra Limited

[Formerly Known as KatwaUdyog Limited]

Belgaum

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Shri Keshav Cements & Infra Limited [Formerly Known as KatwaUdyog Limited] ("the company"),which comprise the Balance Sheet as at31 March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("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 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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 standalone financial statements based on our audit. And

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone 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 financial control relevant to the Company''s preparation of the financial statements that give true and fair view 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 Company''s Directors, as well as evaluating the overall presentation of the standalone 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;

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;

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.

Emphasis of Matters

There are no material/ Major points to be reported.

However, the standalone financial statements of the company have been prepared on a going concern basis.

Report on other Legal and Regulatory Requirements:

1) As required by the companies (Auditor''s Report) order 2016 (''the order'') issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the annexure A, a statement on the matters specified in paragraph 3 and 4 of the order.

2) As required by Section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books (and proper returns adequate for the purposes of our audit have been received from the branches not visited by us)

c) [The reports on the accounts of the branch offices of the Company audited by us and have been properly dealt by us in preparing this report]

d) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

f) The going concern matter described in sub-paragraph (b) under the Emphasis of Matters paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company.

g) On the basis of written representations received from the directors as on 31 March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016, from being appointed as a director in terms of Section 164(2) of the Act.

h) With respect to the adequacy of Internal Financial Controls over Financial Reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B" and

I) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit & Auditor''s) Rules, 2014, In our opinion and to the best of our information and according to the explanations given to us:

i. Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE ''A'' TO THE INDEPENDENT AUDITOR''S REPORT OF SHRI KESHAV CEMENTS & INFRA LIMITED (FORMERLY KNOWN AS KATWA UDYOG LTD)

REFERREDTO IN PARAGRAPH 1 UNDER THE HEADING OF "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE

COMPANY''S (AUDITOR''S REPORT) ORDER 2016 CARO 2016

1) Fixed Assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

b) The fixed assets are physically verified by the management in a phased manner, over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification. There was no substantial disposal of fixed assets during the year.

c) According to the information and explanations given to us and on the basis of our examinations of the records of the company, the title deeds of immovable properties are held in the name of the company.

d) During the year company has undertaken expansion of the project. The project is under progress. During the year company has invested a sum of Rs.8,40,82,074/- which is shown as capital works in progress - project expansion in the balance sheet.

2) Inventory:

Physical verification of inventory has been conducted at reasonable intervals by the management. In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to book records, which were not material, have been properly dealt with in the books of accounts.

3) Loans & Advances:

The company has not granted any loans, secured or unsecured to companies, Firms, Limited Liability Partnerships or other parties covered in the Register maintain under section 189 of the companies act, 2013(''the act''). Accordingly, sub-paragraphs a, b, c of the order are not applicable to the company.

4) Loans & Investments, Guarantees and Security:

In our opinion and according to the information and explanations given to us, the company has not given any loans / guarantee / security to or on behalf of any party refer to in section 185 of the companies act, 2013. The company has complied with section 186 in respect of loans and investments made. The company has not given any guarantee or provided any security in connection with a loan to anybody corporate or any other person.

5) Acceptance of Public Deposits:

On the basis of our examinations of books and records of the company, in our opinion and according to the information and explanations given to us, the company has not accepted deposits during the year and therefore, the directives issued by the Reserve Bank of India and Provisions of sections 73 to 76 or any other relevant provisions of the companies act, 2013 and rules framed there under are not applicable to the company.

6) Cost Records:

We have broadly reviewed the cost records maintained by the Company pursuant to the companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under section 148(1) of the companies act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7) Statutory Dues:

a) According to the information and explanations given to us and on the basis of our examination of the books and records of the company, the company is regular in depositing undisputed statutory dues including provident fund, Income Tax, Sales Tax, VAT, Duty of Customs, Service Tax, Cess and other material statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Sales Tax, Service Tax, Custom duty, Excise duty and cess were in arrears as at 31.03.2016 for a period of more than six months from the date they became payable.

c) According to the information & explanation give to us, there are no dues of Income Tax, Sales Tax, Service Tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute.

d) According the information and explanations given to us, there is no amount required to be transferred to investors education and protection fund in accordance with relevant provisions of the Companies Act. However, unpaid dividend for the year 2012-13 is showing in balance sheet for Rs. 25,309/-.

8) Repayment of Loans & Borrowings:

Based on our examination of books and records and according to the information and explanations given to us, the company has not defaulted in repayment of loans or borrowings to financial institutions or banks or government. The company has not issued any debentures. The company has taken unsecured loans from directors covered in Register maintained under section 73(2) of the companies act, 2013. In our opinion, the rate of interest and other terms and conditions on which loan has been taken from directors are not prima facie prejudicial to the interest of the company. The company is regular in repaying the principle amount as stipulated and has been regular in the repayment of interest.

9) Money Raised Application of Funds:

The company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, sub-paragraph 3 of the order is not applicable.

10) Frauds:

On the basis of our examination of books and records of the company and according to the information and explanations given to us, no material fraud by the company or on the company by its officers or employees has been noticed or reported during the year.

11) Managerial Remuneration:

According to the information and explanations given to us, and based on our examination of the records of the company, the company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the companies act, 2013.

12) Nidhi Company:

In our opinion and according to the information and explanations given to us, the company is not a Nidhi Company. Accordingly, sub-paragraph 3 of the order is not applicable.

13) Related party Transactions:

According to the information and explanations given to us, and based on our examination of the records of the company, transactions with the related parties are in compliance with section 177 and 188 of the act and details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards

14) Preferential Allotment/Private Placement:

According the information and explanations given to us, and based on our examination of records of company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and therefore, sub-paragraph 3 of the order is not applicable.

15) Non-cash Transactions:

In our opinion and according to the information and explanations given to us, the company has not entered into any non-cash transactions with directors or persons connected with him and therefore, sub-paragraph 3 of the order is not applicable.

16) Compliance with RBI Act, 1934:

Since the company is Cement Manufacturing Company, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934, hence not applicable.

ANNEXURE B: TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF Shri Keshav Cements & Infra Limited Belgaum. (Formerly Known as Katwa Udyag Limited.)

Report on the Internal Financial Controls under Clause (I) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Shri Keshav Cements & Infra Limited Belgaum. (Formerly Known as Katwa Udyag Limited) ("the Company") as of March 31,2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India". (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to expression opinion on the Company''s internal financial controls over financial reporting based on my/our audit. I/We conducted my/our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls

over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence / we have obtained is sufficient and appropriate to provide a basis for my / our audit opinion on the Company''s internal financial controls system over financial reporting.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on my/our audit. I/We conducted my/our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance

Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence / we have obtained is sufficient and appropriate to provide a basis for my/our audit opinion on the Company''s internal financial controls system over financial reporting.

Place: Belgaum CA. Prabhakar K. Latkan

Date : 27.05.2016 M. No. 21730

1083, Ananthshayan Galli,

Belgaum-590002


Mar 31, 2015

We have audited the accompanying financial statements of Shri Keshav Cements & Infra Limited [Formerly Known as KatwaUdyog Limited] ("the company"),which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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.and

We have taken into account the provisions of the Act, the accounting and auditing

standards and

Matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 true and fair view 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

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.

Emphasis of Matters

There are no material/ Major points to be reported.

However, the financial statements of the company have been prepared on a going concern basis.

Report on other Legal and Regulatory Requirements: As required by section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books (and proper returns adequate for the purposes of our audit have been received from the branches not visited by us)

c) [The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt by us in preparing this report]

d) The Balance Sheet, the Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.[and the returns received from the branches not visited by us]

e) 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.

f) The going concern matter described in sub-paragraph (b) under the Emphasis of Matters paragraph above, in our opinion, may not have an adverse effect on the functioning of the Company.

g) On the basis of written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

h) With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us :

i. Company does not have any pending litigations which would impact its financial position.

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT OF SHRI KESHAV CEMENTS & INFRA LIMITED (FORMERLY KNOWN AS KATWA UDYOG LTD) REFERRED TO IN PARAGRAPH 1 OF OUR

REPORT OF EVEN DATE

1) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. The fixed assets are physically verified by the management in a phased manner, over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification. There was no substantial disposal of fixed assets during the year. During the year Company has purchased additional machinery and spares for Plant-I for an amount to Rs. 54,42,576/- Plant –II Rs. 72,23,026/- Modvat Credit of Plant-I Rs. 5,47,840/- And Plant-II Rs. 8,19,104/- including capitalization after deducting MODVAT of Rs. 13,66,944/- 2) Physical verification of inventory has been conducted at reasonable intervals by the management. In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to book records, which were not material, have been properly dealt with in the books of accounts.

3) a) As informed, the company has not granted any loan, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 189 of the Companies Act, 2013.

b) The Company has taken unsecured loan from Directors covered in the register maintained under Section 73(2) of the Companies Act, 2013. The number of parties are 5 and the yearend balance of such loan taken was Rs.13,02,19,568/- c) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies and parties covered in the Register maintained under Section 73(2) of the Companies Act, 2013 are not, prima facie, prejudicial to the interest of the Company.

d) The company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

4) In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business, for the purchases of inventory and fixed assets and for sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5) a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 73(2) of the Companies Act, 2013 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 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6) In our opinion and according to the information & explanations given to us, the Company has not accepted deposits from public under section 73 to 76. Hence question of further compliances does not arise.

7) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business, the Company has appointed a Chartered Accountant as an Internal Auditors and regularly carried out the Internal Audit.

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Sec.293 of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of the records with a view to determine whether they are accurate or complete.

9) a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise duty, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Custom duty, Excise duty and cess were in arrears as at 31.03.2015 for a period of more than six months from the date they became payable.

c) According to the information & explanation give to us, there are no dues of Income Tax, Wealth Tax, Sales Tax, Service Tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute.

d) The amount required to be transferred to investors education and protection fund in accordance with relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund, However unpaid dividend for the year 2012-13 is showing in balance sheet for Rs.25,309/- .

10) The Company does not have any accumulated losses. It has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11) Based on our audit procedures and as per the information & explanation given by the management, the company has not defaulted in repayment of dues to financial Institution or Banks.

12) As informed and explained 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.

13) Since the Company is not dealing or trading in shares, securities, debentures and other investment, clause (xiv) of the Order is not applicable.

14) The company has not given any guarantee for loans taken by others from bank or financial institutions.

15) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were raised.

16) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used to finance long term investments.

17) During the period covered by our audit report, the Company has not issued any debentures.

18) The company has not raised any money from public issue during the year.

19) 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 fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management

Place: Belgaum CA.Prabhakar K. Latkan

Date: 26.05.2015 Chartered Accountant

M.No : 21730

1083,Ananthashayan Galli,

BELGAUM- 590 002


Mar 31, 2014

We have audited the accompanying financial statements of Shri Keshav Cements & Infra Limited (formerly known as Katwa Udyog Ltd) (''the company'') which comprise the Balance Sheet as at 31st March 2014 and the Statement of Profit & Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. The Company has changed the name from Katwa Udyog Limited to Shri Keshav Cements and Infra Limited vide Registrar of Companies Bangalore Certificate dated: 07-11 -2007. The change in name is intimated to all the State and Central Government Departments and the change of name is confirmed. The change of name is also intimated to BSE-Mumbai the approval is still under their consideration.

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 and financial performance 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 required 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 misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the 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:

i) In the case of the Balance Sheet, of the state of affairs of the company as at 31s'' March, 2014

AND

ii) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date

AND

iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date

Report on other Legal and Regulatory Requirements:

1. As required by the Companies(Auditor''s Report) Order, 2003 ("the Order"), as amended, 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 and the Statement of Profit and Loss dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and Statement of Profit and Loss 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 31st March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956, nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT OF SHRI KESHAV CEMENTS & INFRA LIMITED (FORMERLY KNOWN AS KATWA UDYOG LTD) REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE:

1) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. The fixed assets are physically verified by the management in a phased manner, over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification. There was no substantial disposal of fixed assets during the year. During the year Company has purchased additional machinery and spares for Plant-I for an amount to Rs. 1,45,17,974/- Plant-II Rs. 1,85,00,794/- including capitalization after deducting Modvat Credit of Rs. 13,02,476/-.

2) Physical verification of inventory has been conducted at reasonable intervals by the management. In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to book records, which were not material, have been properly dealt with in the books of accounts.

3) a) As informed, the company has not granted any loan, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) The Company has taken unsecured loan from Directors covered in the register maintained under Section 301 of the Companies Act, 1956. The number of parties are 5 and the yearend balance of such loan taken was Rs. 11,10,46,935/-.

c) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies and parties covered in the Register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

d) The company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

4) In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business, for the purchases of inventory and fixed assets and for sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5) a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6) In our opinion & according to the information & explanations given to us, the Company has accepted deposits, by issuing SILA and it has complied with the provisions of sec. 58A, 58AA of the Companies Act, 1956 and the Company''s (Acceptance of the Deposits) Rules, 1975 with regard to the deposit accepted. During the year the Company has refunded entire deposits with interest up to date. Hence, there are no public deposits at the year end. No adverse 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, the Company has an internal audit system commensurate with the size and nature of its business, the Company has appointed a Chartered Accountant as an Internal Auditors and regularly carried out the Internal Audit.

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Sec.209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of the records with a view to determine whether they are accurate or complete.

9) a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise duty, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Custom duty,

Excise duty and cess were in arrears as at 31.03.2014 for a period of more than six months from the date they became payable.

c) According to the information & explanation give to us, there are no dues of Income Tax, Wealth Tax, Sales Tax, Service Tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute.

10) The Company does not have any accumulated losses. It has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11) Based on our audit procedures and as per the information & explanation given by the management, the company has not defaulted in repayment of dues to financial Institution or Banks.

12) As informed and explained 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.

13) In our opinion, the Company is not chit fund or a nidhi/mutual benefit fund/societies. Therefore, the provisions of clause 4(xiii) of the Order, are not applicable to the Company.

14) Since the Company is not dealing or trading in shares, securities, debentures and other investment, clause (xiv) of the Order is not applicable.

15) The company has not given any guarantee for loans taken by others from bank or financial institutions.

16) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were raised.

17) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used to finance long term investments.

18) 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) During the period covered by our audit report, the Company has not issued any debentures.

20) The company has not raised any money from public issue during the year.

21) 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 fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management.

Place: Belgaum C.A. Prabhakar K. Latkan

Dated: 30-05-2014 Chartered Accountant

M No. 200/21730

1083, Ananthashayan galli,

BELGAUM-590002.


Mar 31, 2013

Report on the Financial Statements:

We have audited the accompanying financial statements of Shri Keshav Cements & Infra Limited (formerly known as Katwa Udyog Ltd] (''the company'') which comprise the Balance Sheet as at 31st March 2013 and the Statement of Profit & Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. The Company has changed the name from Katwa Udyog Limited tp Shri Keshav Cements and Infra Limited vide Registrar of Companies Bangalore Certificate dated: 07-11-2007. The change in name is intimated to all the State and Central Government Departments and the change of name is confirmed. The change of name is also intimated to BSE-Mumbai the approval is still under their consideration.

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 and financial performance 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 required 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 misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company''s preparation and '' fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies.used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. ''

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the 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:

i) In the case of the Balance Sheet, of the state of affairs of the Companyas at 31st March, 2013

AND

ii) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date

AND

iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date

Report on other Legal and Regulatory Requirements:

1. As required by the Companies(Auditor''s Report) Order, 2003 ("the Order"), as amended, 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 and the Statement of Profit and Loss dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet and Statement of Profit and Loss 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 31st March, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013, from being appointed as a director in terms of clause (g) of sub-section (1] of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956, nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT OF SHRI KESHAV CEMENTS & INFRA LIMITED (FORMERLY KNOWN AS KATWA UDYOG LTD) REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE:

1) The Company has maintained proper records showing full particulars, including quantitative details and situation ''of its fixed assets. The fixed assets are physically verified by the management in a phased manner, over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification. There was no substantial disposal of fixed assets during the year. During the year Company has purchased additional machinery and spares for Plant-I for an amount to Rs. 45,85,504/- Plant -II Rs. 2,50,10,779/- including capitalization after deducting Modvat Credit of Rs. 20,40,154/-.

2) Physical verification of inventory has been conducted at reasonable intervals by the management. In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to book records, which were not material, have been properly dealt with in the books of accounts. , '' . ¦

3) a) As informed, the company has not granted any loan, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) The Company has taken unsecured loan from Directors covered in the register maintained under Section 301 of the Companies Act, 1956. The number of parties are 5 and the yearend balance of such loan taken was Rs.9,35,37,089/-.

c) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies and parties covered in the Register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

d) The company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

4) In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business, for the purchases of inventory and fixed assets and for sale of goods. During the course of our audit, we have not "observed any continuing failure to correct major weaknesses in internal control system.

5) a) According to the information and explanations given to us, we are of the opinion that th transactions that need to be. entered into the register maintained under section 301 of th* Companies Act, 1956 have been so entered.

#

b) In our opinion and according to the information and explanations given to us, the transaction: made in pursuance of contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6) In our opinion & according to the information & explanations given to us, the Company has accepted public deposits, and it has complied with the provisions of sec. 58A, 58AA of the Companies Act, 1956 and the Company''s (Acceptance of the Deposits) Rules, 1975 with regard to the deposit accepted from public. No adverse 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, the Company has an internal audit system commensurate with the size and nature of its business, but it needs to be strengthened.

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Sec.209(l)(d)" of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of the records with a view to determine whether they are accurate or complete.

9) a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise duty, cess and other material statutory dues applicable to it.

b) According to the information and explanations given to us, no undisputed amount payable in respect of Income Tax, Wealth Tax, Sales Tax,. Service Tax, Custom duty, Excise duty and cess were in arrears as at 31.03.2013 for a period of more than six months from the date they became payable.

c) According to the information & explanation give to us, there are no dues of Income Tax, Wealth Tax, Sales Tax, Service Tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute.

10)The Company does not have any accumulated losses. It has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11)Based on our audit procedures and as per the information & explanation given by the management, the company has not defaulted in repayment of dues to financial Institution or Banks. „

12)As informed and explained 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.

13) In our opinion, the Company is not chit fund or a nidhi/mutual benefit fund/societies. Therefore, the provisions of clause 4(xiii) of the Order, are not applicable to the Company.

14)Since the Company is not dealing or trading in shares, securities, debentures and other investment, clause (xiv) of the Order is not applicable.

15)The company has not given any guarantee for loans taken by others from bank or financial institutions.

16)In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were raised.

17)According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used to finance long term investments.

18)The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301of the Companies Act, 1956.

19) During the period covered by our audit report, the Company has not issued any debentures.

20)The company has not raised any money from public issue during the year.

21) 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 fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management.

Place: Belgaum C.A. Prabhakar K. Latkan

Dated: 13-05-2013 Chartered Accountant

M No. 200/21730

1083, Ananthashayan galli,

BELGAUM-590 002.


Mar 31, 2012

1. We have audited the attached Balance Sheet of SHRI. KESHAV CEMENTS AND INFRA LIMITED. BELGAUM, [formally known as Katwa Udyog Limited] as at 31st March 2012, Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. The Company has changed the name from Katwa Udyog Limited to Shri Keshav Cements and Infra Limited vide Registrar of Companies Bangalore Certificate dated: 07-11-2007. The change in name is intimated to all the State & Central Government Departments and the change of name is confirmed. The change of name is also intimated to BSE - Mumbai the approval is still under their consideration.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies [Auditor's Report] Order, 2003 as amended by the Companies (Auditor's Report)(Amendment) Order, 2004(the 'Order'), issued by Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act; 1956, we annex hereto 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 in paragraph (3) 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 the books.

iii) The Balance sheet; Profit and Loss Account and cash flow statements dealt with by this report are in agreement with the books of account;

iv) In our opinion, the Balance sheet; Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; save the compliance with accounting standards 28 on impairment of assets.

v) On the basis of the written representation received from the directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors of the company are disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon subject to notes No ( r) on accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of Balance Sheet of the state of affairs of the Company as at 31st March 2012,

b) in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

c) In the case of cash flow statement, of cash flows for the year ended on that date.

STATEMENT ON THE COMPANIES [AUDITOR'S REPORT] ORDER, 2003

ANNEXURE TO THE AUDITORS1 REPORT

Shri. Keshav Cements and Infra Limited

[formally known as Katwa Udyog Limited]

Belgaum.

Referred to in paragraph 3 of our report of even date:

In respect of Fixed Assets:

i. a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. The Company has physically verified all the assets during the year in accordance with programmed of verification, which in our opinion provides for physical verification of the Fixed Assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c. In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposal of assets during the year and therefore the going concern concept is not affected

d. In our opinion and according to the information and explanation given to us, during the year Company has purchased additional machinery and spares for Plant-II for an amount of Rs. 3,77,90,187/- including capitalization of electricity and Company has also spent for an amount of Rs. 1,83,867/- towards Factory Building (Plant-II).

In respect of Inventories:

ii, a. As explained to us the management during the year physically verified the inventories. In our

opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, The procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and in the nature of its business.

c. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iii a. As informed, the company has not granted loans, secured and unsecured to Companies, Firms or Other parties, covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, sub-clause (b)(c) and (d) are not applicable.

b. The Company has taken unsecured loans from directors covered in the register maintained under section 301 of the Companies Act, 1956. The number of parties are 5 and year end balance of such loan taken was Rs. 7,73,43,608/-

c. In our opinion, the rate of interest and other terms and conditions under section 301 of the Companies Act; 1956 are prima facie, not prejudicial to the interest of the Company.

d The Company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest. -

e. The Company has not given loans and advances in the nature of loans to employees.

iv. 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 regards to purchase of inventory, fixed assets and with regard to 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.

v. a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into a register in pursuance of 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 such contracts or arrangement have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to information and explanations given to us, the company has accepted public deposits, and it has complied with the provisions of section 58A,58AA of the Companies Act, 1956 and the Companies ( Acceptance of the Deposit) Rules, 1975 with regard to the deposit accepted from public. 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

vii. In our opinion, the company has an internal audit system commensurate with the size and nature of its business, but it needs to be strengthened

viii. It is reported by the management that the Company has appointed qualified Cost Auditor and has maintained cost records as required u.s. 209(1) (d) of the Companies Act 1956. The Cost Auditor has issued a certificate stating that the Company has complied with the requirements as required u.s. 209(1) (d) of the Companies Act 1956.

ix. According to the records of the company, Provident Fund Investors Education and Protection Fund Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess, Fringe Benefit Tax and other material statutory dues applicable to it have been generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31,2012 for a period of more than six months form the date on which they became payable.

x. According to the information and explanations given to us, there are no dues of Income Tax, Service Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Tax, and Cess Fringe Benefit Tax, which have not been deposited on account of any dispute.

xi. The company does not have accumulated losses at the end of the financial year and had not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xii. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

xiii. Based on our examination of the records and the information and explanation 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.

xiv. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the order are not applicable to the Company.

xv. In our opinion, as per the information and explanations given to us the company has not given any guarantee for the loans taken by others.

xvi. In our opinion, the term loans have been applied for the purpose which they were raised.

xvii. According to the cash flow statement and other records examined by us and the information and explanations given to us, on an over all basis, funds raised on short term basis have prima facie, not been used during the year for a long term investment (fixed assets etc) other than temporary deployment pending application. .

xviii. According to the information and explanations given to us, the company has not made any preferential allotments of shares to parties and companies covered in the register maintained under section 301 of the Act.

xix. According to the information and explanations given to us, during the period covered by our audit report the company has not issued any debentures.

xx. The Company has not raised any money by public issue during the year.

xxi. According to the information and explanation given to us, no fraud on or by the company has been noticed during the course of our audit

Place : Belgaum C.A. Prabhakar K. Latkan

Date: 14/08/2012 Chartered Accountant

M.No. 200/21730 1083, Anantshayan Galli Belgaum 590 002


Mar 31, 2010

1. We have audited the attached Balance Sheet of SHRI. KESHAV CEMENTS AND INFRA LIMITED, BELGAUM, [formerly known as Katwa Udyog Limited] as at 31st March 2010, Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. The Company has changed the name from Katwa Udyog Limited to Shri Keshav Cements and Infra Limited vide Registrar of Companies Bangalore Certificate dated: 07-11 -2007. The change in name is intimated to all the State & Central Government Departments and the change of name is confirmed. The change of name is also intimated to BSE - Mumbai the approval is still under their consideration.

2. We conducted our audit in accordance with the auditing standards generally accepted in India, Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies [Auditors Report] Order, 2003 as amended by the Companies (Auditors Report)( Amendment) Order, 2004(the Order), issued by Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we annex hereto 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 in paragraph (3) 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 the books.

in) The Balance sheet, Profit and Loss Account and cash flow statements dealt with by this report are in agreement with the books of account;

iv) In our opinion, the Balance sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; save the compliance with accounting standards 28 on impairment of assets.

v) On the basis of the written representation received from the directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the directors of the company are disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon subject to notes No v on accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of Balance Sheet of the state of affairs of the Company as at 31st March 2010,

b) in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

c) In the case of cash flow statement, of cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Shri. Keshav Cements and Infra Limited [formerly known as Katwa Udyog Limited] Belgaum.

Referred to in paragraph 3 of our report of even date:

In respect of Fixed Assets:

i. a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. The Company has physically verified all the assets during the year in accordance with programme of verification, which in our opinion provides for physical verification of the Fixed Assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c. In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposal of assets during the year and therefore the going concern concept is not affected.

d. In our opinion and according to the information and explanation given to us, the Company has undertaken expansion of Plant-I. The expansion work took in the earlier years. The amount spent towards expansion has been shown as capital work in progress. During the year the expansion of Plant-I is completed and Company has purchased additional machinery and spares for an amount of Rs. 1,06,49,888/- including capitalization of electricity and others and after deducting modvat credit. The capital work in progress of Rs. 7,66,85,418/- and net amount of Rs. 1,06,49,888/- totally amounting to Rs. 8,73,35,306/- has been transferred to Plant and Machinery Plant-I. Similarly, the Company has additional machinery & spares, capitalized electricity and other and after deducting modvat credit net amount of Rs. 2,68,25,980/- has been transferred to Plant and Machinery Plant-H.

In respect of Inventories:

ii. a. As explained to us the management during the year physically verified the inventories. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, The procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and in the nature of its business.

c. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

I a. As iriformed, the company has not granted loans, secured and unsecured to Companies, Firms or Other parties, covered in the register maintained under section 301 ofthe Companies Act, 1956. Accordingly, sub-clause (b)(c) and (d) are not applicable.

b. The Company has taken unsecured loans from directors covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs, 6,17,46,241/-the number of parties are 5 and year end balance of such loan taken was Rs. 5,75,88,710/-

c. In our opinion, the rate ofinterest and other terms and conditions under section 301 of the Companies Act, 1956 are prima facie, not prejudicial to the interest ofthe Company.

d. The Company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

e. The Company has not given loans and advances in the nature of loans to employees.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size ofthe company and the nature of its business with regards to purchase of inventory, fixed assets and with regard to 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.

v. a) According to the information and explanations given to us, we are ofthe opinion that the transactions that need to be entered into a register in pursuance of section 301 ofthe Companies Act, 1956 have been so entered.

b) m our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangement have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to information and explanations given to us, the company has accepted public deposits, andithas complied with the provisions of section 58A,58AA of the Companies Act, 1956 and the Companies ( Acceptance of the Deposit) Rules, 1975 with regard to the deposit accepted from public. 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.

vii In our opinion, the company has an internal audit system commensurate with the size and nature of its business, but it needs to be strengthened.

viii. It is reported by the management that the Company has appointed Mr. Manish Astamker, Mumbai, Cost Auditor and has maintained cost records as required u.s, 209( 1 )(d) of the Companies Act 1956. The Cost Auditor has issued a certificate stating that the Company has complied with the requirements as required u.s. 209(1) (d) ofthe Companies Act 1956.

ix. According to the records ofthe company, Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise duty, Cess, Fringe Benefit Tax and other material statutory dues applicable to it have been generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31,2010 for a period of more than six months form the date on which they became payable.

x. According to the information and explanations given to us, there are no dues of Income Tax, Service Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Tax, and Cess Fringe Benefit Tax, which have not been deposited on account of any dispute.

xi. The company does not have accumulated losses at the end of the financial year and had not incurred cash losses during the financial year covered by our audit and me immediately preceding financial year.

xii. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

xiii. Based on our examination of the records and the information and explanation 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.

xiv. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the order are not applicable to the Company.

xv. In our opinion, as per the information and explanations given to us the company has not given any guarantee for the loans taken by others.

xvi. In our opinion, the term loans have been applied for the purpose which they were raised.

xviL According to the cash flow statement and other records examined by us and the information and explanations given to us, on an over all basis, funds raised on short term basis have prima facie, not been used during the year for a long term investment (fixed assets etc) other than temporary deployment pending application.

xviil According to the information and explanations given to us, the company has not made any preferential allotments of shares to parties and companies covered in the register maintained under section 301 of the Act.

xix. According to the information and explanations given to us, during the period covered by our audit report the company has not issued any debentures.

xx. The Company has not raised any money by public issue during the year.

xxi. According to the information and explanation given to us, no fraud on or by the company has been noticed during the course of our audit



Place: Belgaum C.A. Prabhakar K. Latkan

Dated: 30-04-2010 Chartered Accountant

M No. 200/21730

1083, Ananthashayan galli,

BELGAUM-590002.

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