Mar 31, 2018
Report on the Indian Accounting Standards (Ind AS) Financial Statements
We have audited the accompanying financial statements of KEERTHI INDUSTRIES LIMITED, (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation 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 specified in the Companies (Indian Accounting Standards)Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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.
Auditorâs 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 and the Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorsâ 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 Companyâs preparation of the Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other Matter
The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by the predecessor auditor who expressed an unmodified opinion vide reports dated May 29, 2017 and May 28, 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.
Our opinion is not qualified in respect of above matter.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books
(c) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 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 of adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE - A TO THE AUDITORâS REPORT:
The Annexure referred to in Para 1 under the heading of âReport on Other Legal and Regulatory Requirementsâ of our report of even date ,to the members of KEERTHI INDUSTRIES LIMITED, HYDERABAD, for the year ended March 31,2018.,
1. a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. As explained to us, the management has physically verified the fixed assets during the year and there is a regular programme of physical verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of the assets. No discrepancies were noticed on such verification
c. According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the names of the Company.
2. As explained to us, the inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable. The discrepancies noticed on physical verification between the physical stocks and book records were not material.
3. a. During the year, the Company has not granted any loans, secured or unsecured to Companies, firms, limited liability partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.
b. In view of our comments in para (a) above, Clause (III) (a), (b) and (c) of paragraph 3 of the aforesaid order are not applicable to the Company.
4. In our opinion and according to the information and explanation given to us, the Company has not advanced any loan to any Director and no investments were made during the year as referred to in sections 185 and 186 of the Act. Therefore, the provisions of Paragraph 3(iv) of the Companies (Auditorâs Report) Order 2016 are not applicable to the Company.
5. The Company has not accepted any deposits from the public. Hence the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013, and the rules framed there under, do not apply to this Company.
6. We have broadly reviewed the cost records maintained by the Company pursuant to sub-section (1) of section 148 of the Companies Act, 2013 and are of the opinion that prime facie the prescribed accounts and records have been made and maintained. We have however not made a detailed examination of the cost records with a view to determine whether they are accurate or Complete.
7. a. According to the records, the company is regular in depositing undisputed statutory dues including provident fund, employees âstate insurance, Income-tax, Sales-tax, Service tax, Goods and Services Tax, Duty of customs, Duty of excise, Value added tax , Cess and all other statutory dues with the appropriate authorities and there are no arrears of outstanding statutory dues as at March 31, 2018 for a period more than six months from the date they became payable.
b. According to the records of the Company and the information and explanations given to us, there were no dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute except the following.
Name of the Statue |
Nature of Dues |
Amount (Rs.) |
Period to which amount related |
Forum where dispute is pending |
Erstwhile A P General Sales Tax Act |
Tax on packing material |
18,77,197 |
FY1990-91 and FY1991-92 |
SalesTax Appellate Authority |
Central Sales Tax Act |
Central Sales Tax |
39,25,213 # |
FY 2000-01,the Order was passed during FY2007-08 |
AP Sales Tax Tribunal# |
Commercial tax Dept karnataka |
Central sales Tax |
6,20,112 |
FY 1993-94 |
Honâble High Court of Karnataka |
Central Excise Act |
Central Excise |
1,90,02,358* |
Feb2006-August2010Show cause Notice was received on 10.11.2010 |
CESTAT Hyderabad |
# against the demand of Rs. 39,25,213 the Company has paid Rs. 19,08,835. However during 2016-17, the Tribunal has set aside the demand and remanded the matter to assessing authorities.
*against the demand of Rs. 1, 90, 02, 358, Rs.20, 00,000 paid under protest.
8. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions and Banks during the year.
9. During the year under review, the company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). The Term loans availed were applied for the purposes for which those are raised.
10. 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 course of our audit.
11. 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 Act.
12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Companies (Auditorâs Report) Order 2016 is not applicable.
13. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
14. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Companies (Auditorâs Report) Order 2016 is not applicable.
16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
ANNEXURE - B TO THE AUDITORâS REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of KEERTHI INDUSTRIES LIMITED, HYDERABAD (âthe Companyâ) as of 31st March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ).
These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, 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 aspects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud and error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that:
1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditure of the Company are being made only in accordance with authorisations of management and directors of the Company; and
3. provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 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 BRAHMAYYA & CO.,
Chartered Accountants
Firmâs Regn.No.000513S
(K.SHRAVAN)
Place: Hyderabad Partner
Date: 30.05.2018 Membership No. 215798
Mar 31, 2016
To
The Members of
Keerthi Industries Limited
Hyderabad.
We have examined the compliances of requirements of Corporate Governance by KEERTHI INDUSTRIES LIMITED, for the year ended on 31st March, 2016 as stipulated under regulation 17 to
27, clauses (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of Schedule V of the SEBI (LODR) Regulation, 2015 (erstwhile Clause 49 of the Listing Agreement).
The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to review of the procedures and implementations thereof adopted by the Company for ensuring compliance with the conditions of the certificate of Corporate Governance as stipulated in the said Regulations. It is neither an audit nor an expression of opinion on the financial statements of the Company.
In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the management;
We certify that no investor grievances are pending for a period exceeding one month against the Company as per the records maintained by the Company.
We certify that the Company has complied with the conditions of Corporate Governance as stipulated in Regulations 17 to 27 and applicable clauses from (b) to (i) of Regulation 46(2) and para C, D and E of Schedule V the SEBI (LODR) Regulation, 2015 (erstwhile Clause 49 of the Listing Agreement).
We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.
INDEPENDENT AUDITORS'' REPORT
To the Members of KEERTHI INDUSTRIESLIMITED,
Report on the Financial Statements
1. We have audited the accompanying financial statements of KEERTHI INDUSTRIES LIMITED, HYDERABAD, TELANGANA ("The Company"), which comprise the Balance Sheet as at 31st March 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of Significant Accounting Policies and Other Explanatory Information.
Management''s Responsibility for the Financial Statements
2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,2013("the Act")with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules,2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
3. Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and Matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
4. 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.
5. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
6. 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.
Audit Opinion
7. 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 in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2016;in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and in the case of Cash Flow Statement, of the cash flows for the year ended on that date.
8. Emphasis of matter
We draw attention to Note No. 25.4 to the financial statements relating to confirmation of balances in respect of some of the trade receivables, loans & advances and trade payables. Our opinion is not qualified in respect of this matter
Report on other Legal and Regulatory Requirements
9. 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, to the extent applicable.
10. 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 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 it appears from our examination of those books;
(c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;.
(d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards specified under section 133 of the Act, read with rule Rule 7 of the Companies(Accounts) Rules,2014 ;
(e) on the basis of the written representations received from the directors as on 31st March 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2016 from being appointed as a director in terms of Section 164 (2) of the Act ;
(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B"; and
(g) with respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. the Company does not have any pending litigations which would impact its financial position;
ii. the Company did not have any long-term contracts including derivative contracts 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.
Statement on the Companies (Auditor''s Report)Order, 2016
On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:
(i) (a) the Company maintains proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification;
(c) title deeds of immovable properties are held in the name of the Company;
(ii) Management had physically verified the inventory at reasonable intervals and no material discrepancies were noticed on physical verification;
iii) (a) the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013;
(b) in view of our comment in para iii (a) above, paras 3( iii) (b) and (c) of the aforesaid Order are not applicable to the Company;
(iv) the Company has not advanced any loan, not made investments, not given guarantees and not provided any security. Hence para 3(iv) of therefore said Order is not applicable;
(v) the Company has not accepted deposits from the public. Hence the provisions of Sections 73 to 76 and other relevant provisions of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 are not applicable to the Company;
(vi) maintenance of cost records has been prescribed by the Central Government under section 148(1) of the Act in respect of certain products manufactured by the Company and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained
(vii) (a) according to the records, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Fund, Employees State''s Insurance, Income Tax, Sales-tax, Service Tax, Customs duty, Excise duty, Cess and other material statutory dues applicable to the Company. And there are no statutory dues which were in arrears as at 31st March 2016, for a period of more than six months from the date they became payable.
(b) there are no statutory dues which have not been deposited on account of any dispute other than sales tax and excise duty the details of which are given below:
S. No |
Name of the Statue |
Nature of Dues |
Amount ('') |
Period to which amount related |
Forum where dispute is pending |
1 |
AP General Sales Tax Act |
Tax on packing material |
18,77,197 |
FY 1990-91 and FY 1991-92 |
Sales Tax Appellate Authority |
2 |
Central Sales Tax Act |
Central Sales Tax |
39,25,213* |
FY 2000-01, the Order was passed during FY 2007-08 |
AP Sales Tax Tribunal. |
Commercial |
Hon''ble High |
||||
3 |
Taxes Dept., Karnataka |
Central Sales Tax |
6,20,112 |
FY 1993-94 |
Court of Karnataka |
4 |
Central Excise Act |
Central Excise |
1,90,02,358# |
February 2006 to August 2010, Show cause notice received on 10.11.2010. |
CESTAT, Bangalore |
* Against the demand of ''.39,25,213, the Company has paid ''19,08,835.
# Against the demand of ''.1,90,02,358, the Company has paid ''20,00,000.
(viii) the Company has not defaulted in repayment of dues to banks. The company has not issued any debentures;
(ix) on the basis of review of utilization of funds on overall basis, the term loans taken by the company were applied for the purposes for which the loans were obtained.
(x) we report that no fraud on or by the Company has been noticed or reported during the year.
(xi) 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) the Company is not a Nidhi Company .
xiii) based on the audit procedures performed and according to the information and explanations given to us, all transactions with the related parties are in compliance with section 177 and section 188 of the Companies Act 2013, and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;
xiv) the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review;
xv) the Company has not entered into non-cash transactions with directors or persons connected with him;
xvi) the Company is not required to be registered u/s 45IA of the Reserve Bank of India
Re: KEERTHI INDUSTRIESLIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of
Section 143 of the Companies Act, 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting of KeerthiindustriesLimited ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
2. 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". 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
3. 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 âGuidance 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.
4. 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.
5. 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
6. A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. 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
8. 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, 2016, based on "the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India".
F or K.S. RAO & CO.,
Chartered Accountants
Firms'' Regn.No.003109S
Sd/-
(P.GOVARDHANA REDDY)
Place: Hyderabad Partner
Date: 28.05.2016 Membership No.029193
Mar 31, 2015
1. We have audited the accompanying Financial Statements of KEERTHI
INDUSTRIES LIMITED, HYDERABAD, TELANGANA ("The Company") which comprise
the Balance Sheet as at 31st March, 2015 and the Statement of Profit
and Loss and the Cash flow statement for the year ended, and Summary of
Significant Accounting Policies and other explanatory information.
Management's responsibility for the Financial Statements
2. The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the companies Act, 2013 ("the Act") with
respect to the preparation of these 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 maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
3. Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account
the provisions of the Act, the accounting and auditing standards and
Matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under.
4. 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.
5. An audit involves performing procedures to obtain audit evidence
about the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors, as well as
evaluating the overall presentation of the financial statements.
6. 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
7. In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid standalone financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the company as at 31 March 2015 and its profit and its cash
flow for the year ended on that date
Emphasis of matter
8. We draw attention to Note No. 25.6 to the financial statements
relating to confirmation of balances in respect of some of the trade
receivables, loans & advances and trade payables. Our opinion is not
qualified in respect of this matter.
Report on other Legal and Regulatory requirements
9. As required by the Companies(Auditor's Report) Order 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section(11) of section 143 of the Companies Act 2013, we give in
the Annexure, a statement on the matters specified in paragraphs 3 and
4 of the Order .
10. As required by Section 143 (3) of the Act, we report that:
(a) we have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit;
(b) in our opinion, proper books of account as required by law have
been kept by the company so far as it appears from our examination of
those books;
(c) the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the afore said standalone financial statements
comply with the Accounting Standards specified under Section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) on the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March,
2015 V from being appointed as a director in terms of Section 164
(2) of the Act; and
(f) 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 does not have any pending litigations which would
impact its financial position
ii. the Company did not have any long-term contracts including
derivative contracts 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 REFERRED TO IN PARAGRAPH 9 OF OUR REPORT OF EVEN DATE
Statement on the Companies (Auditor's Report) Order, 2015 Re: KEERTHI
INDUSTRIES LIMITED
i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed assets;
(b) All the assets have not been physically verified by the management
during the year but there is a regular program of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. No material discrepancies were noticed on
such verification.
ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable;
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of the
company and the nature of its business.
(c) The company is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records have been properly dealt with in the books of account.
iii) (a) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
u/s.189 of the Act.
(b) In view of our comment in clause iii (a) above and clause iii (b)
of paragraph 3 of the aforesaid Order are not applicable to the
Company.
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 regard
to purchases 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 systems.
v) The Company has not accepted deposits from the public. Hence the
provisions of Sections 73 to 76 and other relevant provisions of the
Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules,
2014 are not applicable to the Company.
vi) We have broadly reviewed the books of account relating to
materials, labour and other items of costs maintained by the Cement
Division of the Company pursuant to the Rules made by the Central
Government for the maintenance of cost records under sub-section (1) of
Section 148 of the Companies Act, 2013 and are of the opinion that
prime facie, the prescribed accounts and records have been made and
maintained.
vii) (a) The company is regular in depositing with appropriate
authorities undisputed statutory dues including Provident fund,
Employees State Insurence, Sales Tax, Income Tax, Custom Duty, Wealth
Tax, Service Tax, Excise Duty and Cess.
(b) According to the information and explainations given to us, there
are no dues of customsduty and wealth tax which have not been deposited
on account of any disputes. The details of disputed Exice Duty, Income
Tax, Service Tax and Sales Tax have not been deposited with the
appropriate authorities are as fallows.
Name of Period to which
the Statute/ Nature of Dues Amount' the amount
S
No Authority relates
AP General Tax on packing FY 1990- 91
1 18,77,197
Sales Tax Act material and FY 1991- 92
Central Sales Central Sales
2 57,13,367 FY 2004- 05
Tax Act Tax
FY 2000- 01,
Central Sales Central Sales the Order was
3 39,25,213@
Tax Act Tax passed during
FY 2007-08
Commercial Central Sales
4 Taxes Dept. 6,20,112 FY 1993- 94
Tax
Karnataka
February 2006
to August 2010,
Central
5 Central Excise 1,90,02,358 Show cause
Excise Act
notice received
on 10.11.2010.
s Name of
No.the Statute Forum where
Authority Due date dispute is
pending
1. AP General Not mentioned Sales Tax
Sales Tax Act in demand Appellate
notice Authority
2. Central Sales Not mentioned Sales Tax
Tax Act in demand Appellate
notice Authority
3. Central Sales Not mentioned AP Sales Tax
in demand tribunal.
notice
4. Commercial Not mentioned Hon'ble
Taxes Dept., in demand High Court
Karnataka notice of
Karnataka
5. Central Not mentioned CES1A1,
Excise Act in the demand
Bangalore
notice
@ Against the demand of Rs. 39,25,213, the Company has paid Rs. 19,08,835.
viii) There are no accumulated losses as at yearend under report. The
company has not incurred cash losses during the financial year covered
by our audit and incurred cash losses in the immediately preceding
financial year.
ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions and Banks.
x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
xi) During the year the company has not availed any term loans from
banks or financial institutions. Accordingly, the provisions of clause
3(xi) of the above referred Order are not applicable to the company.
xii) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For K.S. RAO & CO.,
Chartered Accountants
Firms' Regn.No.003109S
Sd/-
(P.GOVARDHANA REDDY)
Place: Hyderabad Partner
Date : 29.05.2015 Membership No.029193
Mar 31, 2014
We have audited the accompanying Financial Statements of KEERTHI
INDUSTRIES LIMITED, HYDERABAD (A.P) ("The Company") which comprise the
Balance Sheet as at 31st March, 2014 and the Statement of Profit and
Loss and cash flow statement for the year then ended, and Summary of
Significant Accounting Policies and other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for the preparation of these Financial
Statements that give a true and fair view of the Financial position ,
Financial performance and Cash flows of the Company in accordance with
the Accounting Standards referred in the sub-section (3C) of section
211 of the Companies Act 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our Audit. We conducted our Audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain the
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
but not for the purpose of expressing our opinion on the effectiveness
of the entity''s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the management, as well as evaluating
the overall presentation of the Financial statements
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion:
In our opinion and to the best of our inform and according to
explanations given to us the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) In the case of the Balance sheet of the state of affairs of the
Company as at March 31 ,2014;
b) In the case of the statement of profit and loss , of the loss for
the year ended on that date; and
c) In the case of the Cash flow statements, of the cash flow for the
year ended on that date.
Emphasis of Matter:
We draw attention to Note No. 24.5 to the financial statements relating
to confirmation of balances in respect of some of the trade
receivables, loans & advances and trade payables. Our opinion is not
qualified in respect of this matter.
Report on other Legal and Regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. the Balance Sheet, the Statement of Profit and Loss and Cash Flow
statement dealt with by this report are in agreement with the books of
account;
d. in our opinion, the Balance sheet, Statement of Profit and Loss,
and Cash flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Act;
e. on the basis of Written representations received from the Directors
as on March 31, 2014 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a Director in terms of clause (g) of sub-section (1) of
section 274 of the Act;
f. Since the Central Government has not issued any notification as to
the rate at which 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 REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE
Statement on the Companies (Auditor''s Report) Order, 2003 Re: KEERTHI
INDUSTRIES LIMITED
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) All the assets have not been physically verified by the management
during the year, but there is a regular program of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of the assets. No material discrepancies were noticed on
such verification.
c) During the year, the Company has not disposed off any of its fixed
assets that would affect the going concern status of the Company.
2. a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a) The Company has not granted any unsecured loans to Companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Hence, clauses (iii) (a) to (d) of the
said order are not applicable.
b) The Company had taken unsecured loans from two bodies Corporate and
from two parties covered in the register maintained under Section 301
of the Companies Act, 1956. The maximum amount involved during the year
and the closing balance was Rs. 1179.99 lakhs;
c) In our opinion, the terms and conditions on which loans have been
taken are not, prima-facie, prejudicial to the interest of the Company.
d) Time schedule for repayment has not been fixed. Hence we cannot
offer any comment on the over dues.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to 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.
5. a) According to the information and explanations given to us by the
Management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have
been entered in the register to be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted deposits from the public within the
meaning of the provisions of Section 58A, Section 58AA and the other
relevant provisions of the Act and the Companies (Acceptance of
Deposits) Rules, 1975 and hence the same are not applicable to the
Company for the time being.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account relating to
materials, labour and other items of costs maintained by the Cement
Division of the Company pursuant to the Rules made by the Central
Government for the maintenance of cost records under section 209 (1)
(d) of the Companies Act, 1956 and are of the opinion that prime facie,
the prescribed accounts and records have been made and maintained. .
9. a) According to the information furnished to us and in our opinion,
the Company is regular in depositing with
i appropriate authorities undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs
Duty, Excise Duty, cess and other material statutory dues applicable to
it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Customs Duty, Excise Duty and Cess were in arrears as at March 31,
2014 for a period of more than six months from the date they became
payable.
c) According to the records of the Company and the information and
explanations given to us, the dues of Sales Tax, Income Tax, Custom
Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have not
been deposited on account of any dispute are as follows:
Statement showing particulars of Disputed Dues
S. NAme of Nature of Amount Rs Period to which the
No the statute Dues amount relates
Authonty
1 AP General Tax on 18,77,197 FY 1990-91
Sales Tax Act packing and
material FY 1991-92
2 Central Sales Central 57,13,367 FY 2004-05
Tax Act Sales Tax
3 Central Sales Central 39,25,213 FY 2000-2001, the
Tax Act Sales Tax Order was passed
during FY 2007-08
4 Commercial Central 6,20,112 FY 1993-94
Taxes Dept. Sales Tax
Kamataka
5 Central Excise Central 1,90,02,358 February 2006 to
Act Excise August 2010, Show
cause notice received on
10.11.2010.
6 Income-tax Income 2,62,59,373# FY 2006-07.
Act, 1961 Tax Revised Assessment
order received on
05.01.2013.
7 Income-tax Income 1,83,80,281 FY 2005-06.
Act, 1961 Tax Revised Assessment
order received on
04-03-2014
Name of the Statute/Authority Due date Forum where
dispute is
pending
AP General Sales Tax Act Not Sales Tax
mentioned Appellate
in demand Authority
notice
Central Sales Tax Act Not Appellate Dy.
mentioned Commissioner
in demand
notice
Central Sales Tax Act Not AP Sales Tax
mentioned Tribunal.
in demand
notice
Commercial Taxes Dept., Kamataka Not Hon''ble High
mentioned Court of
in demand Kamataka
notice
Central Excise Act Not CESTAT,
mentioned in Bangalore
the demand
notice
Income tax Act 1961 Not ITAT, Hyderabad
mentioned in
the demand
notice
Income tax Act 1961 Not Commissioner
mentioned in (Appeals) III
the demand Hyderabad
notice
@ Against the demand of Rs.39,25,213, the Company has paid Rs.
19,08,835. # Against the demand of Rs.2,62,59,373, the Company has
paid Rs. 1,82,99,755.
10. The Company has accumulated losses as at the end of the financial
year. The Company has incurred cash losses during the financial year
covered by our audit and in the immediate preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions and Banks excepting interest amount of Rs84.01
lakhs outstanding at the end of the year.
12. 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. The Company is not a chit fund or a nidhi/ mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the Order
referred to above are not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Order referred to above are not applicable to the
Company.
15. According to the information and explanations given to us, 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 purpose for which the
loans 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 the funds raised on short-term basis have prima-facie been used
during the year for long- term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. During the year under report, the Company has not issued any
debentures. Accordingly the provisions of clause 4(xix) of the above
referred Order are not applicable to the Company.
20. During the year, the Company has not made any public issue and
hence, the provisions of clause 4(xx) of the above referred Order are
not applicable to the company.
21. According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
for K.S.RAO & CO.,
Chartered Accountants.
Firms'' Regn.No.003109S
Place: Hyderabad (P.GOVARDHANA REDDY)
Date: 29.05.2014 Partner
Membership No.029193
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying Financial Statements of KEERTHI
INDUSTRIES LIMITED, HYDERABAD (A.P) ("The Company") which comprise the
Balance Sheet as at 31st March, 2013 and the Statement of Profit and
Loss and cash flow statement for the year then ended, and Summary of
Significant Accounting Policies and other explanatory information.
Management''s responsibility for the Financial Statements
Management is responsible for the preparation of these Financial
Statements that give a true and fair view of the Financial position ,
Financial performance and Cash flows of the Company in accordance with
the Accounting Standards referred in the sub-section (3C) of section
211 of the Companies Act 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our Audit. We conducted our Audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain the
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 the management, as well as evaluating the overall presentation of
the Financial statements
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Emphasis of Matter:
We draw attention to Note No. 24.5 to the financial statements relating
to confirmation of balances in respect of some of the trade
receivables, loans & advances and trade payables. Our opinion is not
qualified in respect of this matter.
Opinion :
In our opinion and to the best of our inform and according to
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) In the case of the Balance sheet, of the state of affairs of the
Company as at March 31 ,2013;
b) In the case of the Statement of Profit and Loss, of the Loss for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
Report on other Legal and Regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. in our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. the Balance Sheet, the Statement of Profit and Loss and Cash Flow
statement dealt with by this report are in agreement with the books of
account;
d. in our opinion, the Balance sheet, Statement of Profit and Loss,
and Cash flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of section 211 of the Act;
e. on the basis of Written representations received from the Directors
as on March 31, 2013 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
appointed as a Director in terms of clause (g) of sub-section (1) of
section 274 of the Act;
f. Since the Central Government has not issued any notification as to
the rate at which 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 REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE
Statement on the Companies (Auditor''s Report) Order, 2003 Re: KEERTHI
INDUSTRIES LIMITED
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fxed
assets.
b) All the assets have not been physically verified by the management
during the year, but there is a regular program of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of the assets. No material discrepancies were noticed
on such verification.
c) During the year, the Company has not disposed off any of its fixed
assets that would affect the going concern status of the Company.
2. a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a) The Company has not granted any unsecured loans to Companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Hence, clauses (iii) (a) to (d) of the
said order are not applicable.
b) The Company had taken unsecured loan from two bodies Corporate and
from a party covered in the register maintained under Section 301 of
the Companies Act, 1956. The maximum amount involved during the year
was Rs. 1042.32 lakhs and the closing balance was Rs. 996.44 lakhs;
c) In our opinion, the terms and conditions on which loans have been
taken are not, prima-facie, prejudicial to the interest of the Company.
d) Time schedule for repayment has not been fixed. Hence we cannot
offer any comment on the over dues.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to 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. I
5. a) According to the information and explanations given to us by the
Management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have
been entered in the register to be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted deposits from the public within the
meaning of the provisions of Section 58A, Section 58AA and the other
relevant provisions of the Act and the Companies (Acceptance of
Deposits) Rules, 1975 and hence the same are not applicable to the
Company for the time being.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account relating to
materials, labour and other items of costs maintained by the Cement
Division of the Company pursuant to the Rules made by the Central
Government for the maintenance of cost records under section 209 (1)
(d) of the Companies Act, 1956 and are of the opinion that prime facie,
the prescribed accounts and records have been made and maintained. In
respect of Electronics Division, the Central Government has not
prescribed the maintenance of cost records under section 209 (1) (d) of
the Companies Act, 1956.
9. a) According to the information furnished to us and in our opinion,
the Company is regular in depositing with appropriate authorities
undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other
material statutory dues applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Customs Duty, Excise Duty and Cess were in arrears as at March 31,
2013 for a period of more than six months from the date they became
payable.
Against the demand of Rs.39,25,213, the Company has paid Rs.19,08,835. #
Against the demand of Rs.2,62,59,373, the Company has paid Rs. 1,82,99,755.
10. The Company does not have any accumulated losses as at the end of
the financial year. The Company has incurred cash losses during the
financial year covered by our audit and not incurred in the immediate
preceding financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions and Banks.
12. 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. The Company is not a chit fund or a nidhi/ mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the Order
referred to above are not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Order referred to above are not applicable to the
Company.
15. According to the information and explanations given to us, 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 purpose for which the
loans 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 the funds raised on short-term basis have prima-facie been used
during the year for long- term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. During the year under report, the Company has not issued any
debentures. Accordingly the provisions of clause 4(xix) of the above
referred Order are not applicable to the Company.
20. During the year, the Company has not made any public issue and
hence, the provisions of clause 4(xx) of the above referred Order are
not applicable to the company.
21. According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
for K.S.RAO & CO.,
Chartered Accountants.
Firms'' Regn.No.003109S
Sd/-
(P.GOVARDHANA REDDY)
Partner
Membership No.029193
Place: Hyderabad
Date: 29.05.2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of KEERTHI INDUSTRIES
LIMITED, HYDERABAD (A.P) as at 31st March, 2012, the Statement of
Profit and Loss and also the Cash Flow Statement for the year ended on
that date annexed thereto. These financial statements are the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with 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), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow
statement dealt with by this report are in agreement with the books of
account.
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956.
v) On the basis of written representations received from the Directors,
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that, none of the Directors is disqualified as on 31st March,
2012 from being appointed as a Director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
5. a) There are no confirmation of balances, by Sundry Debtors,
Creditors and for Loans and Advances.
6. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, subject to our comment
in Para 5 above, read in conjunction with the Schedules annexed
therewith give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India:
a) in the case of the balance sheet, of the state of affairs of the
Company as at 31st March, 2012;
b) in the case of the Statement of profit and loss, of the Profit of
the Company for the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure to the Auditor's Report: referred to in paragraph 3 of our
report of even date,
Re: KEERTHI INDUSTRIES LIMITED, HYDERABAD.
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) All the assets have not been physically verified by the management
during the year, but there is a regular programme of verification
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of the assets. No material discrepancies were
noticed on such verification.
c) During the year, the Company has not disposed off any of its fixed
assets that would affect the going concern status of the Company.
2. a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a) The Company has not granted any unsecured loans to Companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Hence, clauses (iii) (a) to (d) of the
said order are not applicable.
b) The Company had taken unsecured loan from a Body Corporate and from
a party covered in the register maintained under Section 301 of the
Companies Act, 1956.Maximum amount involved and the year end balance
was Rs.656.04 lakhs and Rs.142.87 lakhs respectively; and
c) In our opinion, the terms and conditions on which loans have been
taken are not, prima-facie, prejudicial to the interest of the Company.
d) Time schedule for repayment has not been fixed. Hence we cannot
offer any comment on the over dues.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to 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.
5. a) According to the information and explanations given to us by the
Management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have
been entered in the register to be maintained under that section
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted deposits from the public. Hence the
provisions of Section 58A, 58AA and other relevant provisions of the
Companies Act, 1956 and the Companies (Acceptance of Deposits)Rules,
1975 are not applicable to the Company for the time being.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Cement
Division of the Company pursuant to the Rules made by the Central
Government for the maintenance of cost records under section 209 (1)
(d) of the Companies Act, 1956 and are of the opinion that prime facie
the prescribed accounts and records have been made and maintained. In
respect of Electronics Division, the Central Government has not
prescribed the maintenance of cost records under section 209 (1) (d) of
the Companies Act, 1956.
9. a) According to the records, the Company is regular in depositing
with appropriate authorities undisputed statutory l dues including
Provident Fund, Investor Education and Protection Fund, Employees'
State Insurance, Income- tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues
applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Customs Duty, Excise Duty and Cess were in arrears as at March 31,
2012 for a period of more than six months from the date they became
payable.
c) According to the records of the Company and the information and
explanations given to us, the dues of Sales Tax, Income Tax, Custom
Duty, Wealth Tax, Service Tax, Excise Duty and Cess, which have not
been deposited on account of any dispute are as follows:
STATEMENT OF DISPUTED DUES
S. Name of the Nature of Dues Amount Rs.
No Statute
i) AP General Tax Liability on 18,77,197
Sales Tax Act packing material
ii) Central Sales Central Sales Tax 74,29,390
Tax
iii) Commercial Central Sales Tax 6,20,112
Tax
Department
Govt.of
Karnataka
iv) AP General Central Sales Tax 39,25,213
Sales Tax
Act
v) Customs,
Central Central Excise 1,90,02,358
Excise &
Service
Tax
vi) Income tax Income Tax 2,90,96,803
Department
Name of the status Period to which
Forum where
the amount Due date
relates dispute is
pending
Ap General sales Tax Act 1990-91& Not mentioned Sales Tax
1991-92 in demand
notice Appellate
Authority
Central Sales Tax 2003-04& Not mentioned Appellate
2004-05 in demand
notice Dy.
Commissioner
Commercial
Tax Department
Gove of Karnataka 1993-94 Not mentioned Honourable
in demand
notice High Court
of
Karnataka
Ap General Sales Tax Accounting
year Not mentioned AP Sales Tax
2000-2001, in demand
notice Tribunal.
the Order was
passed in the
year 2007-08
Customs Central
Execise &Service
Tax February 2006 Not mentioned Customs,
to August
2010. in the demand Excise&
Service
Show cause notice Tax
Appellate
notice
received Tribunal
on
10.11.2010.
Income Tax Department Accounting Not mentioned Commissioner
year
2006-07. in the (appeals).
Assessment assessment
order
received order.
on
14.11.2011.
10. The Company has no accumulated losses as at the end of the
financial year. The Company has not incurred any cash losses during the
financial year covered by our audit and the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions and Banks.
12. 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. The Company is not a chit fund or a nidhi/mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the Companies
(Auditor's Report) Order, 2003 are not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the Company.
15. According to the information and explanations given to us, 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 purpose for which the
loans 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 the funds raised on short-term basis have prima-facie not been
used during the year for long-term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. During the year under report, the Company has not issued any
debentures. Accordingly the provisions of clause 4(xix) of the above
referred Order are not applicable to the Company.
20. During the year, the Company has not made any public issue and
therefore the question of disclosing the end use of money raised by
public issue does not arise.
21. Based upon the audit procedures performed and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported during the year.
for K.S.RAO & CO.
Chartered Accountants
Firm's Registration Number: 003109S
(P.Govardhana Reddy)
Partner
Membership Number: 029193
Place: Hyderabad
Date : 31st August, 2012
Mar 31, 2010
1. We have audited the attached Balance Sheet of KEERTHI INDUSTRIES
LIMITED, HYDERABAD (A.P) as at 31st March, 2010, the Profit and Loss
Account and also the Cash Flow Statement for the year ended on that
date annexed thereto. These financial statements are the
responsibility of the Companys Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with 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), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
i) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit.
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
iii) The Balance Sheet, Profit and Loss Account and Cash Flow statement
dealt with by this report are in agreement with the books of account.
iv) In our opinion, the Balance Sheet, Profit and Loss account and Cash
Row Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
v) On the basis of written representations received from the Directors,
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that, none of the Directors is disqualified as on 31st March,
2010 from being appointed as a Director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956;
5. There are no confirmation of balances, by Sundry Debtors, Creditors
and for Loans and Advances.
6. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, subject to our comment
in Para 5 above, read in conjunction with the Schedules annexed
therewith give the information required by the Companies Act, 1956, in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India:
a) in the case of the balance sheet, of the state of affairs of the
Company as at 31st March, 2010;
b) in the case of the profit and loss account, of the Profit of the
Company for the year ended on that date; and
c) in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure to the Auditors Report: referred to in paragraph 3 of our
report of even date, Re: KEERTHI INDUSTRIES LIMITED, HYDERABAD..
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of
fixed assets.
b) All the assets have not been physically verified by the management
during the year, but there is a regular programme of verification
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of the assets. No material discrepancies were
noticed on such verification.
c) During the year, the Company has not disposed off any of its fixed
assets that would affect the going concern status of the Company.
2. a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c) The Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification between the physical
stocks and book records were not material.
3. a) The Company has not granted any unsecured loans to Companies,
firms or other parties covered in the register maintained under Section
301 of the Companies Act, 1956. Hence, clauses (iii) (a) to
(d) of the said order are not applicable.
b) The Company had taken interest free unsecured loan from a Body
Corporate covered in the register maintained under Section 301 of the
Companies Act, 1956.Maximum amount involved and the year end balance
was Rs.201.04 lakhs;and
c) In our opinion, the terms and conditions on which loans have been
taken are not, prima-facie, prejudicial to the interest of the Company.
d) Time schedule for repayment has not been fixed. Hence we cannot
offer any comment on the over dues.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and with regard to 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.
5. a) According to the information and explanations given to us by the
Management, we are of the opinion that the particulars
of contracts or arrangements referred to in section 301 of the
Companies Act, 1956 have been entered in the register to be maintained
under that section
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
6. The Company has not accepted deposits from the public. Hence the
provisions of Section 58A, 58AA and other relevant provisions of the
Companies Act, 1956 and the Companies (Acceptance of Deposits)Rules,
1975 are not applicable to the Company for the time being.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account relating to
materials, labour and other items of cost maintained by the Cement
Division of the Company pursuant to the Rules made by the Central
Government for the maintenance of cost records under section 209 (1)
(d) of the Companies Act, 1956 and are of the opinion that prime facie
the prescribed accounts and records have been made and maintained. In
respect of Electronics Division, the Central Government has not
prescribed the maintenance of cost records under section 209 (1) (d) of
the Companies Act, 1956.
9. a) According to the records, the Company is regular in depositing
with appropriate authorities undisputed statutory dues
including Provident Fund. Investor Education and Protection Fund,
Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other material statutory dues
applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Customs Duty. Excise Duty and Cess were in arrears as at March 31,
2010 for a period of more than six months from the date they became
payable.
c) According to the records of the Company and the information and
explanations given to us, the dues of Sales Tax, Income Tax, Custom
Duty. Wealth Tax. Service Tax, Excise Duty and Cess, which have not
been deposited on account of any dispute are as follows:
STATEMENT OF DISPUTED DUES
S.No Name of the Nature of Amount Period to
Statute Dues Rs. which the
amount relates
i) AP General Sales Tax Liability on 18,77,197 1990-91
Tax Act packing material &
1991-92
ii) Central Sales Tax Central
Sales Tax 74,29,390 2003-04
&
2004-05
iii) Commercial Tax Central
Sales Tax 6,20,112 1993-94
Department Govt.
of Karnataka
iv) AP General Sales Central Sales Tax 30,25,213 Accounting year
Sales Tax
Tax Act 2000-2001,
the Order was
passed in the
year 2007-08
S.No Name of the Due date Forum where
Statute dispute is
pending
i) AP General Sales Not Sales Tax
Tax Act mentioned Appellate
in demand Authority
ii) Central Sales Tax Not Appellate
mentioned Dy.Commissioner
in demand
iii) Commercial Tax Not Honourable High
Department Govt. mentioned Court of
of Karnataka in demand Karnataka
iv) AP General Sales Not AP
Tax Act mentioned Tribunal.
in demand
10. The Company has no accumulated losses as at the end of the
financial year. The Company has not incurred any cash losses during the
financial year covered by our audit and the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to any
financial institutions and Banks.
12. 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. The Company is not a chit fund or a nidhi/mutual benefit fund/
society. Therefore, the provisions of clause 4 (xiii) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore, the provisions of clause
4(xiv) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.
15. According to the information and explanations given to us, 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 purpose for which the
loans 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 the funds raised on short-term basis have prima-facie not been
used during the year for long-term investment.
18. During the year, the Company has not made any preferential
allotment of shares to parties and Companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. During the year under report, the Company has not issued any
debentures. Accordingly the provisions of clause 4(xix) of the above
referred Order are not applicable to the Company. However, the Company
is required to issue debentures pursuant to a Scheme of Arrangement
u/s.391/394 of the Companies Act, sanctioned by the Hon"ble Andhra
Pradesh High Court effective from 18.03.2010. In pursuance of this, the
Company transferred Rs.7.70 Crores to debenture suspense and allotted
debentures in the following year.
20. During the year, the Company has not made any public issue and
therefore the question of disclosing the end use of money raised by
public issue does not arise.
21. Based upon the audit procedures performed and according to the
information and explanations given to us, we report that no fraud on or
by the Company has been noticed or reported during the year.
for K.S.RAO & CO.
Chartered Accountants
Firms Registration Number: 003109S
(P. Govardhana Reddy)
Partner
Membership Number: 029193
Place: Hyderabad
Date : 30th August, 2010