Mar 31, 2018
Report on the Financial Statements:
We have audited the accompanying financial statements of M/s. KREBS BIOCHEMICALS & INDUSTRIES LIMITED, which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the statement of changes in equity and the statement of Cash Flows for the year ended 31st March, 2018 and a summary of 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 standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order issued under section 143(11) of the Act.
We conducted our audit 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 Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the 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 including the Ind AS, of the state of affairs of the Company as at March 31, 2018, its financial performance including other comprehensive income, its cash flows and the statement of changes in equity for the year ended on that date.
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 said Order.
2 As required by section 143(3) of the Act, we further report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flow dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid Ind AS financial statements comply with the applicable accounting Standards specified under Section 133 of the Act, read with relevant rules there on;
e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us
i. The Company has pending litigations which will have an impact on its financial position in the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.
iii. There have been no occasions in case of the company during the year under report to transfer any sums to the Investor Education and Protection Fund.
âANNEXURE Aâ TO THE INDEPENDENT AUDITORSâ REPORT
Referred to in paragraph 1 under the heading âReport on Other Legal & Regulatory Requirementâ of our report of even date to the financial statements of the Company for the year ended March 31, 2018:
iv. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) The Company has a program of verification to cover all the items of fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
(c) The title deeds of immovable properties are held in the name of the company.
2) (a) The management has conducted the physical verification of inventory at reasonable intervals.
b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.
3) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (c) of the Order are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.
5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.
6) As informed to us, the maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the activities carried on by the company.
7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities though there has been slight delay in few cases.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2018 for a period of more than six months from the date on when they become payable.
(âc) According to the information and explanations given to us, the following are disputed dues relating to Wealth tax, Duty of Customs and Cess which have not been deposited with the appropriate authorities on account of any dispute.
Name of the Statue |
Nature of the Dispute |
Amount (Rs) |
Period to which the amounts relate (F.Y) |
Forum where the dispute is pending and amount deposited |
Central Excise Act, 1944 |
Excise Duty& Service Tax |
1,12,74,000 |
FY 2008-09 & FY 2003-04 |
Central Excise and Service Tax Appellate Tribunal, Hyderabad. |
Income Tax Act, 1961 |
Income tax |
3,58,44,000 |
From FY 2003-04 to FY 2005-06 & FY 2015-16 |
AP and Telangana High Court |
In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks.
9) Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.
10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;
12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.
13) All transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 in so far as our examination of the proceedings of the meetings of the Audit Committee and Board of Directors are concerned. The details of related party transactions have been disclosed in the Standalone Ind AS Financial Statements as required by the applicable Accounting Standard.
14) The Company has not made any preferential allotment / private placement of shares or fully or partly convertible debentures during the year under review and hence the clause 3(xiv) of the Companies (Auditors Report) Order, 2016 is not applicable to the Company.
15) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.
16) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.
âAnnexure Bâ to the Independent Auditorâs Report of even date on the Standalone Financial Statements of KREBS BIOCHEMICALS & INDUSTRIES LIMITED
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 KREBS BIOCHEMICALS & INDUSTRIES LIMITED (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 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 PAVULURI & Co.
Chartered Accountants
Firm Reg. No:012194S
(CA N. RAJESH)
PARTNER
M.No : 223169
Place : Hyderabad
Date :25/05/2018
Mar 31, 2016
To the members of,
M/s. KREBS BIOCHEMICALS & INDUSTRIES LIMITED,
Report on the Standalone Financial Statements:
We have audited the accompanying financial statements of M/s. M/s. KREBS BIOCHEMICALS & INDUSTRIES LIMITED, which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the period ended 31st March, 2016 and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The management and Board of Directors of the company are responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Basis for Qualified Opinion
Reference is invited to Note 14 of the financial statements, The Company''s Non Current Assets consist of Long Term Trade Receivables of Rs.2,173.82 lacs and Other Loans and advances of Rs 177.50lacs. We are unable to ascertain whether such balances as at balance sheet date are fully recoverable. Accordingly, we are unable to ascertain the impact, if any, that may arise in case any of these receivables are subsequently determined to be doubtful of recovery. Had the Company made a provision for the same, the loss of the period would have been higher by the said amount.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;
b) In the case of the Statement of Profit and Loss, of the loss for the year ending 31st March, 2016;
c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), as amended, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure Aâ 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 further report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
b) In our opinion proper books of account as required by law have been kept by the Company s o far as appears from our examination of those books;
c) The Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid financial statements comply with the applicable accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) The matters described in the Basis for Qualified Opinion paragraph above, in our opinion, may not have an adverse effect on the functioning of the company.
f) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164(2) of the Act;
g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us
i. The Company has pending litigations which will have an impact on its financial position in the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.
iii. There have been no occasions in case of the company during the year under report to transfer any sums to the Investor Education and Protection Fund.
âANNEXURE Aâ TO THE INDEPENDENT AUDITORSâ REPORT
Referred to in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirementâ of our report of even date to the financial statements of the Company for the year ended March 31, 2016:
iv. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) The Fixed Assets have been physically verified by the management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its business. Pursuant to the program, a portion of the fixed asset has been physically verified by the management during the year and no material discrepancies between the books records and the physical fixed assets have been noticed.
(c) The title deeds of immovable properties are held in the name of the company.
2) (a) The management has conducted the physical verification of inventory at reasonable intervals.
b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.
3) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability partnerships or other parties covered in the Register maintained under section 189 of the Act. Accordingly, the provisions of clause 3 (iii) (a) to (C) of the Order are not applicable to the Company and hence not commented upon.
4) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and I86 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security.
5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.
6) As informed to us, the maintenance of Cost Records has not been specified by the Central Government under sub-section (1) of Section 148 of the Act, in respect of the activities carried on by the company.
7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities though there has been slight delay in few cases.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they become payable.
(''c) According to the information and explanations given to us, the following are disputed dues relating to Wealth tax, Duty of Customs and Cess which have not been deposited with the appropriate authorities on account of any dispute.
8.
Name of the Statue |
Nature of the Dispute |
Amount (Rs) |
Period to which the amounts relate (F.Y) |
Forum where the dispute is pending and amount deposited |
Central Excise Act, 1944 |
Excise Duty & Service Tax |
1,25,29,949 |
FY 2008-09 |
Central Excise and Service Tax Appellate Tribunal, Hyderabad. |
Income Tax Act, 1961 |
Income tax |
3,15,52,734 |
From FY 2003-04 to FY 2005-06 |
AP High Court |
In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks.
9) Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.
10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.
11) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act;
12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.
13) In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.
14) Based upon the audit procedures performed and the information and explanations given by the management, the company has made preferential allotment or private placement of shares during the year under review according to the requirement of Sec 42 of the Companies Act 2013 and the amount raised have been used for the purposes for which the funds were raised.
15) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.
16) In our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.
âANNEXURE Bâ TO THE INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF KREBS BIOCHEMICALS & INDUSTRIES LIMITED
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 KREBS BIOCHEMICALS & INDUSTRIES LIMITED(âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on âthe internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of Indiaâ. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with 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 companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For PAVULURI & Co.
Chartered Accountants
Firm Reg. No:012194S
Sd/-
(CA N. RAJESH)
PARTNER
M.No : 223169
Place : Hyderabad
Date : 28/05/2016
Mar 31, 2015
We have audited the accompanying financial statements of M/s. Krebs
Biochemicals & Industries Ltd, which comprise the Balance Sheet as at
March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the period from 1st October, 2014 to 31st March, 2015 and
a summary of significant accounting policies and other explanatory
information.
Management's Responsibility for the Financial Statements
The management and Board of Directors of the company are responsible
for the matters stated in section 134(5) of the Companies Act, 2013
("the Act") with respect to the preparation 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
includes maintenance of adequate accounting records in accordance with
the provision of the Act for safeguarding of the assets of the Company
and for preventing and detecting the frauds and other irregularities;
selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial control,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing specified under
section 143(10) of the Act. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company's
preparation of the financial statements, that give true and fair view
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by Company's management and Board of
Directors, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Basis for Qualified Opinion
(1) Reference is invited to Note 15 of the financial statements, The
Company's Non Current Assets consist of Long Term Trade Receivables of
Rs.2,169.80 lacs. We are unable to ascertain whether such balances as
at balance sheet date are fully recoverable. Accordingly, we are unable
to ascertain the impact, if any, that may arise in case any of these
receivables are subsequently determined to be doubtful of recovery. Had
the Company provided provision for the same, the loss of the period
would have been higher by the said amount.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the possible effects of the
matters described in the Basis for Qualified Opinion paragraph, the
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
b) In the case of the Statement of Profit and Loss, of the loss for the
period from 1st October, 2014 to 31st March, 2015; and
c) In the case of the Cash Flow Statement, of the cash flows for the
six months period ended on that date.
Report on Other Legal and Regulatory Requirements :
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-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 to the extent applicable.
2 As required by section 143(3) of the Act, we further report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d) In our opinion, the aforesaid financial statements comply with the
applicable accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of Section 164(2) of the Act;
f) In our opinion and to the best of our information and according to
the explanations given to us, we report as under with respect to other
matters to be included in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014:
(i) The Company has pending litigations which would impact its
financial position.
(ii) The Company did not have any long-term contracts including
derivative contracts; as such the question of commenting on any
material foreseeable losses thereon does not arise.
(iii) There have been no occasions in case of the company during the
year under report to transfer any sums to the Investor Education and
Protection Fund.
ANNEXURE TO AUDITORS' REPORT
REFERRED TO IN PARAGRAPH (8) IN OUR REPORT OF EVEN DATE FOR THE PERIOD
ENDED 31.03.2015.
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us during the course of
our audit, we report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
asset;
(b) The company has a regular programme of physical verification of its
fixed assets by which fixed assets are verified in a phased manner. In
accordance with this programme, certain fixed assets were verified
during the period and no material discrepancies were noticed on such
verification. In our opinion, this periodicity of physical
verification is reasonable having regards to the size of the company
and the nature of its assets;
(ii) (a) The inventories have not been physically verified by the
management during the period due to closure of plants.
(b) Since the inventories have not been physically verified by the
management during period, the point relating to reasonableness of
physical verification procedures is not applicable to the company.
(c) The company has maintained proper records of inventories and the
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
(iii) In our opinion, the Company has neither granted nor taken any
loans to/from companies, firms or other parties covered in the register
maintained under section 189 of the companies Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the company and the nature of its business, for the
purchase of fixed assets and for the sale of services. Further, on the
basis of our examination of the books and records of the company and
according to the information and explanations given to us, no major
weakness has been noticed or reported.
(v) In our opinion and according to the information and explanation
given to us, the company has not accepted any deposits from the public
covered under section 73 to 76 of the Companies Act, 2013.
(vi) In our opinion and according to the information and explanation
given to us, the Central Government has not prescribed the maintenance
of cost records under sub-section (1) of Section 148 of the Companies
Act, 2013.
(vii) (a) According to the information and explanations given to us and
on the basis of our examination of the records of the company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Duty of Customs, Valueadded tax, cess and other
material statutory dues have been regularly deposited during the year
by the company with the appropriate authorities.
According to the information and explanations given to us, there are no
undisputed amounts payable in respect of Provident Fund, Income Tax,
Wealth tax, Service Tax, Sales Tax, Duty of Customs, Excise Duty, Value
added tax and Other material statutory as at March 31, 2015 for a
period of more than six months from the date they became payable except
ESI for Rs. 75,587/-.
(b) According to the information and explanations given to us, the
following are disputed dues relating to Wealth tax, Duty of Customs and
Cess which have not been deposited with the appropriate authorities on
account of any dispute.
Name of the Nature of the Amount
Statue Dispute (Rs)
Central Excise Excise Duty 95,27,999
Act, 1944
The A.P.VAT Act, VAT 1,00,28,066
2005
The Central CST 1,12,18,250
Sales Tax Act
Income Tax Income tax 3,15,52,734
Act, 1961
Name of the Period to Forum where the dispute
Statute which the is pending and amount
amounts deposited
relate (F.Y)
Central Excise FY 2008-09 Central Excise and Service Tax
Act,1944 Appellate Tribunal, Bangalore.
The A.P.VAT Act, From FY ADC, Punjagutta Division,
2005 2009-10 to Hyderabad
FY 2011-12
The Cental Sales
Tax Act FY 2010- ADC, Punjagutta Division,
11and F Hyderabad
Y2011-12
Income Tax
Act,1961 From FY AP High Court
2003-04 to
FY 2005-06
(c) According to the information and explanations given to us the
amounts which were required to be transferred to the Investor Education
and Protection Fund in accordance with the relevant provisions of the
Companies Act, 2013and rules there under have been transferred to such
fund within time.
(viii)The Company's accumulated losses during at the end of the
financial year are more than fifty per cent of its net worth. Also it
has incurred cash loss during the 6 months period covered by our audit
and has incurred cash loss in the immediately preceding accounting
period.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of its dues to
banks and financial institution including interest and principal as on
31st March 2015.
(x) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks, and financial institutions
(xi) In our opinion, the term loans have been applied for the purpose
for which they were raised.
(xii) According to the information and explanations given to us, no
material fraud on or by the company has been noticed or reported during
the course of our audit.
For PAVULURI & Co.
Chartered Accountants
Firm Reg. No:012194S
Sd/-
(CA N. RAJESH)
PARTNER M.No : 223169
Place : Hyderabad
Date : 23/05/2015
Mar 31, 2012
We have audited the attached Balance Sheet of KREBS BIOCHEMICALS &
INDUSTRIES LIMITED as at 31.03.2012 and also the Statement of Profit
and Loss and 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.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies' (Auditor's Report) Order, 2003, issued by
the Central Government of India, in terms of Section 227(4A) of the
Companies Act'1956, we enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the said order.
Further to our comments in the annexure referred to above, we report
that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b) In our opinion, proper books of accounts as required by law have
been kept by the company so for as it appears from our examination of
those books.
c) The Balance Sheet, statement of Profit & Loss account and the 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
the Cash Flow statement dealt with by this report comply with the
mandatory Accounting Standards referred to in Sub-Section 3(C) of
Section 211 of the Companies Act'1956.
e) On the basis of the 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.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read in conjunction
with the schedule annexed therewith and give the information required
by the Companies Act, 1956 in the manner so required and give a true
and fair view in conformity with the accounting principles generally
accepted in India,
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March'2012;
ii) In the case of the Statement of Profit and Loss, of the Loss of the
Company for the year ended on that date; and
iii) In the case of the cash flow statement, of the cash flows for the
year ended on that date.
KREBS BIOCHEMICALS & INDUSTRIES LIMITED
Referred to in paragraph 3 of our report of even date,
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 its business. No material discrepancies were noticed
on such physical verification.
2. (a) The inventories have been physically verified by the management
during the year at reasonable intervals.
(b) The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The company has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3. In our opinion, the Company has neither granted nor taken any loans
to/from companies, firms or other parties covered in the Register,
maintained under Section 301 of the Companies Act, 1956. Therefore, the
provisions of clause 4(iii) (b), (c) & (d) of the Companies (Auditor's
Report) order, 2003 are not applicable to the company.
4. In our opinion, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of inventories, fixed assets and for
the sale of goods.
5. (a) In our opinion and according to the information and explanation
given to us, there are no transactions made in pursuance of contracts
or arrangements that need to be entered into the register maintained
under section 301 of the Companies Act, 1956.
(b) In our opinion and according to the information and explanation
given to us, there are no transactions of purchase and sale of goods,
materials and services made in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Companies
Act, 1956 aggregating during the year to Rs.5,00,000/- or more in
respect of each party.
6. In our opinion and according to the information and explanation
given to us, the company has not accepted any deposits as defined under
section 58A of the Companies Act'1956.
7. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the Books of Account maintained by the
Company as prescribed by the Central Government for maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. However, we have not carried out a detailed
examination of the accounts and records.
9. (a) According to the books and records of the company, the company
is not regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees'
State Insurance, Income Tax, Corporate dividend Tax and other Statutory
dues with appropriate authorities. According to the information and
explanations given to us, there are undisputed amounts payable in
respect of such statutory dues which have remained outstanding as at
31st March, 2012 for a period exceeding six months from the date they
became payable.
Disputed Service Tax, Income Tax & Sales Tax not deposited, has been
disclosed in note no : 32 as 'Contingent Liabilities not provided for'.
Nature of the Amount Deposit Forum where
dispute
Name of the
Statute Dues (Rs.) Amount
(Rs) is pending
Service Tax Central
Excise and
Service
The Central
Excise 3,33,650 Tax Appellate
Tribunal,
Act 1944 Nil Bangalore
AP VAT Act Sales Tax 7,84,419 Nil ADC Guntur
Income Tax Act Income Tax 3,15,52,734 Nil AP High Court
10. The company has incurred cash loss during the financial year
covered by our audit and has incurred cash loss in 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 its dues to
banks and financial institutions.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
13. In our opinion, the company is not a chit fund or a nidhi/mutual
benefit fund/ society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) order, 2003 are not applicable to the
company.
14. In our opinion, the Company is not dealing or trading in shares,
securities, debentures or other investments and hence, the requirements
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
banks and financial institutions.
16. In our opinion, the term loans have been applied for the purpose
for which they were raised.
17. In our opinion and according to the information and explanations
given to us and on an overall examination of the balance sheet of the
company, we report that no funds raised on short-term basis have been
used for long-term investments. No long-term funds have been used to
finance short-term assets except permanent working capital.
18. According to the information and explanation given to us, during
the year the company has made a preferential allotment of 4,64,286
shares with a face value of Rs.10 and with a premium of Rs.18 per share
to Mr. Avinash Ravi who is a director of the company.
19. No debentures have been issued by the company and hence, the
question of creating securities in respect there of does not arise.
20. The company has not raised any money by way of public issues
during the year.
21. On the basis of our examination and according to the information
and explanations given to us, no fraud, on or by the Company, has been
noticed or reported during the year.
For PAVULURI & Co.
Charted Accountants
Firm's Reg. No. : 012194S
Sd/-
(CA P.A.RAMAIAH)
Place : Hyderabad PARTNER
Date : 17.05.2012 M.No.203300
Mar 31, 2010
We have audited the attached Balance Sheet of KREBS BIOCHEMICALS &
INDUSTRIES LIMITED as at 31.03.2010 and also the Profit and Loss
Account and 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.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors Report) Order, 2003, issued by
the Central Government of India, in terms of Section 227(4A) of the
Companies Act1956, we enclose in the Annexure a statement on the
matters specified in paragraph 4 and 5 of the said order.
Further to our comments in the annexure referred to above, we report
that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
b) In our opinion, proper books of accounts as required by law have
been kept by the company so for as it appears from our examination of
those books.
c) The Balance Sheet, Profit & Loss account and the Cash Flow statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit and Loss account and the
Cash Flow statement dealt with by this report comply with the mandatory
Accounting Standards referred to in Sub-Section 3(C) of Section 211 of
the Companies Act1956.
e) On the basis of the 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 Act1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read in conjunction
with the, give the information required by the Companies Act, 1956 in
the manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India,
i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March2010;
ii) In the case of the Profit and Loss Account, of the Loss
of the Company for the year ended on that date; and iii) In the case of
the cash flow statement, of the cash flows for the year ended on that
date.
ANNEXURE TO AUDITORS REPORT KREBS BIOCHEMICALS & INDUSTRIES LIMITED
Referred to in paragraph 3 of our report of even date,
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 its business. No material discrepancies were noticed
on such physical verification.
(c) According to the information and explanations furnished to us, the
Company has disposed of Plant and Machinery of Food Division during the
year.
2. (a) The inventories have been physically verified by the management
during the year at reasonable intervals.
(b) The procedures of physical verification of the inventories followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The company has maintained proper, records of inventories and
discrepancies noticedon physical verification of inventories as
compared to book records were not material.
3. (a) The Company has taken loan from two parties covered in the
Register, maintained under Section 301 of the Companies Act, 1956; The
Maximum amount involved during the year was Rs.20,00,000/- and the year
-end balance of loan taken from such parties was Rs.20,00,000/- The
company has not granted any loans to companies, firms or other parties
covered under section 301 of the Companies Act, 1956.
(b) In our opinion, the rate of interest and other terms and conditions
in respect of unsecured loans given by the company to its employees and
others, are in our opinion, prima facie not prejudicial to the interest
of the Company;
(c) In respect of such loans given by the Company, where stipulations
have been made, they have generally repaid the principal amounts as
stipulated and have been regular in payment of interest, where
applicable;
(d) In respect of such loans given by the Company, there are no overdue
amounts more than Rs.1,00,000/-.
4. In our opinion, there are adequate internal control procedures
commensurate with the . size of the Company and the nature of its
business with regard to purchase of inventories, fixed assets and for
the sale of goods.
5. (a) According to the information and explanation given to us we are
of the opinion, that the transactions made in pursuance of contracts or
arrangements, that need to be entered into the register maintained
under section 301 of the Companies Act, 1956.have been so entered._
(b) In our opinion and according to the information and explanation
given to us, the transaction of purchase of goods made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Companies Act, 1956 aggregating during the year to
Rs.5,00,000/- or more in respect of one party has been made at prices
which are reasonable having regard to prevailing market prices at the
relevant time.
6. In our opinion and according to the information and explanation
given to us, the Company has not accepted any deposits as defined under
section 58A of the Companies Act 1956.
7. In our opinion, the Company has an adequate internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the Books of Account maintained by the
Company as prescribed by the Central Government for maintenance of cost
records under section 209 (1) (d) of the Companies Act, 1956 and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. However, we have not carried out a detailed
examination of the accounts and records.
9. (a) According to the books and records of the company, the company
is not regular
in depositing undisputed statutory dues including Provident Fund,
Investor Education and Protection Fund, Employees State Insurance,
Income Tax, Corporate dividend Tax and other Statutory dues with
appropriate authorities. According to the information and explanations
given to us, there are undisputed amounts payable in respect of such
statutory dues which have remained outstanding as at 31st March, 2010
for a period exceeding six months from the date they became payable.
(b) Disputed Service Tax, Income Tax & Sales Tax not deposited, has
been disclosed in point No.5 of Schedule 18(B) as Contingent
Liabilities not provided for.
Name of the Nature of the Amount Deposit Forum where
dispute
Statute Dues (Rs.) Amount(Rs) is pending
The Central
Excise Service Tax 3,33,650 Nil Central Excise
and
Act1944 Service Tax
Appellate
Tribunal,
Bangalore
APVATAct Sales Tax 7,84,419 Nil ADC Guntur
Income Tax
Act Income Tax 3,15,52,734 Nil AP High
Court
10. In our opinion, the accumulated losses of the company are more
than fifty percent of its net worth. The company has incurred cash loss
during the financial year covered by our audit and has incurred cash
loss in 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 its dues to
banks and financial institutions.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
13. In our opinion, the company is not a chit fund or a nidhi/mutual
benefit fund/ society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditors Report) order, 2003 are not applicable to the
company.
14. In our opinion, the Company is not dealing or trading in shares,
securities, debentures or other investments and hence, the requirements
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
banks, and financial institutions.
16. In our opinion, the term loans have been applied for the purpose
for which they were raised.
17. In our opinion and according to the information and explanations
given to us and on an overall examination of the balance sheet of
thecompany, we report that no funds raised on short-term basis have
been used for long-term investments. No long-term funds have been used
to finance short-term assets except permanent working capital.
18. According to the information and explanation given to us, the
company has not made preferential allotment of shares to parties
covered in the register maintained under Section 301 of the Act.
19. No debentures have been issued by the company and hence, the
question of creating securities in respect there of does not arise.
20. The company has not raised any money by way of public issues
during the year.
21. On the basis of our examination and according to the information
and explanations given to us, no fraud, on or by the Company, has been
noticed or reported during the year.
For PAVULURI & Co.
Chartered Accountants
Firms Reg. No.: 012194S
Sd/-
(CA P.A.RAMAIAH)
Place: Hyderabad PARTNER
Date: 24.05.2010 M.No.203300