Mar 31, 2018
Report on the StandaloneInd AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Kwality Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standaloneInd AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash fiows 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 Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended, and the 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 standaloneInd 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 standaloneInd AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standaloneInd AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate 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 standaloneInd 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 standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 (financial position) of the Company as at March 31, 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the standalone Ind AS financial statements:
a) Note 46 of the financial statement regarding delays in payment of direct taxes as per requirements of Income Tax Act, 1961. Tax amounting to INR 17,929.09 lakhs includes income tax payable for earlier years (Also refer clause VII(a) of Annexure B to this report). The amounts along with interest have been fully provided in the books of accounts of the Company.
b) Note 47 of the financial statement regarding foreign currency receivables and payable outstanding over the respective time limit prescribed under the Foreign Exchange Management Act (FEMA), 1999. The Company is currently in process of initiating settlement proceedings in respect of such dues. Pending outcome of such proceedings, we are unable to comment on its impact on the financial statements.
c) Note 48 of the financial statement regarding proceedings initiated under section 132 of Income Tax Act, 1961 on the Company and some Directors. As part of routine process the Company has received notices under section 153 and section 148. Since the assessment proceedings have not yet started the Company currently is not in a position to evaluate consequential impact, if any of possible tax adjustments.
Our opinion is not qualified in respect of these matters.
Other Matter
The standalone Ind AS financial statements of the Company for the year ended March 31, 2017, were audited by another auditor whose report dated May 26, 2017 expressed an unmodified opinion on those financial statements.
Report on Other Legal and Regulatory Requirements
1. 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, the Statement of Cash Flow 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 standaloneInd AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended.
(e) The matters described in Annexure A to this report under âMaterial Weaknessesâ paragraph, in our opinion, may have an adverse effect on the functioning of the Company.
(f) 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.
(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 Aâ
(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 disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 38 and 48 to the standaloneInd AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of sub-section 11 of section 143 of the Act, we give in the âAnnexure Bâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.
ANNEXURE A TO THE INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL
STATEMENTS OF KWALITY LIMITED
[Referred to in paragraph 1(g) under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ 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 Kwality 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 the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI) (the âGuidance Noteâ). 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 Act.
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 and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with 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.
Material Weaknesses
According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31, 2018:
a) The Company did not have a mechanism to reconcile the âcheque receipt and deposit registerâ with bank book. In the absence of such reconciliation, actual date of receipt of cheques cannot be ascertained (Cut Off). We have verified the date of receipt of cheque from date of posting in the bank book further their subsequent clearance verified from bank statement.
b) Debit/ credit note pertaining to procurement of material, recording of trading sales and journal entries are not authorised in the automated system. Further no competitive quotations are obtained for purchase of fixed assets. Absence of above controls may have an impact on the accuracy of relevant account balance. Absence of comparative quotation may have impact on the purchase price. We have performed other corroborative procedures such as verification of manual authorisation along with necessary supporting document besides obtaining independent year end balance confirmation from select vendors.
A âmaterial weaknessâ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companyâs annual or interim financial statements will not be prevented or detected on a timely basis.
In our opinion, except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audittests applied in our audit of the March 31, 2018 standalone financial statements of the Company, and these material weaknesses does not affect our opinion on the standalone financial statements of the Company.
ANNEXURE B TO INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF KWALITY LIMITED FOR THE YEAR ENDED MARCH 31, 2018
[Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ in the Independent Auditorsâ Report]
i.
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets except assets were not tagged with any unique identification number.
(b) The Management has verified fixed assets during the year as per the 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.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
ii. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on verification between the physical stock and the book records.
iii. The Company has not granted any loans, secured or unsecured to Companies, Firms, Limited Liability Partnerships (LLP) or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (âthe Actâ). Accordingly, the provisions stated in paragraph 3 (iii)(a),3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of loans, investments, guarantees and security made.
v. In our opinion and according to the information and explanations given to us, there are no amounts outstanding which are in the nature of deposits as on March 31, 2018 and the Company has not accepted any deposits during the year.
vi. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant as specified by the Central Government for the maintenance of cost records under sub-section (1) of section 148 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete
vii.
(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, undisputed statutory dues including provident fund, employeesâ state insurance, service tax, duty of customs, duty of excise, value added tax, cess have been regularly deposited with the appropriate authorities. The Company has been generally regular in payment of goods and service tax. Further there are serious delays in payment of withholding tax, Income tax during the year.
Undisputed statutory dues outstanding as at March 31, 2018 for a period of more than six months from the date they became payable are given below. Also refer paragraph (a) under paragraph âEmphasis of Mattersâ of our Independent Auditorâs report.
(Amount in Lakhs)
Name of the statue |
Name of the dues |
Net amount payable |
Period to which the amount relates (financial year) |
Due Date |
Date of Payment |
Remarks, if any |
Income tax act, 1961 |
Income tax |
4,255.79 |
2015 - 16 |
November 30,2016 |
Not Paid |
Refer Note 1 |
Income tax act, 1961 |
Income tax |
4,902.93 |
2016 - 17 |
November 30,2017 |
Not Paid |
Refer Note 1 |
Income tax act, 1961 |
Payment of Advance tax |
2,854.50 |
2017 - 18 |
Represents advance tax payable till September 15, 2017. |
Not Paid |
N e t t a x payable for the year INR 6,343.32 lakhs. Also, refer Note 1 |
Income tax act, 1961 |
Interest on Income Tax |
47.45 |
2014 - 15 |
March 07, 2018 |
Not Paid |
Rectification application under section 154 has been filed on April 12, 2018. |
Note 1 : Excludes interest on unpaid income tax amounting to INR 2,379.60 Lakhs
(b) According to the information and explanation given to us and examination of records of the Company, the outstanding dues of income-tax, sales-tax, service tax, customs duty, excise duty and value added tax dues on account of any dispute, are as follows: (Amount in Lakhs)
Name of the statue |
Name of the dues |
Amount (Note 1) |
Period to which the amount relates |
Forum where dispute is pending |
Remarks, if any |
Uttar Pradesh VAT |
VAT |
5.00 |
2012 - 13 |
Addl. Comm. (Appeal), Ghaziabad |
|
Uttar Pradesh VAT |
VAT & CST |
53.06 |
2013 - 14 |
Joint commissioner (Appeal), Bulandshahar |
|
Uttar Pradesh VAT |
VAT |
30.11 |
2014 - 15 |
Tribunal (2nd Appeal), Aligarh |
|
Haryan VAT |
VAT |
0.44 |
2012 - 13 |
DETC Cum Assessing Authority, Palwal |
|
Haryan VAT |
VAT |
340.86 |
2013 - 14 |
Appellate Authority, Palwal |
|
Rajasthan VAT |
VAT |
18.45 |
2014 - 15 |
Appellate Authority, Jaipur |
|
Delhi VAT |
VAT |
10.87 |
2012 - 13 |
Commissioner (VAT), Appeals, Delhi |
|
Punjab VAT |
VAT |
16.08 |
2012 - 13 |
DETC(Appeals) cum JD (Appeals) Patiala |
|
Punjab VAT |
VAT |
5.96 |
2012 - 13 |
DETC(Appeals) cum JD (Appeals) Patiala |
|
Punjab VAT |
VAT |
7.85 |
2016 - 17 |
AETC, Mobile Wing, Amritsar |
Note 1: The above amount exclude impact of amount paid under protest amounting to INR 72.74 lakhs.
viii. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institution, bank or debenture holders.
ix) In our opinion, according to the information explanation provided to us, money raised by way of term loans during the year have been applied for the purpose for which they were raised. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year.
x. During the course of our audit, examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees.
xi. 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.
xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, the provisions stated in paragraph 3(xii) of the Order are not applicable to the Company.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with 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.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has made preferential allotment of shares during the year under the âEmployee Stock Option Plan 2014â. Further, the Company has not made any private placement of Shares or allotted any partly or fully convertible debenture during the year. Accordingly, requirements of Section 42 of the Act are not applicable to the Company.
xv. 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, provisions stated in paragraph 3(xv) of the Order are not applicable to the Company.
xvi. 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 stated in paragraph clause 3 (xvi) of the Order are not applicable to the Company.
For MSKA & Associates
Chartered Accountants
Firm Registration No. 105047W
Sd/
Amit Mitra
Partner
Membership No. 094518
Place : New Delhi
Date : May 28, 2018
Mar 31, 2017
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Kwality Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March 2017, 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 (herein after referred to as âstandalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013(âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs 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(âInd ASâ) specified under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
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 these standalone Ind AS financial statements are free from material misstatement
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate 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 standalone 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 these standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS specified under Section 133 of the Act, of the financial position of the Company as at 31st March 2017, and its profit including other comprehensive income, its cash flows and 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 Section 143(11) of the Act, we give in the âAnnexure-Aâa 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 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, the statement of profit and loss, the statement of cash flow and the statement of changes in equity dealt with by this report are in agreement with the books of accounts;
d) in our opinion, the aforesaid standalone Ind AS financial statements comply with Accounting Standards specified under Section 133 of the Act read with the relevant rule issued thereunder;
e) on the basis of the written representations received from the directors as on 31st March 2017 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section164(2) of the Act;
f) with respect to the adequacy of internal financial controls over financial reporting of the Company and operating effectiveness of such controls, refer to our separate report on âAnnexure Bâ and;
g) with respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements- refer Note 38 to the standalone Ind AS financial statements.
ii The Company has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long-term contracts including derivative contracts;
iii There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
h) The Company has made requisite disclosures in these standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016 and these are in accordance with the books of accounts maintained by the Company, refer Note 43 to the standalone Ind AS financial statement.
The Annexure referred to in Independent Auditorâs Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31st March 2017, we report that:
(i) (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 during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.
(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 all the immovable properties are held in the name of the Company.
(ii) In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies between physical inventory and book records were noticed have been properly dealt with in the books of account.
(iii) The Company has not granted any loan, secured or unsecured to companies, firms, Limited Liability Partnerships (LLPs) or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 (âthe Actâ).
(iv) In our opinion and according to the information and explanation given to us, the provisions of Sections 185 and 186 of the Act in respect of loans, investments, guarantees and security is not applicable to the Company under review.
(v) In our opinion, the Company has not accepted any deposits within the mean of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2014 prescribed by the Central Government under section 148 of the Act and are of the opinion that prima facie the prescribed cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii) In Respect to Statutory Dues:
(a) According to the records examined by us, the Company is generally regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues with appropriate authorities, except undisputed amount of Income Tax Liability of Rs. 4334.06 lacs (previous year Rs. 4163.12 lacs) outstanding as at the last day of the financial year for a period exceeding six months from the date it became payable.
(b) According to the information and explanation given to us, there are no dues of income tax, service tax, custom duty, excise duty which have not been deposited with the appropriate authorities on account of any dispute except as under.
Name of the statute |
Nature of dues |
Amount unpaid (Rs in lacs) |
Period to which the amount relates |
Forum where dispute is pending |
Haryana Livestock Development Board, Gurgaon. |
Milk Cess |
208.87 (187.65 deposited against 396.52 under protest) |
2002-2017 |
Supreme Court of India |
Haryana Livestock Development Board, Gurgaon. |
Interest on Milk Cess |
2552.95 |
2002-2017 |
Supreme Court of India |
Uttar Pradesh VAT |
VAT |
16.13(24.30 deposited against 40.43 under protest) |
2012-2015 |
Additional Commissioner (Appeal), Ghaziabad, UP |
Kerala VAT |
VAT |
1.40 |
2013-14 |
High Court (Kerala) |
(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution or a bank or government or any dues to debenture-holders during the year under review.
(ix) The Company did not raise monies by way of initial public offer or further public offer (including debt instruments). The monies raised by way of term loans obtained during the year have been utilized by the Company for the purpose they have been raised.
(x) According to the information and explanation given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year covered by our audit.
(xi) According to the information and explanation given to us and based on our examination of the records of the Company, the managerial remuneration paid by the Company during the year is in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion and according to information and explanations given to us, the Company is not a Nidhi Company. Accordingly, provisions of clause 3(xii) of the Order are not applicable.
(xiii) According to the information and explanation given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the financial statements etc., as required by the applicable Ind AS.
(xiv) During the year, the Company has made preferential allotment of shares and compulsory convertible debentures. In respect of the same, in our opinion, the Company has complied with the requirement of Section 42 of the Act and the Rules framed thereunder. Further, in our opinion, the amounts so raised have been used for the purposes for which the funds were raised.
(xv) According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act. Accordingly, provisions of clause 3(xv) of the Order are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For P.P. Mukerjee & Associates
Chartered Accountants
Firmâs Registration No.: 023276N
sd/-
P.P. Mukerjee
Proprietor
Membership Number: 089854
Place: New Delhi
Date: 26 May 2017
Mar 31, 2016
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of M/s Kwality Limited, which comprise the Balance Sheet as at March 31, 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 STANDALONE FINANCIAL STATEMENTS
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section133 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 Actor safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016 and its profit and its cash flows for the year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
a. We have sought & 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 aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. on the basis of the written representations received from the directors as on March 31, 2016 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.
f. with respect to the adequacy of the internal financial controls over financial reporting of the Company and 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 has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 26.1 to the financial statements.
(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and as required on long-term contracts including derivative contracts.
(iii) There is no amount due to be transferred to the Investor Education and Protection Fund by the Company.
I. In respect of Fixed Assets :
1. a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.
1. b The company has a regular programme of physical verification of its fixed assets in a phased manner. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancy was noticed on such verification.
1. c According to the information and explanations given to us and on the basis of our examination of the records of the Company, all the title deeds are held in the name of the company.
2. The physical verification of the inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed during physical verification.
3. The Company has not granted any loan to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (''the Act'') .
4. In our opinion and according to the information and explanations given to us, the provisions of section 185 and 186 of the Companies Act, 2013 is not applicable to the Company during the year under review.
Nature of Statute |
Nature of Dues |
Amount unpaid (''In Lacs) |
Year to which the amount relates |
Forum where litigation is pending |
Haryana Livestock Development Board, Gurgaon |
Milk Cess |
202.12 (169.09 deposited against 371.21 under protest) |
2002-2016 |
Supreme Court Of India |
---Do-- |
Interest on Milk Cess |
1970.45 |
2002-2016 |
Supreme Court of India |
Punjab VAT Act |
VAT |
22.04 |
2013-2014 |
Excise and Taxation Comm.(Appeal) |
Kerala VAT Act |
VAT |
1.40 |
2013-2014 |
High Court ( Kerala) |
UP VAT Act |
VAT |
42.93 |
2012-2015 |
Add. Comm. (Appeal) Ghaziabad, UP |
Rajasthan VAT Act |
VAT |
34.26 |
2015-2016 |
Commercial Taxation Officer (Jaipur) |
Haryana VAT Act. |
VAT |
12.00 |
2015-2016 |
Asstt. Commissioner (Haryana) |
5. The Company has not accepted any deposits from the public.
6. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records ) Rules , 2011 prescribed by the Central Government under Section 148 of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
7. In respect of Statutory dues :
7 a). According to the records of the Company examined by us, the Company has been generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Employees'' state insurance, Income tax, Sales tax, Service tax, Custom duty, Excise duty, Value added tax, Cess and other Statutory dues with appropriate authorities except an undisputed amount of Income Tax liability of ''4163.12 Lacs (Previous Year ''4763.33 Lacs) outstanding as at the last day of the financial year for a period exceeding six months from the date it became payable.
7 b). According to the records of the Company examined by us and according to the information and explanations given to us, there are no dues of income-tax, sales tax, service tax, custom duty, excise duty, value added tax which have not been deposited on account of any dispute, except as under:-
8. The company has not defaulted in repayment of loans or borrowing or other dues to any financial institution, bank, Government or debenture holder.
9. The company has not raised any money by initial public offer, further public offer or debt instrument during the year. The money raised by term loan has been applied for the purpose it has been raised.
10. According to the information and explanations given to us, no fraud by the company or on the company by any officer or employee 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 managerial remuneration paid during the year is in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
12. In our opinion and according to information and explanations given to us, the company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the order is not applicable.
13. According to the information and explanations given to us and based on our examination of the records, all transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 and the relevant details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
14. During the year under review the Company has made preferential allotment of shares in compliance to the requirement of section 42 of the Companies Act 2013, and the amount so raised have been used for the purpose for which the fund were raised.
15. According to the information and explanations given to us and based on our examination of the records, the company has not entered into any non-cash transaction with directors or any person connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.
16. The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (''the Act'')
We have audited the internal financial controls over financial reporting of Kwality Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
MANAGEMENT''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
AUDITORS'' RESPONSIBILITY
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were 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 auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 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.
For P. P. Mukerjee& Associates
Chartered Accountants
Firm''s Registration Number -023276N
Sd/-
P. P. Mukerjee
Place : New Delhi Proprietor
Date : 25th May, 2016 Membership Number 089854
Mar 31, 2012
We have audited the attached Balance Sheet of Kwality Dairy
(India)Limited , as at 31st March 2012 and also the related 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 ouraudit.
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, as amended
by the Companies (Auditor's report) amendment order 2004 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.
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 necessaryforthe purposes of
ouraudit;
(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 the 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.
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give the information
required by the Companies Act, 1956, and give a true and fair view in
conformity with the accounting principles generally accepted in India:
a) In the case of the BalanceSheet, of thestate of affairs of the
Company as at 31st March, 2012;
b) In the case of Statement of Profit and Loss of the Profit for
theyear 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 OF KWALITY DAIRY (INDIA) LIMITED FOR
THE YEAR ENDED 31ST MARCH 2012
1 In respect of Fixed Assets:
1a) The Company has generally maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
1b) All the assets have not been physically verified by the management
duringthe year but there is a regular programme of verification of its
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.
No material discrepancy was noticed on such verification.
1c) During the year, the Company has not disposed off a substantial
part of the fixed assets. Based on the information and explanation
given by the management and on the basis of audit procedures performed
by us, we are of the opinion that the sale of the fixed assets, if any,
has not affected the going concern status of the Company.
2 The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
2a) 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.
2b) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3 In respect of Loans, Secured or Unsecured, granted or taken by the
Company to/from companies, firms or other parties covered in register
maintained undersection 301of the Companies Act, 1956:
3a) The Company has given loans to its wholly owned subsidiary. In
respect of said loans the maximum amount outstanding at any time
duringthe year was Rs.56.34 Lacs and the year end balance is
Rs.56.34Lacs(lnterest free Loan).
3b) The Company has taken unsecured loans from one company covered in
the register maintained under section 301 of the Companies Act 1956.
The maximum amount outstanding at any time duringthe year was Rs.5800.00
lacs and year end balance of is Rs. 5800.00 lacs.
3c) The Company had taken interest free loans from the parties covered
in the register maintained under section 301 of the Companies Act,1956.
In our opinion and according to the information and explanation given
to us, the terms companies, firms or other parties listed in the
registers maintained under Section 301 of the Companies Act, 1956, are
not, prima facie, prejudicial to the interest of the Company.
3d) The Company is regular in repaying the principal amounts wherever
stipulated and has been regular in the payment of Interest wherever
agreed.
3e) There is no overdue amount of loans received from companies, firms
or other parties covered in the register maintained under Section 301
of the Companies Act, 1956.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory and fixed assets and for
the sale of goods and services. Duringthe course of our audit, we have
not observed any continuing failure to correct major weaknesses in the
internal control systems.
5 In respect of the contracts all arrangements referred to in Section
301of the Companies Act, 1956.
5a) Based on the audit procedures applied by us and accordingto the
information and explanations provided by the management, we are of the
opinion that the particulars of contracts or arrangements that need to
be entered into the register maintained unde Section 301 of the
Companies Act, 1956 have been so entered.
5b) According to information and explanations given to us, the
transactions made in pursuance of contracts/ arrangements entered in
the Register maintained under Section 301 of the Companies Act, 1956
and exceeding the value of Rs.5 Lac in respect of each party during the
year have been made at prices which appear reasonable as per
information available with the Company.
6 In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits covered by the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the Companies (Acceptance of Deposits)
Rules, 1975 and hence the provisions of clause 4 (vi) of the Companies
(Auditor's Report) Order, 2003 are not applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the cost records maintained by the company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209 (l)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained .We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
9 In respect of Statutory dues:
9a) Accordingto the records of the Company examined by us, the Company
has been generally regular in depositing with appropriate authorities
undisputed statutory dues including, investor educations protection
fund, employees' state insurance, sales tax ,Vat, wealth tax, service
tax, custom duty, excise duty, cess and other statutory dues with
appropriate authorities. There have been delays in depositing
undisputed Advance Income Tax and the amount outstanding as at the last
day of the financial year for a period exceeding six months from the
date they become payable, amounts to Rs.110.61 Lacs (previous year
Rs.591.88 Lacs). There were no duesduringtheyeartowards Investor
Education and Protection Fund and Excise Duty.
9b) Accordingto the records of the Company examined by us and
accordingto the information and explanations given to us, there are no
dues of income-tax, sales tax, wealth tax, service tax, custom duty,
excise duty and cess which have not been deposited on account of
anydispute, except
Nature of Nature of Amount Year to Forum Where
Statute dues unpaid which the pending
(Rs.in lacs) amount
relates
Haryana Milk cess 192.59 (79.22 2002-2009 Supreme Court
Livestock deposited
Development against 271.81
Board.Gurgaon under protest)
Sales Tax 48.61 1998-2008 Joint Excise &
Sales Tax/
Vat /Vat (including Taxation
Exemption 32.73 as Commissioner
contingent (Appeals),
interest Faridabad.
liability)
10. The company does not have accumulated losses at the end of the
financial year and it has not incurred any cash losses in the current
and immediately precedingf inancial year.
11. Based on our audit procedures and according to the information and
explanations given by the management, We are of the opinion that the
Company has not defaulted in repayment of dues to financial
institutions and banks. The Company has not issued any debentures.
12. As the Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other securities
the provisions of clause 4 (xii) of the Companies (Auditor's Report)
Order, 2003 are not applicable to the Comogj^^^Ã
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society, hence the provisions of clause 4 (xiii) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company
14. According to the information and explanation given to us , the
company is not dealing in or trading in shares, securities, debentures
and other investments. Accordingly the provisions of clause (xiv) of
paragraph 4 of the Companies (Auditor's Report) order2003 (asamended)
are not applicable to the Company.
15. According to the information and explanation given to us, the
Company has not given any guarantee for loans taken by others from
bankorfinancial institutions.
16. In our opinion and according to the information and explanations
furnished to us, the term loans have been applied for the purpose for
which they were obtained.
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
nof unds raised on short-term basis have been used for long-term
investment.
18. The Company has not made preferential allotment of shares to
parties and companies covered in the register maintained under Section
301ofthe Companies Act, 1956.
19. As the Company has not issued any debentures the provisions of
clause 4 (xix) of the Companies (Auditor's Report) Order, 2003 are not
applicable to the Company.
20. As the Company has not raised any money by public issue the
provisions relating to end use thereof as per clause 4 (xx) of the
Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
21. In our opinion and according to the information and explanation
given to us, no material fraud on or by the Company has been noticed or
reported duringthe year.
For P. P. Mukerjee & Associates
Chartered Accountants
Sd/-
Place : New Delhi P.P. Mukerjee
Date :14th August, 2012 Proprietor
Membership Number-089854
Firm Registration No:- 023276N
Mar 31, 2010
We have audited the attached Balance Sheet of Kwality Dairy
(India)Limited , as at 31st March, 2010 and also the Profit and Loss
Account 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,as amended
by the Companies (Auditors report) amendment Order 2004 issued by the
Central Government of India in terms of sub- section (4A) of Section
227 of the Companies Act, 1956, and on the basis of such checks of the
books and records as we considered appropriate and according to the
information and explanation given to us , we set out in the Annexure a
statement on the matters specified in Paragraphs 4 and 5 of the said
Order to the extent applicable to the Company.
Further to our comments in the Annexure referred to above, we report
that:
(i) We have obtained all the information and explanations, which to
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 and the 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 and the Profit and Loss Account
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;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010; and
b) in the case of the Profit and Loss Account of the Profit for the
year ended on that date.
c) In the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT OF KWALITY DAIRY (INDIA) LIMITED FOR
THE YEAR ENDED 31ST MARCH 2010
1.a) The Company has generally maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
1.b) All the assets have not been physically verified by the management
during the year but there is a regular programme of verification of its
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.
No material discrepancies were noticed on such verification.
1c) During the year, the Company has not disposed off a substantial
part of the fixed assets. Based on the information and explanation
given by the management and on the basis of audit procedures performed
by us, we are of the opinion that the sale of the fixed assets, if any,
has not affected the going concern status of the Company.
2 The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
2a) 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.
2b) On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3a) The Company has not granted loans, secured or unsecured , to
companies firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956.
3b) The Company has taken unsecured loans from two companies covered in
the register maintained under section 301 of the Companies Act 1956.
The maximum amount involved during the year and year end balances of
such loans aggregates to Rs. 4500.00 lacs. Besides the company has also
received amounts under current account from three companies covered in
the Register maintainer under section 301 of the Companies Act, 1956.
The maximum amount involved during the year Rs. 3387.80 Lacs and year end
balances of amount received from such companies were Rs. Nil.
3c) The Company had taken interest free loans from the parties covered
in the register maintained under section 301 of the Companies Act,1956.
In our opinion and according to the information and explanation given
to us, the terms and conditions on which above mentioned loans have
been taken from companies, firms or other parties listed in the
registers maintained under Section 301 of the Companies Act, 1956, are
not, prima facie, prejudicial to the interest of the Company.
3d) The Company is regular in repaying the principal amounts as
stipulated and has been regular in the payment of Interest wherever
agreed.
3e) There is no overdue amount of loans received from companies, firms
or other parties covered in the register maintained under Section 301
of the Companies Act, 1956.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory and fixed assets and for
the sale of goods and services. During the course of our audit, we have
not observed any continuing failure to correct major weaknesses in the
internal control systems.
5a) Based on the audit procedures applied by us and according to the
information and explanations provided by the management, we are of the
opinion that the particulars 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.
5b) 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, there are transactions referred to in above
(a) above did not exceed the value of Rupees Five Lac in respect of any
party during the year.
6 In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits covered by the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the Companies (Acceptance of Deposits)
Rules, 1975 and hence the provisions of clause 4 (vi) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business. We recommend the
enlargement of scope of work and frequency of internal audit of the
Company.
8. We have broadly reviewed the books of accounts maintained by the
company in respect of products where, pursuant to the Rules made by the
Central Government of India , the maintenance of cost records has been
prescribed under clause (d) of sub-section 209 of the Companies Act ,
1956 and are of opinion that prima facie, prescribed accounts and
records have been maintained. We have not, however carried out a
detailed examination of the same.
9a). According to the records of the Company examined by us, the
Company has been generally regular in depositing with appropriate
authorities undisputed statutory dues including, investor educations
protection fund, employees state insurance, sales tax ,Vat, wealth
tax, service tax, custom duty, excise duty, cess and other statutory
dues with appropriate authorities. There have been delays in depositing
undisputed Advance Income Tax and the amount outstanding as at the last
day of the financial year for a period exceeding six months from the
date they become payable , amounts to Rs. 467.65Lacs (prev year Rs. 206.38
Lacs) . There were no dues during the year towards Investor Education
and Protection Fund and Excise Duty.
9b). According to the records of the Company examined by us and
according to the information and explanations given to us, there are no
dues of income-tax, sales tax, wealth tax, service tax, custom duty,
excise duty and cess which have not been deposited on account of any
dispute, except
Nature of Statute Nature of dues Amount
unpaid Year to which Forum
Where
(Rs. in lakhs)the amount
relates pending
Haryana Livestock Milk cess 221.39 2002-2010 High Court
Development Board,
Gurgaon
10. The company has no accumulated losses at the end of the financial
year and it has not incurred any cash losses in the current and
immediately preceding financial year.
11. Based on our audit procedures and in our opinion and according to
the information and explanations given by the management, except for
some delays in few cases the Company has not defaulted in repayment of
dues to banks and financial institutions. The company has not issued
any debenture.
12 As the Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other securities
the provisions of clause 4 (xii) of the Companies (Auditors Report)
Order, 2003 are not applicable to the Company.
13 In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society, hence the provisions of clause 4 (xiii) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
14. According to the information and explanation given to us , the
company is not dealing in or trading in shares, securities, debentures
and other investments. Accordingly the provisions of clause (xiv) of
paragraph 4 of the Companies (Auditors Report) order 2003 ( as
amended) are not applicable to the Company.
15. According to the information and explanation 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
furnished to us, the term loans have been applied for the purpose for
which they were obtained.
17. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
18. The Company has not made preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956.
19. As the Company has not issued any debentures the provisions of
clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company.
20 As the Company has not raised any money by public issue the
provisions relating to end use thereof as per clause 4 (xx) of the
Companies (Auditors Report) Order, 2003 are not applicable to the
Company.
21. Based upon the audit procedures performed and according to the
information and explanations given by the management, we report that no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Place : Faridabad For & On Behalf of
Mukesh K Arora & Co.
Date : August 30, 2010 Chartered Accountants
Firms Registration No.016877N
P. P. Mukerjee
Partner
Membership Number: 089854