| We have audited the accompanying financial statements of 'RAVI KUMAR
DISTILLERIES LIMITED'("the Company"), which comprise the Balance Sheet
as at March 31, 2015, 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.
2. 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 Companies (Accounts) Rules, 2014. This responsibility
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; design,
implementation and maintenance of adequate internal financial controls,
that are 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.
3. 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 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.
4. 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 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 accounting policies used and the reasonableness of
the accounting estimates made by the Company's management and Board of
Directors, as well as evaluating the overall presentation of the
financial statements.
5. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion. Emphasis of
Matters Without qualifying our opinion, we draw attention to the
following:
a. Reference is invited to Note No. 17 regarding pending confirmations
and reconciliations with sundry debtors and sundry creditors; Note No.
5.3 regarding balances of tie-up parties and Note No 14.1 regarding
advances to suppliers which might require adjustments in the financial
statements. Further, in case of' Advances to Suppliers' which have been
classified as' Long Term Advances'; though the company has filed
various cases against the parties and initiated action for recovery, we
are unable to comment on readability! recover ability of these debts
and advances given and no provision for doubtful debts is considered
necessary by the company. The impact on the loss for the year and
current assets ,if any, is unascertainable.
b. Reference is invited to Note No. 13 regarding 'Investment in Liquor
India Limited' and 'Advance received from 'Lemonade Shares & slrities
Private Limited' (Refer Note Ll01) which is considered as dispute dand
no adjustmm the financial statements by the Company. The sale agreement
entered into with 'Lemonade Shares & Securities Private Limited 'for
sale of entire undertaking has been challenged and civil suit has been
filed before End Additional District Judge, Ranga Reddy District, LB
Nag J, Hyderabad, with prayers inter-alia Rescind the agreement as
being dander store the parties act 09-2012. Management does not
anticipate any liability on this account. However, since the matter is
pending before court, we are unable to comment whether, any adjustments
are needed for the recoverability of investment thereof. Accordingly,
impact on loss for the year and Investments thereof if any' is
unascertainable.
c. The Company has not complied with the provisions of Section 203 of
the Companies Act, 2013 in respect of appointment of Chief Financial
Officer and Company Secretary.
6. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at 31st March 2015, its loss and its cash flows for the year ended on
that date
7. Report on Other Legal and Regulatory Requirements
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 Sectionl43 of the Act the Order.
8. 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 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 l33 of the
Act,read with Rule7 of the Companies(Accounts) Rules2014.
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 various pending litigations as referred to in Note
No. 40 and 41; which in our opinion 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 has not been an occasion in case of the Company during the
year under report to transfer any sums to the Investor Education and
Protection Fund. The question delay in transferring such sums does not
arise.
Annexure referred to in paragraph 7 Our Report of even date to the
members of Ravi Kumar Distilleries Limited on the accounts of the
company for the year ended 31st March, 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, were port that:
i. a. The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. As explained to us, fixed assets have been physically verified by
the Management at reasonable intervals. We have been informed that
nonmaterial discrepancies were noticed on such physical verification.
ii. In respect of its inventories:
a. As explained to us, inventories have been physically verified
during the year by the Management at reasonable intervals. In our
opinion, having regard to the nature and location of stocks, the
frequency of verification is reasonable.
b. In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management rereasonable and adequatein relation to the
size of the company and the nature of its business.
c. In our opinion and on the basis of our examination of the records,
the company is generally maintaining proper records of its inventories.
Nonmaterial is creamy was notice don physical verification of stocks by
the management as compared to book records.
iii. According to the information and explanations given to us and on
the basis of our examination of the books of accounts, the company has
granted unsecured loans to parties covered in the register maintained
u/s 189 of the Companies Act, 2013. Maximum amount outstanding during
the year ended 31st March 2015 was Rs 5028 Lacs and the year ended
balance was Rs. 5028 Lacs. (Previous Year Rs. 2,613 Lacs)
No interest has been charged on these loans on prudence basis. However,
in our opinion non-charging of interest on loans and advances to
parties covered in the register u/s 189 of the Companies Act, 2013 is
prejudicial to the interest of the company as company has to bear the
interest cost.
According to information provided to us, there is no stipulation of
time schedule for repayment of principal and no interest has been
charged on these loans on prudence basis. The company has taken
reasonable steps for recovery of these loans during the year.
iv. In our opinion and according to information and explanation given
to us, there are adequate internal control procedures commensurate with
the size of the company and nature of its business with regards to
purchase of inventory and fixed assets and for the sale of inventories.
During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control system of the
company
(v) The Company has not accepted any deposits from the public covered
under Section 73 to 76 of the Companies Act, 2013.
(vi) According to the information and explanations given to us, the
Central Government has prescribed maintenance of cost records under
sub-section (1) of Section 148 of the Companies Act, 2013 which are
applicable w.e.f. Financial Year 2011-2012 for products of the company.
We are prima facie of the opinion that, such records are not maintained
by the company.
vii. (a) According to the records of the company, the company is not
regular in depositing the undisputed statutory dues relating to the
contributions under Provident Fund Act, Employees State Insurance Act
and the remittance in Respect of TDS, Income Tax, Service Tax wherever
applicable to it with appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees State Insurance Scheme, Income Tax, Service Tax, Excise
Duty, Value Added Tax, Central Sales Tax, Cess and other material
statutory dues in arrears as at 31st March, 2015 for the period of more
than six months from the date they became payable, except for Provident
Fund dues amounting to Rs. 8.13 Lacs for the period from May 2014 to
August 2014.
(c) There has not been an occasion in case of the Company during the
year under report to transfer any sums to the Investor Education and
Protection Fund. The question of reporting delay in transferring such
sums does not arise as at 31st March, 2015.
(d) According to the information and explanations given to us and the
records of the company examined by us there are no dues of income tax,
sales tax, Wealth tax, service tax, custom duty, and excise duty which
have not been deposited on account of any dispute pending before any
forum other than the following amounts::
Name of the Statute Forum where the Period to which the Amount
dispute is pending. Amount relates (in Lakhs)
Kerala General
Sales Tax Act High Court, Kerala 2001-2004 116.24
income Tax
Act l961 ITAT Chennai 2006-2007
AY 2007-08 238.20
Income Tax
Act l961 ITAT Chennai 2009-2010
AY 2010-11 138.94
Income Tax
Act l961 Commissioner of
Income Tax 2010-2011
AY 2011-12 1,209.99
(Appeals),Chennai
(viii) In our opinion, the company has accumulated losses as at the end
of financial year. The Company has incurred cash loss of Rs. 543 Lacs
during the Financial Year 2014-2015. (Previous Year Rs. 531 Lacs). The
accumulated losses as at the end of the financial year are not less
then SO percent of its net worth;
(ix) Based on the audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that, the
company has defaulted in repayment of dues to financial institution or
bank to the tune of Rs 3,336 Lacs as on 31st March 2015. (Previous
Year Rs. 2,894 Lacs)
(x) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others from banks and financial institutions
are not, prima facie prejudicial to the interests of company.
(xi) In our opinion, and according to the information and explanations
given to us, the term loans have been applied by the company for the
purposes for which they were obtained.
(xii) During the course of our examination of the books and records of
the company, carried in accordance with the auditing standards
generally accepted in India, we have neither come across any instance
of fraud on or by the Company noticed or reported during the course of
our audit nor have we been informed of any such instance by the
Management
For Ramanandfe Associates
Chartered Accountants
FRN: 117776W
Place: Chennai CA Ramanand G t Partner
Date : 25.05.2015 Membership No: 103975 |