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« Mar 12
Auditor's Report (KCP) Year End : Mar '13
Report on the Financial Statements:
 
 We have audited the accompanying fi nancial statements of The KCP
 Limited, Chennai which comprise the Balance Sheet as at March 31, 2013,
 the Statement of Profi t and Loss and Cash Flow Statement for the year
 then ended, and a summary of signifi cant accounting policies and other
 explan- atory information.
 
 Management''s Responsibility for the Financial Statements:
 
 Management is responsible for the preparation of these fi nancial
 statements that give a true and fair view of the fi nancial position,
 fi nancial performance and cash fl ows of the Company in accordance
 with the Accounting Standards referred to in sub-sec- tion (3C) of
 section 211 of the Companies Act, 1956 (The Act). This responsibility
 includes the design, implementation and maintenance of internal control
 relevant to the preparation and presentation of the fi nancial
 statements that give a true and fair view and are free from material
 misstatement, whether due to fraud or error.
 
 Auditors'' Responsibility:
 
 Our responsibility is to express an opinion on these fi nancial
 statements based on our audit.  We conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountants of India. Those Standards require that we comply with
 ethical requirements and plan and perform the audit to obtain reason-
 able assurance about whether the fi nancial state- ments are free from
 material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and dis- closures in the fi nancial statements. The proce-
 dures selected depend on the auditor''s judgment, including the
 assessment of the risks of material misstatement of the fi nancial
 statements, whether due to fraud or error.
 
 In making those risk assessments, the auditor considers internal
 control relevant to the Company''s preparation and fair presentation of
 the fi nancial statements in order to design audit procedures that are
 appropriate in the circumstances. An audit also includes evaluating the
 appropriateness of accounting policies used and the reasonableness of
 the accounting estimates made by management, as well as evaluating the
 overall presentation of the fi nancial statements. We believe that the
 audit evi- dence we have obtained is suffi cient and appropri- ate to
 provide a basis for our audit opinion.
 
 Opinion:
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the fi nancial statements give the
 information required by the Act in the manner so required and give a
 true and fair view in conformity with the accounting principles
 generally accepted in India:
 
 a.  In the case of the Balance Sheet, of the state of affairs of the
 Company as at March 31, 2013;
 
 b.  In the case of the Statement of Profi t and Loss, of the profi t
 for the year ended on that date; and
 
 c.  In the case of the Cash Flow Statement, of the cash fl ows for the
 year ended on that date
 
 Report on Other Legal and Regulatory Requirements:
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 issued
 by the Central Government of India in terms of sub-section (4A) of
 section 227 of the Act, we give in the Annexure a statement on the
 matters specifi ed in paragraphs 4 and 5 of the Order.
 
 2.  As required by section 227(3) of the Act, we report that:
 
 a.  We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit;
 
 b.  In our opinion proper books of account as required by law have been
 kept by the Company so far as appears from our examination of those
 books ;
 
 c.  The Balance Sheet, Statement of Profi t and Loss and Cash Flow
 Statement dealt with by this Report are in agreement with the books of
 account;
 
 d.  In our opinion, the Balance Sheet, Statement of Profi t and Loss
 and Cash Flow Statement comply with the Accounting Standards referred
 to in subsection (3C) of section 211 of the Companies Act, 1956;
 
 e.  On the basis of written representations received from the directors
 as on March 31, 2013, and taken on record by the Board of Directors,
 none of the directors is disqualifi ed as on March 31, 2013, from being
 appointed as a director in terms of clause (g) of sub- section (1) of
 section 274 of the Companies Act, 1956.
 
 f.  Since the Central Government has not issued any notifi cation as to
 the rate at which the cess is to be paid under section 441 A of the
 Companies Act, 1956 nor has it issued any Rules under the said section,
 prescribing the manner in which such cess is to be paid, no cess is due
 and payable by the Company.
 
 Referred to in Paragraph 1 under the heading of Report on other Legal
 and Regulatory Requirements'' of our report of even date.
 
 1.1 According to the information and explanations furnished to us, the
 company has maintained proper records showing full particulars
 including quantitative details and situation of its fi xed assets.
 
 1.2 According to the information and explanations furnished to us, the
 company has physically verifi ed some of its fi xed assets during the
 year, in accordance with a phased programme of verifi cation, which, in
 our opinion, is reasonable, having regard to the size of the company
 and the nature of the assets. As per the said information and
 explanations, no material discrepancies were noticed on such verifi
 cation carried out during the year.
 
 1.3 According to the information and explanations furnished to us, the
 company has not disposed of a substantial part of its fi xed assets
 during the year.
 
 2.1 According to the information and explanations furnished to us, the
 company has physically verifi ed its inventories during the year. In
 our opinion, the frequency of such verifi cation is reasonable.
 
 2.2 In our opinion, the procedures of physical verifi cation of
 inventories followed by the management are reasonable and adequate in
 relation to the size of the company and the nature of its business.
 
 2.3 According to the information furnished to us, the company is
 maintaining proper records of its inventory and the discrepancies if
 any noticed on verifi cation between the physical stocks and the book
 records were not material, and have been properly dealt with in the
 books of accounts.
 
 3.1 According to the information and explanations furnished to us, the
 company has not granted any loans to companies, fi rms or other parties
 covered by the register maintained under Section 301 of the Companies
 Act 1956, at the beginning of the year or during the year, and
 consequently reporting under sub-clauses b, c and d of clause 4(iii) of
 the Order does not arise during the year.
 
 3.2 According to the information and explanations furnished to us, the
 company has, at the date of the Balance Sheet under report, taken loans
 aggregating to Rs.20,75,03,000 from three directors, Rs.6,85,00,000
 from two relatives of the director and Rs. 7,40,00,000 from a company,
 covered by the register maintained under Section 301 of the Companies
 Act 1956.
 
 3.3 In our opinion, the rate of interest and other terms and conditions
 on which loans have been taken by the company from companies, fi rms or
 other parties covered by the register maintained under section 301 of
 the Companies Act, 1956 are not, prima facie, prejudicial to the
 interest of the company.
 
 3.4 According to the information and explanations furnished to us, the
 company has been regular in repaying the principal and interest amounts
 as stipulated on the loans taken by it from the parties listed in the
 registers 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 purchases of inventory, fi xed assets and with
 regard to the sale of goods and services. Further, during the course of
 our audit, we have not come across any instances of major weaknesses in
 internal control that require correction and have so continued without
 correction.
 
 5.1 Based on the information and explanations given to us, we are of
 the opinion that the transactions that are required to be entered in
 the register maintained under section 301 of the Companies Act, 1956
 have been so entered.
 
 5.2 In our opinion and according to the information and explanations
 given to us, the transactions which have been entered into, pursuant to
 contracts that have been entered in the register maintained under
 Section 301 of the Companies Act 1956, have been made at prices which
 are reasonable having regard to prevailing market prices at the
 relevant time.
 
 6.  In our opinion and according to the information and explanations
 given to us, the company has complied with the provisions of section
 58A and 58AA and other applicable provisions of the Companies Act, 1956
 and Companies (Acceptance of Deposits) Rules, 1975 with regard to the
 deposits accepted from the public.  According to the information
 furnished to us, no Order has been passed on the company by the Company
 Law Board or National Company Law Tribunal or Reserve Bank of India or
 any Court or any other Tribunal for non-compliance with the provisions
 of Sections 58A and 58AA of the Companies Act 1956.
 
 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 books of account and records
 maintained by the company at its cement, engineering and electric power
 generation units pursuant to the Rules made by the Central Government
 for the maintenance of Cost Records under section 209 (1) (d) of the
 Companies Act, 1956 and we are of the opinion that prima facie the
 prescribed accounts and records have been made and maintained.
 However, we are not required to and have not carried out a detailed
 audit of the same.
 
 9.1 According to the information furnished to us, the company has
 generally been regular in depositing with the appropriate authorities,
 the undisputed statutory dues including Provident Fund, Investor
 Education Protection Fund, Employees'' State Insurance, Income Tax,
 Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and
 other material statutory dues applicable to it.
 
 9.2 There were no undisputed statutory dues mentioned in the preceding
 paragraph in arrears, as at the date of the Balance Sheet under report,
 for a period of more than six months from the date they became payable.
 
 9.3 According to the information furnished to us, there were no amounts
 of Sales Tax, Customs Duty, Excise Duty, Cess, Income Tax, Wealth Tax,
 Service Tax that have been disputed by the company, and hence, were not
 remitted to the concerned authorities at the date of the Balance Sheet
 under report, except
 
 1 Excise duty Central 101580392 Commissioner and related Excise Act of
 Appeals demands 1944
 
 2 Sales tax Sales tax Acts 3821040 Various and related of various
 appellate demands state Govts.  authorities
 
 3.  Forest Permit A.P. Forest 9520355 Hon''ble High
 
 Charges Produce Court
 
 Rules 1970
 
 10.  According to the information and explanations furnished to us by
 the company, it had no accumulated losses at the end of the fi nancial
 year, and it did not incur cash losses during the fi nancial year
 covered by our audit and in the immediately preceding fi nancial year.
 
 11.  In our opinion and according to the information and explanations
 furnished to us by the company, there were no defaults in repayment of
 dues to fi nancial institutions, banks or debenture holders at the date
 of the Balance Sheet.
 
 12.  According to the information furnished to us, the company has not
 granted any loans or advances on the basis of security by way of pledge
 of shares, debentures, and other securities.
 
 13.  In our opinion and according to the information and explanations
 furnished to us, the company is not a chit fund or a nidhi / mutual
 benefi t fund/ society and hence, the requirements of clause 4(xiii) of
 the Companies (Auditor''s Report) Order, 2003 are not applicable to the
 company during the year under report.
 
 14. According to the information furnished to us, the company is not
 dealing in or trading in shares, securities, debentures and other
 investments.  Accordingly, the requirements of clause 4(xiv) of the
 Companies (Auditor''s Report) Order, 2003 are not applicable to the
 company.
 
 15. In our opinion, and according to the information furnished to us,
 there are guarantees to the extent of Rs. 1,02,00,000/- outstanding as
 at the year end that are given by the company for loans taken by two
 parties from a bank.
 
 16. In our opinion, and according to the information and explanations
 furnished to us, the term loans taken by the company have been applied
 for the purpose for which they were raised.
 
 17. According to the information and explanations given to us and on an
 overall examination of the Balance Sheet of the company, we report that
 funds raised on short-term basis have not been used for long-term
 investment.
 
 18. According to the information and explanations furnished to us, the
 company has not made any preferential allotment of shares during the
 year to parties and companies covered in the register maintained under
 section 301 of the Act.
 
 19. According to the information and explanations given to us, the
 company has not issued any debentures during the year under report.
 
 20. The company has not raised any moneys through public issue of its
 securities during the year, and the question of end use of such moneys
 does not arise during the year.
 
 21. According to the information and explanations furnished to us, and
 based on the audit procedures generally adopted by us, we report that,
 during the year, no fraud on or by the company has been noticed or
 reported that is either signifi cant or could have caused a material
 misstatement in the fi nancial statements.
 
                                   For BRAHMAYYA & CO
 
                                   Chartered Accountants
                                   Firm Regd No 000513S
 
 Place: Chennai                    T. V. Ramana
 
                                   Partner 
 
 Date: 17th May, 2013             (ICAI Memb. No. 200523)
Source : Dion Global Solutions Limited
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