We have audited the accompanying standalone financial statements of The
KCP Limited, Chennai, which comprise the Balance sheet as at 31st
March, 2015, the Statement of Profit and Loss, the 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 with respect to the
preparation of these standalone financial statements that give a true
and fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting standards
specified under section 133 of Companies Act, 2013 read with Rule 7 of
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the company and
for preventing and detecting the frauds and other irregularities;
selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial 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.
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 Companies Act, the
accounting and auditing standards and matters which are required to be
included in the audit report under
the provisions of the Companies Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Companies 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 of error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of 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
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 Companies 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, 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 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
2) As required by Section 143(3) of the Companies Act, 2013 we report
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
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Repot are in agreement with the books
d) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the
Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules,
e) On the basis of written representations received from the directors
as on 31st March, 2015 taken on record by the Board of Directors, none
of the directors is disqualified as on 31st March, 2015 from being
appointed as a director in terms of Section 164(2) of the Companies
f) With respect to the other matters to be included in the Auditor''s
report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 27 to the
ii. The company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, if any,
on long term contracts and did not have derivative contracts - Refer
Note 48 to the financial statements;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Annexure to the Independent Auditor''s Report:
The Annexure referred to in Paragraph 1 under the heading of Report
on other Legal and Regulatory Requirements of our report of even
date, to the members of THE KCP LIMITED, CHENNAI for the year ended 31
March 2015. We report that :
1.1 The company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
1.2 The Fixed Assets are physically verified by the management
according to a phased program designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the company and the nature of its assets.
Pursuant to the program, a portion of the fixed assets has been
physically verified by the management during the year and no material
discrepancies have been noticed on such verification.
2.1 The inventory has been physically verified by the management at
reasonable intervals during the year under report. In our opinion, the
frequency of such verification is reasonable.
2.2 In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
2.3 On the basis of our examination of the inventory records, in our
opinion, the company is maintaining proper records of its inventory.
The discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3.1 The company has not granted any loans to companies, firms or other
parties covered in the register maintained under Section 189 of the
Companies Act 2013. Therefore the provisions of clause 3(iii), (iii)a,
and (iii) (b) of the said order are not applicable to the company.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the company and the nature of its business with regard
to purchases of inventory, fixed assets and with regard to the sale of
goods and services. 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. In our opinion the company has complied with the provisions of
section 73 to 76 and other applicable provisions of the Companies Act,
2013 and Companies (Acceptance of Deposits) Rules, 2014 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 73 to 76 of the Companies Act 2013.
6. 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 148 of the Companies Act,
2013 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.
7.1 According to the information and explanations given to us and the
basis of our examination of the records of the company, in our opinion,
the company is regular in depositing with the appropriate authorities,
the undisputed statutory dues including Provident Fund, Employees''
State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty
of Customs, duty of Excise, Value added tax, Cess and other material
statutory dues applicable to it.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Income Tax,
Sales Tax, Wealth Tax, Service Tax, duty of customs, value added tax,
cess and other material statutory dues were in arrears as at 31st March
2015 for a period of more than six months from the date they became
7.2 According to the information and explanations given to us, there
were no amounts of Sales Tax, duty of
Nature of dues Name of the statute Period
Excise duty and related The Central Excise Act, 1996-2013
Sales tax and related The AP Sales Tax Act, 1996-01
Sales tax and related The UP Sales Tax Act, 1988
Forest Permit Charges A.P Forest Produce 2010-15
transit Rules 1970
Royalty MMDR Act,1957 1986-87
Net Present Value of The Forest Conservation 2014-15
Safety Zone Area Act,1980
Income Tax The Income Tax Act 1961 2011-12
Nature of dues Amount in Rs Forum where the
dispute is pending
Excise duty and related demands 33,73,07,556 At various Appellate
Sales tax and related demands 80,99,276 Hon''ble AP High
Sales tax and related demands 19,97,469 Hon''ble Allahabad
Forest Permit Charges 2,09,57,218 Hon''ble AP High Court
Royalty 93,056 ADMG - Guntur
Net Present Value of Safety 17,87,100 DFO - Guntur
Income Tax 11,32,117 CIT (Appeals)
7.3 According to the information and explanations given to us, amounts
which were required to be transferred to the investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 and rules there under has been transferred to such
fund within time.
8. The company had no accumulated losses at the end of the financial
year, and it did not incur cash losses during the financial year
covered by our audit and in the immediately preceding financial year.
9. According to the records of the company examined by us, and the
information and explanations given to us, there were no defaults in
repayment of dues to financial institutions, banks or debenture holders
at the date of the Balance Sheet.
10. In our opinion, and according to the information and the
explanations given to us, the company has not given any guarantee for
loans taken by others from banks or financial institutions during the
year under report.
11. In our opinion, and according to the information and explanations
given to us, the term loans taken by the company have been applied for
the purpose for which they were raised.
12. During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
audited practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the company, noticed or reported during the
year, nor have we been informed of any such case by the management.
Customs, duty of Excise, 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,
Date: 18th May, 2015
For BRAHMAYYA & CO
Firm Regd No 000513S
T. V. Ramana
(ICAI Memb. No. 200523)