1. We have audited the attached Balance Sheet of SHRI. KESHAV CEMENTS
AND INFRA LIMITED. BELGAUM. [formally known as Katwa Udyog Limited] as
at 31st March 2008, Profit and Loss Account and also the Cash Flow
Statement for the year ended on that date annexed thereto. The Company
during the year has changed the name from Katwa Udyog Limited to Shri.
Keshav Cements and Infra Limited vide Registrar of Companies Bangalore
Certificate dated: 07-11-2007. The change in mane is intimated to all
the State & Central Government Departments and the change of name is
confirmed. The change of name is also intimated to BSE - Mumbai the
approval is under their consideration.
2. We conducted our audit in accordance with the 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 audi, provides a reasonable basis for
our opinion.
3. The Company during the year i.e., 22-05-2007 acquired the assets of
Shree Quality Cements Limited a sick unit located at S.No. 15 & 88 at
Village Naganapur, Post: Lokapur, Taluka: Mudhol Dist: Bagalkot in
public auction from IDBI and others Pune, through DRT Pune. The total
price consideration (bid price) was fixed for Rs. 11.30 crores. As per
the Orders of the DRT Pune, DRT Receiver handed over the possession of
movable and immovable properties on 22-05-2007 as is where is basis
along with lease hold rights. The Company took over the possession and
the required renovation work and up gradation work is under process, It
is separately shown under fixed assets schedule; hereinafter it will
known as Plant-II.
4. As required by the Companies [Auditors Report] Order, 2003 as
amended by the Companies (Auditors Report)(Amendment) Order, 2004(the
Order), issued by Central Government of India in terms of sub-section
(4A) of section 227 of the Companies Act, 1956, we annex hereto a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
5. Further, to our comments in the Annexure referred to in paragraph
(3) above, we report that:
i) 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;
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 the
books;,
iii) The Balance sheet, Profit and Loss Account and cash flow
statements dealt with by this report are in agreement with the books of
account;
iv) In our opinion, the Balance sheet, Profit and Loss Account 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 the written representation received from the
directors, as on 31st March 2008 and taken on record by the Board of
Directors, we report that none of the directors of the company are
disqualified as on 3 lst March 2008 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 read with significant
accounting policies and other notes thereon subject to note on accounts
No. v 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 Balance Sheet of the state of affairs of the Company
as at 31st March 2008;
b) in the case of the Profit and Loss Account, of the Profit for the
year ended on that date; and
c) In the case of cash flow statement, of cash flows for the year ended
on that date.
ANNEXURE TO THE AUDITORS.REPORT
Shri. Keshav Cements and Infra Limited [formally known as Katwa Udyog
Limited] Belgaum.
Referred to in paragraph 3 of our report of even date:
In respect of Fixed Assets:
i. a The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b. The Company has physically verified all the assets during the year
in accordance with programme of verification, which in our opinion
provides for physical verification of the Fixed Assets at reasonable
intervals. According to the information and explanations given to us no
material discrepaucies were noticed on such verification
c. In our opinion and according to the information and explanations
given to us, the Company has not made any substantial disposal of
assets during the year and therefore the going concern concept is not
affected.
d. In our opinion and according the information and explanation given
to us, the company has purchased additional machinery spares for
Plant-I amounting to Rs 6,27,90,557/- and deducted modvat credit of
Rs. 17,36,424/. Net amount of Rs. 6,10,54,133/- is shown under schedule
Fixed Assets Plant-I Capital Work in progress. Similarly Company has
purchased additional Plant & Machinery and spares for Plant-II
amounting to Rs. 6,48,79,891/- and deducted Modvat credit of Rs.
19,29.514/- and net amount of Rs. 6.29.50,377/- is shown under schedule
Fixed Assets Plant-II Capital Work in progress.
e. The Company has acquired the assets of Shree Quality Cements
Limited Naganapur a sick unit in public auction from IDBI Pune through,
DRT Pune. The DRT Receiver has handed over the possession of movable
and immovable assets on as is where is basis and the required
renovation and up gradation work is under process. The same shown under
fixed assets schedule as Plant-II.
In respect of Inventories:
ii. a. As explained to us the management during the year physically
verified the inventories. In our opinion, 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 were reasonable and adequate in relation to
the size of the company and in the nature of its business.
c. In our opinion and according to the information and explanations
given to us, the company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
iii a. As informed, the company has not granted any loans, secured or
unsecured to companies, firms, or parties, covered in the register;
maintained under section 301 of the companies Act 1956.
b. The company has taken unsecured loans from directors covered in the
register maintained under section 301 of the companies Act 1956. The
maximum amount involved during the year was Rs. 75651771 and year end
balance of such loan taken was Rs 34057100.
c. In our opinion, the rate of interest and other terms and conditions
under section 301 of the Companies Act 1956 are not prima facie,
prejudicial to the interest of the company.
d. The company is regular in repaying the principal amount as
stipulated and has been regular in the payment of interest.
e. The company has not given loans and advances in the nature of loans
to employees.
iv. , In our opinion and according to the information and explanations
given to us, there is adequate internal control systems commensurate
with the size of the company and the nature of its business with
regards to purchase of inventory, fixed assets and with regard to the
sale of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system.
v. a. According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into a
register in pursuanceof section 301 of the companies Act 1956 have been
so entered.
b. In our opinion and according to the information and explanations
given to us. The transactions made in pursuance of such contracts or
arrangements have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
vi. In our opinion and according to information and explanations given
to us, the company has accepted public deposit, and subject to belated
filing of statement in lieu of advertisement the company has complied
with the provisions of section 58A.58AA of the Companies Act, 1956 and
the Companies (Acceptance of the Deposit) Rules, 1975 with regard to
the deposit accepted from public. No order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other tribunal.
vii. In our opinion, the company has an internal audit system
commensurate with the size and nature of its business, but it needs to
be strengthened.
viii. It is reported by the management that the Company has appointed
qualified Cost Auditor and has maintained cost records as required u.s.
209(l)(d) of the Companies Act 1956. The Cost Auditor has issued a
certificate stating that the Company has complied with the requirements
as required u.s. 209(1) (d) of the Companies Act 1956.
iv. According to the records of the company, Provident Fund, Investors
Education and Protection Fund, Employees State Insurance, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Custom duty. Excise duty, Cess,
Fringe Benefit Tax and other material statutory dues applicable to it
have been generally regularly deposited during the year with the
appropriate authorities. According to the information and explanations
given to us, no undisputed amounts payable in respect of above were in
arrears, as at March 31, 2008 for a period of more than six months form
the date on which they became payable.
x According to the information and explanations given to us, there are
no dues of Income Tax, Sen ice Tax, Wealth Tax. Sales Tax, Custom
Duty, Excise Tax, and Cess Fringe Benefit Tax, which have not been
deposited on account of any dispute.
xi The company does not have accumulated losses at the end of the
financial year and had not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
xii In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
xiii , Based on our examination of the records and the information and
explanation given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
xiv. In our opinion, the company is not a chit fund or a nidhi /
mutual benefit fund / society Therefore, the provisions of clause 4 of
the order are not applicable to the Company.
xv. In our opinion, as per the information and explanations given to
us the company has not given any guarantee for the loans taken by
others.
xvi. In our opinion, the term loans have been applied for the purpose
which they were raised.
xvii. According to the cash flow statement and other records examined
by us and the information and explanations given to us, on an over all
basis, funds raised on short term basis have prima facie, not been used
during the year for a long term investment (fixed assets etc) other
than temporary deployment pending application.
xviii. According to the information and explanations given to us, the
company has not made any preferential allotments of shares to parties
and companies covered in the register maintained under section 301 of
the-Act.
xx According to the information and explanations given to us, during
the period covered by our audit report the company has not issued any
debentures.
xx. The Company has not raised any money by public issue during the
year.
xxl According to the information and explanation given to us, no fraud
on or by the company has been noticed during the course of our audit
Place: Belgaum C.A.PrabhakarK.Latkan
Dated: July 28,2008 Chartered Accountant
M.No. 200/21730
1083, Anantshayan Galli, Belgaum 590 002
