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Ravi Kumar Distilleries | Auditor's Report > Breweries & Distilleries > Auditor's Report from Ravi Kumar Distilleries - BSE: 533294, NSE: RKDL
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Ravi Kumar Distilleries

BSE: 533294|NSE: RKDL|ISIN: INE722J01012|SECTOR: Breweries & Distilleries
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Auditor's Report (Ravi Kumar Distilleries) Year End : Mar '15
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
Source : Dion Global Solutions Limited
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