We have audited the accompanying financial statements of ''RAVIKUMAR
DISTILLERIES LIMITED'' (the Company); which comprise the Balance Sheet
as at 31st March, 2014, and the statement of Profit & Loss Account &
Cash flow Statement for the year ended, and a summary of significant
accounting policies and other explanatory information.
Management Responsibility for the Financial Statements
Management is responsible for 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 Standards referred to in sub -section (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 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 financial
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 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 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 control relevant to the
company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, 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.
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
amounts transferred to various parties post IPO, which have been
classified as ''Long Term Loans and Advances'' (Under Recovery
Proceedings); which might require adjustments in the financial
statements. Though the company has filed various cases against the
parties and initiated action for recovery, we are unable to comment on
realisabilityl recoverability of these debts and advances given and no
-provision for doubtful debts is considered necessary by the company.
The impact on the lossfor the year and current assets, if any, is
b. Reference is invited to Note No. 13 regarding ''Investment in Liquor
India Limited'' and ''Advance received from ''Lemonade Shares & Securities
Private Limited'' (Refer Note No. 10.1) which is considered as disputed
and no adjustment for sale thereofhave been incorporated in 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
Und Additional District Judge, Ranga Reddy District, L B Nagar,
Hyderabad, with prayers inter-alia to rescind the agreement as being
void and restore the parties back to the position prior to MOU Dated
05- 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 or the
recoverability of investment thereof. Accordingly, impact on lossfor
the year and Investments thereof, if any, is unascertainable.
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements, subject to our
observations noted in part (a) and (b) ''Emphasis of Matters'' Paragraph
above, 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 31,2014;
b) In the case of the Profit and Loss Account, of the loss for the year
ended on the date; and
c) In the case of the Cash Flow statement, of the cash flow 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 (the
Order) 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 specified 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
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
c) That Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representation received from the auditors as
on March 31,2014, and taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,2014, from being
appointed as a director in terms of clause (g) of section 274 of the
Companies Act, 1956.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules for cess payable by the
ANNEXURE TO THE AUDITORS'' REPORT
The Annexure referred to in paragraph 1 of our Report of even date to
the members of RAVIKUMAR DISTILLERIES LIMITED; on the accounts of
the company for the year ended March 31,2014.
i. In respect of its fixed assets:
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 no
material discrepancies were noticed on such physical verification.
c. No substantial part of the fixed assets has been disposed off during
the year, which has bearing on the going concern status of the company.
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.
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 are reasonable and adequate in 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.
No material discrepancy was noticed on physical verification of stocks
by the management as compared to book records.
iii. a. 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 301 of the Companies Act, 1956. Maximum amount
outstanding during the year ended 31st March 2014 was Rs. 2613 Lacs and
the year ended balance was Rs. 2613 Lacs.
b. According to the information and explanations given to us and on the
basis of our examination of the books of accounts, the company has
taken interest free, unsecured loan from a director covered in the
register maintained under section 301 of the Companies Act 1956.
Maximum amount outstanding during the year ended 31st March 2014 was
Rs. 794 Lacs and the year ended balance was Rs. Nil.
c. According to information and explanations provided to us, the terms
and conditions of the said unsecured loans are prima facie not
prejudicial to the interest of the Company.
d. According to information provided to us there is no stipulation of
time schedule for repayment of principal and hence provision of clause
4(iii) (g) of the order is not applicable.
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
v. a. Based on the audit procedures applied by us and according to the
information and explanations provided by the management, the
particulars of contracts or arrangements referred to in section 301 of
the Act have been entered in the register required to be maintained
under that section.
b. In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements exceeding the value of Rupees Five Lakhs in respect of any
party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi. The Company has not accepted deposits from public within the
meaning of section 58-A or Section 58-AA of the Companies Act, 1956.
vii. In our opinion and according to the information and explanations
given to us the Company does not have an internal audit system
commensurate with the size and nature of its business.
viii. According to the information and explanations given to us, the
Central Government has prescribed maintenance of cost records under
Section 209 (1) (d) of the Companies Act, 1956 in terms of ''Cost
Accounting Record Rules, 2011'' 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.
ix. 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 wherever applicable to
it with appropriate authorities. The company is generally regular in
depositing statutory tax dues including Excise Duty Customs Duty and
other applicable dues with appropriate authorities.
There is no amount payable in respect of the above undisputed dues are
in arrears, as at 31st March, 2014 for the period of more than six
months from the date on which they become payable due.
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:
Sl Name of the Nature of Amount Perios to which Forum wherer the
.no Statute dues (in lakhs) the amount rela dispute is pendi
1 Pondicherry Turnover Tax 25.89 2002-2004 Appellate Assist
General Sales ant Assistant
Tax Act Commissioner
2 Pondicherry Turnover Tax 84.70 2004-2008 High Court,
General Sales Madras
3 Pondicherry Turnover Tax 27.04 1999-2002 High Court,
General Sales Madras
4 Kerala Turnover Tax & 84.92 2001-2004 High Court,
General Sales Interest the Madras
Tax Act reon
5 Income Tax Non Deduction 138.94 2009-2010 Commissioner
Act 1961 of Tax Deduc Tax(Appeals),
ted at Source Chennai
x. In our opinion, The Company has accumulated losses as at the end of
financial year. The Company has incurred cash loss of Rs. 531 Lacs
during the Financial Year 2013-2014. (Previous Year Rs. 132 Lacs).
xi. 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. 2,894.44 Lacs.
xii. In our opinion and according to the records of the Company, the
Company has not granted any loans & advances on the basis of security
by way of pledge of shares, debentures and other securities and hence
the provisions of clause 4(xii) of the Order are not applicable to the
xiii. The company is not a chit fund, nidhi, mutual benefit fund or a
society and clause 12 of the order is not applicable. Therefore the
provision of clause 4 (xiii) of the Companies (Auditor''s report) order,
2003 are not applicable to the company.
xiv. As the company is not dealing or trading in shares, securities,
debentures and other investments so clause (xiv) of the said order is
not applicable to the company.
xv. According to the information and explanations given to us, the
Company has given guarantee for loan taken by others from bank or
financial institutions, the terms of which are not prejudicial to the
interest of company.
xvi. In our Opinion & on the Basis of the Review of utilization of
funds pertaining to term loan & related information as made available
to us, the term loan taken by the company from Sundaram Finance
Limited, (Non Banking Financial Institution) of Rs. 70 Lacs for the
purpose of Machinery have been utilized for working capital purpose.
xvii. According to the information and explanations given to us, and on
the basis of an overall examination of the Balance Sheet and Cash Flow
Statement of the Company, we report that no funds raised on short-term
basis have been used for long term investment.
xviii. According to the information and explanation given to us, during
the year, the company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
section 301 of the Companies Act; hence question of issue price of
shares prejudicial to interest of the company does not arise.
xix. During the year covered by our audit report, the company has not
issued any Secured debentures. Hence the creation of security in
respect of debenture is not applicable.
xx. The Company has not made any invitation to public to subscribe to
share of the Company during the financial year 2013-2014.
xxi. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given to us, we report that no fraud
on or by the company has been noticed or reported during the course or
our audit during the year.
For Ramanand & Associates
Place: Mumbai CA Ramanand Gupta/ Partner
Date: May 29, 2014 Membership No: 103975