| We have audited the accompanying financial statements of M/s. Kavveri
Telecom Products Limited "the Company", which comprise the Balance
Sheet as at March 31, 2014, and 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.
Management's 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 notified under the Companies Act, 1956 ("the
Act") read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013. 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.
Auditor's Responsibility:
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 the 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.
Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, the 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:
(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 statement of Profit and Loss Account, of the
loss for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the 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, 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
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 Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards notified under
the Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013;
e) On the basis of written representations received from the directors
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 sub-section (1)
of section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS' REPORT
I. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of Fixed
Assets.
(b) As explained to us, the fixed assets have been physically verified
by the management at reasonable intervals and no material discrepancies
between the book records and the physical inventory have been noticed
on such verification.
(c) The Company has not disposed off substantial part of the Fixed
Assets during the year.
II. (a) The Inventory has been physically verified during the year by
the Management and in our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of the physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory and as
explained to us, no material discrepancies were noticed on physical verification of stocks as compared to book records.
III. (a) According to the information and explanations given to us the
company has made an advance of to the parties covered in the register maintained under section 301 of the Companies Act, 1956 and the year-
end balance of loans granted to such parties is Rs. 4.45 crores.
(b) As per the information given to us, rate of interest & other terms
and conditions on which loans have been granted to parties listed in
the register maintained under Section 301 are not prejudicial to the
interests of the Company.
(c) In respect of loans granted, repayment of principal amount is as
stipulated and payment of interest is regular.
(d) There is no overdue amount of loans granted to Companies, Firms and
other parties listed in the register U/S 301 of the Companies Act, 1956.
(e) The Company has taken unsecured loans from Parties covered in the
register maintained U/s.301 of the Companies Act, 1956 and the amount
outstanding at the yearend an amounting to Rs. 16.405 Crores.
(f) The rate of interest and other terms and conditions on which loans
have been taken from parties listed in the register maintained under
section 301 is not-prejudicial to the interest of company.
(g) The payment of principal & interest are in accordance with the
terms and conditions of such loans.
IV. In our opinion and according to the information and explanations
given to us, there are generally adequate internal control systems
commensurate with the size of the company and the nature of its
business with regard to purchase of inventory and fixed assets and for
sale of goods and services. There is no continuing failure by the
company to correct any major weaknesses in internal control.
V. (a) In our opinion and according to the information and explanation
given to us , the transactions made in pursuance of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 have
been entered in the register required to be maintained U/s.301 of the
Companies Act, 1956.
(b) According to the information and explanations given to us, the
transactions made in pursuance of contracts or arrangements entered in
the register maintained under section 301 of the Companies Act, 1956
and exceeding the value of rupees five lakhs in respect of any party
during the year have been made at the prices which are reasonable
having regard to prevailing market prices at the relevant time except
that reasonableness could not be ascertained where comparable
quotations are not available having regard to the specialized nature of
some of the transactions of the Company.
VI. The Company has not accepted any deposits from the public and hence
the applicability of the clause of directives issued by the Reserve
Bank of India and provisions of section 58A, 58AA or any other
relevant provisions of the Act and the rules framed there under does
not arise
VII. In our opinion, the company is having internal audit system,
commensurate with its size and nature of its business.
VIII. We have broadly verified the books of account and records
maintained by the Company pursuant to the order made by the Central
Government for the maintenance of cost records under section 209(1)(d)
of the Companies act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.
IX. (a) The Company is generally regular in depositing statutory dues
including PF, ESI, TDS, Professional Tax with the appropriate
authorities except in few cases where there was a delay in remitting
the statutory dues and at the end of financial year there were no
amounts outstanding which were due for more than 6 months from the date
they became payable.
(b) According to the information and explanations given to us, there
are no dues of Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty and Cess which have fallen due on before 31st March 2014 and not
been deposited with appropriate authorities on account of any dispute
except for the following:
Name of Nature of Dues Amount Period to
Statute Rs. In. which amount
Lakhs) relates
Central Excise A ailment of Cenvat 5424.26 February 2007
credit ( Including to 2009
penalty)
Forum where
Name of the statue dispute is pending
Central ExciseCESTAT Bangalore
However, the authorities have granted stay for the above, on
payment of Rs. 2.00 crores within specific period which has
been already paid.
Central Excise Irregular aviliment of 33.2 2010-2011
Cenvat Credit
(Including penalty)
Central Excise Irregular aviliment of 1.27 2012-2013
(Including penalty)
Central Excise Irregular aviliment of 2.58 2007-2008
Cenvat Credit
(Including - penalty)
Central Excise Irregular aviliment of 10.36 2007-2008 &
CenvatCredit 2008-2009
(Including penalty)
Sales Tax Rate of tax levied 44.37 2007-08 to
2009-10
Sales Tax Sales Tax, Penalty 497.46 2006-2007
and Interest
Sales Tax Sales tax, 13.29 2007-2008
Interest
Income Tax Net Tax Payable 10,379.12 01.04.2004 to
31.03.2011'
Central Excise Commissioner of customs and central excise
(Appeals) Bangalore
Central Excise CESTAT Bangalore
Central Excise Commissioner of customs and central excise
(Appeal Bangalore
Central Excise CESTAT Bangalore
Sales Tax Joint Commissioner of commercial taxes (Appeals)
Bangalore Joint Commissioner of Commercial Tax
(Appeal)
Sales Tax Joint Commissioner of Commercial Tax
(Appeal)
income tax Commissioner of Income Tax
Appeals -1, Bangalore
X. The Company has been registered for a period of not less than 5
years, and the company has no accumulated losses at the end of the
financial year and the company has incurred cash losses in this
financial year and in the immediately preceding financial year.
XI. According to information and explanations given to us, the company
has defaulted in repayment of cash credit and term loan to bank an
amount of Rs. 96.85 crores which includes outstanding interest.
XII. According to the information and explanations given 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 and hence
the applicability of the clause regarding maintenance of adequate
documents in respect of loans does not arise.
XIII. This clause is not applicable to this Company as the Company is
not covered by the provisions of special statute applicable to Chit
Fund in respect of Nidhi/Mutual Benefit Fund/Societies.
XIV. According to the information and explanations given to us, the
company is not dealing or trading in shares, securities, Debentures
and other investments and hence the provisions of clause 4(xiv) of
the Companies (Auditor's Report) Order 2003, are not applicable to
the Company.
XV. According to the information and explanations given to us, the
Company has given guarantee for loans taken from banks by a subsidiary
Company and prima facie, the terms and conditions on which such
guarantee have been given are not prejudicial to the interests of the
company.
XVI. According to the information and explanations given to us, the
Term Loans obtained by the company were applied for the purpose for
which such loans were obtained by the Company.
XVII. On the basis of our examination of the books & accounts and
according to the information and explanations given to us, in our
opinion the funds raised on short term basis have not been used for
Long term investment.
XVIII. According to the information and explanations given to us, 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, 1956 and hence the applicability of the clause
regarding the price at which shares have been issued and whether the
same is prejudicial to the interest of the Company does not arise.
XIX. According to the information and explanations given to us, the
company does not have any debentures and hence the applicability of the
clause regarding the creation of security or charge in respect of
debentures issued does not arise.
XX. According to information and explanations given to us, the company
has not raised money by way of public issues during the year; hence the
clause regarding the disclosure by the management on the end use of
money raised by public issue is not applicable.
XXI. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year under audit.
For P. Murali & Co.,
Chartered Accountants
Firm's Registration Number: 007257S Ý
P. Murali Mohana Rao -
Partner
Membership Number: 023412
Place: Hyderabad -
Date: 30-05-2014
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