INDEPENDENT AUDITORS REPORT
To The Members of
ANDHRA CEMENTS LIMITED Report on the Financial Statements
We have audited the accompanying financial statements of ANDHRA CEMENTS LIMITED("the Company") which comprises the Balance sheet as at March 31 2016 theStatement of profit and loss and the cash flow statement for the nine months period endedMarch 31 2016 and a summary of significant accounting policies and other explanatoryinformation.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Companys Directors aswell as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2016 and its losses and its cash flows for the period ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2015 ("theOrder") issued by the Central Government of India in terms of section 143 (11) of theAct we give in the "Annexure-A" a statement on the matters specified inthe paragraph 3 and 4 of the Order.
2. 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 bestof our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.
c. The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this report are in agreement with the books of account.
d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e. On the basis of the written representations received from the directors as on March31 2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164 (2) of theAct.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and
g. With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of all pending litigations on its financialposition in its financial statements. (Refer Note-34 to the financial statements).
ii. The Company has made provision as required under the applicable law or accountingstandards. The company did not have any long- term contracts including derivativecontracts for which there were any material foreseeable losses. iii. According to theinformation and explanation given to us an amount of Rs. 102.15 Lakhs and Rs. 193.17Lakhs pertaining to unpaid matured
deposits and unpaid matured debenture respectively held with the banks are pending tobe transferred to the Investor Education and Protection Fund by the Company till March31 2016.
For CHATURVEDI & PARTNERS
Chartered Accountants Firm Registration No. 307068E
RAVINDRA NATH CHATURVEDI
New Delhi Partner May 29 2016 Membership No. 092087
"ANNEXURE- A" REFERRED IN INDEPENDENT AUDITORS REPORT OF EVEN DATE
The "Annexure-A" referred to in our Independent Auditors Report to themembers of the Company on the standalone financial statements for the period ended March31 2016 we report that: i. a. The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets. b. The fixedassets were physically verified during the year by the Management in accordance with aregular programme of verification which in our opinion is reasonable having regard tothe size of the company and nature of assets. According to the information andexplanations given to us no material discrepancies were noticed on such verification. c.According to information and explanation given to us the title deeds of the immovableproperty have been mortgaged with the banks/ Financial Institutions etc. for securing theborrowings and loan raised by the Company. On the basis of our examination of the recordsof the Company and copy of the title deeds of immovable properties the title deeds ofimmovable properties are held in the name of the Company. In respect of immovableproperties been taken on lease the lease agreements are in the name of the Company. ii.The inventories were physically verified by the management at reasonable intervals duringthe year. The discrepancies noticed on verification between physical stocks and bookrecords were not material and have been properly dealt with in the books of account. iii.According to the information and explanations given to us the Company has not granted anyloan secured or unsecured to companies firms limited liabilities partnership or otherparties covered in the register maintained under Section 189 of the Companies Act 2013.Accordingly paragraph 3
(iii)(a) (iii)(b) and (iii)(c) of the Order are not applicable to the Company. iv.According to the information and explanations given to us no loans investment guaranteeand security granted in respect of which section 185 and 186 of the Companies Act 2013 areapplicable. Accordingly paragraph 3(iv) of the Order is not applicable to the Company. v.In our opinion and according to the information and explanations given to us The Companyhas not accepted any deposits within the meaning of Section 73 to 76 of the Act and therules framed thereunder to the extent notified during the year. Further in respect ofdeposits accepted by the Company during an earlier year the Company Law Board (SouthernRegional Bench) has by its order dated July 07 2001 directed the company to repay thesaid deposits in accordance with the scheme sanctioned by the BIFR. However the BIFR inits Modified Rehabilitation Scheme dated July 21 2008 directed the fixed deposits holdersto accept the outstanding principal amount in four annual installments on interest freebasis. Further no other Order against the Company has been passed by the Company LawBoard or National Company Law Tribunal or Reserve Bank of India or any Court or any otherTribunal. In respect of these deposits the Company is yet to comply with the requirementof maintaining liquid assets and filing of Return of Deposit. vi. We have broadly reviewedthe cost records maintained by the Company pursuant to the Rules made by the CentralGovernment under Section 148(1) of the Companies Act 2013 and are of the opinion thatprima facie the prescribed account and records have been made and maintained. We havehowever not made a detailed examination of these records with the view to determiningwhether they are accurate or complete. vii. a. According to the information andexplanation given to us and on the basis of our examination of books of accounts theCompany has been generally regular in depositing undisputed statutory dues includingProvident Fund Employees State Insurance Income tax Sales tax Wealth taxService tax Duty of Customs Duty of excise Cess and other material statutory duesapplicable with the appropriate authorities. According to the information and explanationgiven to us no undisputed amount payable in respect of these and other material statutorydues applicable were in arrears as at March 31 2016 for a period of more than six monthsfrom the date they became payable. b. According to the information and explanation givento us particulars of dues outstanding in respect of Income tax Sales tax Service taxDuty of Customs Duty of excise or value added tax and other material statutory dueswhich have not been deposited as on March 31 2016 on account of disputes and given below:
|SL. No. ||Name of the Statute ||Nature of Dues ||Amount ( Rs. in lakhs) ||Period to which amount relates ||Forum where dispute is Pending |
|1 ||Central Excise ||Interest on duty demanded kept in ||71.11 ||2005-06 ||High Court |
| ||Act1944 ||abeyance pursuant to BIFR order || || || |
|2 ||Central Excise ||Central Excise duty ||10.61 ||2004-05 ||High Court |
| ||Act1944 || || || || |
| || ||Central Excise duty ||651.97 ||2006-12 ||CESTAT |
| || ||Central Excise duty ||371.50 ||2007-09 ||CESTAT |
| || ||Central Excise duty ||1.82 ||2010-11 ||CESTAT |
| || ||Central Excise duty ||11.08 ||2007-11 ||CESTAT |
| || ||Central Excise duty ||3.88 ||2009-10 ||CESTAT |
|3 ||Finance Act ||Service Tax ||1.74 ||2008-10 ||CESTAT |
| || ||Service Tax ||12.74 ||2007-10 ||CESTAT |
| || ||Service Tax ||298.64 ||2007-10 ||CESTAT |
|4 ||APGST Act/CST Act ||Sales Tax ||26.96 ||1995-96 ||High Court |
| || ||Sales Tax ||8.11 ||2001-02 ||Tribunal |
| || ||Sales Tax (CST) ||16.65 ||1991-92 ||Tribunal |
| || ||Sales Tax (CST) ||6.53 ||1992-93 ||Tribunal |
|5 ||Orissa Sales tax Act ||Sales Tax (ET) ||0.21 ||2000-01 ||Tribunal |
| || ||Sales Tax (ET) ||2.77 ||2003-04 ||Tribunal |
|6 ||Tamil Nadu Sales ||Sales Tax (CST) ||12.30 ||1988-89 ||Tribunal |
| ||Tax Act || || || || |
| || ||Sales Tax ||13.26 ||1991-92 ||Tribunal |
| || ||Sales Tax ||5.83 ||1992-93 ||Tribunal |
| || ||Sales Tax ||18.93 ||1996-97 ||Tribunal |
| || ||Sales Tax ||9.16 ||1988-89 ||Commissioner (Appeals) |
| || ||Sales Tax ||6.09 ||1989-90 ||Commissioner (Appeals) |
viii. According to the information and explanations given to us there are no loans orborrowings payable to the Government or debenture holders. The Company has defaulted inrepayment of dues to Bank and Financial Institution during the year. However the defaulthas been made good through rescheduling of loans before the end of the financial yearexcept payment of interest which are given as under:
|Bank/Financial Institution ||Amount of default (in Lakhs) ||Period of default |
|IDFC ||523.49 ||16-30 |
|HDFC ||637.77 ||1-91 |
|Karur Vasya Bank ||1.56 ||1 |
|Total ||1162.82 || |
ix. According to the information and explanations given to us The Company has notraised money by way of initial public offer or further public offer (including debtinstruments) during the year. The term loans have been applied by the Company during theyear for the purposes for which they were obtained. x. According to the information andexplanations given to us no fraud by the Company or any fraud on the Company by itsofficers or employees has been noticed or reported during the year. xi. According to theinformation and explanations given to us managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Act.
xii. According to the information and explanations given to us the Company is not aNidhi Company. Accordingly paragraph 3(xii) of the Order is not applicable to theCompany. xiii. According to the information and explanations given to us all transactionswith the related parties are in compliance with section 177 and 188 of Act whereapplicable and the details have been disclosed in the Financial Statements as required bythe applicable accounting standards. xiv. According to the information and explanationsgiven to us and based on our examination of the records of the Company the Company hasnot made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. xv. According to the information and explanationsgiven to us and based on our examination of the records of the Company the Company hasnot entered into non-cash transactions with directors or persons connected with him. xvi.According to information and explanations given to us the Company is not required to beregistered under section 45 IA of the Reserve Bank of India Act 1934. Accordinglyparagraph 3(xvi) of the Order is not applicable to the Company.
| ||For CHATURVEDI & PARTNERS |
| ||Chartered Accountants |
| ||Firm Registration No. 307068E |
| ||RAVINDRA NATH CHATURVEDI |
|New Delhi ||Partner |
|May 29 2016 ||Membership No. 092087 |
ANNEXURE - B TO THE AUDITORS REPORT
Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ANDHRACEMENTS LIMITED ("the Company") as of March 31 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompanys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For CHATURVEDI & PARTNERS |
| ||Chartered Accountants |
| ||Firm Registration No. 307068E |
| ||RAVINDRA NATH CHATURVEDI |
|New Delhi ||Partner |
|May 29 2016 ||Membership No. 092087 |