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Kavveri Telecom Products Ltd.

BSE: 590041 Sector: Telecom
NSE: KAVVERITEL ISIN Code: INE641C01019
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OPEN 9.55
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VOLUME 305
52-Week high 17.44
52-Week low 8.41
P/E
Mkt Cap.(Rs cr) 20
Buy Price 9.65
Buy Qty 100.00
Sell Price 10.13
Sell Qty 100.00
OPEN 9.55
CLOSE 10.20
VOLUME 305
52-Week high 17.44
52-Week low 8.41
P/E
Mkt Cap.(Rs cr) 20
Buy Price 9.65
Buy Qty 100.00
Sell Price 10.13
Sell Qty 100.00

Kavveri Telecom Products Ltd. (KAVVERITEL) - Auditors Report

Company auditors report

TO THE MEMBERS OF

KAVVERI TELECOM PRODUCTS LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of KAVVERI TELECOMPRODUCTS LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2016 Statement of Profit & Loss and the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting 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.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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 anddisclosures in the financial statements. The procedures selected depend on theauditor’s 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 Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 its loss and its 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 2016 (‘theorder’) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in the 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 it appears from our examination of those books.

(c) The Balance Sheet statement of Profit & Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respect to the adequacy of 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 Auditor’s 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 if any of pending litigations as at March312016 on its financial position in its standalone financial statements (Refer Note No.48)

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

ii. There are amounts which are required to be transferred to the Investor Educationand Protection Fund by the Company.

For P Murali & Co.

Chartered Accountants

Firm’s Regn No. 007257S

P. Murali Mohana Rao

Partner

Membership No. 023412

Place: Hyderabad

Date: 30/05/2016.

Annexure A to the Auditor’s Report

Annexure referred to in paragraph 1 of Our Report of even date to the members ofKAVVERI TELECOM PRODUCTS LIMITED on the accounts of the company for the year ended 31stMarch 2016 Under "Report on other Legal & Regulatory Requirements"

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets are verified by the Management according to a phased programmedesigned to cover all the items over a period of two years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Pursuantto the programme a portion of the fixed assets have been verified by the management duringthe year and no material discrepancies between the book records and the physical inventoryhas been noticed.

(c) According to the information and explanation given to us and to the best of ourknowledge and belief the title deeds of immovable properties are held in the name of theCompany.

ii. (a) The Inventory has been physically verified during the year by the Managementand in our opinion the frequency of verification is reasonable.

(b) In our opinion the procedures of the physical verification of inventory followedby the Management are reasonable and adequate in relation to the size of the Company andthe nature of its business.

(c) The Company is maintaining proper records of inventory and as explained to us nomaterial discrepancies were noticed on physical verification of stocks as compared to bookrecords.

iii. (a) During the year the Company has not granted loans to parties covered in theregister maintained under section 189 of the Companies Act 2013.However in the earlieryears the company has granted loans and advances to 9 companies covered in registermaintained under section 189 of the companies act 2013. The yearend balance outstanding isRs. 226575608/-.

(b) The above advances are unsecured and are repayable on demand.

(c) There is no overdue amount of advances from above companies since the same isrepayable on demand.

iv. In our opinion and according to the information and explanations given to us thecompany in respect of loans investments guarantees and security provisions of section185 and 186 of companies act 2013 has been complied with.

v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits within the meaning of section 73 to 76 or any otherrelevant provisions of the Companies Act2013 and the rules framed there under. vi. Wehave broadly verified the books of accounts and records maintained by the company relatingto the design development and manufacture of Radio Frequency products and antennae fortelecom defense and space applications pursuant to the order made by the CentralGovernment for maintenance of cost records under sub-section (1) of Section 148 of theAct 2013. vii.

(a) The Company is generally regular in depositing undisputed statutory dues with theappropriate authorities However an amount of Rs. 4896987/- and Rs. 15405721 towardsDDT and TDS respectively relating to F.Y 2010-11 for DDT and F.Y. 2012-13 to F.Y. 2015-16for TDS were outstanding at the yearend from the date they became payable.

(b) According to the information and explanations given to us and based on the recordsexamined by us amount outstanding towards income tax on account of dispute are;

Name of the Statute Nature of dues Amount in Rs. (In Lakhs) Period to which the amount relates Forum where dispute is pending
Central Excise Availment of Cenvat Credit (Including Penalty) 5424.26/- February 2007 to 2009 CESTAT Bangalore
Central Excise Irregular availment of Cenvat Credit( Including penalty) 33.2 2010-2011 Commissioner of customs and central excise (Appeals) Bangalore
Central Excise Irregular availment of Cenvat Credit(Including penalty) 1.27 2012-2013 CESTAT Bangalore
Central Excise Irregular availment of Cenvat Credit(Including penalty) 2.58 2007-2008 Commissioner of customs and central excise (Appeals) Bangalore
Central Excise Irregular availment of Cenvat Credit(Including penalty) 10.36 2007-2008 & 2008- 2009 CESTAT Bangalore
Sales Tax Sales Tax Penalty and Interest 497.46 2006-2007 Joint Commissioner of Commercial Tax (Appeal)
Sales Tax Sales tax Penalty and Interest 13.29 2007-2008 Joint Commissioner of Commercial Tax (Appeal)
Central Excise Irregular availment of Cenvat Credit( Including penalty) 33.2 2010-2011 A.Y. 2005-06 to Commissioner of customs and central excise (Appeals) Bangalore
Income Tax Act 1961 Income Tax 16942.67 A.Y. 2012-13 CIT(Appeals) Bangalore

viii. In our opinion and according to information and explanations given to us theCompany has defaulted in repayment of dues to banks. The Bank has transferred theiroutstanding dues to Asset Reconstruction Company for the purpose of recovery on 27th June2014. The Company has not issued any debentures.

ix. According to the information and explanations given to us the Company has notraised moneys by way of initial public offer or further public offer including debtinstruments and term loans. Accordingly the provisions of clause 3(ix) of the order arenot applicable to the company and hence not commented upon.

x. During the course of examination of books of accounts and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to information and explanations given to us we have neither come across anyinstance of material fraud on or by the company noticed or reported during the year norhave been informed of such cases by the management.

xi. According to information and explanations given to us and to the best of ourknowledge and belief no managerial remuneration has been paid/ provided during the year.Hence the provisions of Sec 197 of the Act are not applicable to the Company. Accordinglythis clause is not applicable.

xii. In our opinion and according to information and explanations given to us thecompany is not a Nidhi Company. Therefore the provisions of clause 3(xii) of the orderare not applicable to the company and hence not commented upon.

xiii. According to information and explanations given to us and to the best of ourknowledge and belief all the transactions with the related parties are in compliance withsection 177 and 188 of companies act 2013 wherever applicable and the details oftransactions with related parties have been disclosed in financial statements as requiredby the applicable accounting standards.

xiv. The company has not made any preferential allotment of private placement of sharesor fully or partly convertible debentures. Therefore the provisions of clause 3(xiv) ofthe order are not applicable to the company.

xv. According to information and explanations given to us and to the best of ourknowledge and belief the company has not entered into any non-cash transactions withdirectors or persons connected with the directors. Therefore the provisions of clause3(xv) of the order are not applicable to the company.

xvi. According to information and explanations given to us and to the best of ourknowledge and belief the company is not required to be register under section 45-IA ofReserve Bank of India Act 1934.

For P. Murali & Co.

Chartered Accountants

Firm Registration No 007257S

P Murali Mohana Rao

Partner

Membership .No. 023412

Place: Hyderabad

Date: 30/05/2016

Annexure B to the Auditor’s Report

"Annexure B" referred to in paragraph 2(f) under" Report on other legaland Regulatory Requirements" section of report on financial statements of even dateto the members of KAVVERI TELECOM PRODUCTS LIMITED on the financial statement for the yearended 31st march 2016.

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 (‘the Act’)

We have audited the internal financial controls over financial reporting of KAVVERITELECOM PRODUCTS LIMITED (‘the Company’) as of 31st March 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s 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 the Company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s 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 were 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 Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s 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 company’s 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 authorizations ofthe Management and directors of the Company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition use or dispositionof the Company’s assets that could have a material effect on the financialstatements.

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.

Opinion

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 31 March 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 P. Murali & Co.

Chartered Accountants

Firm Registration No 007257S

P Murali Mohana Rao

Partner

Membership No. 023412

Place: Hyderabad

Date: 30/05/2016.