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Radico Khaitan Ltd.

BSE: 532497 Sector: Consumer
NSE: RADICO ISIN Code: INE944F01028
BSE LIVE 15:40 | 18 Aug 166.05 -2.65
(-1.57%)
OPEN

165.35

HIGH

167.70

LOW

162.00

NSE 15:53 | 18 Aug 166.55 -2.15
(-1.27%)
OPEN

165.30

HIGH

167.90

LOW

162.25

OPEN 165.35
PREVIOUS CLOSE 168.70
VOLUME 128879
52-Week high 171.55
52-Week low 93.00
P/E 26.23
Mkt Cap.(Rs cr) 2,209
Buy Price 0.00
Buy Qty 0.00
Sell Price 165.95
Sell Qty 24.00
OPEN 165.35
CLOSE 168.70
VOLUME 128879
52-Week high 171.55
52-Week low 93.00
P/E 26.23
Mkt Cap.(Rs cr) 2,209
Buy Price 0.00
Buy Qty 0.00
Sell Price 165.95
Sell Qty 24.00

Radico Khaitan Ltd. (RADICO) - Auditors Report

Company auditors report

TO THE MEMBERS OF RADICO KHAITAN LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of RADICO KHAITAN LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2016 theStatement of Profit & Loss and the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the 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 financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the Accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

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 thereunder.

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 of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting principles used and the reasonableness of the accountingestimates made by the company's Directors as well as evaluating the overall presentationof 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.

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 and its profit 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 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us wegive in "Annexure A" a statement on the matters specified in the paragraphs 3and 4 of the said 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 the Statement of Profit and Loss and the Cash flow statementdealt with 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 written representations received from the directors as on 31st March2016 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31st March 2015 from being appointed as a director in terms of section 164(2) ofthe Act.

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";

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 knowledge and information and according to the explanations givento us and such checks as we considered necessary:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note 31(i) to 31(iv) to the financialstatements.

ii. There are no long-term contracts including derivative contracts requiringprovision for material foreseeable losses under the applicable law or accountingstandards.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company

For V. Sankar Aiyar & Co.
Chartered Accountants
(Firm Regn. No.: 109208W)
Place: New Delhi (M.S. BALACHANDRAN)
Dated: 10-May-2016 Partner
(M. No:024282)

Annexure-A referred to in the Independent Auditors' Report to the members of the RadicoKhaitan Limited on the financial statements for the year ended 31 March 2016.

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available informationread with our comment in (c) below.

(b) The Company has carried out physical verification of its assets in the major plantlocations situated at Rampur & Bazpur and also of the assets located at its DelhiOffice. We are informed that prima facie there are no major discrepancies. However thereconciliation process of the physically verified assets with SAP maintained fixed assetsregister is under process. Hence discrepancies if any will be adjusted in books oncesuch reconciliation is complete. We are informed that the physical verification of assetsat other locations would be carried out in the next financial year. The Company has drawnout a policy of verifying its fixed assets once in three years which in our opinion isreasonable in relation to the size of the Company.

(c) According to the information and explanations given to us and the records examinedby us we report that the title deeds comprising of the immovable properties of land andbuilding are held in the name of the Company. However the Company is in the process ofreconciling the land documents with financial records. Hence the discrepancies if anywould be ascertained on completion of the reconciliation.

(ii) On the basis of information and explanations obtained stocks of finished goodsand raw materials of the distillery / bottling units have been under physical check by theexcise department in coordination with the Company's supervisory staff at frequentintervals. Other stocks stores and spares at various locations have been physicallyverified by the management during the year. We are informed that no material discrepancywere noticed on such verification.

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Therefore the provisions of clause3(iii)(a)(b)&(c) of the Order are not applicable.

(iv) The Company has not given any loan or provided any guarantee or security toparties covered under section 185 of the Companies Act 2013. In respect of loansinvestments guarantees and security the Company has complied with the provisions ofsection 186 of the Companies Act 2013 except to the extent and for reasons explained innote no.45(e).

(v) The Company has not accepted deposits from the public within the meaning ofsections 73 or 76 of the Act and hence clause (v) of the Order is not applicable to theCompany.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto rules made under sub-section (1) of section 148 of the Act and are of the opinion thatprima facie the prescribed accounts and records have been maintained and the requiredstatements are in the process of compilation. We have not however made a detailedexamination of the records with a view to determine whether they are accurate or complete.

(vii) (a) According to the records of the Company the Company has been generallyregular in depositing undisputed statutory dues including Provident Fund employees' StateInsurance Income-tax Sales-tax Service tax duty of customs duty of excise valueadded tax cess and any other statutory dues with the appropriate authorities. There wereno arrears of undisputed statutory dues as at 31st March 2016 which were outstanding fora period of more than six months from the date they became payable.

(b) The disputed statutory dues of different years relating to income tax sales taxservice tax or duty of excise or value added tax or cess which have remained unpaid as on31st March 2016 for which appeals are pending as under:

Nature of the Dues Amount (Rs.lacs) Period to which the amount relates Forum where dispute is pending
Sales Tax / Entry Tax/ VAT 4.12 1998-99 & 1999-00 Revision before Allahabad High Court
1.27 1999-00 Trade Tax Tribunal Moradabad
23.24 2012-13 2013-14 AP High Court
1863.50 2007-08 DVAT
Kerala Commercial Tax 84.13 2014-15 Kerala High Court
Excise Duty 17.37 1981 Allahabad High Court – Lucknow Bench
92.38 1995 to 2005 Allahabad High Court – Lucknow Bench (Bank Guarantee issued)
59.01 2005-06 to 2008-09 Allahabad High Court – Lucknow Bench
19.28 1997-98 High Court of Rajasthan
18.44 2014-15 High Court of Rajasthan
Custom duty 10.73 2015 Commissioner of Customs (Appeals)
Service Tax 15371.50 July 2003 to March 2012 (including interest and penalty) CESTAT Delhi

(viii) On the basis of the verification of records and information and explanationsgiven to us the Company has not defaulted in repayment of dues to financial institutionsor banks or debenture holders.

(ix) In our opinion and according to the information and explanations given to us theCompany has not taken any term loans during the year. The Company has not raised moneys byway of public offer (including debt instruments).

(x) Based on the audit procedures performed and representation obtained from themanagement we report that no case of material fraud on or by the Company has been noticedor reported during the year under audit.

(xi) The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

(xii) The Company is not a Nidhi Company. Therefore the provisions of clause 3(xii) ofthe Order are not applicable.

(xiii) In our opinion and according to the information and explanations given to usall the transactions with the related parties are in compliance with section 177 and 188of the Companies Act 2013 to the extent applicable and the details have been disclosed inthe Financial Statements as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Therefore the provisionsof clause 3(xiv) of the Order are not applicable.

(xv) According to the information and explanations given to us and the representationobtained from the management the Company has not entered into any non-cash transactionswith directors or persons connected with him. Therefore the provisions of clause 3(xv) ofthe Order are not applicable.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-I of the Reserve Bank of IndiaAct 1934..

For V. Sankar Aiyar & Co.
Chartered Accountants
(Firm Regn. No.: 109208W)
Place: New Delhi (M.S. BALACHANDRAN)
Dated: 10-May-2016 Partner
(M. No:024282)

Annexure-B referred to in the Independent Auditors' Report to the members of the RadicoKhaitan Limited on the financial statements for the year ended 31 March 2016.

We have audited the internal financial controls over financial reporting of the Companyas of March 31 2016 in conjunction with our audit of the financial statements of theCompany for the year 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 Reporting(the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding 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 Act.

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 and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand issued by ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 auditor's judgement 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 controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures 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 theCompany's 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.

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 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 issued by theICAI.

For V. Sankar Aiyar & Co.
Chartered Accountants
(Firm Regn. No.: 109208W)
Place: New Delhi (M.S. BALACHANDRAN)
Dated: 10-May-2016 Partner
(M. No:024282)