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Raghava Estates & Properties Ltd.

BSE: 531627 Sector: Infrastructure
NSE: N.A. ISIN Code: INE348J01016
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Raghava Estates & Properties Ltd. (RAGHAVAESTATES) - Auditors Report

Company auditors report

To

The members of

M/s Raghava Estates & Properties Limited Report on Financial Statements

We have audited the accompanying financial statements of Raghava Estates &Properties Limited (‘the Company’) which comprise the Balance Sheet as atMarch 31 2016 the Statement of Profit and 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 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 as applicable. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of these financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditors’ Responsibility

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 thereunder and the Order under Section 143(11) ofthe Act.

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 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 financial statements.

Opinion

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 March312016 and its profit/ loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. 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 relating to preparationof financial statements have been kept by the Company so far as it appears from ourexamination 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 maintained for thepurpose of preparation of these financial statements.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act as applicable.

(e) On the basis of the written representations received from the Directors as on March312016 taken on record by the Board of Directors none of the Directors is disqualifiedas on March 312016 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 A’. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.

(g) With respect to the other matters to be included in the Independent Auditors’Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

ii) The Company has made provision in its financial statements as required under theapplicable law or accounting standards for material foreseeable losses on long termcontracts including derivative contracts;

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

2. As required by the Companies (Auditor’s Report) Order 2016 (‘theOrder’) issued by the Central Government in terms of Section 143(11) of the Act wegive in ‘Annexure B’ a statement on the matters specified in paragraphs 3 and 4of the Order.

for SURESH AND BABU
Chartered Accountants
Firm
Reg.No.004254S
Place : Vijayawada
Date : 30th May 2016 (K.Purnachander Rao)
Partner
M.No.226295

ANNEXURE ‘A’ TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (‘the Act’)

We have audited the internal financial controls over financial reporting of RaghavaEstates & Properties Limited (‘the Company’) as of March 312016 inconjunction with our audit of the financial statements of the Company for the year endedand as 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 (the ‘Guidance Note’).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to 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 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 Standards on Auditing prescribed under Section 143(10) of the Act and theGuidance Note to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with the ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 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 controlsover 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 312016 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note.

for SURESH AND BABU
Chartered Accountants
Place : Vijayawada Firm Reg.No.004254S
Date : 30th May 2016 Sd/-
(K.Purnachander Rao)
Partner
M.No.226295

ANNEXURE ‘B’ TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date)

Report on Companies (Auditor’s Report) Order 2016 (‘the Order’) issuedby the Central Government in terms of Section 143(11) of the Companies Act 2013(‘the Act’) of Tata Consultancy Services Limited (‘the Company’)

i. In respect of the Company’s fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the conveyance deed provided to us we report thatthe title deeds comprising all the immovable properties of lands which are freehold areheld in the name of the Company as at the balance sheet date.

ii. The inventories of the company have been physically verified by the Managementduring the year at reasonable intervals. The Company has maintained proper records ofinventories and the discrepancies noticed on physical verification of stocks as comparedto book records which in our opinion were not material have been properly dealt with inthe books of account.

iii. The Company has not granted any loans secured or unsecured to companies firmsand limited liability partnerships or other parties covered in the register maintainedunder Section 189 of the Act.

iv. The provisions of paragraph 3(iv) of the Order are not applicable to the company asthe Company has not granted any loans as specified in Section 185 of the Act or has notmade any investments as specified in Section 186 of the Act.

v. In our opinion and according to the information and explanations given to us thecompany has received advances from several customers to the tune of Rs.1058.81 lakhs ofwhich an amount of Rs.475.45 lakhs were outstanding for a period of more than 365 days ason 31st March 2016 to such extent the company has not complied with theprovisions of Sections 73 to 76 or any other relevant provisions of the Companies Act2013 and Clause 2(c)(xii)(a) of the Companies (Acceptance of Deposits) Rules 2014 withregard to the advances received. According to the information and explanations given tous no Order has been passed by the Company Law Board or the National Company Law Tribunalor the Reserve Bank of India or any Court or any other Tribunal.

vi. Reporting under clause 3(vi) of the Order is not applicable as the Company’sbusiness activities are not covered by the Companies (Cost Records and Audit) Rules 2014.

vii. According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Income Tax Sales Tax and other material statutory dues applicable to it withthe appropriate authorities.

(b) According to the records of the Company and as per the information and explanationsgiven to us there are no dues of income tax duty of excise value added tax value addedtax or cess which has not been deposited on account of dispute as on 31 03 2016 exeentservice tax the details of which are as niven below:

Name of the Statute Nature of Dues

Amount (Rs)

Period to which the amount relates

Forum where dispute is pending

Finance Tax Act 1994 Service Tax on Construction of Residential Complex Service 1567840 2006-07 Appellate Tribunal Bengaluru
Finance Tax Act 1994 Service Tax on Construction of Residential Complex Service 171345 01.04.07 to 30.04.07 Appellate Tribunal Bengaluru
Finance Tax Act 1994 Service Tax on Construction of Residential Complex Service 3414656 01.05.07 to 31.03.08 Appellate Tribunal Bengaluru
Finance Tax Act 1994 Service Tax on Construction of Residential Complex Service 2981615 01.04.08 to 28.02.09 Appellate Tribunal Bengaluru
Finance Tax Act 1994 Service Tax on Construction of Residential Complex Service 102989 01.03.09 to 31.03.09 Appellate Tribunal Bengaluru
Finance Tax Act 1994 Service Tax on Construction of Residential Complex Service 972255 2009-10 Appellate Tribunal Bengaluru
Finance Tax Act 1994 Service Tax on Construction of Residential Complex Service 207231 01.04.10 to 30.06.10 Appellate Tribunal Bengaluru
Finance Tax Act 1994 Service Tax on Construction of Residential Complex Service 1085142 01.07.10 to 31.03. 11 Appellate Tribunal Bengaluru

viii. According to the information and explanations given to us the company defaultedin repayment of secured loan availed form Andhra Pradesh State Financial Corporation. Asper the repayment schedule the company is required to repay the availed loan amount ofRs.420 lakhs in 50 Equated Monthly Installments of Rs.9.20 lakhs each commencing fromJune 2008 ending on July 2012. However an amount Rs.154.56 lakhs was still outstandingas on 31st March 2016 which ought to have been paid before July 2012. Hencethere was delay of 44 months in repayment.

ix. In our opinion and according to the information and explanations given to us nofunds were raised by the company through issue of shares and term loans from banks and/orfinancial institutions during the year under review.

x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company and no fraud on the Company by its officers or employeeshas been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.

xiv. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.

xv. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3(xiv) of the Order is not applicable to the Company.

xvi. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its Directors and hence provisions of Section 192 of theAct are not applicable.

xvii. The Company is not required to be registered under Section 45-I of the ReserveBank of India Act 1934 and hence the clause is not applicable to the company.

for SURESH AND BABU
Chartered Accountants
Firm Reg.No.004254S
Place : Vijayawada Sd/-
Date : 30th May 2016 (K.Purnachander Rao)
Partner
M.No.226295