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Kavveri Telecom Products Ltd.

BSE: 590041 Sector: Telecom
NSE: KAVVERITEL ISIN Code: INE641C01019
BSE 00:00 | 14 Dec 9.44 0.52
(5.83%)
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9.20

HIGH

9.90

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8.25

NSE 00:00 | 14 Dec 9.05 0.15
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HIGH

9.60

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OPEN 9.20
PREVIOUS CLOSE 8.92
VOLUME 7997
52-Week high 15.05
52-Week low 6.76
P/E
Mkt Cap.(Rs cr) 19
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 9.20
CLOSE 8.92
VOLUME 7997
52-Week high 15.05
52-Week low 6.76
P/E
Mkt Cap.(Rs cr) 19
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kavveri Telecom Products Ltd. (KAVVERITEL) - Auditors Report

Company auditors report

 

To the Members of

M/s Kavveri Telecom Products Limited

Report on theStandalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of M/sKavveri Telecom Products Limited ("the Company") which comprise the BalanceSheet as at March 31 2018 the Statement of Profit and Loss (including OtherComprehensive Income) the statement of Cash Flows and the statement of changes in equityfor the year then ended and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Ind AS 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 Ind AS Financial Statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the Indian Accounting Standards(Ind AS) specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended and other the accounting principles generally acceptedin India.

This responsibility includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the Standalone Ind ASFinancial 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 Ind AS FinancialStatements based on our audit. In conducting our Audit we have taken into account theprovisions of the Act the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rulesmade there under.

We conducted our audit of the Standalone Ind AS Financial Statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Standalone Ind AS Financial Statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Standalone Ind AS Financial Statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the Standalone Ind AS Financial Statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Standalone Ind AS Financial Statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the StandaloneInd AS Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the StandaloneInd AS Financial Statements:

Opinion:

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis Emphasis ofMatter Paragraph the aforesaid Standalone Ind AS Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31st March 2018 and its financial performanceincluding other comprehensive income its cash flows and changes in equity for the yearended on that date.

Emphasis of Matter Paragraph:

As per the Note no. 47 of the financial statements the company has defaulted inrepayment of Loans in principal and interests thereon to their respective Banks and thebanks have classified the loans as NPA (Non Performing Asset). The balance outstanding asat 31.03.2018 is Rs. 90.70 Crores. (Including Principle and Interest Provisions on theloans but excluding Penal Interest if any) and Interest Provision during the year made Rs.13.24 Crores have been Provided which is not paid by the company.

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 we give in the Annexure A a statement on the matters Specified in paragraphs 3and 4 of the Order.

2. As required by section 143(3) of the Act we further report that: a) wehave sought and obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;

c) The Balance Sheet Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and the statement of changes in equity dealt with bythis Report are in agreement with the books of account;

d) In our opinion the aforesaid Standalone Ind AS Financial Statements comply with theapplicable Accounting Standards specified under Section 133 of the Act read with relevantrule issued there under.

e) On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 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 other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

i. The Company has disclosed the pending litigations which would impact its financialposition in its notes to financial statements.

ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

iii. There are no amounts which were required to be transferred to the InvestorEducation and Protection Fund bythe company.

For P. Murali & Co.

Chartered Accountants

Firm Registration No: 007257S

Sd/-

P.Murali Mohana Rao

Partner

Membership No. 023412

Place: Hyderabad

Date: 30-05-2018.

Annexure A to the Auditors Report

Annexure referred to in Independent Auditors Report to the Members of M/s KAVVERITELECOM PRODUCTS LIMITED on the Standalone Ind AS Financial Statements for the year ended31stMarch 201 8 we report that:

 

i. (a) The Company has maintained 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 theManageme nt are adequate in relation to the size of the Company and the natureof it'sbusiness.

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 Companies Act 2013. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said order are not applicable to the company.

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. The Company has not accepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013 and rules framed there under to the extent notified.

vi. The maintenance of Cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly verified the cost recordsmaintained by the company and are of the opinion prima facie the prescribed costrecords have been made and maintained. We have however not made detailed examination ofthe cost records inthe view to determine whether they are accurate or complete.

vii. According to the information and explanations given to us and based on the recordsof the company examined by us in respect of the Statutory dues: a) The company isgenerally regular in depositing the undisputed statutory dues. However an amount of Rs.15692148 towards TDS relating to F.Y. 2012-13 to F.Y. 2016-17 were outstanding at theyearend from the date they became payable.

b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Custom Duty and other material statutory dues in arrears asat 31st March 2018 except TDS of an amount of Rs. 15692148 /- relating to F.Y. 2012-13to F.Y. 2016-17 is not paid for a period exceeding six months from the date which itbecamepayable.

c) According to the information and explanations given to us there are no dues ofIncome tax Sales tax duty of customs duty of excise which have not been deposited onaccount of any dispute except the following :

Direct Tax:

Name of the Statue Nature of Dues Amount in Rs. (Lakhs) Period to which amount Forum where dispute pending
Income Tax 1961 Income Tax 3564.66 A.Y 2011-12 Commissioner of Income Tax Appeals Bangalore
Income Tax 1961 Income Tax 4677.90 A.Y 2012-13 Commissioner of Income Tax Appeals Bangalore
Income Tax 1961 Income Tax 220.72 A.Y 2013-14 Commissioner of Income Tax Appeals Bangalore
Income Tax 1961 Income Tax 607.58 A.Y 2014-15 Commissioner of Income Tax Appeals Bangalore
Income Tax 1961 Income Tax 584.85 A.Y 2015-2016 Commissioner of Income Tax Appeals Bangalore

Indirect Tax:

Name of the Statute Nature of dues Amount Rs. Lakhs) Period in to which (In 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 availiment of Cenvat Credit( Including penalty) 33.2 2010- 2011 Commissioner of customs and central excise (Appeals) Bangalore
Central Excise Irregular availiment of Cenvat Credit(Including penalty) 1.27 2012- 2013 CESTAT Bangalore
Central Excise Irregular availiment of Cenvat Credit(Including penalty) 2.58 2007- 2008 Commissioner of customs and central excise (Appeals) Bangalore
Central Excise Irregular availiment of Cenvat Credit(Including penalty) 10.36 2007- 2008 & 2008- 2009 CESTAT Bangalore
Sales Tax Sales Tax Penalty and Interest 4.56 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)

viii. The company has defaulted in repayment of Loans in principal and intereststhereon to their respective Banks and the banks have classified the loans as NPA (NonPerforming Asset). The said bank loans as per the books of accounts outstanding balance asat 31.03.2018 is Rs. 90.70 Crores (Including Principal and Interest Provisions on theloans but excluding Penal Interest if any) and Interest Provision during the year made Rs.13.24 Crores have been Provided which is not paid by the company.

ix. The Company has not raised any moneys by way of initial public officer furtherpublic offer (including debt instruments) but raised a term loanfrom SBI and it wasutilize d for the purpose for which it was sanctioned.

x. According to the information and explanations given to us no material fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our Audit.

xi. According to information and explanations given to us and to the best of ourknowledge and belief managerial remuneration has not provided during the year.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it; the Provisions of clause 3(xii) of the order are not applicable to the company.xiii. As per Note no. 36 the Company has entered into transactions with related partiesin compliance with the provisions of section 188 of the Act. The details of such relatedparty transactions have been disclosed in the Ind AS Financial Statements as requiredunder Indian Accounting standard (Ind AS) 24 related party disclosures specified undersection 133 of the Act read with relevant rules issued thereunder.

xiv. The Company has not made any preferential allotment of private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of The ReserveBank of

India Act 1934. Accordingly the provisions of clause 3(xvi) of the order are notapplicable to the Company.

For P. Murali & Co.

Chartered Accountants

Firm Registration No: 007257S

Sd/-

P.Murali Mohana Rao

Partner

Membership No. 023412

Place: Hyderabad

Date: 30-05-2018.

Annexure B to the Independent Auditor's Report

Report on the Internal Financial Controls over Financial Reporting under clause (i) ofthe Sub-section 3 of the Section 143 of the Companies Act 2013 (‘The Act')

We have audited the internal financial controls over financial reporting of M/sKavveri Telecom Products Limited (‘the company') as of 31st march 2018in conjunction with our audit of IND AS Financial Statements of the company for the yearended 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's 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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an Audit of InternalFinancial Controls both applicable to an audit of Internal Financial Controls and bothissued by the ICAI. These standards and guidance note require that we comply with ethicalrequirements and plan and performed 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 Auditor's Judgment including the assessment of the risk ofmaterial misstatement of the IND AS 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 and the company's internal financial control 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 Ind AS Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes these policies and procedures that (1) pertain to themaintenance of records that in reasonable detailed 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 Ind ASFinancial Statements in accordance with generally accepted principles and that receiptsand expenditures are being made only in accordance with authorization of management anddirectors of the Company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition use or disposition of the Company's assetsthat could have a material effect on the Ind AS Financial Statements.

Inherent Limitation of Internal Financial Controls over Financial Reporting

Because of the inherent limitation 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 31st 2018based on the internal control over financial reporting criteria established by the companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute OfChartered Accountants of India.

For P. Murali & Co.

Chartered Accountants

Firm Registration No: 007257S

Sd/-

P.Murali Mohana Rao

Partner

Membership No. 023412

Place: Hyderabad

Date: 30-05-2018.