The Members of RAVI KUMAR DISTILLERIES LIMITED.
REPORT ON THE FINANCIAL STATEMENTS
1. We have audited the accompanying financial statements of 'RAVIKUMARDISTILLERIES LIMITED' ("the Company") which comprises the BalanceSheet as at March 31 2019 the Statement of Profit and Loss (including othercomprehensive income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us except for the indeterminate effects of the matters stated herein above inBasis of Qualified Opinion; the aforesaid 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 of the state of affairs of theCompany as at March 312019 its Profit total comprehensive income the changes in equityand its cash flows for the year ended on that date.
Basis of Qualified Opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on the financialstatements.
3.1 Your attention is invited to Note No. 4 'Advances to Suppliers' of Rs. 2900.25Lakhs; which have been classified as 'Other NonCurrent Assets'; the company has filedvarious cases against the parties and initiated action for recovery. Further 'Securitiesand Exchange Board of India' (SEBI) vide its Order dated 12-03-2019 directed the aboveparties to repay the amounts back to Company. We are unable to comment on reliability/recoverability of these debts and advances given and no provision for Expected Credit Lossas per Indian Accounting Standards (IND AS) for doubtful recovery of such advances isconsidered necessary by the company.
3.2 Your attention is invited to Note No. 3 Regarding 'Investment in Liquor IndiaLimited' and 'Advance received from 'Lemonade Shares & Securities Private Limited'(Refer Note No. 17) which is considered as disputed and no adjustment for sale thereofhave been incorporated in the financial statements by the Company. The sale agreemententered into with 'Lemonade Shares & Securities Private Limited' for sale of entireundertaking has been challenged and civil suit has been filed before Ilnd AdditionalDistrict Judge Ranga Reddy District L B Nagar Hyderabad with prayers inter-alia torescind the agreement as being void and restore the parties back to the position prior toMQU Dated 05-09-2012. The Company has also filed SLP in Supreme Court of India apart fromregistering various complaints with Police SEBI Enforcement Directorate. Management doesnot anticipate any liability on this account and accordingly the company has not providedfor diminution in value of Investments and not made provision for Expected Credit Loss inrespect of Loan to 'Liquor India Limited' during the Financial Year 2018-19. As the matteris sub-judice we are unable to comment whether any adjustments are needed for therecoverability of investments thereof. Accordingly impact on loss for the year andinvestments thereof if any is unascertainable.
3.3 Your attention is invited to Note No. 6 - In the absence of relevant informationregarding fair value of investments in respect of investment in shares of 'S.V.Distilleries Private Limited'of Rs. 247.79 Lacs as on 31st March 2019; we are unable tocomment on whether any provision for diminution in value of investments thereof isnecessary.
3.4 Note No. 7 regarding Confirmations not obtained as of March 31 2019 in respect ofcertain financial assets such as Sundry Debtors Sundry Creditors Tie Up Parties etc. andallowance for expected credit not recognized on these financial assets even thoughindications of increase in credit risks were observed. Consequential impact on financialresults is not ascertained by the Company.
Information other than the Financial Statements and Auditor's Report thereon
4. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon.
Our Opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusions thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Responsibility of Management and those charged with Governance for the StandaloneFinancial Statements
5. 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 (changes in equity)[iv] and cash flows of the Company inaccordance with the 2/6 accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
6. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
7. The Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
8. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
9. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
10. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
11. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
12. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal andRegulatory Requirements
13. 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 Companies Act 2013 we give in the Annexure-1 a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
14. Further to our comments in Annexure-1 as required by Section 143(3) of the Act wereport 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 accounts.
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 31 stMarch 2019 taken on record by the Board ofDirectorsnoneofthedirectorsisdisqualifiedason31stMarch 2019 from being appointed as adirector in terms of Section 164 (2) of the Act.
f) We have also audited the Internal Financial Controls over Financial Reporting(IFCoFR) of the Company as on 31st March 2019 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date and our report as perAnnexure-2 expressed an unmodified opinion.
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 as detailed in Note 39 to the financial statements has disclosed theimpact of pending litigations on its financial position as at 31 st March 2019.
ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii) Following are the instances of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
|Particulars ||Amount Rs. ||Due Date ||Delay in Days ||Remarks |
|Unpaid Dividend for Financial Year 2010-11 ||43987 ||10-10-2018 ||230 Days till the date of reporting ||Amount not yet paid till the date of reporting |
| ||For Ramanand & Associates |
| ||Chartered Accountants |
| ||FRN: 117776W |
| ||CA Ramanand Gupta |
|Place: Mumbai ||Partner |
|Date : 27.05.2019 ||Membership No: 103975 |
"Annexure-1" to the Independent Auditors' Report of even date to the membersof 'RAVI KUMAR DISTILLERIES LIMITED' on the financial statements for the year ended March31 2019
(Referred to in paragraph 14 under 'Report on other Legal and Regulatory Requirements'section of our report to the Members of even date)
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that :
(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us fixed assets have been physically verified by the Management atreasonable intervals. We have been informed that no material discrepancies were noticed onsuch physical verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.
(ii) In respect of inventories :
(a) As explained to us inventories have been physically verified during the year bythe Management at reasonable intervals. In our opinion having regard to the nature andlocation of stocks the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
(c) In our opinion and on the basis of our examination of the records the company isgenerally maintaining proper records of its inventories. No material discrepancy wasnoticed on physical verification of stocks by the management as compared to book records.
(iii) According to the information and explanations given to us and on the basis of ourexamination of the books of accounts the company has granted unsecured loans to partiescovered in the register maintained u/s 189 of the Companies Act 2013. Maximum amountoutstanding during the year ended 31st March 2019 was Rs. 4189 Lakhs theyear ended balance was Rs. 4184 Lakhs. (Previous Year Rs. 4184 Lakhs).
No interest has been charged on these loans on prudence basis. However in our opinionnon-charging of interest on loans & advances to parties covered in the register u/s189 of the Companies Act 2013 is prejudicial to the interest of the company as companyhas to bear the interest cost.
According to information provided to us there is no stipulation of time schedule forrepayment of principal and no interest has been charged on these loans on prudence basis.No steps have been taken by the company for recovery of these loans during theyear.
(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013In respect of grant of loans making investments and providing guarantees and securitiesas applicable.
(v) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
(vi) To the best of our knowledge and as per the information and explanations given tous the Central Government has not specified the maintenance of cost records undersub-section (1) of Section 148 of the Companies Act 2013 which are not applicable forproducts of the company.
(vii) (a) According to the records of the company the company is not regular indepositing the undisputed statutory dues relating to the contributions under ProvidentFund Act Employees State Insurance Act and the remittance in respect of TDS Income Taxwherever applicable to it with appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund EmployeesState Insurance Scheme Income Tax Service Tax Excise Duty Value Added Tax CentralSales Tax Cess and other material statutory dues in arrears as at 31st March 2019 forthe period of more than six months from the date they became payable except thefollowing amounts as mentioned in the table below :
|Particulars ||Amount |
| ||Rs. In Lakhs |
|Tax Collected at Source ||44.71 |
|Tax Deducted at Source ||7.99 |
|Service Tax ||3.22 |
|Employees State Insurance ||5.93 |
|Provident Fund ||44.99 |
|Total ||106.84 |
(c) Following are the instances of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
|Particulars ||Amount Rs. ||Due Date ||Delay in Days ||Remarks |
|Unpaid Dividend for Financial Year 2010-11 ||43987 ||10-10-2018 ||230 Daystillthe date of reporting ||Amount not yet p aid till the date of reporting |
(d) According to the information and explanations given to us and the records of thecompany examined by us there are no dues of income tax sales tax Wealth tax servicetax custom duty and excise duty which have not been deposited on account of any disputependingbefore any forum other than the following amounts:
|Name of the S tatute ||Fomm where the dispute is pending. ||Period to which the amount relates ||Amount (in Lakhs) |
|Kerala General Sales Tax Act ||High Court Kerala ||2001-2004 ||116.24 |
|Income Tax Act 1961 ||High Court Chennai ||2006-2007 AY 2007-08 ||238.20 |
|Income Tax Act 1961 ||High Court Chennai ||2009-2010 AY 2010-11 ||81.66 |
|Income Tax Act 1961 ||Commissioner of Income Tax (Appeals) Chennai ||2011-2012 AY 2012-13 ||1209.99 |
|Service Tax ||CESTAT ||April 2009 to June 2012 ||83.60 |
(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowings to afinancial institution or bank.
(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
(x) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of Companies Act 2013 where applicablefor all transaction with related parties and the details of related party transactionshave been disclosed in the financial statements as required by the applicable accountingstandards.
(xii) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
(xiii) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
(xiv) In our opinion the company is not required to be registered under section 45IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.
| ||For Ramanand & Associates |
| ||Chartered Accountants |
| ||FRN: 117776W |
|Place: Mumbai ||CA Ramanand Gupta |
|Date : 27.05.2019 ||Partner |
| ||Membership No: 103975 |
"Annexure-2" to the Independent Auditors' Report of even date to the membersof 'RAVI KUMAR DISTILLERIES LIMITED' on the financial statements for the year ended March31 2019
Referred to in paragraph 14(f) of the Independent Auditors' Report of even date to themembers of Ravi Kumar Distilleries Limited on the financial statements for the year endedMarch 31 2019
1. Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Act
We have audited the internal financial controls over financial reporting of Ravi KumarDistilleries Limited ("the Company") as of March 31 2019 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
2. 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.
3. 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 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. 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.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.
5. 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.
6. 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
7. 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 2019 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 Ramanand & Associates |
| ||Chartered Accountants |
| ||FRN: 117776W |
|Place: Mumbai ||CA Ramanand Gupta |
|Date : 2/.05.2019 ||Partner |
| ||Membership No: 1039/5 |