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Sathavahana Ispat Ltd.

BSE: 526093 Sector: Metals & Mining
NSE: SATHAISPAT ISIN Code: INE176C01016
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VOLUME 2000
52-Week high 10.41
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P/E
Mkt Cap.(Rs cr) 11
Buy Price 1.91
Buy Qty 100.00
Sell Price 2.10
Sell Qty 15000.00
OPEN 2.10
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VOLUME 2000
52-Week high 10.41
52-Week low 1.30
P/E
Mkt Cap.(Rs cr) 11
Buy Price 1.91
Buy Qty 100.00
Sell Price 2.10
Sell Qty 15000.00

Sathavahana Ispat Ltd. (SATHAISPAT) - Auditors Report

Company auditors report

To the Members of SATHAVAHANA ISPAT LIMITED

Report on the Audit of the Financial Statements Qualified Opinion

We have audited the accompanying financial statements of SATHAVAHANA ISPAT LIMITED("the Company") which comprise the Balance Sheet as at March 312019and theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion section below the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2019 and its loss totalcomprehensive loss its cash flows and the changes in equity for the year ended on thatdate.

Basis for Qualified Opinion

i. Note no. 36 to the Ind AS financial statements where in management has consideredoutstanding trade receivables Supplier advances capital advances and other financialassets of Rs.442713012/- Rs.44012281/- Rs 21530656/- and 32156145/-respectively for period more than one-year as good and fully recoverable as at the balancesheet date. For reasons stated in the aforesaid note and due to confirmations being notavailable and pending reconciliation adjustments we are unable to comment on therecoverability of these receivables advances and its consequential effect on thesefinancial statements.

This matter was also qualified in our report on the financial statements for the yearended March 31 2018.

ii. Substantial amount of statutory dues related to Income tax Employee's providentfund Employee state insurance act and professional tax amounting to Rs. 49045618/-have become overdue and remain unpaid interest penalty if any in respect of the same hasremained unascertained and unaccounted for.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibility for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our qualified opinion on the financial statements.

Material uncertainty related to Going Concern

We draw attention to Note 33 to the financial statements which indicates that theCompany has incurred a net loss of Rs. 2277776344/- during the year ended March 312019 and as of that date the Company's current liabilities exceeded its current assetsby Rs. 10232697002/-. These events or conditions along with other matters as set forthin Note 33 indicate that a material uncertainty exists that may cast significant doubt onthe Company's ability to continue as a going concern. However the IND AS financialstatements of the Company have been prepared on a going concern basis for the reasonsstated in the said Note.

Our opinion is not modified in respect of this matter.

Emphasis of Matters

i. We draw attention to Note no 38 included in Ind AS financial statements wherein thecompany had accounted Rs. 298397641/- as inventory loss identified based on thephysical verification process during the year end. Management identified the physicalinventory loss due to the reasons in the aforesaid note.

Our opinion is not modified in respect of this matter.

ii. We draw attention to Note no 13 (1) of Ind AS financial statements included inStatement of Financial Results where in company choose to classify the term loans as longterm and short term in accordance with the existing loan covenants until the revisedrestructure payment schedule finalised by consortium bankers as mentioned in note no 33.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matter described in the Basis for Qualified Opinion section and MaterialUncertainty Related to Going Concern section of our report we have determined the mattersdescribed below to be the key audit matters to be communicated in our report.

Sr.No. Key Audit Matter Auditor's Response
1 Impairment of Plant and Equipment: Principal audit procedures performed:
Refer to note no 33 of the IND AS financial statements Company operations at ferrous division have been impacted and the plant was under shut down since 12th June 2017. The operations of Metallurgical Coke facility and power generation is also partially operated. Our procedures included discussion with management and those charged with governance on the reasonableness of the assumptions along with performing the following procedures:
The company has plant and machinery with net book value of Rs.5937376909/- as at March 31 2019. (Refer note no: 3 of the IND AS financial statements) With challenging financial conditions continuing the Company's performance and prospects could be impacted increasing the risk that Plant and Equipment may impaired. • Reviewed the Techno economic Viability study report performed by the management expert appointed by the company's management and also reviewed the assumptions carried out in preparation of cash flow projections prepared and sensitive analysis for changes in assumptions used in cash flows .
For the Cash generating units that contain Financial constraints the determination of recoverable amount being the higher of fair value less costs to sell and value-in-use. (Impairment of Assets(Ind AS) 36). • Verified the Valuation certificates obtained by the company from two independent registered valuers for the entire Plant and machinery of the company.
• Management obtained the Valuation certificates from two independent registered valuers. And • We further challenged management regarding the appropriateness of the judgments/ assumptions w.r.t to timing of cash flows and discount rate applied.
• Management also carried out Techno economic Viability study of entire plant by appointing Independent technical experts. The study would be assessing the techno economic viability of the Project through a detailed techno financial analysis of the venture and evaluation of the constraints and future potential of the unit and assessing the technical commercial and financial viability study of the proposed Debt Restructuring proposal of the company. Based on the above procedures' management concluded no impairment of plant and machinery required.
These conclusions are dependent upon significant management judgements in respect of:
– Estimated resale values provided by an independent external valuer; and
– Estimated discount rates applied to future cash flows and on timing and approval of future capital by lenders.

Information Other than the Financial Statements and Auditor's Report Thereon

• The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Directors report including theannexures to directors' report Corporate governance and Management Discussion andanalysis (MD & A) but does not include the financial statements and our auditor'sreport thereon. The Directors report including the annexures to directors' reportCorporate governance and Management Discussion and analysis (MD & A) report isexpected to be made available to us after the date of this auditor's report.

• Our opinion on the financial statements does not cover the other information andwe do not and will not express any form of assurance conclusion thereon.

• In connection with our audit of the financial statements our responsibility isto read the other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.

• When we read the Directors report including the annexures to directors reportCorporate governance and Management Discussion and analysis (MD & A) if we concludethat there is a material misstatement therein we are required to communicate the matterto those charged with governance as required under SA 720 ‘The Auditor'sresponsibilities Relating to Other 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 Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance including othercomprehensive Loss cash flows and changes in equity of the Company in accordance with theInd AS and other accounting principles generally accepted in India. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 statement that givea true and fair view and are free from material misstatement whether due to fraud orerror. 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 Board ofDirectors either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. The Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditor's Responsibility for the Audit of the Financial Statements

• 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.

• As part of an audit in accordance with SAs we exercise professional judgmentand maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial control 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 the 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report that:

a. We have sought and except for the matter described in the Basis for QualifiedOpinion section above obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.

b. Except for the possible effects of the matters described in the Basis for QualifiedOpinion section above in our opinion proper books of account as required by law havebeen kept by the Company.

c. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d. Except for the possible effects of the matters described in the Basis for QualifiedOpinion section above in our opinion the aforesaid financial statements comply with theInd AS specified under Section 133 of the Act.

e. The matters described in the Basis for Qualified Opinion section above and Materialuncertainty related to Going Concern section above in our opinion may have an adverseeffect on the functioning of the Company.

f. On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.

g. The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion section above.

h. 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 qualified on the operatingeffectiveness of the Company's internal financial controls over financial reporting forthe reasons stated therein.

i. 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 as amended 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. (Refer Note No 29 to the financial statements)

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

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 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For MAJETI & CO
Chartered Accountants
Firm Registration Number: 015975S
Kiran Kumar Majeti
Place: Hyderabad Partner
Date: May 30 2019 Membership No.: 220354

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(h) under ‘Report on Other Legal and RegulatoryRequirements' 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 SATHAVAHANAISPAT LIMITED ("the Company") as of March 31 2019 in conjunction with our auditof the financial statements of the Company 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 Reportingissued by the Institute of Chartered Accountants of India". 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 Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand 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 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 qualified 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 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.

Basis for Qualified opinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified in the operating effectiveness of theCompany's internal financial controls over financial reporting as at March 31 2019: a.Refer note no 36 of the financial statements in respect of long outstanding overdue tradereceivables and advances whereby evidences of control over monitoring /assessingrecoverability of such over dues including assessment of provision of provision fordoubtful trade receivables and advances were not operating effectively. This couldpotentially result in the company not recognising a provision for doubtful/old overduetrade receivables. b. The Company's internal financial controls over monitoring thePhysical Inventories located at Factory and third-party locations are not operatingeffectively which could potentially result in loss of inventory which may not be timelydetected and may lead to material misstatements in the Company's financial statements. c.The Company's internal financial controls over updating the customers /vendors master datawith present addresses were not operating effectively. A ‘material weakness' is adeficiency or a combination of deficiencies in internal financial control over financialreporting such that there is a reasonable possibility that a material misstatement of thecompany's annual or interim financial statements will not be prevented or detected on atimely basis.

Qualified Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects maintained adequate internal financialcontrols over financial reporting as of March 31 2019 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India" and except for the possible effects of the material weaknessesdescribed in Basis for Qualified Opinion paragraph above on the achievement of theobjectives of the control criteria the Company's internal financial controls overfinancial reporting were operating effectively as of March 31 2019.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the financialstatements of the Company for the year ended March 31 2019 and these material weaknessesdo not affect our opinion on the said standalone Ind AS financial statements of theCompany.

For MAJETI & CO
Chartered Accountants
Firm Registration Number: 015975S
Kiran Kumar Majeti
Place: Hyderabad Partner
Date: May 30 2019 Membership No.: 220354

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

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

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

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items on rotation basis 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 has been physically verified by theManagement during the year and no material discrepancies have been noticed on suchverification.

(c) The title deeds of immovable properties as disclosed in Note 3 on Property Plantand Equipment to the financial statements are held in the name of the Company.

ii. The physical verification of inventory excluding stocks with third parties havebeen conducted at reasonable intervals by the Management during the year except orescoal & Coke which will be carried out only at year end. We were informed that physicalverification of the same was difficult due to its volume and loose nature. In respect ofinventory lying with third parties these have been confirmed by them except for Rs52243383/- for which we performed alternative testing procedures on sample basis byverifying subsequent good received notes. Discrepancies amounting to Rs. 298397641/-noticed on physical verification of inventory by Management as compared to book recordswere material and have been appropriately dealt with in the books of accounts. (Refer note38 to the financial statements).

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 Act. 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 The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186. Therefore theprovisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is not regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax Goods and Services Tax and cess and other material statutory dues as applicable withthe appropriate authorities. The extent of the arrears of statutory dues outstanding as atMarch 312019 are as follows:

Name of the statute Nature of dues Amount (Rs.) Period to which it relates Due date Date of Payment
Income Tax Act 1961 Tax Deducted at source 24513389 April 2018 to March 2019 on 7th day of next month Not Yet Paid
Income Tax Act 1961 Tax Collected at source 4399806 July 2017 to March 2019 on 7th day of next month Not Yet Paid
Employees' Provident Funds & Miscellaneous Provisions Act 1952 Provident Fund 16118130 September 2017 to March 2019 on 15th of next month Not Yet Paid
Employee state Insurance Act Employees State Insurance 2485163 April 2018 to March 2019 on 15th of next month Not Yet Paid
Andhra Pradesh Tax on Professions Trades Callings and Employments Act 1987 Professional Tax 974880 July 2017 to March 2019 on 10th of next Month Not Yet Paid
Karnataka Tax on Professions Trades Callings and Employments Act 1976 Professional Tax 393800 July 2017 to March 2019 on 10th of next Month Not Yet Paid
Telangana Tax on Profession Trades Callings and EmploymentAct 1987 Professional Tax 160450 July 2017 to March 2019 on 10th of next Month Not Yet Paid

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of service-tax value added tax which have notbeen deposited on account of any dispute. The particulars of dues of income tax salestax duty of excise duty of customs as at March 31 2019 which have not been depositedon account of a dispute are as follows:

Name of the statute Nature of dues Amount (Rs.) Period to which the amount relates Forum where the dispute is pending
Central Sales Tax 1956 Sales Tax 2329595 2005-06 Sales Tax Appellate Tribunal Hyderabad
Income Tax Act 1961 Interest on Dividend Distribution Tax 1379100 2009-10 Deputy Commissioner of Income Tax Hyderabad
Central Excise Act 1944 Excise duty and penalty 25399502 September 2011- March 2015 The commissioner of central excise and customs Belgaum
Customs Act 1962 Customs duty and penalty 104795907 2012-13 The Customs Excise and Service Tax Appellate Tribunal Hyderabad
Andhra Pradesh Value Added tax Act 2005 Penalty on Late Payment 447276 March 2017 to May 2017 High court of Andhra Pradesh Amaravati
Central Sales Tax 1956 Penalty on Late Payment 2004728 March 2017 to May 2017 High court of Andhra Pradesh Amaravati
Central Sales Tax 1956 Non-submission of C-Forms 5282708 2014-15 to 2015-16 Appeal Pending Before H'ble App. Dep. Commissioner (CT) Tirupathi
Andhra Pradesh Tax on Entry of Goods into Local Areas Act 2001 Dues of Entry Tax 446229 2014-15 to 2016-17 Appeal Pending Before H'ble App. Dep. Commissioner (CT) Tirupathi
The Karnataka Value Added Tax Act 2003 Excess availment of Input tax credit 648501 2012-13 Appeal Pending before JCCT/Davangere
Central Sales Tax 1956 Non- submission of C-Forms 388623 2011-12 Commercial Taxes Officer- Enforcement Bellary
The Karnataka Value Added Tax Act 2003 Excess availment of Input tax credit 2411901 2011-12 Appeal Pending before JCCT/Davangere

viii. According to the records of the Company examined by us and the information andexplanations given to us The Company has delayed in repayment of principle and interestas mentioned below for the period from March 2017 to March 2019 aggregating Rs.2933264028/-

Term Loans (Refer note 13 to the financial statements) Nature of dues Amount of default (Rs.) Period of default and remains unpaid as at balance sheet date
From Banks
Canara Bank Principal 509203487 59-730 Days
Canara Bank Interest 358914468 59-789 Days
State Bank of India Principal 429496471 1-731 Days
State Bank of India Interest 287402974 1-730 Days
Andhra Bank Principal 362643795 1-731 Days
Andhra Bank From Financial Institutions Interest 274450435 1-730 Days
Industrial Finance Corporation of India Principal 423368877 60-700 Days
Industrial Finance Corporation of India Interest 287783521 60-700 Days

 

Working capital Borrowings (Refer note 13 to the financial statements) Fund based limit (Sanctioned) (Rs.) Balance outstanding as at March 31 2019 (Rs.) Overdrawn balance* (Rs.)
From Canara Bank 264000000 2672111970 2408111970
From State Bank of India 402000000 2050179673 1648179673
From Andhra Bank 264000000 2168620619 1904620619
Total 930000000 6890912263 5960912263

*Overdrawn balance mainly on account of devolvement of letters of credit and interestaccrued there on. ix. The Company has not raised any moneys by way of initial publicoffer further public offer (including debt instruments) and term loans. Accordingly theprovisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

xi. The Company has paid/ provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

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. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (IND AS) 24 Related Party Disclosures specified under Section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.

xiv. The Company has not made any preferential allotment or 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 any 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 MAJETI & CO
Chartered Accountants
Firm Registration Number: 015975S
Kiran Kumar Majeti
Place: Hyderabad Partner
Date: May 30 2019 Membership No.: 220354