To the Members of Virat Crane Industries Limited
We have audited the accompanying financial statements of VIRAT CRANE INDUSTRIES LIMITED("the Company") which comprise the Balance Sheet as at 31 st March 2017 theStatement of Profit and Loss and Cash Flow Statement for the year then ended and a summaryof significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements: The Company's Board ofDirectors is responsible for the matters stated in Section 134(5) of the Companies Act2013 ("the Act") with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance and cashflows of the company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; 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 the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these
financial statements based on our audit. We have taken into account the provisions ofthe Act the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder.
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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments; the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
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 31st March2017 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to best ofour knowledge 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 it appears from our examination of those books;
c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;
d) In our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.
e) On the basis of written representations received from the directors as on 31st March2017 taken on record by the Board of Directors none of the directors is disqualified ason 31st March 2017 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"
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 has disclosed the impact of pending
litigations on its financial position in its financial statements-Refer Note: 1 (Noteson Accounts) to the financial statements.
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses. - Refer Note: 10 (Notes on Accounts) tothe financial statements.
iii. There were no amounts which are required to be transferred to Investor Educationand Protection Fund by the Company.
iv. The Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period 8th November 2016to 30th December 2016 and the same are in accordance with books of accounts maintained bythe Company.
ybr Nagaraju & Co.
Chartered Accountants FRN: 02271S
K. Nagaraju Proprietor M.No: 020474
Place: Guntur Date: 27.05.2017
Annexure "A" to the Auditor's Report dated May 27 2017 issued to the Membersof Virat Crane Industries Limited
As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of Sub-section (11) of section 143 of the Companies Act 2013(18 of 2013) and on the basis of such checks as we considered appropriate we furtherreport that:
i. a) The Company is maintaining 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 and no material discrepancies were noticed on such verification.
c) All the title deeds of immovable properties are held in the name of the company orin the name of Durga Dairy Ltd which is a merged entity.
ii. a) As explained to us inventories have been physically verified during the year bythe management at reasonable intervals.
b) No material discrepancy was noticed on physical verification of stocks by themanagement as compared to book records.
iii. a) The Company has granted loans to three bodies corporate listed in the registermaintained under section 189 of the Companies Act 2013 ("the Act").
b) The terms of arrangement does not stipulate any repayment schedule and the loans arerepayable on demand. The loans bear no interest. The loans to Virat Crane Agri TechLimited and to Virat Crane Bottling Limited are outstanding from a long time and noprovision has been considered by the management in the accounts.
|Nature of Transaction ||Party & Relation ||Max. Amount involved (Rs. In Lakhs) ||Closing Balance as on 31.03.2017 (Rs. In Lakhs) |
|Advance ||Virat Crane Agri Tech Limited ||631.57 ||631.57 |
|Advance ||Crane Infrastructure Limited ||161.44 ||149.02 |
|Advance ||Virat Crane Bottling Limited ||3.45 ||3.45 |
The above transactions are related by virtue of GVSL Kantha Rao being Director in theirrespective boards.
c) There are no overdue amounts in respect of the above loans granted to the bodiescorporate as there is no repayment schedule and bear no interest.
iv. According to the information and explanations given to us the Company has givenCorporate Guarantee to IDBI for the term loan of Rs. 10.00 Crores given to Virat CraneBottling Limited. However the loan by IDBI has been limited and taken only Rs. 5.00Crores.
v. The company has not accepted deposits from public within the meaning of sections 73to 76 or any other relevant provisions of the Companies Act 2013.
vi. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the goods produced by the Company.
vii. a) According to information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees'
State Insurance Income-tax Sales-tax Service Tax Cess to the extent applicable andany other material statutory dues have generally been regularly deposited with theappropriate authorities.
b) According to the information and explanations given to us and on the basis of thedocuments the disputed statutory dues which have not been deposited with the appropriateauthorities are as under:
Demands for which liability is not created
|Nature of the Statute ||Nature of the Dues ||Amount (Rs) ||Period to which the amount relates ||Review Status/Position |
|1. Agricultural Market Committee Cess ||Cess ||1055689 ||1994-95 to 2000 ||Stay given by the Supreme Court. Case is pending. |
|2. Agricultural Market Committee Cess ||Cess ||10629410 ||2011-12 to 2015-16 ||Contested with Secretary AMC Vijayawada. Case is pending. |
|3.APVAT ||Commercial Tax Department ||7327091 ||2006-07 to 2011-12 ||Interim stay given by the AP High Court order dated 10.09.2014. Case has not yet come for hearing. |
|4. APGST ||Sales Tax Authority ||195000 ||1999 - 2000 ||The Sales Tax Appellate Tribunal has in their order dated 12.04.2013 has struck down the case allowed the appeal and remanded the case. |
|5. Luxury Tax ||Commercial Tax Department ||347484 ||2005 - 06 ||Pending with the AP High Court. In their order dated 24.06.2008 asked to deposit 50% of demand Rs.173742/- which has been deposited by the Company with CTO Guntur on 13.08.2008. |
viii. Based on our audit procedure and on the information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesduring the year to financial institutions and banks.
ix. The Company has not raised any Initial Public Offer or further public offer and notobtained any term loan.
x. Based upon the audit procedures performed and information and explanations given bythe management we report that we have not come across any instances of fraud by thecompany or any fraud on the company by its officers or employees that have been noticed orreported during the year nor have we been informed of such a case by management.
xi. Managerial remuneration has been paid or
provided in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Companies Act 2013.
xii. The Company is not a Chit Fund Company/or Nidhi/mutual benefit fund/society.
xiii. All transactions with the related parties are in compliance with sections 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Hence compliance to theprovision of section 42 of Companies Act 2013 is not applicable.
xv. The Company has not entered into noncash transactions covered by Section 192 ofCompanies Act2013 with directors or persons connected with him.
xvi. In our opinion the company is not required to be registered under section 45-IAof 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.
ybrNagaraju & Co.
Annexure - "B" to the Auditor's Report
Report on the Internal Financial Controls over Financial Reporting in terms of Clause(i) of Subsection 3 of Section 143 of the Companies Act 2013 ("the Act").
We have audited the Internal Financial Controls over financial reporting of Virat CraneIndustries Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of 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 Reporting(IFCOFR) issued 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.
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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of
Chartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 procedures selected depend on the
Auditor's judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Company's internal financial controls system 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 the company'sassets 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.
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 2017 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.
/or Nagaraju & Co.