|We have audited the accompanying financial statements of KUWER
INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as
at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position, financial performance and cash
flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and 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 of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder. We conducted our
audit in accordance with the Standards on Auditing specified under
Section 143(10) of the Act. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement. An audit involves performing procedures to
obtain audit evidence about the amounts and the disclosures in the
financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers
internal financial control relevant to the Company's preparation of the
financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on whether the Company has in
place an adequate internal financial controls system over financial
reporting and the operating effectiveness of such controls. An audit
also includes evaluating the appropriateness of the accounting policies
used and the reasonableness of the accounting estimates made by the
Company's Directors, as well as evaluating the overall presentation of
the financial statements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit
opinion on the standalone financial statements.
Basis for Qualified Opinion
We are unable to give our comments on the amount given for purchase of
the property of Rs.129.39 lacs & corporate advance of Rs.27.34 lacs due
to lack of audit evidence.
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the basis for Qualified opinion paragraph, the aforesaid
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India, of the state of
affairs of the Company as at 31st March, 2015, and its profit/loss and
its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified 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 the best of 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 the Company so far as it appears from our examination of
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards 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 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
(f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i.) The Company have pending litigations with CBEC in Allahabad High
Court in respect of demand raised by Excise Dept. of Rs.114 lacs (For
the FY 2007-08) & 111 lacs (For the FY 2011-12), and with Income Tax
Dept. in CIT(Appeal) in respect of demand raised for AY 2011-12
amounting to Rs.43.72 lacs. The above said cases would impact the
financial position of the Company.
ii.) The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
iii.) There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Annexure to the Auditors' Report
The Annexure referred to in our report to the members of KUWER
INDUSTRIES LIMITED (the Company') for the year Ended on 31st March
2015. We report that:
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
(b) The Company has a regular programme of physical verification of its
fixed assets by which fixed assets are not physically verified by the
management during the year but there is a regular program of
verification which, in our opinion, is reasonable having regard to the
size of the company and the nature of its assets. No material
discrepancies were noticed on such verification.
(ii ) a) As per the information and explanations given to us, the
inventories have been physically verified by the management at
reasonable intervals during the year.
b) In our opinion and as per the information and explanations given to
us, procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
Company and nature of its business.
c) The Company is maintaining proper records of inventories. In our
opinion, discrepancies noticed on physical verification of inventory
were not material in relation to the operations of the Company and the
same have been properly dealt with in the books of account.
(iii) The Company has not granted any loans to any bodies corporate,
firm or other parties covered in the register maintained under section
189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of fixed assets and sale of Products. The activities of
the Company involve purchase of Raw Material, Manufacturing and the
sale of finished goods. We have not observed any major weakness in the
internal control system during the course of the audit.
(v) The Company has not accepted any deposits from the public.
(vi) As Per the guideline issued by Central Govt. the company is
required to maintain cost record under section 148(1), and shall submit
a dully certified report by cost accountant along with the annexure to
the Central Govt. We are of the opinion that prima facie the prescribed
cost records have been made and maintained. We have, however, not made
a detailed examination of these records with a view to determining
whether they are accurate or complete.
(vii) (a) According to information and explanations given to us and the
records examined by us, the Company has generally been regular in
depositing with appropriate authorities undisputed statutory dues
including provident fund, investor education and protection fund,
employees' state insurance, income tax, value added tax, wealth tax,
custom duty, excise duty, cess and other statutory dues wherever
(b) According to information and explanations given to us, no
undisputed arrears of statutory dues were outstanding as at March 31,
2015, for a period of more than six months from the date they became
payable expect Income Tax Demand for various years amounting to Rs.
(c) According to the records of the Company, there are no dues
outstanding in respect of income tax, UP-VAT, customs duty, wealth-tax,
service tax, excise-duty, cess, on account of any dispute. However
following amounts are involved with under-mentioned forums, in respect
of the disputed statutory dues: -
- The Company have pending litigations with CBEC in Allahabad High
Court in respect of demand raised by Excise Dept. of Rs.200.91/- lacs
(net), and with Income Tax Dept. in CIT(Appeal) in respect of demand
raised for AY 2011-12 amounting to Rs.43.72 lacs.
(viii) The Company have not accumulated losses less than 50% of its net
worth, at the end of the financial year and has not incurred cash
losses in the financial year and in the immediately preceding financial
(ix) The Company did not have any outstanding dues to financial
institutions, banks or debenture holders during the year.
(x) In our opinion and according to the information and the
explanations given to us, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xi) The Company has taken a term loans of Rs.9 lacs during the year
and utilised the Term loans against the Purpose for which they were
(xii) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
FOR PVSP & Co.
(FRN No. 008940N)
Place: New Delhi (Vinod Ralhan)
Date : 30-05-2015 (Partner)
(Membership No. 1503)