| 1. | We have audited the attached Balance Sheet of Kesoram Industries Limited (the "Company") as at 31st March, 2012, and the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit. | |
| 2. | We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. | |
| 3. | As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of subsection (4A) of Section 227 of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order. | |
| 4. | We draw your attention to | |
| (a) | Note 31 to the financial statements, regarding legal proceedings initiated by the Company in the month of July 2011 against an erstwhile Whole time Director and certain other persons (the "accused parties") in relation to certain transactions in one of the units of the Company that were allegedly authorised and executed by/ in favour of the accused parties to the detriment of the Company's interests during the period from May, 2008 to June, 2011, which are being investigated by the Management. Pending completion of the Management's investigation, any adjustments and related disclosures that may be required to the financial statements could not be determined; | |
| (b) | Note 24 to the financial statements, in relation to the recognition of Rs. 18.14 crore towards compensation from insurance company towards loss of certain items of inventory and fixed assets due to flood during the year, in spite of the awaited approval of the insurance claim and uncertainties as to the amount that may be approved by the insurance company; which does not meet the requirement to consider prudence in selection of accounting policies, as set out in Accounting Standard 1 – "Disclosure of Accounting Policies". Had the aforesaid insurance claim not been recognised, Other income would have been Rs. 77.08 crore instead of the reported amount of Rs. 84.00 crore, Exceptional item would have been Rs. Nil instead of the reported amount of Rs. 11.22 crore, Loss for the year would have been Rs. 397.88 crore instead of the reported amount of Rs. 379.74 crore. Earnings per share would have been Rs. (-) 86.98 instead of reported amount of Rs. (-) 83.02 and net worth as at March 31, 2012 would have been Rs. 896.87 crore instead of reported amount of Rs. 915.01 crore. | |
