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Kernex Microsystems (India) Ltd.

BSE: 532686 Sector: Engineering
NSE: KERNEX ISIN Code: INE202H01019
BSE LIVE 15:40 | 22 Sep 46.05 1.75
(3.95%)
OPEN

46.00

HIGH

46.50

LOW

45.10

NSE 15:31 | 22 Sep 46.25 1.65
(3.70%)
OPEN

44.60

HIGH

46.80

LOW

44.60

OPEN 46.00
PREVIOUS CLOSE 44.30
VOLUME 30747
52-Week high 60.00
52-Week low 31.50
P/E
Mkt Cap.(Rs cr) 58
Buy Price 0.00
Buy Qty 0.00
Sell Price 45.80
Sell Qty 1500.00
OPEN 46.00
CLOSE 44.30
VOLUME 30747
52-Week high 60.00
52-Week low 31.50
P/E
Mkt Cap.(Rs cr) 58
Buy Price 0.00
Buy Qty 0.00
Sell Price 45.80
Sell Qty 1500.00

Kernex Microsystems (India) Ltd. (KERNEX) - Auditors Report

Company auditors report

To

The Members of

Kernex Microsystems (India) Limited

1. Report on the Financial Statements

We have audited the accompanying financial statements of KERNEX MICROSYSTEMS (INDIA)LIMITED ("The Company") which comprise the Balance Sheet as at March 31 2016the Statement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

2. Management's Responsibility for the Financial Statements

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 and in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers 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 the 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.

4. Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner 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 31stMarch 2016 and its loss and its cash flows for the year ended on that date.

5. Other Matters

We did not audit the financial statements/ information of Egypt Branch included in thestandalone financial statements of the Company whose financial statements/informationreflect total assets of Rs.126592013 as at 31st March 2016 and total revenues ofRs.32367138 for the year ended on that date as considered in the standalone financialstatements. The financial statements/information of this foreign branch have been auditedby the branch auditors whose reports have been furnished to us and our opinion in so faras it relates to the amounts and disclosures included in respect of this branch is basedsolely on the report of such branch auditors and the returns submitted at the branch.

The outstanding debtors amount of Rs.24.06 crores from Konkan Railway CorporationLimited is subject to confirmation and reconciliation.

Our opinion is not modified in respect of this matter.

6. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 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 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 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 account.

(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 written representations received from the directors as on 31stMarch2016 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed to act as a director in terms ofSection 164(2) of the Act;

(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 the "Annexure B" and

(g) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to thebest of our information and according to the explanations given to us:

I. the company has disclosed the impact of pending litigations on its financialposition in its financial statements- Refer Note No. 27 to the financial statements;

ii. the company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts- Refer Note 27 to the financial statements;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For GMK ASSOCIATES
Chartered Accountants
Firm Regn No.006945S
G. Satyanarayana Murty
Partner
Membership No: 29919
Place: Hyderabad
Date: 28th May 2016

ANNEXURE-A TO THE INDEPENDENT

AUDITOR'S REPORT

1. a) The Company has maintained requisite records showing required particularsincluding quantitative details and situation of its fixed assets.

b) According to the information and explanation given to us by the management most ofthe fixed assets of the company have been physically verified by the management during theyear and the intervals of such verification had also been reasonable.

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.

2. As explained to us by the management and as observed by us the inventory of rawmaterial finished goods stores and spares etc. has been physically verified during theyear and specifically at the year-end by the management and no material discrepancies wereobserved in the inventories.

3. Based on our scrutiny and as per information and explanations provided to us by themanagement the company has not granted any loans during the period under review coveredin the registers maintained under section 189 of the Companies Act 2013. Since there areno loans granted sub-clauses b c and d are not applicable.

4. Based on our scrutiny and as per the information provided by the management thecompany does not have any transactions in respect of loans investments guarantees andsecurities granted to be complied with the provisions of Sections 185 and 186 of theCompanies Act 2013.

5. Based on our scrutiny and as per the information provided by the management thecompany has not accepted any deposits during the year under review attracting the sections73 to 76 of the Companies Act 2013 and rules made there under.

6. According to the information and explanations given the maintenance of cost recordsas specified under sub-section (1) of section 148 of the Companies Act 2013 are notapplicable for the year under review.

7. a) According to the books and records as produced and examined by us in accordancewith Generally Accepted Auditing Practices in India and also based on managementrepresentations undisputed statutory dues in respect of provident fund employee stateinsurance income tax service tax sales tax value added tax excise duty cess andother material statutory dues have not been regularly deposited by the company during theyear with the appropriate authorities and the outstanding statutory dues as at the end ofthe financial year outstanding for more than 6 months are as follows :

Nature of Statutory Dues Amount (Rs. in Lakhs)
Provident Fund 42.25
Employees State Insurance 3.22
Tax Deducted at Source 24.18
Service Tax 190.78
Professional Tax 0.49
Works Contract Tax 9.69
TOTAL 270.61

b) According to information and explanations given to us disputed amounts payable inrespect of Income Tax and Sales Tax were outstanding as on 31st March 2016 are asfollows:

Name of the Statute Amount (Rs. In lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 8.00 F.Y. 1997-98 A.Y. 1998-99High Court of Judicature at Hyderabad for the state of Telangana and State of Andhra Pradesh
APGST Act 1957 4.13 F.Y. 2002-03 Sales Tax Appellate Tribunal

8. As observed by us and as per the information and explanations given by themanagement we are of the opinion that the company has not defaulted in repayment of duesto its financial institution or bank during the year under audit.

9. As observed by us the company has not availed any Term Loans from Banks during theyear. The company has not raised any monies by way of IPO or FPO during the year underreview.

10. Based upon the audit procedures performed and information and explanations given bythe management we report that no material fraud on or by the company by its officers oremployees has been noticed or reported during the course of our audit.

11. According to the information and explanations given to us and based on ourexamination of the records of the company the managerial remuneration paid/providedduring the year by the company is as per the provisions of section 197 read with ScheduleV of the Companies Act 2013.

12. In our opinion and according to the information and explanations given to us thecompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the company transactions with related parties are incompliance with section 177 and 188 of the Act wherever applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

15. As observed by us and as per the information and explanations given by themanagement the company has not entered into any non-cash transactions with the directorsor persons connected with him during the period under review.

16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For GMK ASSOCIATES
Chartered Accountants
Firm Regn No.006945S
G. Satyanarayana Murty
Partner
Membership No: 29919
Place: Hyderabad
Date: 28th May 2016