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Khandelwal Extractions Ltd.

BSE: 519064 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Khandelwal Extractions Ltd. (KHANDELWALEXTRA) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF KHANDELWAL EXTRACTIONS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of KHANDELWAL EXTRACTIONSLIMITED("the Company") which comprise the Balance Sheet as at 31st March 2017the Statement of Profit and Loss the Cash Flow Statement for the year then ended and asummary 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules2014. 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.

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.

Opinion

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 31stMarch 2017 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 (Auditor's Report) Order 2016("the Order ")issued by the Central Government of India in terms of sub- section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure-"A" a statement onthe matters specified in paragraphs 3 and 4 of the order to the extent applicable .

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 it 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 and Companies (Accounting Standards) amendment Rules 2016.

(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (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 "Annexure B"; and

(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 financialposition in its financial statements - Refer Note No. 29 to the financialstatements;

II. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

III. There were no amounts which were required to be transferred to the InvestorEducation and 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 from 8th November2016 to 30th December 2016.Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the management. - Refer Note No 15 B

For P.L. TANDON & Co.
Chartered Accountants
Registration Number: 000186C
ANIL AGARWAL
(PARTNER)
Place: Kanpur Membership Number: 071548
Date: 26/05/2017

ANNEXURE-A TO THE INDEPENDENT AUDITOR'S REPORT Re : KHANDELWAL EXTRACTIONS LIMITED

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31st March 2017 wereport that:

i. In respect of its Fixed Assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) All the assets have not been physically verified by the management during the yearbut there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of registered sale deed /transfer deed/ conveyance deedand other relevant records evidencing title provided to us we report that the titledeeds comprising all the immovable properties of land and building are held in the nameof the company as at the balance sheet date except the following:

Particular of land Gross Block as at 31-03-2017 Rs. Net Block as at 31-03-2017 Rs. Remarks
Freehold land (two cases) 155124 155124 The title deeds of land is held in the erstwhile name of the company - KHANDELWAL EXTRACTIONS PRIVATE LIMITED

ii. In respect of its Inventories:

As explained to us inventories have been physically verified during the year by themanagement at reasonable intervals and discrepancies noticed on verification betweenphysical stocks and the book records were not material.

iii. In respect of loans secured or unsecured granted by the Company to Companiesfirms or other parties covered in the register maintained under section 189 of theCompanies Act 2013 according to the information and explanations given to us : TheCompany has not granted any loan to Companies firms or other parties covered in theregister maintained under section 189 of the Companies Act 2013. Therefore the provisionsof paragraph (iii) the Companies (Auditor's Report) order 2016 are not applicable to thecompany.

iv. In our opinion and according to the information and explanation given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

v. In our opinion and according to information and explanations given to us thecompany has not accepted any deposits within the provisions of sections 73 to 76 or anyother relevant provisions of the Companies Act 2013. Therefore the provisions ofparagraph (v) of the Companies (Auditor's Report) order 2016 are not applicable to thecompany.

vi. In our opinion and according to the information and explanations given to us theCentral Government has not prescribed maintenance of cost records under sub-section (1) ofsection 148 the Companies Act 2013 for the products of the company.

vii. According to the information and explanations given to us in respect of statutoryand other dues:

(a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of custom duty of excise value added tax cess and anyother statutory dues applicable to it.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxservice tax duty of custom duty of excise value added tax cess and other statutorydues were in arrear as at 31st March 2017 for a period more than six monthsfrom the date they became payable. b. According to the information and explanations givento us there is no dues of income tax sales tax service tax duty of custom duty ofexcise or value added tax which have not been deposited on account of any dispute exceptbelow:

Name of the Statute Nature of the Dues Amount Rs. Period to which Amount Relates Forum where Dispute is Pending
Vat tax Act Vat 1065813 2013-14 Ap pellant Authority

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to banks.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loan during the year. Accordinglyprovisions of paragraph (ix) of the Companies (Auditor's Report) order 2016 are notapplicable to the company.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanations given to us and based on ourexamination of the records of the company the company has paid/provided for managerialremuneration in accordance with requisite approvals mandated by the provisions of section197 read with schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly provisions of paragraph (xii) of theCompanies (Auditor's Report) order 2017are not applicable to the company.

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

xiv. According to the information and explanations given to us and on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us and on our examination ofthe records of the Company the Company has not entered into non cash transactions withdirectors or person connected with them. Accordingly provisions of paragraph (xv) of theCompanies (Auditor's Report) order 2017are not applicable to the company.

xvi. The Company is not required to be registered under 45 -IA of the Reserve Bank ofIndia Act 1934.

For P.L. TANDON & Co.
Chartered Accountants
Registration Number: 000186C
ANIL AGARWAL
(PARTNER)
Place: Kanpur Membership Number: 0715648
Date: 26/05/2017

ANNEXURE -"B" TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF KHANDELWAL EXTRACTIONS LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of KHANDELWALEXTRACTIONS LIMITED ("the Company") as of 31 March 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 Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). 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.

Auditors' Responsibility

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 ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 judgment 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 audit opinion on the Company's internal financial controls systemover 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.

Opinion

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 31 March 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.

For P.L. TANDON & Co.
Chartered Accountants
Registration Number: 000186C
ANIL AGARWAL
(PARTNER)
Place: Kanpur Membership Number: 071548
Date: 26/05/2017