TO THE MEMBERS OF KINETIC ENGINEERING LIMITED.
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of KINETICENGINEERING LIMITED ( the Company ) which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.
Management s Responsibility for the Standalone 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 of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the Accountingand Auditing Standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance 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 theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on the auditors 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company s Directors as well asevaluating the overall presentation of 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 standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2015 and its profit and its cash flows for the year ended onthat date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the financial statements:
Refer Note No. A-22 relating to Managerial Remuneration which is subject to approvalof Central Govt.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by The Companies (Auditor s Report) Order 2015 issued by the Governmentof India (Ministry of Corporate Affairs) in terms of sub section (11) of section 143 ofthe Companies Act 2013 we give in Annexure a statement on the matters specified inparagraphs 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 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 Company has no branch offices whose accounts are audited by branch auditors.
(d) 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.
(e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(f) There are no observations and comments on financial transactions or other matterswhich have an adverse effect on the functioning of the Company.
(g) On the basis of the written representations received from the directors as on 31stMarch 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2015 from being appointed as a director in terms of Section164 (2) of the Act.
(h) There are no qualifications reservations or adverse remarks relating tomaintenance of accounts and other matters connected therewith.
(i) 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. Refer Note No.3 on Contingent Liabilities disclosing the impact of pendinglitigation on the financial position of the company in its financial statements.
ii. The Company does not have any long-term contracts including derivative contractshaving any material foreseeable losses for which provision was required.
iii. There are no amounts required to be transferred to the Investor Education andProtection Fund by the Company.
| ||For M/s P G Bhagwat |
|Chartered Accountants ||Membership No. 47235 |
|Firm s Registration No.: 101118W ||Pune: |
| ||28th May 2016 |
|Sandeep Rao || |
|Partner || |
Re: KINETIC ENGINEERING LIMITED
Referred to in paragraph 1 under the heading Report on Other legal and RegulatoryRequirements of our report on even date:
(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As informed to us the fixed assets have been physically verified by the managementat reasonable intervals and no material discrepancies were noticed on such verification.
(ii) (a) In our opinion and according to the information and explanations given to usthe procedure of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
(b) In our opinion the procedures of physical verification of inventory followed by themanagement reasonable and adequate in relation to the size of the Company and the natureof its business.
(c) On the basis of our examination of the records of inventory we are of the opinionthat the company is maintaining proper records of inventory. No material discrepancieswere noticed on verification between the physical stock and the book records.
(iii) The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under section 189 of the CompaniesAct.
(iv) In our opinion and according to information and explanation given to us there isan adequate internal control system commensurate with the size of the Company and thenature of its business for the purchase of inventory and fixed assets and for the sale ofgoods and services. During the course of our audit we have not observed any majorweaknesses or continuing failure to correct major weaknesses in internal control system.
(v) In our opinion and according to information and explanation given to us theCompany has not accepted deposits hence the directives issued by the Reserve Bank ofIndia and the provisions of sections 73 to 76 or any other relevant provisions of theCompanies Act and the rules framed there under are not applicable to it. According toinformation and explanation given to us no order has been passed against the company byCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any courtor any other tribunal.
(vi) As informed to us the cost records pursuant to the rules made by the CentralGovernment for the maintenance of cost records under sub-section (l) of section 148 of theCompanies Act 2013 are under preparation.
(vii) (a) According to the records of the company there are delays in depositingundisputed statutory dues of Provident Fund Employees State Insurance and Income Taxdeducted at source and as such the company is not regular in depositing the same.According to the information and explanations given to us undisputed Income Tax deductedat source amounting to Rs. 10.09 Lacs and Provident Fund amounting to Rs. 6.98 Lacs werein arrears as at 31st March 2016 for a period of more than six months from thedate they became payable.
(b) According to information and explanations given to us following are the details ofdisputed dues of income tax sales tax custom duty and excise duty which have not beendeposited and the forum where such dispute is pending.
Statement of disputed dues:
|Nature of dues ||Amount ||Forum where dispute is pending. || |
|Income Tax AY 2000-01 ||1.29 ||Income Tax ||Appellate |
| || ||Tribunal Pune || |
|Income Tax AY 2007-08 ||1455.65 ||CIT Appeals Pune || |
|Income Tax AY 2009-10 ||186.12 ||CIT Appeals Pune || |
|Income Tax AY 2011-12 ||62.11 ||CIT Appeals Pune || |
|West Bengal Sales Tax Central Sales Tax AY 2001- 02 2002-03. ||6.92 ||Deputy Commissioner of Sales Tax Kolkata. || |
|CST(Pune) 2005-06 ||65.35 ||Commissioner Pune ||Sales Tax |
|CST 2006-07 ||9.50 ||Commissioner Pune ||sales Tax |
|CST 1994-95 99-2000 2000-01 2002-032003-04 2008-09 2007-08 2009-10 ||105.76 ||Appellate Dy. Commercial Tax Indore ||Comm. |
|CST 1998-99 2001-02 ||27.27 ||Appellate Dy. Commercial Tax Indore ||Comm. |
|Sales Tax Kolkatta 2001-02 ||0.60 ||Sales Tax Tribunal Kolcutta || |
|Entry Tax 1994-95 95-96 2007-08 ||8.41 ||Dy. Comm. Indore ||Commercial Tax |
|MP Commercial Tax 1998- 99 ||1.88 ||Appellate Commercial Tax Indore ||Dy. Comm. |
|MP Commercial Tax 1999- 00 2007-08 08-09 ||14.12 ||Appellate Commercial Tax Indore ||Dy. Comm. |
|CST 2000-01 2001-02 ||41.44 ||Appellate Commercial Tax Indore ||Dy. Comm. |
|Excise Duty ||121.11 ||CESTAT Mumbai || |
|Excise Duty ||166.19 ||Appellate Tribunal || |
(c) According to the information and explanation given to us there are no amountsrequired to be transferred to Investor Education and Protection Fund in accordance withthe relevant provisions of the Companies Act 1956 (1 of 1956) and rules made there under.
(viii) The Company s accumulated losses at the end of 31st March 2016 arenot less than 50% of its net worth. The Company has not incurred cash losses in thecurrent financial year.
The Company has incurred cash losses in the immediately preceding financial year.
(ix) According to the information and explanation given to us the company has notdefaulted in repayment of dues to a financial institution or bank. The Company does nothave any debenture holders.
(x) According to the information and explanation given to us the Company has not givenany guarantee for loans taken by others from bank or financial institutions.
(xi) The Company has applied the term loans for the purpose for which the same wasraised.
(xii) Based upon the audit procedures performed by us and according to the informationand explanations given to us no fraud on or by the Company has been noticed or reportedduring the year.
For M/s P G Bhagwat
Firm s Registration No.: 101118W
28th May 2016