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S H Kelkar & Company Ltd.

BSE: 539450 Sector: Industrials
NSE: SHK ISIN Code: INE500L01026
BSE LIVE 15:40 | 22 Aug 245.70 -4.25
(-1.70%)
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251.05

HIGH

251.05

LOW

245.00

NSE 15:54 | 22 Aug 245.65 -4.25
(-1.70%)
OPEN

251.00

HIGH

251.00

LOW

244.00

OPEN 251.05
PREVIOUS CLOSE 249.95
VOLUME 4295
52-Week high 361.90
52-Week low 244.50
P/E 51.19
Mkt Cap.(Rs cr) 3,553
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 251.05
CLOSE 249.95
VOLUME 4295
52-Week high 361.90
52-Week low 244.50
P/E 51.19
Mkt Cap.(Rs cr) 3,553
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

S H Kelkar & Company Ltd. (SHK) - Auditors Report

Company auditors report

To the Members of

S H Kelkar and Company Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of S H Kelkar andCompany Limited (‘the Company’) which comprise the Balance Sheet as at 31 March2016 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

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 ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding 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.

Auditors’ responsibility

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 accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the rules made thereunder.

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 anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company’s Directors as well as evaluatingthe 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.

Opinion

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 a3airs of the Companyas at 31 March 2016 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 (‘theOrder‘) issued by the Central Government of India in terms of subsection (11) ofSection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the said 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 standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) on the basis of written representations received from the directors as on 31 March2016 and taken on record by the Board of Directors none of the directors is disqualifiedas on

31 March 2016 from being appointed as a director in terms of Section 164(2) of theAct;

(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 Auditors’ 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 30 to the standalone financialstatements;

ii. the Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses; and

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

For B S R & Co. LLP
Chartered Accountants
Firm’s Registration No : 101248W/W-100022
Aniruddha Godbole
Mumbai Partner
27 May 2016 Membership No: 105149

Annexure A to the Independent Auditors’ Report – 31 March 2016

With reference to Annexure A referred to in the Independent Auditor’s Report tothe members of the Company on the standalone financial statements for the year ended 31March 2016 we report the following:

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

(b) The Company has a regular programme of physical verification of its fixed assetsby which all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. In accordance with the above programmethe Company has verified certain fixed assets during the year and no materialdiscrepancies were noticed in respect of assets verified during the year.

(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.

(ii) The inventory except for goods-in-transit has been physically verified by themanagement during the year. In our opinion the frequency of such verification isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records were not material and have been dealt with in books of account.

(iii) (a) The Company has granted unsecured loans to one body corporate covered in theregister maintained under Section 189 of the Companies Act 2013 (‘the Act’).The Company has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Act. In our opinion and according to the information and explanations given tous the Company does not consider the reimbursement of cost charged and outstanding tofall under purview of loans. In our opinion the rate of interest and other terms andconditions on which the unsecured loans has been granted to a body corporate listed in theregister maintained under Section 189 of the Act is not prima facie prejudicial to theinterest of the Company.

(b) The unsecured loans granted to a body corporate covered in the register maintainedunder Section 189 of the Act do not have stipulations with regard to the repayment ofprincipal and interest. Accordingly we are unable to comment on the regularity ofrepayment of principal and interest.

(c) The unsecured loans granted to a body corporate covered in the register maintainedunder Section 189 of the Act do not have stipulations with regard to the repayment ofprincipal and interest. Accordingly we are unable to comment whether there is any amountoverdue for more than ninety days in respect of such loan.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the unsecured loans given to a body corporate a guarantee given to companies and abody corporate and investments made by the Company. The Company has not any security underSection 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the rules framed there under. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148 (1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the records.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of records of the Company amounts deducted/ accrued in the books ofaccount in respect of Provident fund Employees’ State Insurance Sales tax Valueadded tax Professional tax Duty of customs Duty of excise Cess and other materialstatutory dues have been regularly deposited with the appropriate authorities. Accordingto the information and explanations given to us and on the basis of our examination ofrecords of the Company amounts deducted/ accrued in the books of account in respect ofIncome tax and Service tax have generally been regularly deposited with the appropriateauthorities though there have been slight delay in a few cases.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees’ State Insurance Income tax Servicetax Sales tax Value added tax Professional tax Duty of customs Duty of excise Cessand other material statutory dues were in arrears as at 31 March 2016 for a period of morethan six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofSales tax Value added tax and Duty of customs which have not been deposited with theappropriate authorities on account of any dispute. According to the information andexplanations given to us the dues of Income-tax Service tax and Duty of excise as listedin Appendix 1 have not been deposited as on 31 March 2016 by the Company on account ofdisputes.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to financial institutions or banks. TheCompany does not have any loans or borrowings from government or dues to debenture holdersduring the year.

(ix) In our opinion and according to the information and explanations given to us theCompany has raised money by way of initial public offer during the year. Out of the totalmoney raised aggregating

` 191.79 crores Rs. 158 crores have been utilised till 31 March 2016 (also refer noteno. 45 to the financial statements) and Rs. Nil has been utilized subsequent to 31 March2016. Pending utilisation of the funds raised through Initial Public Offer the unutilisedfunds aggregating to Rs. 33.79 were temporarily used for the purpose other than for whichthey were raised. In our opinion and according to the information and explanations givento us the Company did not raise any term loans during the year.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its Officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

(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 the requisite approvals mandated by the provisions ofSection 197 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 paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations give 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. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm’s Registration No : 101248W/W-100022
Aniruddha Godbole
Mumbai Partner
27 May 2016 Membership No: 105149

Appendix 1 as referred to in paragraph (vii)(b) of the Annexure A to the IndependentAuditors’ Report

Name of the statute Nature of the dues Demand in Rupees crores Amount not deposited on account of demand Rupees in crores Period to which the amount relates Forum where dispute is pending
Income tax Act 1961 Income-tax 0.70 0.70 2008-09 Income-tax Appellate Tribunal
Income tax Act 1961 Income-tax 0.52 0.52 2010-11 The Commissioner of Income-tax (appeals)
Central Excise Act 1944 Excise duty 0.02 0.00* 1999-2010 The Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Excise duty 0.32 0.20 2008-09 The Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Excise duty 0.11 0.07 2011-12 The Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Excise duty 0.04 0.04 2004-06 The Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Service tax 0.04 0.04 2008-09 The Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Service tax 6.75 6.75 2011-12 The Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Service tax 0.04 0.04 2011-12 The Customs Excise and Service Tax Appellate Tribunal
Central Excise Act 1944 Service tax 0.39 0.39 2012-13 The Commissioner of Central Excise (appeals)
Central Excise Act 1944 Service tax 0.96 0.96 2011-12 The Commissioner of Central Excise (appeals)
Central Excise Act 1944 Service tax 0.15 0.15 2011-12 The Commissioner of Central Excise (appeals)
Central Excise Act 1944 Service tax 0.09 0.09 2011-12 The Commissioner of Central Excise (appeals)

*Amount less than C0.01 crore

Annexure B to the Independent Auditors’ Report – 31 March 2016

(Referred to in our report of even date)

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 S H Kelkarand Company Limited ("the Company") as of 31 March 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company’s policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

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 deemed tobe prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 judgement 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea 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 2016 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 B S R & Co. LLP
Chartered Accountants
Firm’s Registration No : 101248W/W-100022
Aniruddha Godbole
Mumbai Partner
27 May 2016 Membership No: 105149