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BKV Industries Ltd.

BSE: 519500 Sector: Others
NSE: N.A. ISIN Code: INE356C01022
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NSE 05:30 | 01 Jan BKV Industries Ltd
OPEN 2.49
PREVIOUS CLOSE 2.49
VOLUME 262
52-Week high 2.87
52-Week low 2.38
P/E
Mkt Cap.(Rs cr) 4
Buy Price 2.49
Buy Qty 43.00
Sell Price 2.49
Sell Qty 157.00
OPEN 2.49
CLOSE 2.49
VOLUME 262
52-Week high 2.87
52-Week low 2.38
P/E
Mkt Cap.(Rs cr) 4
Buy Price 2.49
Buy Qty 43.00
Sell Price 2.49
Sell Qty 157.00

BKV Industries Ltd. (BKVINDUSTRIES) - Auditors Report

Company auditors report

To

The Members of BKV Industries Limited

Report on the Audit of the standalone Indian Accounting standards (Ind AS) FinancialStatements.

Opinion

We have audited the accompanying standalone Ind AS financial statements of BKVIndustries Limited (the "Company") which comprise the Balance Sheet as at March31 2019 and the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flow for the year then ended anda summary of significant accounting policies and other explanatory information. In ouropinion and to the best of our information and according to the explanations given to usthe aforesaid standalone financial statements give the information required by theCompanies Act 2013 (the "Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its loss total comprehensiveincome the changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report. Our findings with respect to goingconcern: As included in Note No.26 to the Standalone Ind AS financial statements thecompany's financial statements have been prepared using the going concern basis ofaccounting. The use of this basis of accounting is appropriate unless management eitherintend to liquidate the company or to cease operations or has no realistic alternative butto do so.

Management has not identified a material uncertainty that cast significant doubt on thecompany's ability to continue as going concern and accordingly none is disclosed in thefinancial statements.

Auditor's Response to KAMS

As part of our audit of the standalone Ind AS financial statements we applied thenecessary audit procedures under auditing standards and after considering the terms ofunexpired operating lease we concluded to concur with management's use of going concernbasis of accounting in preparation of the Company's financial statements.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's Report including Annexuresto Board's Report Management Discussion and Analysis Report and Business ResponsibilityReport standalone Ind AS financial statements and our auditor's report thereon. Ouropinion on the standalone Ind AS financial statements does not cover the other informationand does not express any form of assurance conclusions thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding comprehensive income (Loss) changes in equity and cash flows of the Company inaccordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the standalone Ind AS financialstatements management is responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so. Those Boardof Directors are also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibility for the Audit of Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also: Identify and assess therisks of material misstatement of the standalone Ind AS financial statements whether dueto fraud or error design and perform audit procedures responsive to those risks andobtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error as fraud may involve collusion forgery intentionalomissions misrepresentations or the override of internal control. Obtain anunderstanding of internal financial control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances. Under section 143(3)(i) of the Actwe are also responsible for expressing our opinion on whether the Company has adequateinternal financial controls system in place and the operating effectiveness of suchcontrols. Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the management. Conclude on theappropriateness of management's use of the going concern basis of accounting and based onthe audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in our auditor's report to the related disclosures in the standalone financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone Ind AS financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation. Materiality is the magnitude of misstatements in the standalone Ind ASfinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone Ind AS financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone Ind ASfinancial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the standalone Ind AS financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Emphasis of Matter

We draw attention to the following matters in the Notes to the financial statements:Note No.26 in the Standalone Ind AS financial statements which indicates that the companyhas accumulated losses the company incurred a net loss during the current year and in theprevious year had earned a marginal profit and company's current liabilities exceeded thecurrent assets as at the Balance sheet Date. These conditions indicate the existence ofmaterial uncertainty that may cast significant doubt about the company's ability tocontinue as a going concern. However as the company has consistent operating lease incometo meet its financial commitments and hence the accounts have drawn up on going concernbasis.

Our opinion is not qualified in this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit 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 including Other ComprehensiveIncome(Loss) the Statement of Changes in Equity and the Statement of Cash Flow dealt withby this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors are disqualifiedas on March 31 2019 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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses on long-term contracts including derivativecontracts.

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

2. As required by the Companies (Auditor's Report) Order 2016 (the "Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Kurapati Subba Rao & Co
Chartered Accountants
Firm Regn. No. 001618S
Place: Guntur. K. Rajendra Prasad
Date: 29th May 2019 Partner M.No.: 207646

"Annexure A" of Independent Auditors' Report

(Referred to in paragraph (f) under 'Report on Other Legal and Regulatory Requirements'of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 (the act).

We have audited the internal financial controls over financial reporting of BKVIndustries Limited "and reduced" ("the Company") as of March 31 2019in conjunction with our audit of the standalone Ind AS financial statements of the Companyfor 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 guidance note issued by Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree 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 March 31 2019 based oninternal 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 Kurapati Subba Rao & Co
Chartered Accountants
Firm Regn. No. 001618S
Place: Guntur. K. Rajendra Prasad
Date: 29th May 2019 Partner M.No.: 207646

Annexure -B of Independent Auditors' Report Referred to in Paragraph of Report on OtherLegal and Regulatory Requirements of our report of even date on the Accounts of theCompany for the year ended 31st March 2019.

(I) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the management during the yearwhich in our opinion is reasonable having regard to the size of the company and thenature of its assets. No material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties of the Company shown under theFixed Assets schedule are held in the name of Company.

(ii) The company has given it's farm on operating lease and hence does not hold anyInventory. Paragraph 3(ii) is therefore not applicable to the company.

(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act.

(iv) The Company has not granted any loans / investments / guarantees to which theprovisions of Section 185 and 186 of the Act are applicable - Hence Clause 3(iv) of theorder is not applicable.

(v) The Company has not accepted deposits during the year.

Hence Clause 3(v) of the Order is not applicable.

(Vi) As the company's farm given on operating lease and no other manufacturing activityis undertaken during the financial year 2018-19 maintenance of cost records under section48 does not arise. Thus paragraph 3(vi) of CARO is not applicable to the company.

(vii) (a) According to the information and explanations given to us and records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including provident fund employees' state insuranceincome-tax goods and service tax Duty of customs cess and any other statutory dues tothe appropriate authorities. There are no arrears of undisputed statutory dues outstandingas at March 31 2019 for a period of more than six months from the date they becomepayable.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax or goods and service tax or dutyof customs or duty of excise or value added tax cess have not been deposited on accountof any dispute.

(viii) According to the information and explanations given to us and records of theCompany examined by us the Company has not raised any loans from any financialinstitution or bank or government and that there are no debenture holders and thereforeparagraph 3(viii) is not applicable to the company.

(ix) The Company has not raised any money by way of initial public offer or furtheroffer and term loan during the year. Paragraph 3(ix) of the order is not applicable to thecompany.

(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 explanation given to us we have neither observed anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesof the Company nor have we been informed of such case by the Management during the year.

(xi) The Company has paid/provided managerial remuneration as per the provisions ofSection 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company/as per Nidhi rules 2014 and hence Clause3(xii) of the Order is not applicable. (xiii) All the transactions with the relatedparties are in compliance with Section 177 and 188 of the Act wherever applicable and thedetails have been disclosed in the Financial Statements as required by the applicableaccounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review and henceClause 3(xiv) is not applicable.

(xv) According to the information and explanation provided to us and based on ourexamination of records the Company has not entered into any non-cash transactions withDirectors or persons connected with him and hence Clause 3(xv) is not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934 and hence Clause 3(xvi) is not applicable.

For Kurapati Subba Rao & Co
Chartered Accountants
Firm Regn. No. 001618S
K. Rajendra Prasad
Place: Guntur Partner
Date: 29th May 2019 M.No.: 207646