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K A Wires Ltd.

BSE: 532581 Sector: Metals & Mining
NSE: KAWIRES ISIN Code: INE372S01017
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K A Wires Ltd. (KAWIRES) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF K A WIRES LIMITED

We have audited the accompanying standalone financial statements of K A Wires Ltd.("the Company'’) which comprise the Balance Sheet as at March 31 2018 theStatement of Profit and Loss for the year then ended cash flow statement of the CashFlow for the year ended on that date and a summary of significant accounting policies andother 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 Act2013 ("the Act") with respect to the preparation ofthese standalone financial statement that give a true and fair view of the financialposition financial performance of the company in accordance with the accountingprinciples generally accepted in India including 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 ofwith 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 judgments 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions 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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error In making those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company’s directors as wellas evaluating 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.

Basis for Qualified Opinion

The Company's inventories are carried in the Balance Sheet at Rs 78149741/- (As at31st March 2017: Rs 88601082/-). The Management has not stated the inventories at thelower of cost and net realisable value but has stated them solely at estimated marketprice which constitutes a departure from the Accounting Standard - 2 "Valuation ofInventories". The Company’s records indicate that had the Management stated theinventories at the lower of cost and net realisable value an amount of Rs. 286.70.443/-and 27943108 /- would have been required to write down the opening inventories andclosing inventories respectively to their net realisable value. Accordingly cost of saleswould have been decreased by Rs 727335 /- and income tax profit for the year andshareholders’ funds would have been increased by Rs. 138594/- Rs. 727335 /- andRs 588741 /- respectively. This matter was also mentioned in our report on the financialstatements for th 31st March 2017

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2018;

(b) In the case of the Statement of Profit and Loss of the profit for the year endedon that date.

(c) In the case of cash flow statement of the Cash Flow for the year ended on thatdate

Report on Other Legal and Regulatory Requirements

1 As required by Companies (Auditor’s Report) order 2016 issued by the centralgovernment of India in terms of Section 143(11) of the Companies Act2013 we give in theannexure a statement on the matters specified in paragraphs 3 and 4 of the said order

2 As required by section 143(3) of the Act we report that:

a) We have obtained all the information and explanations which to the best of ourknowledge and * belief were necessary for the purpose of our audit.

b) In our opinion proper books of account as required by law have been kept by thecompany as far as appears from our examination of the books of the company.

c) The Balance Sheet and the Profit & Loss Account dealt with by this report are inagreement with the books of account submitted to us.

d) In our opinion the Profit & Loss Account and the Balance Sheet comply with theaccounting standards referred to Sub-Section 133 of the Companies Act 2013 read with rule7 of the Companies (Accounts) Rules2014

e Based on the written representations received from the directors and taken on recordby the board we are of the opinion that none of the directors are disqualified forappointment under section 164(2) of the Companies Act 2013.

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 included in the Auditor’s Report and to ourbest of our information and according to the explanations given to us :

I The Company has disclosed the impact of pending litigations on its financial positionin its financial statements as referred to in Note 29

ii The Company did not have any long-term contracts including derivatives contracts forwhich there were any material foreseeable losses.

in There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company.

46 B B Ganguly Street For S.N. Kedia & Associates
4lh Floor Room No. 11 Chartered Accountants
Kolkata - 700 012. FRN - 3J9025E

Dated the 16th day of May 2018.

(S.NvKedia)

Partner

Membership No. - 054075

ANNEXURE TO INDEPENDENT AUDITOR’S REPORT

RE KA WIRES LIMITED

Referred to in para 1 in 'Report on Other Legal and Regulatory Requirements' of ourreport of even Date

i) * a) The Company has maintained proper records showing full particulars includingquantitative

details and situation of fixed assets.

b) The Company has regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepencies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of company and nature ofits assets.

c) According to the information and explanation given to us and on the basis of ourexamination of the records of the companythe title deeds of immovable properties are heldin the name of company.

ii) In respect of its inventories:

a) The inventories have been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us. theprocedures of physical verification of inventories followed by the management arereasonable and adequate to the size of the Company and nature of its business.

. c) The Company has maintained proper records of the inventories. As per theinformation and explanation given to us no material discrepancies were noticed onphysical verification.

iii) According to the information and explanation given to us and on the basis of ourexamination of the books of account the company has not granted any loans secured orunsecured to companies firms or other parties covered in the register maintained underSection 189 of the Companies Act 2013.

iv) In our opinion and according to the information and explanations given to us. thecompany has complied with the provisons of section 185 & 186 of the Act with respectto loans and investment made

v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from the Public. Therefore the provisions of clause(v) of paragraph 3 of CARO 2016 are not applicable to the company.

vi) According to the information and explanations given to us the Central governmenthas not prescribed maintenance of cost records under sub-section (1) of section 148 of theCompanies Act 2013. Therefore the provisions of clause (vi) of paragraph 3 of CARO 2016are not

. applicable to the company.

vn) a) According to the information and explanation given to us and on basis of ourexamination of the records of the Company amounts deducted/accrued in books of account inrespect of undisputed statutory dues including provident fundESI income tax sales tax.vaule added tax. duty of customs Excise service tax cess and material statutory dueshave been regularly deposited during the year by the Company with the appropriateauthorities

According to the information and explanation given to us.no undisputed amounts paybalein respect of provident fundincome taxvalue added taxduty of customsservice taxcessand other material statutory dues were in arrears as at 31s' March 2018 for aperiod of more than six months from the date they become paybale.

b) According to information and explanations given to us there are no material dues ofduty of customs sales tax duty of excise service tax and value added tax which has notbeen deposited with appropriate authorities on account of any dispute. However accordingto information and explanation to given to us the following dues of income tax have notbeen deposited by the Company on account of disputes:

Sr No Name of the statute Nature of Dues Amount (Rs. In Period to which the amount relates Forum where dispute is pending
1 Income tax Demand u/s 143(3) 4414910/- A Y. 2012-13 CIT(Appeals)-3

viii) In our opinion and according to the information and explanation given to us Thecompany has not defaulted in the repayment of dues to a financial institution bankgovernment or dues to debenture holders

ix) Based upon the audit procedure performed and the information and explanation givenby the management the Company did not raise any money by way of initial public offer orfurther public offer (including debt insturements during the year. The company has raisedterm loans from bank during the year and were utilized for the purpose said loans wereraised

x) According to 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 information and explanations given to us and based on our examinationof the records of the Company the company has paid/provided for managerial remunarationin accordance with the requisite approvals mandated by the provisons of section 197 readwith schedule V of the Act.

xii) In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company Accordingly paragraph 3(xii) of the order is notapplicable.

xiii) According to information and explanations given to us and based on ourexamination of the records of the Companytransactions with the related parties are incompliance with section 177 & 188 of the Act where applicable and details of suchtransaction have been disclosed in the financial statements as required by the applicableaccounting standared

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

xv) According to information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) of the order is notapplicable.

xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

46 B.B Ganguly Street For S.N. Kedia & Associates
4 Floor Room No. 11 Chartered Accountants
Kolkata - 700 012. FRN No. 319025E
(S NyKedia)
Partner
Membership No. - 054075
Dated the 16th day of May 2018

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