To The Members of KAIRA CAN COMPANY LIMITED Report on the Audit of the StandaloneFinancial Statements Opinion
We have audited the accompanying standalone financial statements of KAIRA CANCOMPANY LIMITED ("the
Company") which comprise the Balance Sheet as at March 31 2021 the Statement ofProfit and Loss (including
Other Comprehensive Income) the Statement of Changes in Equity and the Statement ofCash Flows for the year ended on that date notes to the financial statements and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2021 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethical /independence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the standalone financialstatements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment 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.
|Sr. No. Key Audit Matter ||Auditor's Response |
|1 Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of Ind AS 115 "Revenue from Contracts with Customers". ||Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows; Evaluated the design of internal controls relating to the revenue recognition. |
|T h e a p p l i c a t i o n o f t h e r e v e n u e accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period. Additionally standard contains disclosures which involve collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. ||Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation re-performance and inspection of evidence in respect of operation of these controls. |
| ||Selected a sample of continuing and new contracts and performed the following procedures: |
| ||Read analysed and identified the distinct performance obligations in these contracts. Compared these performance obligations with those identified and recorded by the Company. |
| ||Considered the terms of the contracts to determine basis of recognising the revenue at a point' or over the period' the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. Verified whether the revenue has been recognised only post the fulfilment of the performance obligations and related conditions. |
| ||Verified whether the revenue is appropriately recognised only after the transfer of control over the said goods. |
|2. Consumption and Inventory Valuation: ||We have performed the following procedures in relation to the accuracy of consumption booked and inventory recorded: |
|Accuracy of recording of inventory & related consumption at appropriate values: ||Understood evaluated and tested the key controls over the recording of inventory and booking of consumption. We selected a sample of transactions and: |
| ||Checked the GRNs and material issue slips on a sample basis to ensure correct recording of materials receipts & consumption. Tested and verified the weighted average rate of inputs at which consumption was recorded. |
| ||Tested and verified the Overhead absorption rate calculation used for inventory valuation. |
| ||Reviewed the process of physical verification of inventories carried out by the management at various location by participating in the said process. |
| ||Verified and analyzed the physical verification report of inventory carried out by the management and corrective actions taken to rectify the identified discrepancies (if any). |
| ||Due to the Covid-19 related lockdown we were not able to participate in the physical verification of inventory that was carried out by the management subsequent to the year-end. Consequently we have performed alternate procedures to audit the existence of inventory as per the guidance provided in SA 501 Audit Evidence Specific Considerations for Selected Items' and have obtained sufficient appropriate audit evidence. |
|3. Assessment of contingent liabilities and provisions related to Taxation Litigations and claims: ||Our audit procedures included: As part of our audit procedures we have assessed Management's processes to identify new possible obligations and changes in existing obligations for compliance with company policy and Ind AS 37 requirements. |
|The assessment of the existence of the present legal or constructive obligation analysis of the probability of the related payment and analysis of a reliable estimate requires management's judgement to ensure appropriate accounting or disclosures. ||We have analysed significant changes from prior periods and obtain a detailed understanding of these items and assumptions applied. We have obtained relevant status details and Management representations on the major outstanding litigations. |
|Due to the level of judgement relating to recognition valuation and presentation of provisions and contingent liabilities this is considered to be a key audit matter. ||As part of our audit procedures we have reviewed minutes of board meetings (including the Audit Committee). |
|Reference note 2.B.(xiii) and 36 to the financial statements. ||We have held regular discussions with Management and internal legal department. |
| ||We challenged the assumptions and critical judgements made by management which impacted their estimate of the provisions required considering judgements previously made by the authorities in the relevant jurisdictions or any relevant opinions given by the Company's advisors and assessing whether there was an indication of management bias. |
| ||We discussed the status in respect of significant provisions with the Company's internal tax and legal team. |
| ||We performed retrospective review of management judgements relating to accounting estimate included in the financial statement of prior year and compared with the outcome. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated. When we read other information if we conclude thatthere is a material misstatement therein we are required to communicate the matter tothose charged with governance and describe actions applicable in the applicable laws andregulations.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe
Ind AS and other accounting principles generally accepted in India. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements. We communicate with those chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships 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
in the audit of the standalone 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.
Report on Other Legal and Regulatory Requirements
I. 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 Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
II. 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 (including other comprehensiveincome) the Cash Flow
Statement and Statement of Changes in Equity dealt with by this Report are in agreementwith the books of account. d) In our opinion the aforesaid Standalone FinancialStatements comply with the Ind AS specified under Section
133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules2015.
e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors disqualifiedas on March 31 2021 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" to this report.
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 read with Notification No G.S.R 307(E) dated30.03.2017 in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone
Financial Statements Refer Note No. 36 to the Standalone Financial Statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
I. As required by The Companies (Amendment) Act 2017 in our opinion according toinformation explanations given to us the remuneration paid by the Company to itsdirectors is within the limits prescribed under Section 197 of the Act and the rulesthereunder.
ANNEXURE A to the Independent Auditors' Report on Standalone FinancialStatements of Kaira Can Company Limited (Referred to in paragraph I under the heading"Report on Other Legal and Regulatory Requirements" of our report of even dateto the members of Kaira Can Company Limited on the Standalone Financial Statements for theyear ended March 31 2021)
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
b) As informed to us the fixed assets having substantive value have been physicallyverified by the management during the period according to a phased programme. In ouropinion such programme is reasonable having regard to the size of the Company and thenature of its assets. We have been further informed that no material discrepancies werenoticed on such verification by the management between the book records and physicalverification.
c) According to the information and explanations given to us and based on the recordsproduced the title deeds of the immovable properties held by the Company are in the nameof the Company.
i. The inventory has been physically verified during the year by the Management. In ouropinion the frequency of is reasonable. No material discrepancies were noticed on suchphysical verification.
ii. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of sub clauses (a) (b) (c) of clause(iii) of the order are not applicable to the company.
iii. The Company has not granted any loans or made any investment or provided anyguarantee or security in respect of which provisions of section 185 of the Act areapplicable. Accordingly the provisions of clause (iv) of the order are not applicable tothe company. iv. In our opinion and according to the information and explanations given tous the Company has complied with the directives issued by the Reserve Bank of India andthe provisions of sections 73 to 76 or any other relevant provisions of the Act and therules framed there under to the extent applicable. We are informed by the Management thatno order has been passed by the Company Law Board or National Company Law Tribunal orReserve Bank of India or any court or any other Tribunal in this regard.
v. We have broadly reviewed accounts and records maintained by the Company pursuant torules made by the Central Government for the maintenance of cost records under Section148(1) of the Act in respect of Company's products to which the said rules are madeapplicable and are of the opinion that prima facie the prescribed accounts and recordshave been made and maintained. We have however not made a detailed examination ofrecords with a view to determine whether they are accurate.
a) According to the information and explanations given to us and according to therecords of the Company examined by us in our opinion the Company is generally regular indepositing with the appropriate authorities undisputed statutory dues including ProvidentFund Employees' State Insurance Income-tax Sales Tax Service Tax Goods and ServiceTax duty of Custom duty of Excise Value Added Tax Cess and any other statutory dueswherever applicable. According to the information and explanations given to us noundisputed amounts payable in respect of aforesaid dues were outstanding as at March 312021 for a period of more than 6 months from the date they became payable.
b) According to the information and explanations given to us there were no dues inrespect of Income Tax Duty of Excise Duty of Customs Sales Tax Service Tax Goods andService Tax and Value Added Tax which have not been deposited on account of any disputeexcept the following:
|Name of the Statue ||Nature of Dues ||Forum where the case is pending ||Period to which the Amount relates (Financial Year) ||Gross Amount Involved ||Amount Paid in Protest |
|Central Excise Act 1944 ||Excise Duty ||Commissioner of Excise Appeals - III and Additional Director General ||FY 2001-02 to 2016-17 ||1999.63 ||130.13 |
|Service Tax (Finance Act1994) ||Service Tax ||Commissioner of Service Tax ||FY 2007-08 to 2011-12 ||290.28 ||21.77 |
|Income Tax Act 1961 ||Income Tax ||Income Tax Appellate Tribunal/ Commissioner of Income Tax Appeal/ High Court ||1989-90 to 2015-16 ||348.88 ||108.10 |
|Bombay Sales Tax Act ||Sales Tax ||Deputy Commissioner of Sales Tax Appeals Mumbai ||1993-94 ||2.50 ||1.00 |
i. We have been informed that the Company has not defaulted in repayment of loans orborrowings to financial institutions banks and Government. The Company has not raised anyfunds through debentures.
ii. According to the information and explanations given to us and on the basis ofexamination of records the Company has neither obtained new term loans nor raised anymoney by way of initial public offer or further public offer of shares and/or debtinstruments during the year. Therefore the provisions of clause (ix) of the Order are notapplicable to the Company.
iii. Based on our audit procedures performed for the purpose of reporting the true andfair view of the Standalone Financial Statements and on the basis of information andexplanations given by the management no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year.
iv. The managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
v. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and accordingly the provisions of clause (xii) of the Orderare not applicable to the Company.
vi. According to the information and explanations given to us and based on ourexamination of records of the Company the transactions entered with related parties arein compliance with provisions of section 177 and 188 of the Act where applicable and thedetails of such transactions are disclosed in the Standalone Financial Statements asrequired by the applicable accounting standards.
vii. According to the information and explanations given to us and based on ourexamination of records of the Company the Company during the year has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures. Accordingly the provisions of clause (xiv) of the Order are not applicable tothe Company.
viii. In our opinion and according to the information and explanations given to us andbased on our examination of records of the Company the Company during the year has notentered into any non-cash transactions with directors or persons connected with thedirectors covered under the provisions of sec 192 of the Act and accordingly theprovisions of clause (xv) of the Order are not applicable to the Company.
ix. In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct1934.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT ON STANDALONE FINANCIALSTATEMENTS OF KAIRA CAN COMPANY LIMITED
(Referred to in paragraph II (f) under Report on Other Legal and RegulatoryRequirements' of our report of even date to the members of Kaira Can Company Limited onthe Standalone Financial Statements for the year ended March 31 2021) Report on theInternal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Kaira CanCompany Limited ("the Company") as of March 31 2021 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 Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). 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.
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 and the Standards on Auditing issued by the ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 Standalone Financial Statements whether due to fraud orerror.
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 with reference to Financial Statements
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 Standalone 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 themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneFinancial Statements.
Inherent Limitations of Internal Financial Controls with reference to FinancialStatements
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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as of March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the ICAI.
For G. D. Apte & Co.
Firm registration number: 100515W
Chetan R. Sapre
Membership No: 116952
UDIN : 21116952AAABVA7467
Place : Mumbai
Date : June 30 2021