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Kalyani Commercials Ltd.

BSE: 538403 Sector: Others
NSE: KALYANI ISIN Code: INE610E01010
BSE 05:30 | 01 Jan Kalyani Commercials Ltd
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Kalyani Commercials Ltd. (KALYANI) - Auditors Report

Company auditors report

on Consolidated Financial Statements To

The Members of

Kalyani Commercials Limited

Report on the Audit of the Consolidated Financial Statements Opinion

We have audited the accompanying consolidated financial statements of KALYANICOMMERCIALS LIMITED (the "Company") and its subsidiary (the Company and itssubsidiary together referred to as the "Group") which comprise the ConsolidatedBalance Sheet as at March 31st 2020 and the Consolidated Statement of Profitand Loss (including Other Comprehensive Income) the Consolidated Statement of Changes inEquity and the Consolidated Statement of Cash Flows for the year then ended and a summaryof significant accounting policies and other explanatory information (hereinafter referredto as the "consolidated financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid consolidated financial statements give the informationrequired by the Company Act 2013 (the "Act") in the manner so required and givea true and fair view in conformity with the Indian Accounting Standards ("IndAS") prescribed under section 133 of the Act read with the Company (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia of the consolidated state of affairs of the Group as at March 31st2020 the consolidated profit consolidated total comprehensive income consolidatedchanges in equity and its consolidated cash flows for the year ended on that date.

Other Matters

1. The Company was registered u/s 45-IA of the RBI Act 1934 as an NBFC Company besidesits other business activities. During the year the company has surrendered its NBFC statusto the RBI and continued to running its normal business activities. Pursuant to this theCompany has prepared its financial statement as per Ind AS. The same is not affecting thebusiness activity of the company in any manner including going concern concept.

Our opinion is not modified in respect of this matter.

2. We did not audit the separate financial statements of one subsidiary included inthese consolidated financial statements. Financial statements of this Subsidiary reflecttotal assets of Rs. 6631.92 Lacs and Total liabilities of Rs 5806.44 Lacs as at 31 March2020 and Net Loss of Rs. 19.89 Lacs for the year ended on that date as considered inthese consolidated financial statements.

The Company had prepared separate set of financial statements of subsidiary for theyears ended 31st March 2020 in accordance with accounting principles generallyaccepted in India and which have been audited by other auditors under generally acceptedauditing standards applicable in India. Our opinion in so far as it relates to the amountsand disclosures in respect of these subsidiaries is solely based on report of the otherauditors. Our opinion is not qualified in respect of this matter.

3. Due to COVID-19 related lock-down we were not able to participate in the physicalverification of inventory at the year end. Consequently we have performed alternativeprocedures to audit the existence of inventory as per the guidance provided in SA 501"Audit Evidence - Specific Considerations for Selected Items" and have obtainedsufficient appropriate audit evidence to issue our unmodified opinion on these StandaloneFinancial Results. Our opinion is not modified in respect of this matter.

Basis for Opinion

We conducted our audit of the consolidated financial statements in accordance with theStandards on Auditing ("SA"s) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Consolidated Financial Statements section of ourreport. We are independent of the Group in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ("ICAI") together with theethical requirements that are relevant to our audit of the consolidated financialstatements under the provisions of the Act and the Rules made there under and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence obtained by us is sufficient andappropriate to provide a basis for our audit opinion on the consolidated

financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the consolidated financial statements of the current period.These matters were addressed in the context of our audit of the consolidated 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.

KEY AUDIT MATTERS AUDITORS' RESPONSE
1. Accuracy of recognition measurement presentation and disclosures of revenues and other related balances Principal Audit Procedures We assessed the Company's process to identify the impact of the revenue accounting standard. 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 implementation of the revenue accounting standard.
• Selected a sample 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 observation reperformance and inspection of evidence in respect of operation of these controls.
• Tested the relevant information of management controls relating to sales and service and other related information used in recording and disclosing revenue in accordance with the revenue accounting standard.

Information Other than the 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 consolidated financial statements standalone financial statements and ourauditor's report thereon.

Our opinion on the consolidated financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the consolidated 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 a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Consolidated 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 and presentation of these consolidatedfinancial statements that give a true and fair view of the consolidated financialposition consolidated financial performance including other comprehensive incomeconsolidated changes in equity and consolidated cash flows of the Group in accordance withthe Ind AS and other accounting principles generally accepted in India. The respectiveBoards of Directors of the company included in the Group are responsible for maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Group and for preventing and detecting frauds and otherirregularities; selection and application of appropriate

accounting policies; making judgments and estimates that are reasonable and prudent;and design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror which have been used for the purpose of preparation of the consolidated financialstatements by the Directors of the Company as aforesaid.

In preparing the consolidated financial statements the respective Boards of Directorsof the company included in the Group are responsible for assessing the ability of therespective entities to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless therespective Boards of Directors either intend to liquidate their respective entities or tocease operations or have no realistic alternative but to do so.

The respective Boards of Directors of the company included in the Group are alsoresponsible for overseeing the financial reporting process of the Group.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidatedfinancial 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 consolidated financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidatedfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to 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 and its subsidiary company which are company incorporated in India 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 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 ability ofthe Group to continue as a going concern.

• If we conclude that a material uncertainty exists we are required to drawattention in our auditor's report to the related disclosures in the consolidated 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 Group to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the consolidatedfinancial statements including the disclosures and whether the consolidated financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

• Obtain sufficient appropriate audit evidence regarding the financial informationof the entities within the Group to express an opinion on the consolidated financialstatements. We are responsible for the direction supervision and performance of the auditof the financial statements of such entities included in the consolidated financialstatements of which we are the independent auditors.

Materiality is the magnitude of misstatements in the consolidated financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the consolidated

financial statements may be influenced. We consider quantitative materiality andqualitative factors in (i) planning the scope of our audit work and in evaluating theresults of our work; and (ii) to evaluate the effect of any identified misstatements inthe consolidated financial statements.

We communicate with those charged with governance of the Company and such otherentities included in the consolidated financial statements of which we are the independentauditors regarding among other matters the planned scope and timing of the audit andsignificant 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 with those charged with governance we determine thosematters that were of most significance in the audit of the consolidated financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 of the aforesaidconsolidated financial statements.

b) In our opinion proper books of account as required by law relating to preparationof the aforesaid consolidated financial statements have been kept so far as it appearsfrom our examination of those books.

c) The Consolidated Balance Sheet the Consolidated Statement of Profit and Loss(including Other Comprehensive Income) Consolidated Statement of Changes in Equity andthe Consolidated Statement of Cash Flows dealt with by this Report are in agreement withthe relevant books of account maintained for the purpose of preparation of theconsolidated financial statements.

d) In our opinion the aforesaid consolidated financial statements comply with the IndAS specified under section 133 of the Act.

e) On the basis of the written representations received from the directors of theCompany as on March 31st 2020 taken on record by the Boards of Directors ofthe Company and its subsidiaries incorporated in India and the reports of the statutoryauditors of its subsidiary company incorporated in India none of the directors of theGroup company incorporated in India is disqualified as on March 312020 from beingappointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting and the operating effectiveness of such controls; refer to our separate Reportin "Annexure A" which is based on the auditors' reports of the Company and itssubsidiary company incorporated in India. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of internal financial controls over financialreporting of those companies.

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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the 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 Company (Audit and Auditors) Rules 2014 as amended in ouropinion and to the best of our information and according to the explanations given to us:

i. The consolidated financial statements disclose the impact of pending litigations onthe consolidated financial position of the Group.

ii. The Company and its Subsidiary company incorporated in India did not have any longterm contract including derivative contract for which there were any material foreseeablelosses.

iii. There were no amount required to be transferred to the Investor Education andProtection Fund by the Company and its Subsidiary company incorporated in India.

For M.C. Bhandari & CO. Chartered Accountants (Firm's Registration No. 303002E)

CA S.K. Mahipal Partner

(Membership No.70366)

Place: Delhi Date: 02/07/2020

UDIN: 20070366AAAAA08411

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the members of KALYAM COMMERCIALS LMITED of evendate)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

In conjunction with our audit of the consolidated financial statements of the Companyas of and for the year ended March 312020 we have audited the internal financialcontrols over financial reporting of KALYANI COMMERCIALS LIMITED (hereinafter referred toas the "Company") and its subsidiary company which are company incorporated inIndia as of that date.

Management's Responsibility for Internal Financial Controls

The Boards of Directors of the Company and its subsidiary company which are companyincorporated in India are responsible for establishing and maintaining internal financialcontrols based on the internal control over financial reporting criteria established bythe respective Company considering the essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issuedby the Institute of Chartered Accountants of India (the "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 the respective company's policies thesafeguarding 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 Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company and its subsidiary company which are companyincorporated in India based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India("ICAI") and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company and its subsidiary company which are companyincorporated in India.

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 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 in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 and to the best of our information and according to the explanationsgiven to us the Company and its subsidiary company which are company incorporated inIndia have in all material respects an adequate internal financial controls system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2020 based on the internal financial control overfinancial reporting criteria established by the respective company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the ICAI.

For M C BHANDARI & CO. CharteredAccountants (Firm Registration No.303002E)
CA S.K. MAHIPAL Partner (MembershipNo.70366)
Place: Delhi Date: 02/07/2020 UDIN: 20070366AAAAA08411

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