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Kalyani Steels Ltd.

BSE: 500235 Sector: Metals & Mining
NSE: KSL ISIN Code: INE907A01026
BSE 00:00 | 19 Oct 232.60 -3.50
(-1.48%)
OPEN

235.95

HIGH

237.90

LOW

230.15

NSE 00:00 | 19 Oct 232.00 -5.65
(-2.38%)
OPEN

235.95

HIGH

237.15

LOW

230.00

OPEN 235.95
PREVIOUS CLOSE 236.10
VOLUME 17826
52-Week high 431.35
52-Week low 220.50
P/E 8.79
Mkt Cap.(Rs cr) 1,016
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 235.95
CLOSE 236.10
VOLUME 17826
52-Week high 431.35
52-Week low 220.50
P/E 8.79
Mkt Cap.(Rs cr) 1,016
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kalyani Steels Ltd. (KSL) - Auditors Report

Company auditors report

To the Members of Kalyani Steels Limited

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying standalone Ind AS financial statements of KalyaniSteels Limited („the Company‰) comprising of the Balance Sheet as at March 312018 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement for the year then ended and the Statement of Changes in Equity for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation which includes one Joint Operation Company on proportionate basis.(hereinafter referred to as „the Standalone Ind AS Financial Statements‰).Management's Responsibility for the Standalone Ind AS Financial Statements

2. The Company's Board of Directors is responsible for the preparation of thesestandalone Ind AS financial statements in terms of the requirements of the matters statedin Section 134(5) of the Companies Act 2013 (hereinafter referred to as „theAct‰) that give a true and fair view of the standalone financial position standalonefinancial performance standalone cash flows and changes in equity of the Company inaccordance with accounting principles generally accepted in India including the IndianAccounting Standards specified in the Companies (Indian Accounting Standards) Rules 2015(as amended) under Section 133 of the Act. The Company's Board of Directors is alsoresponsible for ensuring accuracy of records including financial information considerednecessary for the preparation of standalone Ind AS financial statements. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; the selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and the 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 which has been used for the purpose of preparation of thestandalone Ind AS financial statements by the Directors of the Company as aforesaid.Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. While conducting the audit we have taken into account theprovisions of the Act and the Rules made thereunder including the accounting standards andmatters which are required to be included in the audit report.

4. We conducted our audit of the standalone Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India. Those Standards and pronouncements require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sBoard of Directors as well as evaluating the overall presentation of the standalone IndAS financial statements.

6. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

7. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the standalone state ofaffairs of the Company as at March 31 2018 and their standalone profit (including othercomprehensive income) their standalone cash flows and standalone changes in equity forthe year ended on that date.

Other Matters

8. The comparative financial information of the Company for the year ended March 312017 and the transition date opening balance sheet as at April 1 2016 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements for the years ended March 31 2017 and March 31 2016 prepared inaccordance with the Companies (Accounting Standards) Rules 2006 (as amended) which wereaudited by us on which we expressed an unmodified opinion dated May 25 2017 and May 242016 respectively. The adjustments to those financial statements for the differences inaccounting principles adopted by the Company on transition to the Ind AS have been auditedby us.

9. We did not audit the financial statements of one joint operation whose financialstatements reflect total assets of

Rs. 228.53 Million and net assets of Rs. (4.95) Million as at March 31 2018 totalrevenue of Rs. 14.36 Million net profit of

Rs. 3.87 Million and net cash flows amounting to Rs. 18.13 Million for the year endedon that date as considered in the standalone Ind AS financial statements as per Ind AS111 „Joint Operations‰ on proportionate basis. These financial statements havebeen audited by other auditor whose report has been furnished to us by the Management andour opinion on the standalone Ind AS financial statements in so far as it relates to theamounts and disclosures included in respect of this Joint Operation Company and our reportin terms of sub-section (3) of Section 143 of the Act in so far as it relates to theaforesaid joint operation is based solely on the report of the other auditor. 10. Thecomparative financial information for the year ended March 31 2017 and the transitiondate opening balance sheet as at April 1 2016 in respect of on joint operation includedin this standalone Ind AS financial statements on proportionate basis prepared inaccordance with the Ind AS have been audited by other auditor and have been relied upon byus.

Our opinion on the standalone Ind AS financial statements and our report on Other Legaland Regulatory Requirements below is not modified in respect of the above matters withrespect to our reliance on the work done and the report of the other auditor. Report onOther Legal and Regulatory Requirements 11. As required by the Companies (Auditor'sReport) Order 2016 issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act (hereinafter referred to as the „Order‰) and onthe basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us we give in theAnnexure A' a statement on the matters specified in paragraphs 3 and 4 of the Order. 12.As required by Section143(3) of the Act we report to the extent applicable that : (a)We have sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit of the aforesaidstandalone Ind AS financial statements.

(b) In our opinion proper books of account as required by law have been kept by theCompany and its Joint Operation Company incorporated in India so far as it appears fromour examination of those books and the report of the other auditor. (c) The Balance Sheetthe Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report arein agreement with the books of account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2018 taken on record by the Board of Directors and the report of the other auditor ofits Joint Operation Company none of the directors is disqualified as on March 31 2018from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and its Joint Operation Company and the operatingeffectiveness of such controls refer to our separate Report in Annexure B'.

(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 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us : i. The Company has disclosed the impact if any of pendinglitigations as at March 31 2018 on its financial position in its standalone Ind ASfinancial statements - Refer Note 37; ii. The Company has long-term contracts includingderivative contracts as at March 31 2018 for which there were no material foreseeablelosses; iii. There has been no delay in transferring amounts required to be transferredto the Investor Education and Protection Fund by the Company during the year ended March31 2018.

For M/s. P. G. Bhagwat Firm Registration No.101118W

Chartered Accountants

Pritam Prajapati Pune Partner May 18 2018 Membership No.135734

Annexure ‘A' to Independent Auditor's Report

Referred to in paragraph 11 of the Independent Auditor's Report of even date to themembers of Kalyani Steels Limited on the standalone Ind AS financial statements as of andfor the year ended March 31 2018 i. (a) The Company is maintaining proper records showingfull particulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of four years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. Pursuant to the programme a portion of the fixed assets has been physicallyverified by the Management during the year and no material discrepancies have been noticedon such verification.

(c) The title deeds of immovable properties as disclosed in Note 3 on fixed assets tothe financial statements are held in the name of the Company. ii. The physicalverification of inventory have been conducted at reasonable intervals by the Managementduring the year. The discrepancies noticed on physical verification of inventory ascompared to book records were not material. iii. The Company has not granted any loanssecured or unsecured to companies firms Limited Liability Partnerships or other partiescovered in the register maintained under Section 189 of the Act. Therefore the provisionsof Clause 3(iii) (iii)(a) (iii)(b) and (iii)(c) of the said Order are not applicable tothe Company. iv. The Company has not granted any loans or made any investments or providedany guarantees or security to the parties covered under Section 185 and 186. Thereforethe provisions of Clause 3(iv) of the said Order are not applicable to the Company. v. TheCompany has not accepted any deposits from the public within the meaning of Sections 7374 75 and 76 of the Act and the Rules framed there under to the extent notified. vi.Pursuant to the rules made by the Central Government of India the Company is required tomaintain cost records as specified under Section 148(1) of the Act in respect of itsproducts. We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete. vii. (a) According to the information and explanations given to us and therecords of the Company examined by us in our opinion the Company is generally regular indepositing undisputed statutory dues in respect of income tax though there has been aslight delay in a few cases and is regular in depositing undisputed statutory duesincluding provident fund employees' state insurance sales tax service tax duty ofcustoms duty of excise value added tax Goods and Services Tax (with effect from July 12017) cess and other material statutory dues as applicable with the appropriateauthorities.

(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 sales tax service tax duty ofcustoms value added tax Goods and Services Tax (with effect from July 1 2017) whichhave not been deposited on account of any dispute. The particulars of dues of duty ofexcise as at March 31 2018 which have not been deposited on account of a dispute are asfollows :

Name of the statute Nature of dues Amount ( Rs. ) Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Excise Duty 9425387/- August 2008 to February 2011 Customs Excise and Service Tax Appellate Tribunal (CESTAT)

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date. ix. The Company has not raised any moneys by way of initial publicoffer further public offer (including debt instruments) and term loans during the year.Accordingly the provisions of Clause 3(ix) of the Order are 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 explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement. xi. The Company has paid/provided for managerial remuneration in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV to the Act. xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it the provisions of Clause 3(xii) of the Order are not applicable to theCompany.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under Ind AS 24Related Party Disclosures specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. xiv. The Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearunder review. Accordingly the provisions of Clause 3(xiv) of the Order are not applicableto the Company. xv. The Company has not entered into any non-cash transactions with itsdirectors or persons connected with him.

Accordingly the provisions of Clause 3(xv) of the Order are not applicable to theCompany. xvi. The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Orderare not applicable to the Company.

For M/s. P. G. Bhagwat
Firm Registration No.101118W
Chartered Accountants
Pritam Prajapati
Pune Partner
May 18 2018 Membership No.135734

Annexure ‘B'to the Independent Auditor's Report

Referred to in paragraph 12 (f) of the Independent Auditor's Report of even date to themembers of Kalyani Steels Limited on the standalone Ind AS financial statements for theyear ended March 31 2018

Report on the Internal Financial Controls under clause (i) of sub-section 3 of Section143 of the Act

We have audited the internal financial controls with reference to financial statementsof Kalyani Steels Limited („the Company‰) as of March 31 2018 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended on that date which includes internal financial controls with reference to financialstatements of the Company's one Joint Operation which is incorporated in India.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrols stated in the Guidance Note on Audit of Internal financial controls overfinancial reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal financial controls overfinancial reporting (the „Guidance Note‰) and the Standards on Auditing to theextent applicable to an audit of internal financial controls both issued by the Instituteof Chartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to financialstatements 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 with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal controls basedon the assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error. We believe that the audit evidence we have obtained and the auditevidence obtained by the other auditor in terms of their report referred to in the OtherMatter paragraph below is sufficient and appropriate to provide a basis for our auditopinion on the Company's internal financial controls with reference to financialstatements.

Meaning of Internal financial controls with reference to financial statements

A Company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal financial controls with reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to financial statements and such internal financialcontrols with reference to financial statements were operating effectively as at March 312018 based on the internal controls with reference to financial statements criteriaestablished by the Company considering the essential components of internal controlsstated in the Guidance Note on Audit of Internal financial controls over financialreporting issued by the Institute of Chartered Accountants of India.

Other Matter

Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls with reference to financial statements inso far as it relates to one Joint Operation which is a Company incorporated in India isbased on the corresponding report of the auditor of such Company incorporated in India.Our opinion is not qualified in respect of this matter.

For M/s. P. G. Bhagwat
Firm Registration No.101118W
Chartered Accountants
Pritam Prajapati
Pune Partner
May 18 2018 Membership No.135734