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Kamanwala Housing Construction Ltd.

BSE: 511131 Sector: Infrastructure
NSE: N.A. ISIN Code: INE344D01018
BSE 00:00 | 17 Sep 10.25 0.48
(4.91%)
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NSE 05:30 | 01 Jan Kamanwala Housing Construction Ltd
OPEN 9.80
PREVIOUS CLOSE 9.77
VOLUME 6845
52-Week high 13.05
52-Week low 3.80
P/E
Mkt Cap.(Rs cr) 14
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 9.80
CLOSE 9.77
VOLUME 6845
52-Week high 13.05
52-Week low 3.80
P/E
Mkt Cap.(Rs cr) 14
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kamanwala Housing Construction Ltd. (KAMANWALAHOUSIN) - Auditors Report

Company auditors report

To the Members of

Kamanwala Housing Construction Limited

Report on the Audit of Standalone Financial Statements Opinion

We have audited the accompanying Standalone financial statements of Kamanwala HousingConstruction Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2020 the Statement of Profit and Loss (including other comprehensive income)Statement of changes in Equity and Cash Flow Statement for the year then ended and notesto the financial statements including a summary of significant accounting policies andother explanatory information ( hereinafter referred to as ("the standalone financialstatements") In our opinion and to the best of our information and according to theexplanations given to us 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 Indian Accounting Standards prescribed under section 133 of theCompanies Act 2013 ("the Act") read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and its profits (including other comprehensive income) changes in equity and its cashflows for the year ended on that date.

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 together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the Standalone Financial Statements

Key Audit Matters

Key audit matters (‘KAM') are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matter described below to bethe key audit matter to be communicated in our report.

The Key Audit Matter How the matter was addressed in our audit
1. Evaluation of uncertain tax positions:- Our audit procedures included the following:
The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. • Obtained details of completed tax assessments and demands for the year ended March 312020 from management.
There are pending litigations which has been mentioned in Note no. 40 - a) to c) to the Standalone Ind AS financial statements. • Discussed with appropriate senior Management and evaluated Management's underlying key assumptions in estimating the tax provisions;
The litigations are with respect to dues of income tax sales tax which has not been deposited by the company on account of disputes. • Assessed management's estimate of the possible outcome of the disputed cases.
• Assessed the reason behind the pending litigations.
• Based on our procedures we also considered the adequacy of disclosures in respect of pending litigations and it is disclosed accordingly.
2. Recoverability of investments in and loans / advances given to certain associates and Joint ventures and other Parties: Our audit procedures included the following:
The Company has investments in certain associates and joint ventures with a carrying value of Rs. 69 Lakhs. • We have obtained and read Management's assessment for identification of indicators of impairment.
The Key Audit Matter How the matter was addressed in our audit
Further Company has also provided loans and advances to other parties amounting to Rs. 1205.60 Lakhs. • We performed test of controls over impairment process through inspection of evidence of performance of these controls.
These parties have either been incurring losses or has pending litigation and therefore dues are overdue. Assessment of the recoverable amount of the investments in and loans/advances including interest thereon has been identified as a key audit matter due to: • Assessed the impairment assessment made by the management and the assumptions used with particular attention understanding the legal dispute commercial prospects of the assets/ projects.
• Significance of the carrying amount of these balances. • The calculation of certain credit provisions for the Company is inherently judgmental. Impairment provisions (identified and unidentified) may not reflect recent developments in credit quality.
• The assessment requires management to make significant estimates concerning the estimated future cash flows qualitative assessments of the status of the project and its future depending on balance work to be performed or approvals to be received and growth rates based on management's view of future business prospects
• Changes to any of these assumptions could lead to material changes in the estimated recoverable amount impacting both potential impairment charges and also potential reversals of impairment taken in prior years

Information other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Company's Annual Report but doesnot include the standalone financial statements and our auditors' report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

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 state of affairs (financial position) profit orloss (financial performance including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Ind AS specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also 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 standalonefinancial 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place with reference to standalonefinancial statements in place and the operating effectiveness of such controls.

• 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 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 ourauditors' 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 standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein "Annexure A" a statement on the matters specified in paragraphs 3 and4 of the Order.

2. As required by Section 143(3) of the Act based on our audit we report that:

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the relevant books of account.

(d) In our opinion the aforesaid standalone 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 as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct except the following Director:

Name of the Director DIN of the Director
Ajit Anant Surve 08266710

(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".

(g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us: i. TheCompany has disclosed the impact of pending litigations as of March 31 2020 on itsfinancial position in its standalone financial statements – Refer Note no. 40 –a) to c) to the standalone IND AS

Financial statements. ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses. iii. There wereno amounts which were required to be transferred to the Investor Education and ProtectionFund by the Company.

(h) With respect to the matters to be included in the Auditors' Report in accordancewith the requirements of section 197(16) of the Act as amended: In our opinion andaccording to the information and explanations given to us the remuneration paid by theCompany to its directors during the current year is in accordance with the provisions ofSection 197 of the Act.

For Majithia & Associates
Chartered Accountants
Firm Reg. No. 105871W
Bhavesh R. Majithia
Partner
Membership No. 048194
UDIN: 20048194AAAABR6006
Place : Mumbai
Date : 28th July 2020

"Annexure-A" to the Independent Auditor's Report

The Annexure referred to in Paragraph 1 under heading of "Report on Other Legaland Regulatory Requirements" section of our report of even date to the members of KamanwalaHousing Construction Limited (‘the Company') for the year ended March 31 2020:

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.

(b) As per the information and explanation provided to us the Company has a regularprogramme of physical verification of its fixed assets by which fixed assets are verifiedin a phased manner over a period of three years. In accordance with this programmecertain fixed assets were physically verified by the Management during the year. Accordingto the information and explanation given to us no material discrepancies were noticed onsuch verification. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company does not have any immovableproperty in its Fixed Assets and therefore provisions of sub-clause (c) of Clause (i) ofparagraph 3 of the order is not applicable to the Company. ii. As per the information andexplanation given to us the inventories have been physically verified during the year bythe Management. In our opinion the frequency of verification is reasonable. No materialdiscrepancy was noticed on physical verification of stocks by the management as comparedto book records. iii. As per the information and explanation given to us the Company hasgranted loans to parties covered in the register maintained under section 189 of theCompanies Act 2013 (‘the Act').

(a) The rate of interest and other terms and conditions on which the loans had beengranted to the bodies corporate listed in the register maintained under Section 189 of theAct were prima facie not prejudicial to the interest of the Company.

(b) In the case of the loans granted to the parties listed in the register maintainedunder section 189 of the Act the borrowers have been regular in the payment of theinterest as stipulated. The terms of arrangements do not stipulate any repayment scheduleand the loans are repayable on demand. Accordingly clause (iii) (b) of the paragraph 3 ofthe Order is not applicable to the Company in respect of repayment of the principalamount.

(c) There are no overdue amounts in respect of the loans granted to the bodiescorporate listed in the register maintained under section 189 of the Act. iv. In ouropinion and according to the information and explanations given to us the Company hascomplied with the provisions of section 185 and 186 of the Act in respect of loans andinvestments made. The company has not given any guarantees and therefore provisions ofclause (iv) of paragraph 3 of the order in respect of guarantees is not applicable to theCompany. v. According to the information and explanations given to us the Company has notaccepted any deposit from the public. Therefore the provisions of Clause (v) of paragraph3 of the Order are not applicable to the Company. vi. According to the information andexplanations given to us as per the Companies (Cost records and audit) Rules 2015provisions of sub-section (1) of section 148 of the Act relating to maintenance of costrecords are applicable to the Company and the Company has maintained the necessary recordsas required under the Act. vii. (a) According to the information and explanations given tous and on the basis of our examination of the records of the Company amounts deducted/accrued in the books of account in respect of undisputed statutory dues includingprovident fund income tax sales tax wealth tax service tax duty of customs valueadded tax and other material statutory dues have been regularly deposited during the yearby the Company with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of provident fundincome tax service tax value added tax and other material statutory dues were in arrearsas at 31st March 2020 for a period of more than six months from the date they becamepayable.

(b) According to information and explanations given to us the following dues of incometax sales tax and value added tax have not been deposited by the Company on account ofdisputes:

Name of Statute Nature of dues Amount (Rs. In lacs) Period to which the amount relates (FY) Forum where dispute is pending
The MVAT Act 2002 Sales Tax 20.93 2006-07 Commissioner of Sales Tax (Appeal)
The MVAT Act 2002 Sales Tax 14.53 2007-08 Commissioner of Sales Tax (Appeal)
The MVAT Act 2002 Sales Tax 4.64 2008-09 Commissioner of Sales Tax (Appeal)
The MVAT Act 2002 Sales Tax 23.69 2010-11 Commissioner of Sales Tax (Appeal)
The MVAT Act 2002 Sales Tax 74.56 2011-12 Commissioner of Sales Tax (Appeal)
The MVAT Act 2002 Sales Tax 16.32 2014-15 Commissioner of Sales Tax (Appeal)
The Income Tax Act1961 Income Tax 345.60 2014-15 Commissioner of Income Tax (Appeals)

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to financial institutions bank ordebenture holders. ix. The Company did not raise any money by way of initial public offeror further public offer (including debt instruments) and term loans during the year.Therefore the provisions of Clause (ix) of paragraph 3 of the Order are not applicable tothe Company. x. In our opinion and according to the information and explanations given tous no material fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the financial year covered by our audit. xi. According tothe information and explanations given to us and based on our examination of the books ofaccounts of the Company the Company has paid / provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act. xii. In our opinion and according to the information andexplanations given to us the Company is not a nidhi company.

Therefore the provisions of Clause (xii) of paragraph 3 of the Order are notapplicable to the Company xiii. According to the information and explanations given to usand based on our examination of the books of account of the Company transactions with therelated parties are in compliance with sections 177 and 188 of the Act where everapplicable and details of such transactions have been disclosed in the standalonefinancial statements as required by the applicable accounting standards and the Act. xiv.According to the information and explanations give to us and based on our examination ofthe books of account of the Company the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during thefinancial year covered by our audit. Therefore the provisions of Clause (xiv) ofparagraph 3 of the Order are not applicable to the Company. xv. According to theinformation and explanations given to us and based on our examination of the books ofaccount of the Company the Company has not entered into non-cash transactions withdirectors or persons connected with him. Therefore the provisions of Clause (xv) ofparagraph 3 of the Order are not applicable to the Company. xvi. In our opinion andaccording to the information and explanation given to us the Company is not required tobe registered under section 45-IA of the Reserve Bank of India Act 1934.

For Majithia & Associates
Chartered Accountants
Firm Reg. No. 105871W
Bhavesh R. Majithia
Partner
Membership No. 048194
UDIN: 20048194AAAABR6006
Place : Mumbai
Date : 28th July 2020

Annexure - B to the Independent Auditor's Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of KamanwalaHousing Construction Limited ("the Company") as of 31st March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on 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 Reportingissued by the Institute of Chartered Accountants of India (‘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 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 Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI andspecified under section 143(10) of the Companies Act 2013 to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements by ICAIand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment 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 Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) Pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) Provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.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 according to the information and explanations given to us theCompany has 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 control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.

For Majithia & Associates
Chartered Accountants
Firm Reg. No. 105871W
Bhavesh R. Majithia
Partner
Membership No. 048194
UDIN: 20048194AAAABR6006
Place : Mumbai
Date : 28th July 2020

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