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Kedia Construction Company Ltd.

BSE: 508993 Sector: Infrastructure
NSE: N.A. ISIN Code: INE511J01027
BSE 05:30 | 01 Jan Kedia Construction Company Ltd
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Kedia Construction Company Ltd. (KEDIACONSTRUCT) - Auditors Report

Company auditors report

To the Members of Kedia Construction Company Limited

Report on the Indian Accounting Standards ("Ind AS") Financial StatementsQualified Opinion

We have audited the financial statements of Kedia Construction Company Limited whichcomprise the Balance Sheet as at 31st March 2021 and the Statement of Profitand Loss including Other Comprehensive

Income Statement of Changes in Equity and Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"Ind AS financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects on the Ind AS financial statements of thematter described in "Basis for Qualified paragraph the aforesaid financialstatements give the information required by the Companies Act 2013

(The Act) in the manner so required and give a true and fair view in conformity withthe accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2021 and its profit total comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We draw your attention to note no.5 Other Financial Assets (Non-Current Assets) inwhich the company has given interest free unsecured loans to certain parties whichincludes an amount of Rs.19.23 lakhs to Sanjeev Builders Pvt. Ltd. which is having anegative net worth as on 31st March 2021 and hence recoverability of theamount outstanding cannot be determined. Further the company has not made any provisionfor expected credit loss in respect of loans and advances provided as stated above. Assuch the effect of the same on current year's profit is not ascertainable.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section

143(10) of the Companies Act 2013. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered

Accountants of India together with the ethical requirements that are relevant to ouraudit of the financial statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidences wehave obtained are sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Inventories

The Company's inventory consists of Shares. Our audit procedures for this area included:
Total Inventory of the Company represents 11.71 per cent of the Company's total assets. We assessed appropriateness of the pricing methodologies with reference to Company's valuation policy.
Inventories are made and valued in accordance with Policy of the Company and relevant Ind AS at cost or market value whichever is lower. We have not verified the inventory of shares with the physical share certificates.
Refer Note no. 2.3(k) of "Significant Accounting Policies". In Unquoted Inventories are valued based on the previous year's net worth.

Investments

The Company's Investments consists of Mutual Funds. Our audit procedures for this area included:
Total Investment of the Company represents 14.71 per cent of the Company's total assets. We assessed appropriateness of the pricing methodologies with reference to Company's valuation policy.
Investments are made and valued in accordance with Policy of the Company and relevant Ind AS at fair value through profit or loss. We have verified the investments with the Mutual funds statements.
Refer Note no. 2.3(p) of "Significant Accounting In Quoted Mutual Fund recalculated the valuation with independent pricing sources.
Policies".

Emphasis of Matter

1. We draw attention to note no.26 of the Financial Statements of the company whereinthe financial impact of COVID-19 on the operations of the company has been disclosed.Further the extent to which the COVID-19 pandemic will impact the company's financialperformance is dependent on future developments which are highly uncertain. Our opinionis not modified in this matter.

2. We draw your attention to note no.27 of the Financial statements of the companywhich relates to the pending litigation of the company along with a group company againstLIC of India for the Ridge Road Property for which an amount of Rs.66.27 lakhs is shown inInventory and also no provision for diminution in value if any is considered as thematter is subjudice.

Other Matters

Due to COVID-19 pandemic and the lockdown and other restrictions imposed by theGovernment and local administration the audit processes were carried out based on theremote access to the extent available/feasible and necessary records made available by themanagement through digital medium.

Our opinion is not modified in respect of this matter

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 CorporateGovernance and Shareholder's Information but does not include the financial statementsand our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

We have been provided the aforesaid reports and based on the work we have performed wedid not observe any material misstatement of this other information and accordingly wehave nothing to report in this regard.

Responsibilities of Management and those charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies

Act 2013 ("the Act") with respect to the preparation of these financialstatements that give a true and fair view of the financial position and financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the accounting standards (Ind_AS) specified under section 133 of the Act readwith relevant rules issued thereunder.

 

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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 reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 exists we are required to draw attention inour auditor's report to the related disclosures in the financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained upto the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

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.

Report on Other Legal and Regulatory Requirements

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 Companies Act 2013 we give in the Annexure "A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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) Except for the effects of the matter described in the basis for qualifiedopinion paragraph above In our opinion proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks.

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) The company does not have any branches. Hence the provisions of section 143(3)(c)is not applicable.

(e) Except for the effects of the matter described in the basis for qualifiedopinion paragraph above In our opinion the aforesaid IND AS financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withrule 7 of the Company's (accounts)

2014.

(f) The matter described in the Basis for Qualified Opinion paragraph above inour opinion may have an adverse effect on the functioning of the Company.

(g) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of the Act.

(h) The Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial control over financialeffectively as at 31st March 2021 based on the internal control over financial reportingcriteria established by the Company. With respect to adequacy of the internal financialcontrol over financial reporting of the company and operating effectiveness of suchcontrols refer our separate report in "Annexure-B".

(i) 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 opinionto the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

(j) 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 information and according to the explanations given to us:

i. The Company has disclosed the impact of the pending litigation on its financialposition in note no. 27 in its IND AS financial statements.

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For GMJ & Co
Chartered Accountants
Firm Registration No: 103429W
CA Atul Jain
Partner
M. No. 037097
UDIN: 21037097AAAABK7164
Place: Mumbai
Date: 26th April 2021

The Annexure A referred to in Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31 March 2021 we report that:

(i) In respect of its fixed assets :

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets (b) Plant and equipment were physicallyverified during the year by the Management in accordance with a programme of verificationwhich in our opinion provides for physical verification of all the plant and equipment atreasonable intervals. According to the information and explanation given to us no materialdiscrepancies were noticed on such verification.

(c) The Company does not own any immovable properties as disclosed in fixed assetsfinancial statements. Therefore the provisions of Clause 3(i)(c) of the said Order arenot applicable to the Company.

(ii) The inventory includes unlisted shares in respect of which physical sharescertificates cannot be verified as such we are unable to offer any comment on materialdiscrepancies if any between physical and book records.

(iii) According to information and explanations given to us and to the best of ourknowledge and belief the Company has granted unsecured loans to a company and LLPcovered in the register maintained under Section 189 of the Act.

(a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company's interest.

(b) In respect of the aforesaid loans no schedule for repayment of principal andpayment of interest has been stipulated by the Company. Therefore in absence ofstipulation of repayment terms we do not make any comment on the regularity of repaymentof principal and payment of interest.

(c) In respect of the aforesaid loans there is no amount which is overdue for morethan ninety days.

(iv) According to the information and explanations given to us the Company hascomplied with the provisions of Section 185 and 186 of the Companies Act 2013 in respectof the loans and investments made and no guarantee or security has been provided by it.

(v) According to the information and explanations given to us the Company has notaccepted any deposit from the public in accordance with the provisions of Sections 73 to76 or any other relevant provisions of the Act and the rules framed thereunder.Accordingly paragraph 3(v) of the Order is not applicable to the Company.

(vi) The Central Government of India has not specified the maintenance of cost recordsunder subsection (1) of Section 148 of the Act for any of the products of the Company.

(vii) According to the information and explanations given to us and according to thebooks and records as produced and examined by us in our opinion

a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employee State Insurance Income Tax Custom Duty Goods and Service TaxCess and other material statutory dues as applicable to it with appropriate authorities.

b) There were no undisputed amounts payable in respect Provident Fund Employee StateInsurance Income Tax Custom Duty Goods and Service Tax Cess and other materialstatutory dues in arrears as at 31st March 2021 for a period of more than sixmonths from the date they became payable.

(viii) As the Company does not have any loans or borrowings from any financialinstitution or bank or

Government nor has it issued any debentures as at the balance sheet date theprovisions of Clause 3(viii) of the Order are not applicable to the Company.

(ix) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

(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 employees noticed or reported during theyear nor have we been informed of any such case by the Management.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid managerial remuneration in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Companies Act 2013.

(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) According to the information and explanations given to us and based on ourexamination of the records of the Company all transaction with related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Ind AS financial statements as required by theapplicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly the provisions of Clause 3(xiv) of the Order are not applicable to theCompany.

(xv) The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For GMJ & Co

Chartered Accountants Firm Registration No: 103429W

CA Atul Jain

Partner M. No. 037097

UDIN: 21037097AAAABK7164

Place: Mumbai

Date: 26th April 2021

Annexure - B to the Auditors' 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 KediaConstruction Company Limited ("the Company") as of 31st March2021 in conjunction with our audit of the financial statements of the Company for the yearended 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').

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to 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 Companies Act 2013.

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 and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial

Controls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 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 Becauseof the inherent limitations of internal financial controls over financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion and to the best of our information & according to the explanationsgive to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2021 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For GMJ & Co

Chartered Accountants Firm Registration No: 103429W

CA Atul Jain

Partner M. No. 037097

UDIN: 21037097AAAABK7164

Place: Mumbai

Date: 26th April 2021

.