TO THE MEMBERS OF KEI INDUSTRIES LIMITED
Report on the Standalone Financial Statements
1. We have audited the accompanying Standalone financial statements of KEI IndustriesLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Standalone
2. 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 ofthese Standalone financial statements to give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance 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 statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these Standalone financial statementsbased on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting standards and matters which are required to be included in theaudit report.
5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone financial statements.
8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its profit and its cash flows for the year ended onthat date.
Report on Other Legal and Regulatory
9. As required by 'the Companies (Auditor's Report) Order 2016) issued by the CentralGovernment of India in terms of Sub-section (11) of Section 143 of the Act (hereinafterreferred to as the "Order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the Annexure B a statement on the matters specifiedin paragraphs 3 and 4 of the Order.
10. As required by Section 143 (3) of the Act we report to the extent applicablethat:
(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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid Standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of written representation received from the directors as on 31stMarch 2017 taken on record by the
Board of Directors none of the directors is disqualified as on 31st March2017 from 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure A.
(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 of pending litigations as at 31stMarch 2017 on its financial position in its financial statements - Refer Note No 35.1 to35.4.
ii. The Company did not have any longterm contracts including derivative contracts asat 31st March 2017.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended on 31stMarch 2017.
iv. The Company has provided requisite disclosures in its financial statements as toholdings as well as dealing in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016 and these are in accordance with thebooks of accounts maintained by the company- Refer Note No 36.
| ||For JAGDISH CHAND & CO. |
| ||Firm Registration Number: 000129N |
| ||Chartered Accountants |
| ||(PRAVEEN KUMAR JAIN) |
|Place of signature: New Delhi ||Partner |
|Date: 10th May 2017 ||Membership No.: 085629 |
Annexure A to Independent Auditors' Report
Referred to in paragraph 10 (f) of the Independent Auditors' Report of even date to themembers of KEI Industries Limited on the standalone financial statements for the yearended 31st March 2017.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act
1. We have audited the internal financial controls over financial reporting of KEIIndustries Limited ("the Company") as of 31st March 2017 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
2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial
Controls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
3. 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 deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.
5. 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
6. A Company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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
7. 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
8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
For JAGDISH CHAND & CO. Firm Registration Number: 000129N
Chartered Accountants (PRAVEEN KUMAR JAIN)
Place of signature: New Delhi Partner
Date: 10th May 2017 Membership No.: 085629
Annexure B to Independent Auditors' Report
Referred to in paragraph 9 of the Independent Auditors' Report of even date to themembers of KEI Industries Limited on the Standalone financial statements as of and for theyear ended 31st March 2017. i. (a) The Company is maintaining proper recordsshowing full particulars including quantitative details and situation of fixed assets.
(b) The fixed assets of the Company have been physically verified by the Managementduring the year. The discrepancies noticed on such verification were not material and havebeen properly dealt with in the books of account. In our opinion the frequency ofverification is reasonable.
(c) The title deeds of immovable properties as disclosed in Note 11 on fixed assets tothe financial statements are held in the name of the Company. ii. The physicalverification of inventory (excluding stocks with third parties) has been conducted atreasonable intervals by the Management during the year. In respect of inventory lying withthird parties these have substantially been confirmed by them. The discrepancies noticedon physical verification of inventory as compared to book records were not material. iii.The Company has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Act. There are two parties covered in the register maintained under Section 189of the Act to which Company has given security deposits as per contractual obligations.(Refer Note 13).
(a) In respect of the aforesaid deposits the terms and conditions under which suchdeposits were granted are not prejudicial to the Company's interest.
(b) Since it is a security deposit no schedule for repayment of deposit is applicableand no interest was charged.
(c) In respect of the aforesaid deposit there is no amount which is overdue for morethan ninety days. iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of the loans and investments made and guarantees andsecurity provided by it. v. In our opinion and according to the information andexplanations given to us the Company has complied with the provisions of Sections 73 7475 and 76 or any other relevant provisions of the Act and the Rules framed thereunder tothe extent notified with regard to the deposits accepted from the public. According tothe information and explanations given to us no order has been passed by the Company LawBoard or National Company Law Tribunal or Reserve Bank of India or any Court or any otherTribunal on the Company in respect of the aforesaid deposits. vi. Pursuant to the rulesmade by the Central Government of India the Company is required to maintain cost recordsas specified under Section 148(1) of the Act in respect of its products.
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 records of the Company and information andexplanations given to us and the records of the Company examined by us the Company hasbeen regular in depositing the undisputed statutory dues including provident fundemployees state insurance income tax Investor education and protection fund sales taxservice tax customs duty excise duty cess and other material statutory dues applicableto it with the appropriate authorities.
(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of Income Tax Service Tax Value AddedTax/ Sales Tax Entry Tax Customs Duty and Excise Duty as at 31st March 2017which have not been deposited on account of a dispute are as follows:
|Name of the Statute ||Nature of the Due ||Amount (` In Millions) ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act ||Income Tax ||0.87 ||2011-12 ||Income Tax Appellate Tribunal |
| ||Income Tax ||0.32 ||2012-13 ||Income Tax Appellate Tribunal |
|Sales/ Entry Tax Act ||Central Sales Tax ||0.42 ||1999-2000 ||Tax Board |
| ||West Bengal Tax on Entry of Goods into Local Areas Act 2012 ||6.72 ||2013-14 to 2016-17 ||Hon'ble High Court |
|Central Excise Duty ||Excise Duty ||83.86 ||2010-11 & 2014-15 ||CESTAT |
| ||Excise Duty ||1.98 ||2007-08 & 2008-09 ||Commissioner (Appeals) |
|Finance Act ||Service Tax ||0.87 ||2014-15 ||Commissioner (Appeals) |
| ||Service Tax ||31.70 ||Various years for 2009-10 to 2014-15 ||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). Term loans have been applied forthe purposes for which they were obtained. x. During the course of our examination of thebooks and records of the Company carried out in accordance with the generally acceptedauditing practices in India and according to the information and explanations given tous we have neither come across any instance of material fraud by the Company or on theCompany by its officers or employees noticed or reported during the year nor have webeen informed of any such case by the Management. xi. The Company has paid/ provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act. xii. As the Company is not aNidhi Company and the Nidhi Rules 2014 are not applicable to it the provisions of Clause3(xii) of the Order are not applicable to the Company. xiii. The Company has entered intotransactions with related parties in compliance with the provisions of Sections 177 and188 of the Act. The details of such related party transactions have been disclosed in thefinancial statements as required under Accounting Standard (AS) 18 Related PartyDisclosures specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. xiv. The Company has not made any preferential allotment orprivate 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) ofthe Order are not applicable to the Company. xvi. The Company is not required to beregistered under Section 45-IA of the Reserve Bank of India Act 1934. Accordingly theprovisions of Clause 3(xvi) of the Order are not applicable to the Company.
| ||For JAGDISH CHAND & CO. |
| ||Chartered Accountants |
|Firm Registration Number: 000129N ||(PRAVEEN KUMAR JAIN) |
|Place of signature: New Delhi ||Partner |
|Date: 10th May 2017 ||Membership No.: 085629 |