The Members of KEMP & COMPANY LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of KEMP & COMPANY LIMITED("the Company") which comprise the Balance Sheet as at March 31 2021 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity the Statement of CashFlowsfortheyearthenendedandnotestothefinancialstatements including a summary ofsignificant accounting policies and other explanatory information ("the financialstatements"). In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 the loss other comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing ("SAs") specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Financial Statements' section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevantto our auditofthefinancial under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
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.
|Key Audit Matter ||Auditor's Response |
|1. Valuation of Unquoted Investments || |
|The Company has made an investment in financial instruments amounting to Rs.162061 (in 000) as of March 31 2021. The valuation of this unquoted investment is based on the valuation report obtained from the professional valuer by the Company. ||Our procedures included discussion with the management on the reasonableness of the assumptions and our substantive procedures included: |
|There is measurement uncertainty involved in this valuation and it is based on certain assumptions. || we reviewed the information supplied by the Company for the valuation of the unquoted investment. |
|As a result the valuation of this unquoted investment was significant to our audit. || we reviewed the valuation report issued by the independent valuation professional for the valuation of this unquoted investment. |
| || we reviewed the assumptions made in the prior years and any significant changes in the assumptions made during the year while conducting the valuation. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sAnnual Report but does not include the financial statements and our Auditors' Reportthereon. Our opinion on the financial statements does not cover the other information andwe do not 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. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Financial Statements
The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of Act with respect to the preparation and presentation of thesefinancialstatements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding Accounting Standards specified under Section 133 of the Act ("IndAS").
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internalfinancialcontrols 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. In preparing the financial statementsmanagement and Board of Directors are responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. The management and Board of Directors are responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibility 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 assessthe risks of material misstatement of the financial statements whether due to fraud orerror design and perform audit procedures responsive to those risks and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The riskof not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.
Obtain an understanding of internal financial control relevant to the auditin order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists relatedtoeventsorconditionsthatmaycastsignificantdoubt 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 financial statements or inadequate to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. However futureevents or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our We also provide those chargedwith governance with a statement that we have complied with relevant ethical requirementsregarding independence and to communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence and where applicable relatedsafeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most statements of the current period and are therefore the key auditmatters. We describesignificanceintheauditofthefinancial these matters in our auditor'sreport unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. 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 Act we give in the "Annexure A" a statement on the mattersspecifiedinparagraphs 3 and 4 of the Order to the extent applicable.
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 relating to preparationof the aforesaid financial statements have been kept by the Company so far as it appearsfrom our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.
(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 Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company does not have any pending litigations which would impact its financialposition read along with note no. 27 to the financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under section 197(16) which arerequired to be commented upon by us.
For M L BHUWANIA AND CO LLP
Membership No. 109931
Date: May 21 2021
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
Referred to in paragraph 1 of Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report on the financial statements of thecompany for the year ended March 31 2021 we report the following:
i. (a) The Company is generally maintaining proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) The fixed assets are physically verified by the management in accordance with aregular programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. Pursuant to the programcertain fixed assets were physically verified during the year and no materialdiscrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in property plant and equipment are held in the name of the Company.
ii. During the year inventories have been physically verified by the management. Inour opinion the frequency of verification is reasonable. The discrepancies noticed onphysical verification of inventories as compared to the book records were not material andhave been properly dealt with in the books of account.
iii. According to the information and explanations provided to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theAct. Hence sub clauses (a) to (c) of clause 3(iii) of the order are not applicable to theCompany.
iv. In our opinion and according to information and explanations provided to us theCompany has complied with provisions of sections 186 of the Companies Act 2013 in respectof investments made. Section 185 of the Companies Act 2013 is not applicable as therewere no loans securities and guarantees given during the year.
v. According to the information and explanations provided to us the Company has notaccepted any deposits from the public within the meaning of Sections 73 74 75 and 76 ofthe Act and the rules framed there under to the extentnotifiedand therefore clause 3(v) ofthe Order is not applicable.
vi. The Central Government has not prescribed maintenance of cost records under subsection (1) of section 148 of the Companies Act 2013 for any of the products of thecompany.
vii. (a) According to the information and explanations provided to us and on the basisof our examination of the records the Company is generally regular in depositing withappropriate authorities undisputed statutory dues including provident fund employees'state insurance Income Tax Goods and Services Tax Custom Duty Excise Duty Sales TaxValue Added Tax Service Tax Cess and any other material statutory dues applicable to it.According to the information and explanations given to us no undisputed arrears ofstatutory dues were outstanding as at March 31 2021 for a period of more than six monthsfrom the date they became payable.
(b) According to the information and explanations given to us and on the basis of ourexamination of the records there are no dues of Income Tax Goods and Services TaxCustom Duty Excise Duty Sales Tax Value Added Tax Service Tax and Cess which have notbeen deposited on account of any dispute.
viii. In our opinion and according to information and explanations provided to us thecompany has not taken any loan or borrowing from bank government financial institutionand has not issued debentures during the year.
ix. In our opinion and according to information and explanations provided to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) and through term loans during the year.
Accordingly clause 3 (ix) of the Order is not applicable to the Company.
x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company and no fraud on the Company by its officers or employeeshas been noticed or reported during the year.
xi. In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.
xii. According to the information and explanations given to us the nature of theactivities of the company does not attract any special statue applicable to Nidhi Company.Accordingly clause 3(xii) of the order is not applicable to the company.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sec 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. According to the information and explanations provided to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly clause 3 (xiv) of the Order is not applicable to the Company.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly clause 3 (xv) ofthe Order is not applicable to the Company.
xvi. According to information and explanations provided to us the Company is notrequired to be registered under Sec 45-IA of the Reserve Bank of India Act 1934.Accordingly clause 3(xvi) of the Order is not applicable to the Company.
For M L BHUWANIA AND CO LLP
FRN: 101484W / W100197
Membership No. 109931
Date: May 21 2021
ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section143 of the Companies Act 2013 ("the Act")
Referred to in paragraph 2(f) of Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report on the financial statements of thecompany for the year ended March 31 2021.
We have audited the internal financial controls over financial reporting of KEMP &COMPANY LIMITED ("the Company") as of March 31 2021 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date. In ouropinion to the best of our knowledge and according to the information and explanationsprovided 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 March 31 2021 based on the criteriafor internal financial control over financial reporting 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.
Management's Responsibility for Internal Financial Controls
The Company's management and Board of Directors are responsible for establishing andmaintaining internal financial controls 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(ICAI'). These responsibilities include the design implementation and maintenanceof adequate 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 Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under Section 143(10) of the Act totheextentapplicable to financial controls and both issued by the ICAI. audito finternal ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to controls over financial reporting was obtainreasonableassuranceaboutwhetheradequate internal financial established and maintained andif such controls operated effectively in all material respects. Our audit involvesperforming procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included reportingassessing the risk that a material weaknessobtaininganunderstandingofinternalfinancialcontrols over financial exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk.
The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Company's internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A Company'sinternal financial control over financial reporting includes those policies and proceduresthat (1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company; (2) 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 withauthorizations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.
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.
For M L BHUWANIA AND CO LLP
Membership No. 109931
Date: May 21 2021.