The Members of
Kewal Kiran Clothing Limited
Report on the Audit of the Standalone Ind AS Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of KewalKiran Clothing Limited (the Company') which comprise the Balance Sheet as atMarch 31 2019 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information. In our opinion and to the best ofour information and according to the explanations given to us the aforesaid standaloneInd AS financial statements give the information required by the Companies Act 2013(the Act') in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2019 and its profit (including other comprehensive income)changes in equity and its cash flows for the year ended on that date.
BASIS FOR OPINION
2. We conducted our audit in accordance with the Standards on Auditing (SAs')specified under Section 143(10) of the Act. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the Standalone Ind ASFinancial Statements Section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI') together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and the Rules thereunder; andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
3. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the year underaudit. We have determined that there is no key audit matter to be communicated in ourreport.
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON
4. The Company's Board of Directors is responsible for the preparation of the otherinformation comprising of the information included in the Management Discussion andAnalysis Directors' Report including Annexures to Directors' Report Corporate Governanceand such other disclosures related Information excluding the standalone Ind AS financialstatements and auditors report thereon (Other Information'). The other informationis expected to be made available to us after the date of this auditors' report. Ouropinion on the standalone Ind AS 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 Ind AS financial statements ourresponsibility is to read the other information when it becomes available and in doingso consider whether the other information is materially inconsistent with the standaloneInd AS financial statements or our knowledge obtained during the course of our audit orotherwise appears to be materially misstated. When we read the other Information and if weconclude that there is a material misstatement therein we are required to communicate thematter to those charges with governance as required under SA 720 The Auditor'sresponsibilities Relating to other Information'
RESPONSIBILITY OF MANAGEMENT FOR STANDALONE IND AS FINANCIAL STATEMENTS
5. 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 Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under prescribed Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent;design implementation 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 standalone
Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the standalone Ind AS financialstatements management is responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS
6. Our objectives are to obtain reasonable assurance about whether the standalone IndAS financial statements as a whole are free from material misstatement whether due tofraud or error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone Ind AS financial statements. Our auditprocess in accordance with the SAs is narrated in Annexure 1 to this report.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
7. 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 2 a statement on the matters specified in paragraphs 3and 4 of the Order.
8. 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. 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 Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
d. In our opinion the aforesaid standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 3 of theCompanies (Accounting Standards) Rules 2015.
e. On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 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 3.
g. In terms of provisions of Section 197(16) of the Act as per the information andexplanations given we report that the managerial remuneration paid by the Company to itsDirectors is in accordance with provisions of Section 197 of the Act.
h. 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 wereport as under:
(i) The Company has disclosed the impact of pending litigations on the financialsposition in its standalone Ind AS financial statements.
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For Khimji Kunverji & Co
Firm Registration No 105146W
Hasmukh B Dedhia
Date: 4th May 2019
ANNEXURE 1 TO THE INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEWAL KIRAN CLOTHINGLIMITED
[Referred to in para 6 titled "Auditor's Responsibilities for the Audit of theStandalone Ind AS Financial Statements")
As part of our audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error to 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 Companyhas adequate internal financial controls system in place and the operating effectivenessof such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa 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.
Communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour Auditor's Report unless law or regulation precludes public disclosure about the matteror 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.
ANNEXURE 2 TO THE INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEWAL KIRAN CLOTHELIMITED
[referred to in para 7 under Report on Other Legal and Regulatory Requirements']
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As informed to us fixed assets were physically verified by the Management atregular intervals. In our opinion the frequency of physical verification is reasonablehaving regard to the size of the Company and nature of its business; according to theinformation and explanations given to us no material discrepancies were noticed on suchverification.
(c) In our opinion and according to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company
ii. The Inventories (other than lying with the third parties) have been physicallyverified during the year by the management. In our opinion the frequency of suchverification is reasonable. As informed the discrepancies noticed on verification betweenthe physical stocks and the book records were not material. In respect of inventorieslying with the third parties confirmations have been obtained by the company from suchthird parties and discrepancies therein were not material.
iii. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the requirement of clause (iii)(a) (iii) (b) and (iii](c] of paragraph 3 of the Order are not applicable to the company.
iv. In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantees or securities covered underSection 185 and 186 of the Act and in respect of Investments made by company provisionsof Section 186 of the Act have been complied with.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year in terms of theprovisions of Sections 73 to 76 or any other relevant provisions of the Act and the rulesframed there under. Accordingly paragraph 3(v) of the Order is not applicable to theCompany.
vi. The maintenance of cost records has not been specified by the Central Governmentunder Section 148(1) of the Act for the business activities carried out by the Company.Thus reporting under (vi) of the Order is not applicable.
vii. In respect of Statutory dues:
viii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Income-taxSales-tax Service tax Goods and Service Tax Cess and other material statutory duesgenerally have been regularly deposited during the year by the Company with theappropriate authorities. There are no undisputed statutory dues payable in respect to theabove statues outstanding as at March 31 2019 for a period of more than six months fromthe date they became payable.
(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no dues of Sales-tax Service taxGoods and Service Tax and Value added tax which have not been deposited as on March 312019 on account of disputes except as under:
|Nature of Statue ||Nature of Dues ||Period to which the Amount Relates (Assessment Year) ||Forum where Dispute is Pending ||Amount Unpaid/ (refund) |
|Income Tax 1961* ||Income Tax and Interest ||2005-06 ||Bombay HC (appeal filed by the department) ||6894194.00 |
|Income Tax 1961** ||Income Tax and Interest ||2011-12 ||Appeal Partially Allowed. Pending for order giving effects to ITAT order ||885510.00 |
|Income Tax 1961 ||Income Tax and Interest ||2011-12 ||CIT (A) ||1075480.00 |
|Income Tax 1961 ||Income Tax and Interest ||2012-13 ||Appeal Partially Allowed. Pending for order giving effects to ITAT order ||689290.00 |
|Income Tax 1961** ||Income Tax and Interest ||2013-14 ||CIT (A) ||(779065.00) |
|Income Tax 1961 ||Income Tax and Interest ||2014-15 ||CIT (A) ||501770.00 |
(*) Adjusted against the refund of assessment year 2007-08 (**) Adjusted against therefund of assessment year 2013-14
ix. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to banks and dues todebenture holders. The Company has not taken loans or borrowings from government andfinancial institutions.
x. In our opinion and according to the information and explanations given to usCompany did not raise any money by way of initial public offer (including debtinstruments) and loans. Hence clause (ix) of paragraph 3 of the Order is not applicable.
xi. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
xii. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.
xiii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly reporting under clause (xii) of the Order isnot applicable.
xiv. 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 Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required underapplicable Indian Accounting Standard (Ind AS).
xv. According to the information and explanations given 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 reporting under clause (xiv) of the Order is not applicable to theCompany.
xvi. 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 non-cashtransactions with directors or persons connected with them. Accordingly reporting underclause (xv) of the Order is not applicable to the Company.
xvii. In our opinion The Company is not required to be registered under Section 45IAof the Reserve Bank of India Act 1934.
For Khimji Kunverji & Co
Firm Registration No 105146W
Hasmukh B Dedhia
Date: 4th May 2019
ANNEXURE 3 TO THE INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KEWAL KIRAN ClotheLimited
[referred to in paragraph 8[f] under Report on Other Legal and RegulatoryRequirements']
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE [I] OF SUB-SECTION 3 OF SECTION143 OF THE ACT
We have audited the internal financial controls over financial reporting of Kewal KiranClothing Limited ("the Company") as at March 31 2019 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat 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 the company's policies the safeguardingof its 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.
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 of the Act to the extent applicable to an audit ofinternal financial controls both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 standalone Ind AS financial statements whether due to fraudor 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:
[a] pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;
[b] provide reasonable assurance that transactions are recorded as necessary to permitpreparation of standalone Ind AS financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorisations of management and directors of theCompany; and
[c] provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the standalone Ind AS 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.
In our opinion considering the nature and size of the operations the Company has inall material respects an adequate internal financial controls system over financialreporting and such internal financial controls over financial reporting were operatingeffectively as at March 31 2019 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the ICAI.
For Khimji Kunverji & Co
Firm Registration No 105146W
Hasmukh B Dedhia
Date: 4th May 2019.