To the Members of Kiran Vyapar Limited
Report on the Audit of the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Kiran VyaparLimited (the Company') which comprise the Balance Sheet as at 31 March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
2. 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 Companies Act 2013 (Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards (Ind AS') specified under section 133 of the Act of thestate of affairs (financial position) of the Company as at 31 March 2019 and its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matter
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
5. We have determined the matters described below to be the key audit matters to becommunicated in our report.
|Key audit matter ||How our audit addressed the key audit matter |
|First time adoption of Ind AS framework ||Our procedures in respect of the first time adoption of |
| ||Ind AS financial reporting framework included but not limited to the following: |
|Refer Note 1 and 2 for significant accounting policies and Note 39 for reconciliation. As disclosed in Note 39 to the standalone financial statements the Company has adopted the Indian Accounting Standards notified under section 133 of the Companies Act 2013 read together with the Companies (Indian Accounting Standards) Rules 2015 (as amended) (Ind AS') with effect from 1 April 2018 (1 April 2017 being the transition date) and prepared the first set of standalone financial statements under Ind AS framework in the current year. || |
| || Obtained an understanding of management's processes and controls around adoption of Ind AS. |
| || We sought explanations from the management for areas involving complex judgements or interpretations to assess its appropriateness. |
| || |
| || Reviewed the diagnostics performed by the management to assess the impact on Ind AS transition to the individual financial statement line items. |
|For periods up to and including the year ended 31 March 2018 the Company prepared its standalone financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014 (Indian GAAP or previous GAAP). || Reviewed the implementation of exemptions availed and options chosen by the Company in accordance with the requirements of Ind AS 101 first time adoption of Indian Accounting Standards (Ind AS 101). |
|This change in the financial reporting framework required an end-to-end evaluation of the potential impact on each component of the financial statement which involved significant efforts required by the management. This process also required the management to apply significant judgements to identify and elect appropriate accounting policies suitable for various transactions and balances relating to the operations of the Company including electing of available options for transition of balances as at transition date from the previous GAAP to the new GAAP. || Evaluated the accounting policies adopted by the Company on transition to Ind AS and assessed its appropriateness basis our understanding of the entity and its operations and the requirements of relevant accounting standards under the Ind AS framework. |
| || Evaluated whether the presentation and disclosures in the standalone financial statements are in accordance with the requirements of the applicable standards and regulatory requirements. |
|Further the first time preparation of the Ind AS standalone financial statements involved preparation and presentation of additional notes and disclosures as required by the Ind AS framework as compared to the previous GAAP in addition to Note 39 to the standalone financial statements setting forth the reconciliation of balances from previous GAAP to the new GAAP as at the transition date and the impact of restatement on the results of the comparative period due to such transition. || Evaluated the appropriateness and adequacy of disclosures with respect to the reconciliations prepared and presented by the management in the standalone financial statements in accordance with Ind AS 101. |
|The areas where there was a significant impact on account of first time adoption of Ind AS; involved the following standards amongst others: || |
|a) Ind AS 109 Financial Instruments Considering the significance of the above transition with respect to the standalone financial statements the complexities and efforts involved this matter has been identified as a key audit matter for the current year audit. || |
|Investments in unquoted investments carried at fair value ||Our audit procedures included but were not limited to the following: |
|Refer note 1 and 2 for significant accounting policies and note 6 and 34 for financial disclosures || Obtained a detailed understanding of the managements process and controls for determining the fair valuation of unquoted equity investments preference instruments and venture capital funds. The understanding was obtained by performance of walkthroughs which included inspection of documents produced by the Company and discussion with those involved in the process of valuation. |
|As at 31 March 2019 the Company has unquoted investments to INR 21599.10 lakhs which includes investments in equity instruments preference instruments and venture capital funds. These investments represent 30% of the total assets of the Company as at 31 March 2019. || Evaluated the design and tested the operating effectiveness of key controls implemented for fair valuation of the investments; |
|The aforesaid investment is not traded in the active market. These investments are fair valued using Level 3 inputs. The fair valuation of these investments is determined by a management-appointed independent valuation specialist based on discounted cash flow method for equity and preference instruments. Investment in venture capital funds are valued based on the net asset value declared by the respective funds. The process of computation of fair valuation of investments include use of unobservable inputs and management judgements and estimates which are complex. || Obtained the valuation reports done by management' expert and assessed the expert's competence objectivity and independence in performing the valuation of the investments; |
| || Assessed the appropriateness of valuation methodology used for the fair valuation computation with the help of an auditor's expert and tested the mathematical accuracy of management's model adopted for the different types of investments; |
|The key assumptions underpinning management's assessment of fair value of these investments include application of liquidity discounts; calculation of discounting rates and the estimation of projections of revenues projections of future cash flows growth rates. || Performed a test of reasonableness and also ensured that the key assumptions used in the cash flow projections including the growth rates discount rates considering evidence available to support these assumptions and our understanding of the business. |
|The valuation of these investments was considered to be one of the areas which required significant auditor attention and was one of the matters of most significance in the standalone financial statements due to the materiality of total value of investments to the standalone financial statements and the complexity involved in the valuation of these investments. || Tested the discount rate and long-term growth rates used in the forecast including comparison to economic and industry forecasts where appropriate; |
| || Ensured the appropriateness of disclosures in relation to these investments in accordance with the accounting standards. |
| || Verified the mathematical accuracy of the valuations model. |
| || Obtained written representations from management and those charged with governance whether they believe significant assumptions used in valuation of the investments are reasonable. |
| || |
Information other than the Financial Statements and Auditor's Report thereon
6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. The Annual Report is expectedto be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
7. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the state of affairs (financial position) profit orloss (financial performance including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Ind AS specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
8. In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
9. Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
10. 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 withStandards on Auditing 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 financial statements.
11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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.
12. We 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.
13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
14. 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.
Report on Other Legal and Regulatory Requirements
15. As required by section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditor's Report) Order 2016 (the Order')issued by the Central Government of India in terms of section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.
17. Further to our comments in Annexure A as required by section 143(3) of the Act wereport that:
a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit; b) in ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books;
c) the standalone financial statements dealt with by this report are in agreement withthe books of account;
d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under section 133 of the Act;
e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2019 from being appointed as a director in terms of section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31 March 2019 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 20 May 2019 as per Annexure B expressed an unmodified opinion;
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 as detailed in note 29 to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position as at 31 March 2019;
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2019;
iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended 31 March 2019;
iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.
For Walker Chandiok & Co LLP
Firm Regn. No. : 001076N/N500013
Membership No. : 105117
Place : Kolkata
Date : 20 May 2019
Annexure A to the Independent Auditor's Report of even date to the members of KiranVyapar Limited on the standalone financial statements for the year ended 31 March2019
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during theyear however there is a regular program of verification once in three yearswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.
(c) The Company does not hold any immovable property (in the nature of propertyplant and equipments').
Accordingly the provisions of clause 3(i)(c) of the Order are not applicable.
(ii) The Company does not have any inventory. Accordingly the provisions of clause3(ii) of the Order are not applicable.
(iii) The Company has granted unsecured loan to companies covered in the registermaintained under Section 189 of the Act; and with respect to the same:
(a) in our opinion the terms and conditions of grant of such loans are not primafacie prejudicial to the Company's interest.
(b) the schedule of repayment of principal and payment of interest has been stipulatedand the repayment/ receipts of the principal amount and the interest are regular; and
(c) there is no overdue amount in respect of loans granted to such company.
(iv) The provisions of Sections 185 and 186 of the Act do not apply to the Company.Accordingly the provisions of clause 3(iv) of the Order are not applicable.
(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) The Central Government has not specified maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's services. Accordinglythe provisions of clause 3(vi) of the Order are not applicable.
(vii) (a) The Company is regular in depositing undisputed statutory dues includinggoods and service tax provident fund employees' state insurance income tax sales-taxservice tax duty of customs duty of excise value added tax cess and other materialstatutory dues as applicable to the appropriate authorities. Further no undisputedamounts payable in respect thereof were outstanding at the year-end for a period of morethan six months from the date they become payable.
(b) The dues outstanding in respect of income-tax sales-tax service tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:
Statement of Disputed Dues
|Name of the statute ||Nature of dues ||Amount ||Amount Paid Under Protest ||Period to which the amount relates ||Forum where dispute is pending ||Remarks if any |
| || ||(? lakhs) ||(? lakhs) || || || |
|The Income-Tax Act 1961 ||Income Tax ||685.00 ||Nil ||AY 2011-12 ||Commissioner of Income Tax (Appeals) ||Refer Note I below |
|The Income-Tax Act 1961 ||Income Tax ||15.40 ||2.31 ||AY 2013-14 ||Commissioner of Income Tax (Appeals) ||Refer Note II below |
|The Income-Tax Act 1961 ||Income Tax ||1054.34 ||158.15 ||AY 2014-15 ||Commissioner of Income Tax (Appeals) ||Refer Note II below |
I. Pertains to outstanding demand of income tax in respect of the demerged Investmentdivision of Maharaja Shree Umaid Mills Limited. The Company is liable to pay the tax (inrespect of the demerged division) as per the order of the Hon'ble High Court at Calcutta.
II. The Company has made a payment of 15% of the disputed dues basis which a stay hasbeen granted for the said demand by the authorities.
(viii) The Company has not defaulted in repayment of loans or borrowings to anyfinancial institution during the year.
The Company has no loans or borrowings payable to a bank or government and no duespayable to debenture-holders during the year.
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments).
In our opinion the terms loans were applied for the purposes for which the loans wereobtained.
(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been provided by the Company in accordance with therequisite approvals mandated by the provisions of Section 197 of the Act read withSchedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance withsections 177 and 188 of the Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable accountingstandards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.
(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under section 192 of the Act.
(xvi) The Company is required to be registered under section 45-IA of the Reserve Bankof India Act 1934 and such registration has been obtained by the Company.
|For Walker Chandiok & Co LLP |
|Chartered Accountants |
|Firm Regn. No. : 001076N/N500013 |
|Manish Gujral |
|Membership No. : 105117 |
|Place : Kolkata |
|Date : 20 May 2019 |
Independent Auditor's Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act')
1. In conjunction with our audit of the standalone financial statements of Kiran VyaparLimited (the Company') as at and for the year ended 31 March 2019 we have auditedthe internal financial controls over financial reporting (IFCoFR') of the Company asat that date.
Management's Responsibility for Internal Financial Controls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls 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 Institute of Chartered Accountants of India the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (ICAI' ) and deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of IFCoFR and theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (theGuidance Note') issued by the ICAI. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate IFCoFR were established and maintained and if suchcontrols operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR include those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that the IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such controls were operating effectivelyas at 31 March 2019 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.
For Walker Chandiok & Co LLP
Firm Regn. No. : 001076N/N500013
Membership No. : 105117
Place : Kolkata
Date : 20 May 2019