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KKalpana Industries (India) Ltd.

BSE: 526409 Sector: Industrials
NSE: N.A. ISIN Code: INE301C01028
BSE 14:17 | 18 Sep 19.50 -1.00
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NSE 05:30 | 01 Jan KKalpana Industries (India) Ltd
OPEN 20.45
PREVIOUS CLOSE 20.50
VOLUME 25753
52-Week high 26.45
52-Week low 11.95
P/E 7.44
Mkt Cap.(Rs cr) 183
Buy Price 19.70
Buy Qty 307.00
Sell Price 20.00
Sell Qty 151.00
OPEN 20.45
CLOSE 20.50
VOLUME 25753
52-Week high 26.45
52-Week low 11.95
P/E 7.44
Mkt Cap.(Rs cr) 183
Buy Price 19.70
Buy Qty 307.00
Sell Price 20.00
Sell Qty 151.00

KKalpana Industries (India) Ltd. (KKALPANAINDS) - Auditors Report

Company auditors report

TO THE MEMBERS OF KKALPANA INDUSTRIES (INDIA) LIMITED

Report on the Audit of Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of KKALPANAINDUSTRIES (INDIA) LIMITED ("the Company") which comprise the Balance Sheetas at 31st March 2019 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

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 (the Act) in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under section 133 ofthe Act read with Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2019 its profits (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor’sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics.

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

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificant in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Key Audit Matters Auditor’s Response
Information Technology (IT) Systems and Controls During the year the Company has implemented SAP a new Enterprise Resource Planning (ERP) System. The new system is fully integrated financial accounting and reporting system. Audit Procedures Performed We have performed procedures to ensure the migration of financial data between old system and new system.
The implementation of ERP has a risk of loss of integrity of key financial data being migrated and elimination of traditional controls without replacing them with the new effective controls measures monitoring of IT controls which are relating to critical business processes such as purchase production sales inventory and including recording of transactions which could lead to financial errors or mis-statements and inaccurate financial reporting and also there is risk that automated accounting procedures and related IT manual controls might not work. Our audit approach consisted testing of design and operating effectiveness of internal controls and substantive testing around the new ERP system. We also performed sufficient test of details as a part of our audit.
We have performed the test of details for areas where the Management has implemented manual controls during the year including the continuing manual controls as at the year end.
We have accordingly designated this as a focus area in the audit. We have performed the test of controls regarding the appropriateness of system access and an effective maker and checker system built in the ERP system for proper authorizations of transactions and posting of accounting entries.
The combination of these tests of controls and procedures performed gave us a sufficient evidence to enable us to rely on the operations of ERP system for the purpose of the audit of the financial statements.

Information Other than the Standalone Financial Statements and Auditor’s reportthereon

The Company’s Board of Directors is responsible for the preparation of otherinformation. The Other information comprises the information included in the ManagementDiscussion and Analysis Board’s Report including Annexures to the Board reportBusiness responsibility Report Corporate Governance report and Shareholder’sinformation but does not include the standalone financial statement and ourauditor’s report thereon.

Our opinion on the standalone 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 financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we required to report that fact. We have nothingto report in this regard.

Responsibilities of Management and those charged with Governance for the StandaloneFinancial Statements

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 financial position financial performance (includingother comprehensive income) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under section 133 of the Act.

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

In preparing the standalone financial statements management is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company’s financialreporting process

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements are free from material misstatement whether due to fraud or errorand to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud 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 standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error 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 financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial control system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the 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 related to events or conditions that may cast significant doubt on theentity’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However future events or conditionsmay cause the entity to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) Planning the scope of ouraudit work and in evaluating the results of our work and (ii) To evaluate the effect ofant identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh 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 ("theOrder") issued by the Central Government of India in terms of Section 143(11) of theAct we give in "Annexure A" a statement on the matters specified in paragraphs3 and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit we reportto theextent applicable 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014

d) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164(2) of the Act.

e) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company’s internalfinancial controls with reference to financial statements of the Company.

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

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 has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich 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 B.Mukherjee & Co.
Chartered Accountants
Firm Registration No : 302096E
B.Mukherjee
Place: Kolkata (Partner)
Date: 28th day of May 2019 Mem No : 002941

ANNEXURE - A TO THE INDEPENDENT AUDITOR’S REPORT

ANNEXURE "A" REFERRED TO IN PARAGRAPH 1 UNDER "REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS" SECTION OF OUR REPORT TO THE MEMBERS OF THE KKALPANAINDUSTRIES (INDIA) LIMITED OF EVEN DATE:

i. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) As per the information and explanations given to us physical verification of fixedassets have been carried out in terms of the phased program of verification of its fixedassets adopted by the Company and no material discrepancies were noticed on suchverification. In our opinion the frequency of verification is reasonable having regard tosize of the Company and nature of its business.

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 properties areheld in the name of the Company.

ii. As per the information and explanations given to us the inventories have beenphysically verified at reasonable intervals during the year by the management and nomaterial discrepancies between book stock and physical stock have been found.

iii. According the information and explanations given to us the Company has grantedunsecured loan to a subsidiary covered in the register maintained under section 189 ofthe companies Act2013 in respect of which:

(a) The terms and conditions of the grant of such loan are in our opinion primafacie not prejudicial to the Company’s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(c) There is no amount overdue.

iv. In our opinion and according to the information and explanations given to us theCompany has not given any loan not made any investment and have not provided anyguarantee in respect of which Section 185 and 186 of the Companies Act 2013 areapplicable. Accordingly the paragraph 3(iv) of the Order is not applicable.

v. According to information and explanations given to us the Company has not acceptedany deposits from public during the year.

vi. We have broadly reviewed the books of accounts maintained by Company in respect ofproduct where pursuant to the rule made by the Central Government of India themaintenance of cost records has been prescribed under section 148 (1) of the Companies Act2013 and are of the opinion that prima facie the prescribed records have beenmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company is regular in depositingundisputed statutory dues including provident fund employee’s state insuranceincome tax sales tax service tax goods and service tax duty of customs duty ofexcise value added tax cess and other statutory dues with the appropriate authorities.According to the information and explanations given to us no undisputed amounts payablein respect of provident fund employee’s state insurance income tax sales taxservice tax goods and service tax duty of customs duty of excise value added tax cessand other material statutory dues were in arrears as at 31st March 2019 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanation given to us the dues of Income Tax sales tax duty of excise service tax and value added tax which have not been depositedon account of any dispute and the forum where the dispute is pending as on 31stMarch 2019 are as under :-

Name of the statute Nature of dues Amount Rs. in Lacs Assessment Year Forum where dispute is pending
Income Tax Act Income Tax 25.46* 2012-13 CIT(A)
1961 Income Tax 123.02* 2011-12 CIT(A)
Income Tax 153.16 2010-11 CIT(A)

*Net of amounts paid under protest.

viii. The Company has not defaulted in repayment of dues to Financial Institutions orBanks or Government or Debenture holders.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer including debt instruments during the year. However the Company has raisedTerm Loan during the year and has applied the same for the purpose for which term loansare raised.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. 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.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

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 sections 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 give 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.

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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For B.Mukherjee & Co.
Chartered Accountants
Firm Registration No : 302096E
B.Mukherjee
Place: Kolkata (Partner)
Date: 28th day of May 2019 Mem No : 002941

ANNEXURE - B TO THE INDEPENDENT AUDITOR’S REPORT

ANNEXURE "B" REFERRED TO IN PARAGRAPH 2(F) UNDER "REPORT ON OTHER LEGALAND REGULATORY REQUIREMENTS" SECTION OF OUR REPORT TO THE MEMBERS OF THE KKALPANAINDUSTRIES (INDIA) LIMITED OF EVEN DATE: Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 ("the Act")

We have audited the internal financial controls over financial reporting of KKALPANAINDUSTRIES (INDIA) LIMITED ("the Company") as of 31st March2019 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI’). 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 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 Companies Act 2013.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

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 controlssystem over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

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 the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea material effect on the 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.

OPINION

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 2019based 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 B.Mukherjee & Co.
Chartered Accountants
Firm Registration No : 302096E
B.Mukherjee
Place: Kolkata (Partner)
Date: 28th day of May 2019 Mem No : 002941