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KNR Constructions Ltd.

BSE: 532942 Sector: Infrastructure
NSE: KNRCON ISIN Code: INE634I01029
BSE 00:00 | 14 Dec 189.20 -5.60
(-2.87%)
OPEN

198.70

HIGH

199.05

LOW

188.55

NSE 00:00 | 14 Dec 189.95 -5.30
(-2.71%)
OPEN

198.00

HIGH

200.00

LOW

188.95

OPEN 198.70
PREVIOUS CLOSE 194.80
VOLUME 11991
52-Week high 348.80
52-Week low 163.30
P/E 10.06
Mkt Cap.(Rs cr) 2,660
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 198.70
CLOSE 194.80
VOLUME 11991
52-Week high 348.80
52-Week low 163.30
P/E 10.06
Mkt Cap.(Rs cr) 2,660
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

KNR Constructions Ltd. (KNRCON) - Auditors Report

Company auditors report

To the Members of

KNR CONSTRUCTIONS LIMITED

REPORT ON THE STANDALONE INDIAN ACCOUNTING STANDARD (IND AS) FINANCIALSTATEMENTS

We have audited the accompanying Standalone Ind AS Financial Statementsof KNR CONSTRUCTIONS LIMITED ("the Company") which comprise the Balance Sheetas at 31 March 2018 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and Statement of Cash Flow for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIALSTATEMENTS

The Company's Board of Directors are responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Standalone Ind AS Financial Statements that give a true and fair viewof the financial position financial performance including other comprehensive incomecash flows and changes in equity of the Company in accordance with the Indian AccountingStandards prescribed under section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia. 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 Ind AS Financial Statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these Standalone Ind ASFinancial Statements based on our audit. In conducting our audit we have taken intoaccount the provisions of the Act the accounting and auditing standards and matters whichare required to be included in the audit report under the provisions of the Act and theRules made thereunder.

We conducted our audit of the Standalone Ind AS Financial Statements inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the Standalone Ind AS FinancialStatements are free from material misstatement. An audit involves performing procedures toobtain audit evidence about the amounts and the disclosures in the Standalone Ind ASFinancial Statements. The procedures selected depend on the auditor's judgment includingthe assessment of the risks of material misstatement of the Standalone Ind AS FinancialStatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial controls relevant to the Company's preparation of theStandalone Ind AS Financial Statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Standalone Ind AS Financial Statements. We believe that theaudit evidence we have obtained is su3 cient and appropriate to provide a basis for ouraudit opinion on the Standalone Ind AS Financial Statements.

OPINION

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Ind AS Financial Statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2018 and its profits (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

A. As required by the Companies (Auditor's Report) Order

2016 (‘the Order') issued by the Central Government of India interms of Sub-section 11 of Section 143 of the Act we give in the "Annexure 1 "a statement on the matters specified in paragraphs 3 and 4 of the said order.

B. As required by Section 143 (3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including othercomprehensive income) the Cash Flow

Statement and Statement of Changes in Equity dealt with by this Reportare in agreement with the books of account.

d) In our opinion the aforesaid Standalone Ind AS Financial Statementscomply with the Indian Accounting Standards prescribed under Section 133 of the Act readwith Companies (Indian Accounting Standards) Rules 2015 as amended and other accountingprinciples generally accepted in India.

e) On the basis of the wri3 en representations received from thedirectors as on March 31 2018 taken on record by the Board of Directors none of thedirectors are disqualified as on March 31 2018 from being appointed as a director interms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial control overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure 2". Our Report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's financial controlsover financial reporting.

g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact if any of pending litigationsas at March 31 2018 on its financial position in its Standalone Ind AS FinancialStatements – Refer Note No. 37(i).

ii. The Company did not have any long term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There was a delay of 30 days in transferring an amount ofdifferent 0.57 lakhs to the Investor Education and Protection Fund by the Company.

iv. The disclosure in the Standalone Ind AS Financial Statementsregarding holdings as well as dealings in specified bank notes during the period from 8thNovember 2016 to December 30 2016 have not been made since they do not pertain to thefinancial year ended March 31 2018.

For K.P.Rao & Co.

Chartered Accountants

Firm's Registration No. 003135S

K. Viswanath

Partner

Membership No. 022812

Place: Hyderabad Date: May 30 2018

Annexure 1

To the Independent Auditor's Report of even date on the Standalone IndAS Financial Statements of KNR Constructions Limited

We report that;

1. a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets. b) According tothe information and explanations given to us the fixed assets have been physicallyverified by the management at reasonable intervals. No material discrepancies were noticedon such verification of fixed assets. c) According to the information and explanationsgiven to us the title deeds of the immovable properties disclosed in the Note no. 3 &3.1 to Standalone Ind AS Financial Statements held by the Company are in the name of theCompany except following assets.

Total No. of cases (lands)

Whether leasehold/ freehold

Gross block and net block as on 31-03-2018

Remarks

(different in Lakhs)

44

Freehold

762.07

Lands are registered in the name of directors relatives of directors for and on behalf of the company due to restrictions in registration of lands in the name of the Company by the land laws of respective states in which respective states in which the land is situated.*

*The Company has taken undertaking from respective parties for havingno interest in the lands.

2. According to the information and explanations given to usinventories have been physically verified at regular intervals by the Management duringthe year. In our opinion the frequency of such verification is reasonable. No materialdiscrepancies were noticed on such physical verification.

3. According to the information and explanations given to us thecompany has granted unsecured loans to Subsidiary Companies during the year and maximumamount involved during the period and the balance of said loans were aggregating todifferent 899.90 Lakhs and

different 503.41 lakhs respectively covered in the register maintainedunder section 189 of the Companies Act 2013.

These loans have been given on "On Account" basis. In theabsence of agreements for these loans the terms and conditions and their impact on theinterest of the Company cannot be ascertained. Hence the question of regularity of paymentof principal and interest does not arise.

4. In our opinion and according to the information and explanationsgiven to us the Company has not advanced any loan to any director given any guaranteeprovided any security in connection with any loan taken by any director or made investmentthrough more than two layers of investment companies as per the provisions of section 185and 186 of the Act. Accordingly reporting under clause (iv) of paragraph 3 of the Orderis not applicable.

5. In our opinion and according to the information and explanationgiven to us the Company has not accepted deposits to which directions issued by theReserve Bank of India and the provisions of section 73 to 76 or any other relevantprovisions of the Companies Act 2013 were applicable. Accordingly reporting under clause(v) of paragraph 3 of the Order is not applicable.

6. The maintenance of cost records has been specified by the CentralGovernment under section 148(1) (d). We have broadly reviewed the books of accountmaintained by the company pursuant to the Rules made by the Central Government for themaintenance of cost records under section 148 of the Act and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate and complete.

7. According to the information and explanations given to us inrespect of records of statutory dues: a) The Company is regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax SalesTax Service Tax Duty of Customs Duty of Excise Value Added Tax Cess and otherstatutory dues applicable to it with the appropriate authorities. However there have beendelays in depositing Goods and Services Tax (GST) dues with the appropriate authorities.b) There were no undisputed amounts payable in respect of Provident Fund Employees StateInsurance Income Tax Wealth Tax Service Tax Duty of Customs Duty of Excise Cess andother statutory dues in arrears as at March 31 2018 for a period of more than six monthsfrom the date they became payable except as below.

Name of the Statute Nature of the Dues

Amount

Period to which the amount relates

Due Date

Date of Payment

(different in Lakhs)

The Kerala Value Added Tax Act 2003 Value Added Tax

3.01

2016-17

Various Dates

Outstanding as on the date of this Report

19.35

2017-18

Various Dates

Outstanding as on the date of this Report

</td>

c) Disputed statutory dues that have not been deposited on account ofmatters pending before appropriate authorities are as under :

Name of the Statue

Nature of the Dues

Amount (different in lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961

Income Tax

Paid under protest FY 2006-07 Income Tax Appellate Tribunal Hyderabad
Income Tax Act 1961

Income Tax

Paid under protest FY 2002-03 CIT (Appeals) – 12 Hyderabad
Income Tax Act 1961

Income Tax

4.60 FY 2000-01 CIT (Appeals) – 12 Hyderabad
Income Tax Act 1961

Income Tax

Paid under protest FY 2012-13 Income Tax Appellate Tribunal Hyderabad
Income Tax Act 1961

Income Tax

Paid under protest FY 2013-14 Income Tax Appellate Tribunal Hyderabad
Income Tax Act 1961

TDS

9.86 FY 2009-10 Deputy Commissioner of Income Tax
Andhra Pradesh Value

VAT

25.91 FY 2010-11 Telangana Value Added Tax Appellate
Added Tax Act 2005 Tribunal
Madhya Pradesh Value Added Tax Act 2002

VAT

34.97 FY 2014-15 Additional Commissioner (Appeals) Gwalior

Entry Tax

41.13 FY 2010-11 Additional Commissioner (Appeals) Gwalior

Entry Tax

182.88 FY 2014-15 Additional Commissioner (Appeals) Gwalior
Odisha Sales Tax and VAT Laws

Entry Tax

28.87 FY 2009-10 to 11-12 Odisha High Court

Entry tax

22.00 FY 2012-13 to 14-15 Joint Commissioner Appeals Bhubaneswar

VAT

171.81 FY 2012-13 to 14-15

CST

6.03 FY 2012-13 to 14-15

8. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of its dues to Banks &Financial Institutions. The Company has not issued debentures.

9. The Company has not raised any monies during the reporting periodby way of initial public officer (including debt instruments) or further public officer.The Company has not raised any monies by way of term loans during the year.

10. According to the information and explanations given to us no fraudby or by its officers or employees on the Company has been noticed or reported during theyear.

11. According to the information and explanations given to us and basedon our examination of the records of the Company managerial remuneration has beenpaid/provided during the year in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Companies Act 2013.

12. In our opinion and according to the information given to us theCompany is not a Nidhi Company. Accordingly reporting under clause (xii) of paragraph 3of the Order is not applicable.

13. In our opinion and according to the information and explanationsgiven to us and based on our examination of the records all transactions with the relatedparties are in compliance with Section 177 and Section 188 of the Act where applicableand the details have been disclosed in the

Standalone Ind AS Financial Statements as required by the applicableaccounting standards.

14. According to the information and explanations given to us and basedon our examination of the records the Company has not made any preferential allotment orprivate placement of shares or convertible debentures during the reporting period.Accordingly reporting under clause (xiv) of paragraph 3 of the Order is not applicable.

15. In our opinion and according to the information and explanationsgiven to us and based on our examination of the records the Company has not entered intoany non-cash transactions with any directors or persons connected with him. Accordinglyreporting under clause (xv) of paragraph 3 of the Order is not applicable.

16. The Company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934.

For K.P.Rao & Co.

Chartered Accountants

Firm's Registration No. 003135S

K. Viswanath

Partner

Membership No. 022812

Place: Hyderabad Date: May 30 2018

Annexure 2

to the Independent Auditor's Report of even date on the Standalone IndAS Financial Statements of KNR Constructions Limited

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of KNR CONSTRUCTIONS LIMITED ("the Company") as of March 31 2018 inconjunction with our audit of the Standalone Ind AS 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 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 Controlsover Financial Reporting issued by the Institute of Chartered Accountants of India".These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding 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.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness.

Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the Standalone Ind AS Financial Statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Standalone Ind AS Financial Statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial control over financial reporting includes those policies and procedures that

1. Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

2. Provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Standalone Ind AS Financial Statements in accordancewith generally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and

3. Provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the Standalone Ind AS Financial Statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

OPINION

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2018 basedon the Internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the "Guidance Noteon Audit of Internal Financial Controls over Financial Reporting issued by the Instituteof Chartered Accountants of India".

For K.P.Rao & Co.

Chartered Accountants

Firm's Registration No. 003135S

K. Viswanath

Partner

Membership No. 022812

Place: Hyderabad Date: May 30 2018