Kovalam Investment & Trading Co. Ltd.
|BSE: 505585||Sector: Financials|
|NSE: N.A.||ISIN Code: INE735U01011|
|BSE 00:00 | 17 Aug||Kovalam Investment & Trading Co. Ltd|
|NSE 05:30 | 01 Jan||Kovalam Investment & Trading Co. Ltd|
|BSE: 505585||Sector: Financials|
|NSE: N.A.||ISIN Code: INE735U01011|
|BSE 00:00 | 17 Aug||Kovalam Investment & Trading Co. Ltd|
|NSE 05:30 | 01 Jan||Kovalam Investment & Trading Co. Ltd|
THE MEMBERS OF
KOVALAM INVESTMENT AND TRADING COMPANY LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Kovalam Investment And TradingCompany Limited ("the Company") which comprise the Balance Sheet as at March31 2022 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the 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 March 31 2022 the profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made there underand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.There is no key matters to be communicated in our report.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including annexures to the Board's Report and Management Discussion & AnalysisReport but does not include the standalone financial statements and our auditors' reportthereon. The Board's Report including annexures to the Board's Report and ManagementDiscussion & Analysis Report is expected to be made available to us after the date ofthis auditors' report.
Our opinion on the standalone financial statements does not cover the other informationand we will 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 identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit orotherwise appears to be materially misstated. When we read the Board's Report includingannexures to the Board's Report and Management Discussion & Analysis Report if weconclude that there is a material misstatement therein we are required to communicate thematter to those charged with governance.
Management's Responsibility for the Financial 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 financial statements that givea true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the Ind AS andother accounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraudor 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 financial controls 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 controls 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 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.
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 ofany 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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
1. As required by Section 143(3) of the Act based on our audit we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of ouraudit.
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 thosebooks.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014.
e) On the basis of the written representations received from the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 from being appointed as a director in terms of Section 164 (2) oftheAct.
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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g) 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:
The Company has not paid any managerial remuneration.
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 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 financial statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that no funds (which are material eitherindividually or in the aggregate) have been advanced or loaned or invested (either fromborrowed funds or share premium or any other sources or kind of funds) by the Company toor in any other person or entity including foreign entity ("Intermediaries")with the understanding whether recorded in writing or otherwise that the Intermediaryshall whether directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalf of the Company ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries;
(b) The Management has represented that no funds (which are material eitherindividually or in the aggregate) have been received by the Company from any person orentity including foreign entity ("Funding Parties") with the understandingwhether recorded in writing or otherwise that the Company shall whether directly orindirectly lend or invest in other persons or entities identified in any mannerwhatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under and (a)and (b) above contain any material misstatement.
v. Company has not been declared or paid dividend during the year. Hence reportingunder rule 11(2)(f) of companies (Audit and Auditors) amendment 2021 is not applicable tothe company
2. As required by the Companies (Auditor's Report) Order 2020 (the "Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of KOVALAM INVESTMENT AND TRADINGCOMPANY LIMITED of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of KOVALAMINVESTMENT AND TRADING COMPANY LIMITED ("the Company") as of March 31 2022 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company 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. These areresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that we are operating effectively for ensuring the orderly andefficient conduct of its business including adherence to respective company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section143(10) of the CompaniesAct2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 judgement 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 internal financial controls system overfinancial reporting of the Company.
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 financial reporting includes those policiesand 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 authorisations of management and directors of the company; and
(3) 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 financial statements.
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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2022 based on 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.
ANNEXURE 'B' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report to the Members of KOVALAM INVESTMENT AND TRADING COMPANYLIMITED of even date)
To the best of our information and according to the explanations provided to us by theCompany and the books of account and records examined by us in the normal course ofaudit we state that:
i. The Company does not have any Property Plant Equipment and Intangible Assets.Hence reporting under the clause 3(i) is not applicable to the company.
ii. (a) The Company does not have any Inventories. Hence reporting under the clause3(ii)(a) is not applicable to the company.
(b) The Company has not been any sanctioned working capital limits during the yearfrom banks on the basis of security of current assets. Hence the clause is not applicableto the company.
iii. The Company has made investments in companies firms Limited LiabilityPartnerships and granted unsecured loans to other parties during the year in respect ofwhich:
(a) The principal business of the company is investments and financing of funds hencereporting under clause 3(iii)(a) is not applicable to the company
(b) As per the information and explanations given to us and the investments made andthe terms and conditions of the grant of loans during the year are prima facie notprejudicial to the Company's interest.
(c) In respect of loans granted by the Company the schedule of repayment of principaland payment of interest has been stipulated and the repayments of principal amounts andreceipts of interest are generally been regular as per stipulation.
(d) In respect of loans granted by the Company there is no overdue amount remainingoutstanding as at the balance sheet date.
(e) No loan granted by the Company which has fallen due during the year has beenrenewed or extended or fresh loans granted to settle the overdues of existing loans givento the same parties.
(f) The Company has granted loan in the nature of loan repayable on demand but companyhas not provided loans to any promoters related parties as defined in clause (76) ofsection 2 of the company Act 2013 hence reporting under clause 3(iii)(f) is notapplicable to the company
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
v. The Company has not been accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2022 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.
vi. The provision of cost record is not applicable to the company. Hence reportingunder clause 3(vi) is not applicable to the company.
vii. According to the information and explanations given to us in respect of statutorydues:
a. The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.
b. There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Customs Duty Cess and other materialstatutory dues in arrears as at March 31 2022 for a period of more than six months fromthe date they became payable.
c. There are no dues of Income Tax Sales Tax Service Tax Excise Duty and Value AddedTax which have not been deposited on account of any dispute as at March 31 2022
viii. There were no transactions relating to previously unrecorded income that havebeen surrendered or disclosed as income during the year in the tax assessments under theIncome Tax Act 1961(43 of 1961).
ix. The Company has not taken loans or other borrowings from any lender. Hencereporting under clause 3(ix) is not applicable to the company
x. (a) The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year and hence reporting under clause3(x)(a) of the Order is not applicable.
(b) During the year the Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully or partly or optionally) and hencereporting underclause 3(x)(b) of the Order is not applicable.
xi. (a) According to information and explanation given to us no fraud by the Companyand no material fraud on the Company has been noticed or reported during the year.
(b) No report under sub-section (12) of section 143 of the Companies Act has been filedin Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government during the year and upto the date of this report.
(c) We have taken into consideration the whistle blower complaints received by theCompany during the year (and upto the date of this report) while determining the naturetiming andextent of our audit procedures.
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 applicableIndian accounting standards.
xiv. (a) In our opinion the Company has an adequate internal audit system commensuratewith the size and the nature of its business.
(b) We have considered the internal audit reports for the year under audit issued tothe Company during the year and till date in determining the nature timing and extent ofour audit procedures.
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. (a) The Company is registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
(b) According to information and explanations given to us and based on the examinationof records of the company company has not conducted any Non-Banking Financial or HousingFinance activities without a valid certificate of registration (COR) from Reserve Bank ofIndia as per Reserve Bank of India Act 1934.
(c) In our opinion Company is not a Core investment Company (CIC) as defined in theregulations made by Reserve Bank of India.
(d) According to information and explanations given to us and based on the examinationof records of the company there is no core investment company within the Group (asdefined in the Core Investment Companies (Reserve Bank) Directions 2016) and accordinglyreporting under clause 3(xvi)(d) of the Order is not applicable.
xvii. The Company has not incurred cash losses during the financial year covered by ouraudit and the immediately preceding financial year.
xviii. There has been no resignation of the statutory auditors of the Company duringthe year.
xix. On the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the Board of Directors and Management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.
xx. CSR provisions have not been applicable to the company. Hence reporting underclause 3(xx) is not applicable to the company