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Kranti Industries Ltd.

BSE: 542459 Sector: Engineering
NSE: N.A. ISIN Code: INE911T01010
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NSE 05:30 | 01 Jan Kranti Industries Ltd
OPEN 14.50
PREVIOUS CLOSE 14.27
VOLUME 12000
52-Week high 32.50
52-Week low 11.50
P/E
Mkt Cap.(Rs cr) 13
Buy Price 14.00
Buy Qty 3000.00
Sell Price 14.99
Sell Qty 3000.00
OPEN 14.50
CLOSE 14.27
VOLUME 12000
52-Week high 32.50
52-Week low 11.50
P/E
Mkt Cap.(Rs cr) 13
Buy Price 14.00
Buy Qty 3000.00
Sell Price 14.99
Sell Qty 3000.00

Kranti Industries Ltd. (KRANTIINDUSTRIE) - Auditors Report

Company auditors report

Independent Auditor's Report on Standalone Financials

To

The Members of Kranti Industries Limited

Report on the Audit of the Standalone Financial Statements: Opinion

We have audited the accompanying Standalone Financial Statements of Kranti IndustriesLimited ("the Company") which comprise the Balance Sheet as at March 312020 the Statement of Profit and Loss the Statement of Cash Flows for the year ended onthat date and a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the Standalone Financial Statements").

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 givea true and fair view in conformity with the Accounting Standards prescribed under section133 of the Act and other accounting principles generally accepted in India of the stateof affairs of the Company as at March 31 2020 the loss and its cash flows for the yearended on that date.

Basis for opinion

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). 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 independencerequirements 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 ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.

Emphasis of Matter

We draw your attention to Note no 2.5 to these financial statement which describe theManagement's assessment of the impact of COVID-19 pandemic and the resultantlockdowns on the significant uncertainties involved in developing some of the estimatesinvolved in preparation of the financial statements including but not limited to itsassessment of liquidity and going concern recoverable value of its property plant andequipment and the net realisable value of other assets. Based on information available asof the date Management believes that no further adjustments are required to the financialstatements. However in view of the highly uncertain economic impacting the automotiveindustry a definitive assessment of the impact is highly dependent upon circumstances asthey evolve in future and the actual result may differ from those estimated as at the dateof approval of these financial statements.

Our opinion is not modified in respect of the above matters.

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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

KEY AUDIT MATTER
Revenue Recognition
(refer Note 2.11 related to Revenue)
1 We focused on this area as a key audit matter due to the risk of incorrect timing of revenue recognition and estimation related to recording the discount and rebates. According to the financial statement' accounting principles revenue is recognized at a point in time when the control of the goods is transferred to the customer according to delivery terms. Due to variation of contractual sales terms and practices across the market and the pressure the management may feel to achieve performance targets there is a risk of material error.
Auditor's Response
To address this risk of material misstatement relating to revenue recognition our audit procedures included:
- Assessing the compliance of company's revenue recognition policies with applicable accounting standards including those related to discounts and rebates.
- Assessing the adequacy of relevant disclosures.

Other Information

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Informationbut does not include the Standalone Financial Statements and our auditor's reportthereon.

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 are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated insection 134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the Accounting Standards and otheraccounting 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 Standalone Financial Statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management is responsible for assessingthe 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.

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 as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these Standalone Financial Statements.

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

1. Identify and assess the risks of material misstatement of the Standalone 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.

2. 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.

3. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

4. 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 the Company'sability to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the Standalone Financial Statements or if such disclosures are inadequateto modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause theCompany to cease to continue as a going concern.

5. Evaluate the overall presentation structure and content of the Standalone FinancialStatements including the disclosures and whether the Standalone 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 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 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 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 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 and the Statement of Cash Flowdealt with by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial 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: 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.

h) With respect to the other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us :

i. The Company does not have any pending litigation which would impact its financialposition.

ii. The Company did not have any long-term contracts including derivative contracts; assuch the question of commenting on any material foreseeable losses thereon does not arise.iii.There has not been an occasion in case of the Company during the year under report totransfer any sums to the Investor Education and Protection Fund.

2. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of theAct we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For A D V & Associates
Chartered Accountants
Firm Registration number: 128045W
Sd/-
Ankit Rathi
Partner
Membership number: 162441
UDIN: 20162441AAAABD3487
Place: Mumbai
Date :10th July 2020

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements'section of our report to the Members of Kranti Industries Limited of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act") Wehave audited the internal financial controls over financial reporting of Kranti IndustriesLimited ("the Company") as of March 31 2020 in conjunction with ouraudit of the Standalone Financial Statements of the Company for the year ended on thatdate.

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. 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 respective 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.

Auditor's Responsibility

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 CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and 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 judgment including the assessment of the risks ofmaterial misstatement of the Standalone Financial Statements whether due to fraud orerror.

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 processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of Standalone Financial Statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on theStandalone 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.

Opinion

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 2020 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.

For A D V & Associates
Chartered Accountants
Firm Registration number: 128045W
Sd/-
Ankit Rathi
Partner
Membership number: 162441
UDIN: 20162441AAAABD3487
Place: Mumbai
Date :10th July 2020

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Kranti Industries Limited ofeven date)

1) In case of the Company's Fixed Assets:

(a) According to the information and explanations given to us the Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets; (B) The Fixed Assets have been physically verified by themanagement in a phased manner which in our opinion is reasonable having regard to thesize of the company and nature of its assets. Pursuant to the program a portion of thefixed asset has been physically verified by the management during the year and no materialdiscrepancies between the books records and the physical fixed assets have been noticed.

(C) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the balance sheet date.

2) The Company has a program of verification to cover all the items of inventories in aphased manner which in our opinion is reasonable having regard to the size of theCompany. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.

3) The Company has not granted any loans secured or unsecured to Companies firmsLimited Liability Partnerships or other parties covered in the Register maintained underSection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (c) of theOrder are not applicable to the Company and hence not commented upon.

4) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013In respect of loans investments guarantees and security.

5) The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2020 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.

6) We have broadly reviewed the books of accounts maintained by the Company in respectof products where pursuant to the Companies (Cost Records and Audit) Rules 2014 asamended and prescribed by the Central Government under section 148(1) of the Act. We areof the opinion that prima facie the prescribed accounts and records have been maintainedby the Company. The contents of these accounts and records have not been examined by us.

7) a) According to information and explanations given to us and on the basis ofour examination of the books of account and records the Company has generally beenregular in depositing undisputed statutory dues including Income-Tax Goods and ServicesTax and any other material statutory dues applicable to it with the appropriateauthorities b) According to the information and explanations given to us no undisputedamounts payable in respect of the above were in arrears as at March 31 2020 for a periodof more than six months from the date on when they become payable. c) According to theinformation and explanations given to us there are no dues of income tax duty of exciseand service tax and value added tax have not been deposited with the appropriateauthorities on account of any dispute.

8) In our opinion and according to information and explanation given to us the Companyhas not defaulted in repayment of Loans/Borrowings taken from Banks/FinancialInstitutions.

9) In our opinion and according to the information and explanations given to us theCompany has not raised any moneys by way of initial public offer or further public offer(including debt instruments). The company has spent the amount raised through term loansfor the purpose for which such loans were availed.

10) Based upon the audit procedures performed and the information andexplanations given by the management we report that no fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the year.

11) Based upon the audit procedures performed and the information andexplanations given by the management the managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act;

12) In our opinion the Company is not a Nidhi Company. Therefore theprovisions of clause 4 (xii) of the Order are not applicable to the Company.

13) In our opinion all transactions with the related parties are in compliancewith section 177 and 188 of Companies Act 2013 and the details have been disclosed in theStandalone Financial Statements as required by the applicable accounting standards.

14) Based upon the audit procedures performed and the information andexplanations given by the management the company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearunder review. Accordingly the provisions of clause 3 (xiv) of the Order are notapplicable to the Company and hence not commented upon.

15) Based upon the audit procedures performed and the information andexplanations given by the management the company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly the provisions ofclause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

16) The company is not required to be registered under section 45IA of theReserve Bank of India Act 1934.

For A D V & Associates
Chartered Accountants
Firm Registration number: 128045W
Sd/-
Ankit Rathi
Partner
Membership number: 162441
UDIN: 20162441AAAABD3487
Place: Mumbai
Date :10th July 2020

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