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KRBL Ltd.

BSE: 530813 Sector: Agri and agri inputs
NSE: KRBL ISIN Code: INE001B01026
BSE 00:00 | 08 Feb 366.80 -7.10
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NSE 00:00 | 08 Feb 366.90 -6.75
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OPEN 381.70
PREVIOUS CLOSE 373.90
VOLUME 56937
52-Week high 449.40
52-Week low 184.85
P/E 12.48
Mkt Cap.(Rs cr) 8,634
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 381.70
CLOSE 373.90
VOLUME 56937
52-Week high 449.40
52-Week low 184.85
P/E 12.48
Mkt Cap.(Rs cr) 8,634
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

KRBL Ltd. (KRBL) - Auditors Report

Company auditors report

Independent Auditor's Report on the Standalone Financial Statements of KRBL Limited forthe year ended 31 March 2022

To the Members of KRBL Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

1. We have audited the accompanying standalone financial statements of KRB L Limited('the Company') which comprise the Standalone Balance Sheet as at 31 March 2022 theStandalone Statement of Profit and Loss (including Other Comprehensive Income) theStandalone Statement of Cash Flow and the Standalone Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 ('the Act') in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standards('Ind AS') specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 and other accounting principles generally accepted inIndia of the state of affairs of the Company as at 31 March 2022 and its profit(including other comprehensive income) its cash flows and the changes in equity for theyear ended on that date.

Basis for Qualified Opinion

3. As stated in Note 48(A)(4) to the standalone financial statements the EnforcementDirectorate ('ED') is investigating the Company's Joint Managing Director Mr. Anoop KumarGupta ('JMD') under the Prevention of Money Laundering Act 2002 for alleged involvementin Agusta Westland case. Further the ED has filled criminal complaint and made certainallegations against the Company KRBL DMCC (a subsidiary of the Company) and JMD. Asfurther described in the said note a review of the impact of allegations on the financialstatement and its control environment was performed by an independent professional firmappointed by the Board of Directors and in our view as per their report there is noconclusive evidence to ascertain impact of the aforesaid matter on the financial statementof the Company and its control environment. Pending the completion of ongoinginvestigation oftheabovematter by regulatory authorities we are unable to comment on anyadjustment that may be required to the standalone financial statements in this respect.

4. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the standalone financialstatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India ('ICAI') togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our qualified opinion.

Emphasis of Matter

5. We draw attention to Note 48(A)(3) to the standalone financial statements whereinit is stated that a portion of land parcels and building thereupon owned by the Company asidentified in the aforesaid note has been attached by the Directorate of Enforcement("ED") which is being contested by the Company. The Company had filed an appealwith the Appellate Tribunal PMLA (Government of India) New Delhi ('Appellate Tribunal')and vide its order dated 17 January 2020 the Appellate Tribunal had ordered to restorethe possession in favor of the Company while the aforesaid attachment would continue tillthe conclusion of the matter. The matter is being contested in the Hon'ble High Court ofDelhi ('High Court'). The High Court vide its order dated 23 October 2020 has restored thephysical possession of the aforesaid land parcels and building thereupon for specifiedpurposes against a deposit of fl113 lacs as an interim relief until conclusion of theaforesaid matter. Based on the legal assessment of the outcome of the aforesaid matterthe management is of the view that no adjustment is required to the accompanyingstandalone financial statements.

Our opinion is not modified in respect of this matter.

Key Audit Matter

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

7. In addition to the matters described in the Basis for Qualified Opinion we havedetermined the matters described below to be the key audit matters to be communicated inour report.

Key audit matter How our audit addressed the key audit matter
Revenue recognition - Sale of Goods Our audit work included but was not limited to the following procedures:
Refer Note 2(g) in the Summary of significant accounting policies and other explanatory information. • Obtained an understanding of the process of each revenue stream particularly of sale of rice and by products;
The Company recognised an amount of Rs.421056 lacs revenue for the year ended 31 March 2022 as disclosed in Note 29 to the standalone financial statements. • Evaluated the design and implementation and tested the operating effectiveness of controls over revenue recognition including around quantity sold pricing and accounting of revenue transactions;
Revenue for the Company primarily comprises of revenue from sale of manufactured goods (rice) and by products. • Performed substantive analytical procedures on revenue which includes ratio analysis product mix analysis region wise analysis;
In accordance with Standards on Auditing there is a presumed fraud risk relating to revenue recognition. Accordingly occurrence and existence of revenue is a key focus area on account of the multiplicity of Company's products multiple channels for sales various categories of customers having varying terms of contracts and the volume of the sales made to them. • Evaluated the terms and conditions of the contracts including incoterms with customers to ensure that the revenue recognition criteria are assessed by the management in accordance with the accounting standards;
Due to the above factors we have identified testing of revenue recognition as a key audit matter. • On a sample basis tested revenue transactions recorded during the year and revenue transactions recorded in the period before and after year-end with supporting documents such as invoices agreements with customers proof of deliveries and subsequent collection of payment;
• Performed other substantive audit procedures including obtaining debtor confirmations on a sample basis reviewed the subsequent collection of payment and proof of deliveries document of such selected debtors. Further reconciling revenue recorded during the year with statutory returns;
• Tested on sample basis manual journal entries recorded in revenue accounts credit notes and claims to the relevant approvals and the supporting documents;
• Evaluated disclosures made in the standalone financial statements for revenue recognition from sale of goods for appropriateness in accordance with the accounting standards.
Inventory existence and valuation Our audit work included but was not limited to the following procedures:
Refer Note 2(f) in the Summary of significant accounting policies and other explanatory information. Existence:
Inventory of the Company consists primarily of variety of rice paddy and their by-products manufactured during the process of conversion of paddy into rice. • Obtained an understanding of the management's process of inventory management and inventory physical verification performed subsequent to year-end;
The Company held inventories amounting to Rs. 281610 lacs as at 31 March 2022. The inventory primarily comprises of Paddy as raw material and finished goods in the form of rice and by-products. Inventory holding is generally significant considering the finished goods are aged for 18-24 months and also due to seasonality of the purchase/produce. Such inventory is stored in plants warehouses silos and storage bags. High quantity of inventory makes inventory physical verification an extensive procedure for the management at the year end. • Evaluated the design effectiveness of controls over inventory management process/ inventory physical verification and tested key controls for their operating effectiveness;
The valuation of finished rice and by products is a complex exercise and is carried out manually. The valuation process involves estimation around determination of - • Reviewed the instructions given by senior management to stock count teams including ensuring proper segregation of stock use of calibration scales/charts identification of damaged inventory if any etc.;
• Allocable overheads and their absorption rates; • Observed physical count carried out by the management at locations selected based on materiality and risk factors;
• Determination of net realisable value of byproducts such as husk bran etc and • During the above said observation noted whether the instructions given by senior management to stock count teams were followed.
• Determination of net realisable value of the different variety of rice. • Recounted inventory on sample basis to match with inventory records and results of management conducted count;
Accordingly existence and valuation of the year- end inventory balance which is significant with respect to the total assets held by the Company is considered to be one of the areas which required significant auditor attention owing to the complexity and judgements involved in the process of physical count and valuation. • Obtained inventory records and results of management conducted count;
• Reviewed reconciliation of differences if any between management physical count and inventory records and tested the necessary adjustment made in the inventory records by the management;
Valuation:
• Obtained an understanding of management process of inventory valuation;
• Evaluated design effectiveness of controls over inventory valuation process and tested key controls for their operating effectiveness;
• Tested inputs into the valuation process from source documents/ general ledger accounts;
• Tested reconciliation of opening inventory purchase/ production sales and year-end inventory to validate the amount of yield during the year and to identify any abnormal production loss;
• Compared key estimates including those involved in computation of allocable overheads and their absorption rate to prior years and enquired reasons for any significant variations.
• Checked net realisable value of rice and by-products from actual sale proceeds near/ subsequent to the year-end;
• Tested arithmetical accuracy of valuation calculations; and
• Evaluated appropriateness of disclosure of inventory year-end balance in the financial statements.

Information other than the Standalone Financial Statements and Auditor's Report thereon

8. The Company's Board of Directors are responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the standalone financial statements and our auditor's report thereon. The AnnualReport is expected to be made available to us after the date of this auditor's 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 in the audit or otherwise appears to bematerially misstated.

When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance. Wehave nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements

9. The accompanying standalone financial statements have been approved by the Company'sBoard of Directors. The Company's Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparation and presentation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with the Ind AS specified under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 and otheraccounting principles generally accepted in India.

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 financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

10. In preparing the standalone financial statements the Board of Directors areresponsible for assessing the Compan/s ability to continue as a going concern disclosingas applicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intend to liquidate the Company or tocease operations or has no realistic alternative but to do so.

11. Those Board of Directors are also responsible for overseeing the Company'sfinancial reporting process.

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

12. 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements.

13. As part of an audit in accordance with Standards on Auditing specified undersection 143(10) of the Act we exercise professional judgment and maintain professionalskepticism 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls system with reference to financial statements inplace and the operating effectiveness 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 Board of Directors' 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 theCompany'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 conditions maycause the Company 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;

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

15. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

16. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

17. As required by section 197(16) of the Act based on our audit we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under section 197 read with Schedule V to the Act.

18. As required by the Companies (Auditor's Report) Order 2020 ('the Order') issued bythe Central Government of India in terms of section 143(11) of the Act we give in theAnnexure A a statement on the matters specified in paragraphs 3 and 4 of the Order tothe extent applicable.

19. Further to our comments in Annexure A as required by section 143(3) of the Actbased on our audit we report to the extent applicable that:

a) We have sought and except for the matter described in the Basis for QualifiedOpinion section obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit of the accompanyingstandalone financial statements;

b) Except for the possible effects of the matter described in the Basis for QualifiedOpinion section in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books;

c) The standalone financial statements dealt with by this report are in agreement withthe books of account;

d) Except for the possible effects of the matter described in the Basis for QualifiedOpinion section in our opinion the aforesaid standalone financial statements comply withInd AS specified under section 133 of the Act;

e) The matter described in paragraph 3 under the Basis for Qualified Opinion sectionin our opinion may have an adverse effect on the functioning of the Company;

f) On the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2022 from being appointed as a director in terms of section 164(2) of the Act;

g) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company as on 31 March 2022 and the operating effectiveness ofsuch controls refer to our separate Report in Annexure B wherein we have expressed amodified opinion; and

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. Except for the possible effects of the matter described in paragraph 3 of the Basisfor Qualified Opinion section the Company as detailed in note 48 to the standalonefinancial statements has disclosed the impact of pending litigations on its financialposition as at 31 March 2022;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31 March 2022;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2022;

iv. a. The management has represented that to the best of its knowledge and belief asdisclosed in Note 52 (vii) to the standalone financial statements no funds have beenadvanced or loaned or invested (either from borrowed funds or securities premium or anyother sources or kind of funds) by the Company to or in any person or entity includingforeign entities ('the intermediaries') with the understanding whether recorded inwriting or otherwise that the intermediary shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company ('the Ultimate Beneficiaries') or provide any guarantee security or the likeon behalf the Ultimate Beneficiaries;

b. The management has represented that to the best of its knowledge and belief asdisclosed in Note 52 (viii) to the standalone financial statements no funds have beenreceived by the Company from any person or entity including foreign entities ('theFunding Parties') with the understanding whether recorded in writing or otherwise thatthe Company shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party('Ultimate Beneficiaries') or provide any guarantee security or the like on behalf of theUltimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonable and appropriate inthe circumstances nothing has come to our notice that has caused us to believe that themanagement representations under sub clauses (a) and (b) above contain any materialmisstatement.

v. As stated in note 44 (B) to the accompanying standalone financial statements theBoard of Directors of the Company have proposed final dividend for the year ended 31 March2022 which is subject to the approval of the members at the ensuing Annual GeneralMeeting. The dividend declared is in accordance with section 123 of the Act to the extentit applies to declaration of dividend.

 

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Rohit Arora

Partner

Membership No.: 504774

UDIN: 22504774AJSUMB3432

Place: Noida

Date: 27 May 2022

Annexure A referred to in Paragraph 18 of the Independent Auditor's Report of even dateto the members of KRBL Limited on the standalone financial statements for the year ended31 March 2022

In terms of the information and explanations sought by us and given by the Company andthe books of account and records examined by us in the normal course of audit and to thebest of our knowledge and belief we report that:

(i) (a) (A) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment right ofuse assets and investment property.

(B) The Company has maintained proper records showing full particulars of intangibleassets.

(b) The Company has a regular program of physical verification of its property plantand equipment right of use assets and investment property under which the assets arephysically verified in a phased manner over a period of three years which in our opinionis reasonable having regard to the size of the Company and the nature of its assets. Inaccordance with this program certain property plant and equipment right of use assetsand investment property were verified during the year and no material discrepancies werenoticed on such verification.

(c) The title deeds of all the immovable properties (including investment properties)held by the Company (other than properties where the Company is the lessee and the leaseagreements are duly executed in favour of the lessee) disclosed in the financialstatements are held in the name of the Company except for the following properties forwhich the Company's management is in the process of getting the registration in the nameof the Company:

Description of property Gross carrying value (Rs. in lacs) Held in name of Whether promoter director or their relative or employee Period held Reason for not being held in name of Company
Land 61 K B Overseas Partnership Firm in which Directors were partners Since Financial Year 1990-91 to 1994-95 Refer Note 3 to the Standalone Financial Statements.
Land 195 Mr. Anil Kumar Mittal Mr. Arun Kumar Gupta and Mr. Anoop Kumar Gupta Directors Since Financial Year 2000-01 to 2002-03 Refer Note 3 to the Standalone Financial Statements.
Land 63 Mr. Anil Kumar Mittal Directors Since Financial Year 2006-07 Refer Note 3 to the Standalone Financial Statements.
Land 80 Mr. Arun Kumar Gupta Directors Since Financial Year 2003 - 04 Refer Note 3 to the Standalone Financial Statements.
Land 160 Mr. Anoop Kumar Gupta Directors Since Financial Year 2003-04 and 2004-05 Refer Note 3 to the Standalone Financial Statements.
Land 246 Mr. Ashish Mittal Relative of Director Since Financial Year 2001-02 and 2002-03 Refer Note 3 to the Standalone Financial Statements.
Building 153 Since Financial Year 2015-16 Refer Note 3 to the Standalone Financial Statements.

However for title deeds of immovable properties in the nature of land with grosscarrying values of Rs.6996 lacs as at 31 March 2022 which have been mortgaged assecurity for loans or borrowings taken by the Company confirmations with respect to titleof the Company have been directly obtained by us from the Consortium bank.

(d) The Company has not revalued its Property Plant and Equipment and Right of Useassets or intangible assets during the year.

(e) No proceedings have been initiated or are pending against the Company for holdingany benami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made thereunder. Accordingly reporting under clause 3(i)(e) of the Order is notapplicable to the Company.

(ii) (a) The management has conducted physical verification of inventory at reasonableintervals during the year except for inventory lying with third parties. In our opinionthe coverage and procedure of such verification by the management is appropriate and nodiscrepancies of 10% or more in the aggregate for each class of inventory were noticed. Inrespect of inventory lying with third parties these have substantially been confirmed bythe third parties.

(b) The Company has a working capital limit in excess of Rs 5 crore sanctioned by banksbased on the security of current assets. The quarterly statements in respect of theworking capital limits have been filed by the Company with such banks and such returns arein agreement with the books of account of the Company for the respective periods whichwere not subject to audit.

(iii) (a) The Company has not provided any loans or provided any advances in the natureof loans or guarantee or security to any other entity during the year. Accordinglyreporting under clauses 3(iii)(a) of the Order is not applicable to the Company.

(b) The Company has not provided any guarantee or given any security or granted anyloans or advances in the nature of loans during the year. However the Company has madeinvestment in 2 entities amounting to Rs.427 lacs (year-end balance Rs.427 lacs) and inour opinion and according to the information and explanations given to us suchinvestments made are prima facie not prejudicial to the interest of the Company.

(c) The Company does not have any outstanding loans and advances in the nature of loansat the beginning of the current year nor has granted any loans or advances in the natureof loans during the year. Accordingly reporting under clauses 3(iii)(c) 3(iii)(d)3(iii)(e) and 3(iii)(f) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 186 of the Act in respect ofinvestments as applicable. Further the Company has not entered into any transactioncovered under section 185 and section 186 of the Act in respect of loans guarantees andsecurity.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits or there is no amount which has been considered asdeemed deposit within the meaning of sections 73 to 76 of the Act and the Companies(Acceptance of Deposits) Rules 2014 (as amended). Accordingly reporting under clause3(v) of the Order is not applicable to the Company.

(vi) The Central Government has specified maintenance of cost records under sub-section(1) of section 148 of the Act only in respect of specified products of the Company. Forsuch products we have broadly reviewed the books of account maintained by the Companypursuant to the Rules made by the Central Government for the maintenance of cost recordsunder the aforesaid section and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) (a) In our opinion and according to the information and explanations given tous the Company is regular in depositing undisputed statutory dues including goods andservices tax provident fund employees' state insurance income-tax and other materialstatutory dues as applicable with the appropriate authorities. Further no undisputedamounts payable in respect thereof were outstanding at the year-end for a period of morethan six months from the date they became payable.

(b) According to the information and explanations given to us there are no statutorydues referred in sub-clause (a) which have not been deposited with the appropriateauthorities on account of any dispute except for the following:

Name of the statute Nature of dues Gross Amount ( Rs.in lacs) Amount paid under protest ( Rs.in lacs) Period to which the amount relates Forum where dispute is pending
Punjab Value Added tax Act 2005 Value added tax 3199 - Financial years 2009-10 Hon'ble Punjab and Haryana High Court Chandigarh
Punjab Value Added tax Act 2005 Value added tax 1708 641 Financial years 2005-2007 and 2010-2014 VAT Tribunal Chandigarh
Central Excise Act 1944 Excise duty 684 185 Financial years 2014-17 Deputy Excise and Taxation Commissioner Patiala
Central Sales Tax Act 1956 Sales tax 39 39 Financial years 2014-16 Deputy Commissioner of Sales Tax (Appeal) Mumbai
Central Sales Tax Act 1956 Sales tax 2 1 Financial years 2017-18 Deputy Commissioner of Sales Tax Greater Noida
Central Sales Tax Act 1956 Sales tax 2 2 Financial years 2013-14 Additional Commissioner Grade-2 (Appeal) Noida
Income-tax Act 1961 Income-tax 96 19000 Financial years 2009-16 Remanded back to Income- tax officer by the Hon'ble Income Tax Apellate Tribunal New Delhi

(viii) According to the information and explanations given to us no transactions weresurrendered or disclosed as income during the year in the tax assessments under the IncomeTax Act 1961 (43 of 1961) which have not been recorded in the books of accounts.

(ix) (a) According to the information and explanations given to us the Company has notdefaulted in repayment of its loans or borrowings or in the payment of interest thereon toany lender.

(b) According to the information and explanations given to us including representationreceived from the management of the Company and on the basis of our audit procedures wereport that the Company has not been declared a willful defaulter by any bank or financialinstitution or other lender.

(c) In our opinion and according to the information and explanations given to us moneyraised by way of term loans were applied for the purposes for which these were obtained.

(d) In our opinion and according to the information and explanations given to us andon an overall examination of the standalone financial statements of the Company fundsraised by the Company on short term basis have not been utilised for long term purposes.

(e) According to the information and explanations given to us and on an overallexamination of the standalone financial statements of the Company the Company has nottaken any funds from any entity or person on account of or to meet the obligations of itssubsidiaries.

(f) According to the information and explanations given to us the Company has notraised any loans during the year on the pledge of securities held in its subsidiaries.

(x) (a) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly reporting underclause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or (fully partially oroptionally) convertible debentures during the year. Accordingly reporting under clause3(x)(b) of the Order is not applicable to the Company.

(xi) (a) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or on the Company has been noticed or reported duringthe period covered by our audit.

(b) No report under section 143(12) of the Act has been filed with the CentralGovernment for the period covered by our audit.

(c) According to the information and explanations given to us including therepresentation made to us by the management of the Company there are no whistle-blowercomplaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it. Accordingly reporting under clause 3(xii) of the Order is not applicable to theCompany.

(xiii) In our opinion and according to the information and explanations given to usall transactions entered into by the Company with the related parties are in compliancewith sections 177 and 188 of the Act where applicable. Further the details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedin Companies (Indian Accounting Standards) Rules 2015 as prescribed under section 133 ofthe Act.

(xiv) (a) In our opinion and according to the information and explanations given to usthe Company has an internal audit system as required under section 138 of the Act which iscommensurate with the size and nature of its business.

(b) We have considered the reports issued by the Internal Auditors of the Company tilldate for the period under audit.

(xv) According to the information and explanation given to us the Company has notentered into any non-cash transactions with its directors or persons connected with themand accordingly provisions of section 192 of the Act are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly reporting under clauses 3(xvi)(a) (b) and (c) ofthe Order are not applicable to the Company.

(a) Based on the information and explanations given to us and as represented by themanagementof the Company the Group (as defined in Core Investment Companies (ReserveBank) Directions 2016) does not have any Core Investment Company.

(xvii) The Company has not incurred any cash loss in the current as well as theimmediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors during the year.Accordingly reporting under clause 3(xviii) of the Order is not applicable to theCompany.

(xix) According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the standalone financialstatements our knowledge of the plans of the Board of Directors and management and basedon our examination of the evidence supporting the assumptions nothing has come to ourattention which causes us to believe that any material uncertainty exists as on the dateof the audit report that Company is not capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date. We however state that this is not an assurance as to the futureviability of the company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the Company as and when they fall due.

(xx) (a) According to the information and explanations given to us there is no unspentamount pertaining to other than ongoing projects as at end of the current financial year.Accordingly reporting under clause 3(xx)(a) of the Order is not applicable to theCompany.

(b) The Company has transferred the remaining unspent amount under sub-section (5) ofsection 135 of the Act in respect of ongoing project within a period of 30 days from theend of financial year to a special account in compliance with the provision of subsection(6) of section 135 of the Act.

(xxi) The reporting under clause 3(xxi) of the Order is not applicable in respect ofaudit of standalone financial statements of the Company. Accordingly no comment has beenincluded in respect of said clause under this report.

 

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Rohit Arora

Partner

Membership No.: 504774

UDIN: 22504774AJSUMB3432

Place: Noida

Date: 27 May 2022

Annexure B to the Independent Auditor's Report on the internal financial controls withreference to standalone financial statement under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ('the Act')

1. In conjunction with our audit of the standalone financial statements of KRBL Limited('the Company') as at and for the year ended 31 March 2022 we have audited the internalfinancial controls with reference to financial statements of the Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal FinancialControls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal financial controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting ('the Guidance Note') issued by the Institute ofChartered Accountants of India ('ICAI'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of the Company's businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's Responsibility for the Audit of the Internal Financial Controls withReference to Financial Statements

3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Standards on Auditing issued by ICAI prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlswith reference to financial statements and the Guidance Note issued by the ICAI. 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 with reference to financial statements were established and maintainedand if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements includes obtaining an understanding of such internal financialcontrols 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 financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualified audit opinion on the Company's internal financialcontrols with reference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

6. A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with Reference to FinancialStatements

7. Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Qualified opinion

8. According to the information and explanation given to us in the previous year theED vide their criminal complaint has made certain allegations against the Company KRBLDMCC (a subsidiary of the Company) and Mr. Anoop Kumar Gupta (Joint Managing Director) asfully explained in Note 48(A) (4) of the standalone financial statements. Pending thecompletion of ongoing investigation of the above matter by regulatory authorities we areunable to obtain sufficient appropriate audit evidence that adequate internal financialcontrols with reference to financial statements relevant to prevention and timelydetection of management override of controls were established and maintained and if suchcontrols operated effectively in all material respects which could potentially result inthe Company not providing for adjustment if any that may be required to the accompanyingstandalone financial statements.

9. A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial controls with reference to financial statements such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

10. In our opinion except for the possible effects of the material weakness describedabove on the achievement of the objectives of the control criteria the Company has inall material respects adequate internal financial controls with reference to financialstatements and such controls were operating effectively as at 31 March 2022 based on theinternal financial controls with reference to financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued byICAI.

11. We have considered the material weakness identified and reported above indetermining the nature timing and extent of audit tests applied in our audit of thestandalone financial statements of the Company as at and for the year ended 31 March 2022and the material weakness has affected our opinion on the standalone financial statementsof the Company and we have issued a modified opinion on the standalone financialstatements.

 

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

Rohit Arora

Partner

Membership No.: 504774

UDIN: 22504774AJSUMB3432

Place: Noida

Date: 27 May 2022.

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