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Krypton Industries Ltd.

BSE: 523550 Sector: Auto
NSE: N.A. ISIN Code: INE951B01014
BSE 14:04 | 05 Aug 9.04 0.71
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NSE 05:30 | 01 Jan Krypton Industries Ltd
OPEN 9.11
PREVIOUS CLOSE 8.33
VOLUME 1118
52-Week high 15.70
52-Week low 5.99
P/E 19.23
Mkt Cap.(Rs cr) 13
Buy Price 8.90
Buy Qty 26.00
Sell Price 9.04
Sell Qty 12.00
OPEN 9.11
CLOSE 8.33
VOLUME 1118
52-Week high 15.70
52-Week low 5.99
P/E 19.23
Mkt Cap.(Rs cr) 13
Buy Price 8.90
Buy Qty 26.00
Sell Price 9.04
Sell Qty 12.00

Krypton Industries Ltd. (KRYPTONINDUSTRI) - Auditors Report

Company auditors report

To the Members of Krypton Industries Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of KryptonIndustries Limited (Rs. the Company") which comprises the Balance Sheet as atMarch 312019 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Cash Flow Statement for the year ended andnotes to the standalone financial statements including a summary of the significantaccounting policies and other explanatory information (herein after 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 (Rs. the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 312019 and its profit and othercomprehensive income the changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities 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 together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Companies Act 2013 and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of 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.

Description of Key Audit Matter

The Key Audit Matter How the matter was addressed in our audit
Revenue Recognition Our audit procedures included the following:-
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. During the year ended March 312019 the company has recognised revenue amounting to Rs. 2851.24 Lakhs &Rs. 766.32 Lakhs from domestic and export (including exports from SEZ)sales respectively. Terms of sales arrangements including the timing of transfer of control delivery specifications including terms in case of exports timing of recognition of sales require significant judgment in determining revenues. The risk is therefore that revenue may not get recognised in the correct period or that revenue and associated profit may be misstated. Accordingly due to the significant risk associated with revenue recognition in accordance with terms of Ind AS 115 'Revenue from contracts with customers' it has been determined to be a key audit matter in our audit of the standalone Ind AS financial statements. • Considering Company's revenue recognition policy and its compliance in terms of Ind AS 115 'Revenue from contracts with customers'.
• Assessing the design and tested the operating effectiveness of internal controls related to revenue recognition.
• Testing samples of individual sales transaction and tracing to sales invoices sales orders (received from customers) and other related documents including terms and conditions if any.
• Selecting sample of sales transactions made pre- and post-year end agreeing the period of revenue recognition to underlying documents.
• Performing analytical review of revenue to identify any unusual trends.
• Assessing the relevant disclosures made within the standalone Ind AS financial statements.
The Key Audit Matter How the matter was addressed in our audit
Provisions/Accruals for Rebates & Incentives Our audit procedures included the following:-
Revenue is recognised net of Rebates discounts incentives and sales returns owed to the customers based on the arrangement with customers. The recognition and measurement of rebates discounts and incentives including establishing an appropriate accrual at year endinvolves significant judgement and estimatesparticularly the expected level of claims of each of the customers. The value of rebates discounts and schemes allowances together with the level of judgement involved make its accounting treatment a significant matter for our audit. • Selecting a sample of revenue transactions and scheme details to re-check that rebates discounts and incentives were calculated in accordance with the eligibility criteria mentioned in the scheme details;
• Considering the assumptions and judgements used by the Company in calculating rebates discounts and incentives including the level of expected claims by reviewing historical trends of claims.
The Key Audit Matter How the matter was addressed in our audit
Inventories Our audit procedures included the following:-
Total Inventory as at 31.03.2019 was Rs. 1734.82 Lakhs and Finished goods of Rs. 801.38 Lakhs comprise 46.19 per cent of such inventory holdings. Total Inventories are 47.96 per cent of the total turnover of the company for FY 2018-2019. The inventories are counted by the company on a cyclical basis and accordingly provisions for obsolescence if any of inventories are assessed and recognized by the management in the financial statements based on management estimation as at the end of the reporting period. Significant degree of judgment is thereby required to assess the net realizable value of the inventories and appropriate level of provisioning for items which may be ultimately sold below cost. Such judgment includes management's expectations for future sale volumes inventory liquidation plans and future selling prices less cost to sell. Such high holdings existence and valuation of inventories make it a key audit matter. • Obtaining an understanding of and assessing the design implementation and operating effectiveness of management's key internal controls relating to physical verification of inventories by the management of the Company.
• Assessing whether items in the inventory ageing report prepared by themanagement were classified within the appropriate ageing bracket;
• Performing a review of the provisions for inventories by examining movements in the balance during the current year;
• Assessing on a sample basis the net realizable value of inventories as calculated by management with reference to prices achieved and costs to sell after the financial year end.

Information Other than the Standalone 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 Company'sAnnual Report but does not include the standalone financial statements and our auditor'sreport thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

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

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

Management's Responsibility for the StandaloneFinancial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (Rs. the Act") with respect to the preparation ofthese standalone financial statements to give a true and fair view of the state ofaffairs profit/loss and other comprehensive income changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards(Ind AS) specified under Section 133 of theAct.This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the 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 also 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken 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:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

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

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 auditors' report unless law or regulation precludes public disclosure about thematter or when 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 Requirement

1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section 143 of the Act (hereinafterreferred to as the "Order") and on the basis of such checks of the books andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143 (3) of the Act 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 Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 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 B". 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 Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014as amended inour opinion and to the best of our knowledge and belief and according to the informationand explanations given to us:

(i) The Company as detailed in Note 40 to the standalone financial statements hasdisclosed the impact of pending litigations as on March 31 2019 on its financial positionin its standalone financial statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

3. With respect to the matter to be included in the Auditors' Report under Section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For P. K. LUHARUKA & CO.
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO. 322020E
Place : Kolkata. PRADEEP KUMAR LUHARUKA
Dated : 30.05.2019 PARTNER
Membership No.055782

ANNEXURE "A" TO INDEPENDENT AUDITORS' REPORT

Referred to in Paragraph 9 under "Report on other Legal and RegulatoryRequirements" of our report of even date to the Financial Statements of the Companyfor the year ended March 312019

(i) In respect of its fixed assets:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assetsare verified in a phased manner over a period of three years. Inaccordance with this program certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such physical verification. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and nature of its assets

(c) According to the information and explanations given to us and the records examinedby us and on the basis of our examination of the records of the company the title deedsof immovable properties are held in the name of the Company except for leasehold buildingacquired pursuant to the scheme of Amalgamation (i.e. Eco Wheels Pvt. Ltd. and BaronsPolymers Pvt. Ltd.) as per High Court Order dated 28.02.2013.

(ii) During the year the inventories have been physically verified by the management.In our opinion the frequency of verification is reasonable. On the basis of ourexamination of the record of inventories we are of the opinion that the Company ismaintaining proper records of inventories. The discrepancies noticed on physicalverification of inventories as compared to book records were not material and have beenproperly dealt with in the books of account.

(iii) In respect of the loans secured or unsecured granted by the Company tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Companies Act 2013:

(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted were not prima facie prejudicial to the interest of the company.

(b) The borrowers are regular in repaying the Principal Amounts and interest asstipulated and are also regular in payment of as applicable.

(c) There is no overdue amount for more than 90 days.

(iv) In our opinion and to the best of information and explanations given to us theCompany has complied with the provisions laid down under sections 185 or 186 of the Actwith respect to loans and investments made in the current year. However Opening balanceof such loans granted to "persons in whom the director is interested" before thecommencement of Section 185 still exists on Balance Sheet date.

(v) According to the information and explanations given to us the Company has notaccepted any deposit from the public. Therefore the provisions of Clause (v) of Paragraph3 of the Order are not applicable.

(vi) We have broadly reviewed the cost records maintained by the company as prescribedby the Central Government under section 148(1) of the Companies Act 2013 and are of theopinion that prima facie the prescribed cost records have been made and maintained. Wehave however not made a detailed examination of the cost records with a view todetermine whether they are accurate or complete.

(vii) In respect of Statutory Dues:

(a) According to the information and explanations given to us and on the basis ofexamination of records given to usamounts deducted/accrued in the books of accounts inrespect of undisputed statutory dues including Provident Fund Employees' State InsuranceIncome Tax Sales Tax Custom Duty Excise Duty Value Added Tax etc have been generallyregularly deposited during the year by the company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income Tax Sales TaxCustom Duty Excise Duty Value Added Tax etc were in arrears as at 31st March 2019 fora period of more than six months from the date they become payable.

(b) According to the information and explanations given to us and on the basis ofexamination of records given to us there are no dues of customs which have not beendeposited with appropriate authorities on account of any dispute. However according toinformation and explanations given to us dues of Income Tax aggregating "2036029/-and Sales Tax aggregating " 3159113/- which have not been deposited on account ofdisputes the details of which are set out below. We have been informed that there are nofurther dues in respect of income tax sales tax and custom duty which have not beendeposited on account of any dispute.

Sl. No. Name of the Statute Nature of the Dues Amount (Rs.) Period to which the amount relates Forum where the dispute is pending
Amount of Demand / Dispute (Rs.) Amount Deposited (Rs.)
1 Income Tax Act 1961 Income Tax (For the Company) Rs. 1433509/- - AY : 2012-13 Appeal u/s 246A before CIT (Appeals)
2 Income Tax (For the Company) Rs. 602520/- FY : 2011-12 Appeal u/s 246A before CIT (Apeeals)
3 Central Sales Tax Act/WB VAT Act. Sales Tax & VAT (For the Company) Rs. 3197413/- " 38300/- FY : 2010-11 Appeal with joint Commissioner

(viii) Based on our audit procedures and on the information and explanations given bythe management we are of the opinion that the Company has not defaulted in repayment ofloans or borrowings to any financial institution bank or government. Further the Companyhas not issued any debentures. Hence reporting under Clause (viii) of the Order is notapplicable to the Company.

(ix) The Company did not raise any money by way of Initial Public Offer or FurtherPublic Offer (including debt instruments). All money raised by Term loans was applied forthe purposes for which it was raised.

(x) According to the information and explanations given to us no material fraud on orby the Company by its officer or employees has been noticed or reported during the courseof our audit.

(xi) According to the information and explanations given to us and on the basis ofexamination of records of the Company the Company has paid/provided for ManagerialRemuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Companies Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and hence reporting under Clause (xii) of CARO 2016 Orderis not applicable here.

(xiii) According to the information and explanations given to us and on the basis ofexamination of records of the Company the transactions with the related parties are incompliance with Section 177 and 188 of the Act where applicable and details of suchtransactions has been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and on the basis ofexamination of records of the Company the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearand hence reporting under Clause (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and on the basis ofexamination of records of the Company the Company has not entered into any non-cashtransactions with its directors or persons connected with him. Accordingly paragraph 3(xv)of Order is not applicable.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934

For P. K. LUHARUKA & CO.
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO. 322020E
Place : Kolkata. PRADEEP KUMAR LUHARUKA
Dated : 30.05.2019 PARTNER
Membership No.055782

ANNEXURE "B" TO INDEPENDENT AUDITORS' REPORT

Referred to in Clause (f) of Paragraph 10 under "Report on other Legal andRegulatory Requirements" of our report of even date to the financial statements ofthe company for the year ended March 312019.

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

We have audited the internal financial controls over financial reporting of KryptonIndustries Limited (Rs. the Company") as of March 31 2019 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended and as onMarch 312019.

Management's Responsibility for Internal Financial Controls

The Company's managementis responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the 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 Company's internal financialcontrols over financial reporting based on our audit.

We conducted our audit in accordance with the Guidance Note and the Standards onAuditing prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Control and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

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

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 financialreporting includes those policies and procedures that: (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) Provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) Provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion 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 2019 based on the internal financialcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

For P. K. LUHARUKA & CO.
CHARTERED ACCOUNTANTS
FIRM REGISTRATION NO. 322020E
Place : Kolkata. PRADEEP KUMAR LUHARUKA
Dated : 30.05.2019 PARTNER
Membership No.055782