The Members of
Report on the Standalone Financial Statements
We have audited the accompanying financial statements of KSS LIMITED ("thecompany")which comprise the Balance Sheet as at 31 March 2018 the Statement ofProfit and Loss(including other comprehensive Income) the Cash Flow Statement and thestatement of changes in equity for the year then ended and a summary of significantaccounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the state of affairs (financialposition) Profit or loss (financial Performance including other comprehensive income)change in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards(Ind. AS') specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes the maintenance of adequateaccounting records in accordance with the provision of the Act for safeguarding of theassets of the Company and for preventing and detecting the frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of internal financial control that were operating effectively for ensuringthe accuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under. We conducted our audit in accordancewith the Standards on Auditing specified under section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.
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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Ind. AS specified undersection 133 of the Act of the state of affairs (financial position) of the company as at31st March 2018 and its profit and loss account (financial performanceincluding other comprehensive Income)its cash flow and the changes in equity for the yearended on that date.
Emphasis of Matters
a. We draw attention to the Note 32 to the financial statement for a demand of Rs734.06 Lacs excluding interest and penalty under section 142 of the Custom Act 1962.Custom department freeze/attached the various assets and bank accounts against the saidrecovery. Based on legal Opinion obtained the company is of the view that said demandcontesting. Provision has been considered by the management in these financial statements.Our opinion is not qualified in respect of this matter.
b. We draw attention to the Note 32 to the financial statement for a demand of Rs1035.05 Lacs including the interest and penalty under MVAT. In line with film industryconsensus the Company is of the opinion that there are no grounds for levying VAT Basedon legal Opinion obtained; the company is of the view that said demand contesting. Henceno provision has been considered by the management in these financial statements. Ouropinion is not qualified in respect of this matter.
c. Notes to the financial statements which describe the uncertainty related to theoutcome of the pendency's of appeals and legal matters filed by the company as well asagainst the company.
Our opinion is not modified in respect of these matters.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (the Order')issued by the Central Government of India in terms of sub section (11) of section 143 ofthe Act we give in the Annexure A' statement on the matters specified in theparagraph 3 and 4 of the Order to the extent applicable.
2. Further to our comments in Annexure A as required by section 143(3) of the Actwe report that:
a) We have sought and obtained all the information and explanations which to thebest of 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 appears from our examination of those books;
c) The Balance sheet statement of profit and loss (including other comprehensiveincome) the statement of changes in Equity and statement of cash flows dealt with by thisreport are in agreement with the books of account;
d) In our opinion the aforesaid standalone financial statements comply with Ind.AS specified under section 133 of the Act;
e) In our opinion the matter described under the Emphasis of Matter Para above mayhave an adverse effect on the functioning of the Company;
f) on the basis of written representations received from the directors as on 31stmarch 2018 taken on record by the board of directors none of the directors isdisqualified as on 31st march 2018 from being appointed as a director interms of section 164(2) of the act;
g) 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'; and
h) With respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rule 2014 in our opinion best of ourinformation and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer to Note No. 32;
ii. The Company does not have any long-term contracts including derivatives contractsfor which any provision is required;
iii. The Company is not required to transfer amounts to the Investor Education andProtection Fund.
iv. The disclosures regarding details of specified bank notes held and transactedduring 8 November 2016 to 30 December 2016 has not been made since requirement does notpertain to financial year ended 31 march 2018.
For Agrawal Jain and Gupta.
Firm Reg. No. 013538C
CA Narayan Swami
Membership No. 409759
Dated: 05th June 2018
Annexure A to the Standalone Auditors' Report-31 March 2018 on the standalone Ind ASfinancial statements
The Annexure referred to in Independent Auditors' Report to the members of the KSSLimited on the standalone financial statements for the year ended 31 March 2018 we reportthat:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of all fixed assets.
(b) The Company has regular Programme of physical verification of its fixed assetsat reasonable intervals; no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
ii. The Company is a service company. Accordingly it does not hold any physicalinventories. Thus paragraph 3(ii) of the Order is not applicable to the company.
iii. The Company has granted loans corporate covered in the register maintainedunder section 189 of the Companies Act 2013 (the Act').
|S/no . ||Name of Company ||Opening Balance ||Loan given ||Repay/Adjusted ||Closing Balance |
|1. ||Birla Jewels Limited ||158.48 ||32.00 ||160.00 ||30.48 |
|2. ||Birla Gold and Precious Metals Limited ||319.14 ||739.76 ||320.22 ||738.68 |
|3. ||K Sera Sera Box office Pvt. Limited ||79.65 ||80.73 ||80.75 ||79.63 |
|4. ||K Sera Sera Productions FZE *(Foreign exch. Gain) ||443.75 ||31.93 ||*27.06 ||448.62 |
a. In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the bodies corporate listed in the register maintained underSection 189 of the Act were not prima facie prejudicial to the interest of the Company.
b. In the case of the loans granted to the bodies corporate listed in the registermaintained under Section 189 of the Act have been regular in the payment of the principleand interest as stipulated.
c. There are no overdue amounts in respect of the loan granted to body corporatelisted in the register maintained under Section 189 of the Act.
iv. In our opinion and according to the information and explanations given to usprovisions of section 186 of the Act in respect of loans and advances given investmentsmade and guarantees given has been complied with by the Company. The provisions ofsection 185 in respect of loans to directors including entities in which they areinterested and provisions of section 186 with respect to securities given are notapplicable to the Company and hence not commented upon
v. The Company has not accepted any deposits within the meaning of Sections 73 to76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
vi. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.
vii. (a) According to the information and explanation given to us and recordsexamined by us the company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues to theappropriate authorities. According to the information and explanation given to us therewere no undisputed amounts payable in respect of Income Tax and any other statutory duesoutstanding as on 31st March 2018 for a period more than six months from the date theybecame payable.
(b) According to the information and explanations given to us the dues in respectof Income Tax Sales Tax wealth Tax Value Added Tax Service tax customs duty have notbeen deposited with the appropriate authorities on account of dispute and the forum wherethe disputes are pending are as given below:
| || || || ||(Amount in Lacs) |
|Nature of Statues ||Nature of Dues ||Amount ||Period for which amount related ||Forum where dispute is pending |
|MVAT- 2002 ||Value Added taxes ||1035.05 ||F.Y. 2005-06 to 2010- 11 ||Joint Commissioner of Sales Tax Mumbai |
|Income tax Act- 1961 ||Income tax ||887.68 ||A.Y. 2006-07 to 2013-14 ||ITAT Mumbai |
|Custom Act 1962 ||Custom duty ||734.06 ||2009-10 to 2010-11 ||Writ petition filed in Hon'ble high Court |
| || || || ||Mumbai Demand |
| || || || ||U/s 114A of Customs Act |
(c) Demand of Rs 734.06 Lacs excluding the interest and penalty under section 142of the Custom Act 1962. Custom department freeze/attached the various assets and bankaccounts against the said recovery. Based on legal Opinion obtained the company is of theview that said demand contesting. Provision has been considered by the management in thesefinancial statements. Our opinion is not qualified in respect of this matter.
(d) Demand of Rs 1035.05 Lacs including the interest and penalty under MVAT. Inline with film industry consensus the Company is of the opinion that there are no groundsfor levying VAT Based on legal Opinion obtained; the company is of the view that saiddemand contesting. Hence no provision has been considered by the management in thesefinancial statements. Our opinion is not qualified in respect of this matter
viii. The Company does not have any loans or borrowings from any financialinstitution banks government or debenture holders during the year. Accordinglyparagraph 3(viii) of the Order is not applicable.
ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3(ix) of the Order is not applicable.
x. According to the information and explanations given to us no material fraud bythe Company or on the Company by its officers or employees has been noticed or reportedduring the course of our audit.
xi. According to the information and explanations given to us and based on ourexamination of our 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 Act.
xii. In our opinion and according to the information and explanations given to usthe Company is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian accounting standards.
xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or person connected with him as referred to in section 192 ofthe Act.
xvi. The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934.
For Agrawal Jain and Gupta
Firm Reg. No. 013538C
CA Narayan Swami
Membership No. 409759
Annexure B to the Independent Auditors' Report of the even date on the standalonefinancial statement of KSS Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") To the member of KSS Limited
We have audited the internal financial controls over financial reporting of KSSLIMITED ("the Company") as of March 31 2018 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is 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 Reportingissued by the Institute of Chartered Accountants of India (ICAI'). 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 company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be 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 Controls 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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Agrawal Jain and Gupta
ICAI Firm Reg. No. 013538C
CA Narayan Swami
Membership No. 409759