Mar 31, 2023
REPORT ON THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTSOPINION
1. We have audited the accompanying standalone financial statements of KEC International Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information in which are included the Returns for the year ended on that date audited by the branch auditors of the Companyâs 40 branches located at Abu Dhabi, Afghanistan, Algeria, Bangladesh, Bhutan, Burundi, Burkina Faso, Cameroon, Egypt, Ethiopia, Georgia, Ghana, Guinea, Ivory Coast, Jordan, Kenya, Kuwait, Lebanon, Libya, Malaysia, Mali, Moldova, Morocco, Mozambique, Nepal, Nicaragua, Nigeria, Oman, Papua New Guinea, Philippines, Senegal, Sierra Leone, South Africa, Sri Lanka, Tanzania, Thailand, Togo, Tunisia, Uganda and Zambia and financial statements / financial information of 31 jointly controlled operations consolidated on a proportionate basis (refer Notes 3.3 and 50 to the attached standalone financial statements) (hereinafter referred to as âstandalone financial statementsâ).
2. In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on audited financial statements / financial information of branches and jointly controlled operations, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs responsibilities for the audit of the standalone financial statementsâ section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraphs 16 and 17 of the Other Matters Paragraph below, is sufficient and appropriate to provide a basis for our opinion.
4. We draw attention to Note 64(a) of the standalone financial statements, regarding the Companyâs net exposure of '' 252 crores (including exposure of '' 79.20 crores in the Afghanistan branch) after netting off advances, liabilities (including contract liabilities) and proposed settlement with a funding agency from its transmission line projects in Afghanistan as at March 31, 2023, which are currently on hold due to Force Majeure event. The timing of the recovery of the said exposure is dependent upon the geopolitical environment in Afghanistan and negotiations with international funding agencies. Our opinion is not modified in respect of this matter.
5. Audit report on the Financial Statements of the Afghanistan branch issued by an independent firm of chartered accountants vide its report dated April 26, 2023 include an emphasis of matter paragraph which is reproduced by us as under:
ââWe draw attention to Note xviii of the Financial Statements, regarding Afghanistan Branch net exposure of USD 90,87,881 (equivalent to INR. 79.20 crores) to its transmission line Projects as at March, 2023, which are currently on hold due to Force Majeure event. Timeline of the recovery of said exposure is dependent upon the geopolitical environment in Afghanistan and negotiation with international funding agencies. Further, the bank guarantees issued in respect of these ongoing projects are also currently not enforceable due to the force majeure event. Our Conclusion is not modified in respect of this matter.ââ
Note xviii as described above is reproduced as Note 64(b) to the standalone financial statements for the year ended March 31,2023.
Our opinion is not modified in respect of this matter.
6. Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter |
How our audit addressed the key audit matter |
|
Estimation of contract cost and revenue recognition |
Our procedures over the recognition of construction revenue included the following: |
|
(Refer notes 38 and 51 to the standalone financial statements) |
||
⢠|
Understood and evaluated the design and tested operating |
|
Contract revenue amounting to '' 13,813.01 crores for engineering, procurement and construction contracts which |
effectiveness of key internal financial controls, including those related to contracted revenue and review and |
|
usually extends over a period of 2-3 years, contract prices are |
approval of estimated project cost by the authorised |
|
fixed / subject to price variance clauses. |
representatives. |
|
⢠|
For sample of contracts, we obtained the percentage of |
|
The contract revenue is measured based on the proportion of |
completion calculations, agreed key contractual terms back |
|
contract costs incurred for work performed to date relative to the |
to signed contracts, tested the mathematical accuracy of |
|
estimated total contract costs. |
the cost to complete calculations and re-performed the calculation of revenue recognized during the year based on |
|
This method requires the Company to perform an initial assessment of total estimated cost and further, reassess the |
the percentage of completion. |
|
total construction cost at each reporting period to determine the |
⢠|
For costs incurred to date, we tested samples to |
appropriate percentage of completion. |
appropriate supporting documentation and performed cut off procedures. |
|
We considered the estimation of construction contract cost |
⢠|
To test the forecasted cost to complete, for sample of |
as a key audit matter given the involvement of significant |
contracts, we obtained the breakdown of forecasted |
|
management judgement which has a consequential impact on |
costs and tested elements of the forecast by obtaining |
|
revenue recognition. |
executed purchase orders and agreements, evaluating reasonableness of managementâs judgements / and assumptions using past trends and comparing the estimated costs to the actual costs incurred for the completed projects. |
|
⢠|
Assessed the adequacy of presentation and related disclosures in the standalone financial statements. |
|
Based on the procedures performed above, we considered manner of estimation of contract cost and recognition of revenue to be reasonable. |
||
Recoverability of Trade Receivables |
Our |
procedures towards recoverability of trade receivables |
involved the following: |
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(Refer to Notes 10 and 15 to the standalone financial statement) |
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⢠|
Understood and evaluated the accounting policy |
|
Trade receivables amounting to '' 6,962.91 crores (including |
of the Company. |
|
retention receivables) is a significant balance in the Companyâs standalone financial statements as at March 31, 2023 and assumptions used for estimating the credit loss on receivables is an area which is influenced by managementâs judgment. |
⢠|
Evaluated the design and tested the operating effectiveness of key controls in relation to determination of estimated credit loss. Inquired with senior management regarding status of |
⢠|
||
The Company makes an assessment of the estimated credit |
collectability of the receivables. |
|
losses basis credit risk, project status, past history, ongoing |
⢠|
Assessed and challenged the information used by the |
litigations and disputes, if any, existing market conditions and |
Management to determine the expected credit losses by |
|
forward looking estimates, with the customer. |
considering credit risk of the customer, project status, past history, ongoing litigations and disputes, if any, |
|
Given the relative significance of these receivables to the |
existing market conditions and forward looking estimates, |
|
standalone financial statements and judgement involved as well as the nature and extent of audit procedures involved to assess |
with the customer. |
|
the recoverability of receivables, we determined this to be a key audit matter. |
Based on the procedures performed above, no significant deviations were observed in respect of managementâs assessment of recoverability of trade receivables. |
Key audit matter |
How our audit addressed the key audit matter |
Assessment of carrying value of investments in a subsidiary |
Our procedures over the assessment of carrying value of investment in a subsidiary included the following: |
(Refer to Note 9 to the standalone financial statement) |
⢠Evaluated the design and tested the operating effectiveness |
The Company has an investment of '' 1,056.49 crores in KEC Investment Holding, Mauritius, whose wholly owned subsidiary |
of key controls in relation to the assessment of the carrying value of investment. |
SAE Tower holdings LLC (âSAEâ) is making losses over the past |
⢠Assessed and challenged the information used by |
few years and the carrying value of the investment is higher than |
Management for assessing impairment if any, in the |
the net assets of SAE. |
carrying value of investment. |
This is an indicator of a potential impairment of the investment. |
⢠Compared the growth rates used in the Model with historical information, economic and industry forecasts. |
The managementâs assessment of impairment depends on the |
⢠Evaluated the competency and capabilities of the |
value in use of SAE derived by business plans, anticipating the |
managementâs external valuation expert performing the |
future market conditions and cash flows, key assumptions such |
impairment assessment of the carrying value of investment. |
as estimated long term growth rates, weighted average cost of capital and estimated operating margins. |
⢠Involved auditorâs valuation expert to assist in assessing the reasonableness of the valuation approach and |
In addition, there is significant scope for judgement in determining the assumptions underlying the forecasted results. |
methodology including the independent assessment of the underlying assumptions relating to weighted average cost of capital and terminal value growth rate. |
Given the relative significance of this investment to the |
⢠Checked the mathematical accuracy of the |
standalone financial statements and the nature and extent of |
impairment model. |
audit procedures involved in assessing the carrying value of this investment, we determined this to be a key audit matter. |
⢠Obtained results of work performed by the component auditor of the subsidiary in their impairment testing |
including consistency of the future cash flow projections and assumptions used in the componentâs valuation model. |
|
⢠Assessed the adequacy of presentation and disclosures |
|
made in the financial statements. |
|
Based on the above procedures performed, we observed the managementâs impairment assessment related to investments in a subsidiary to be reasonable. |
|
7. The following Key Audit Matters were included in the audit report dated April 17, 2023, issued by an independent firm, containing |
|
an unmodified audit opinion on the standalone financial statements of Sri Lanka, a branch of the Parent Company issued by an independent firm of Chartered Accountants reproduced by us as under: |
|
Key audit matter |
How the other auditor addressed the key audit matter |
Estimation of Contract Cost and Consequential Revenue For sample of contracts, we obtained the percentage of |
|
Recognition : |
completion calculations, and we noticed that the manner of estimation of contract cost to be reasonable. |
We considered that estimation of construction contract cost |
|
is a key audit matter given the involvement of significant |
|
management judgement which has consequential impact on |
|
revenue recognition. |
8. The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the annual report but does not include the financial statements and our auditorâs report thereon. The annual report is expected to be made available to us after the date of this auditorâs report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.
RESPONSIBILITIES OF MANAGEMENT AND THOSECHARGED WITH GOVERNANCE FOR THE STANDALONEFINANCIAL STATEMENTS
9. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
10. In preparing the standalone financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
AUDITORâS RESPONSIBILITIES FOR THE AUDIT OF THE
STANDALONE FINANCIAL STATEMENTS
11. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
12. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design 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 Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
⢠Obtain sufficient appropriate audit evidence regarding the financial statements/financial information of the branches and jointly controlled operations which are included in the Company to express an opinion on the standalone financial statements. We are responsible for the direction, supervision and performance of the audit of financial information of such entities included in the standalone financial statements of which we are the independent auditors. For the other entities included in the standalone financial statements, which have been audited by other auditors, such other auditors remain responsible for the direction, supervision and performance of the audits carried out by them. We remain solely responsible for our audit opinion.
13. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
14. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
15. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
16. We did not audit the financial statements/ financial information of 33 branches and 30 jointly controlled operations included in the standalone financial results of the Company, whose financial statements / financial information reflect total assets of '' 3,896 crores and net assets of '' 287 crores as at March 31,2023, total revenues of '' 3,715 crores, total net loss after tax of '' 187 crores, total comprehensive loss (comprising of loss and other comprehensive income) of '' 149 crores for the year ended March 31, 2023 and net cash outflows amounting to '' 1 crore for the year ended March 31,2023. The financial statements / financial information of these branches and jointly controlled operations have been audited by branch auditors and other auditors whose reports have been furnished to us by the Management, and our opinion on the standalone financial results in so far as it relates to the amounts and disclosures included in respect of these branches and jointly controlled operations, is based solely on the reports of such branch auditors and other auditors.
17. The financial statements/ financial information of 7 branches and 1 jointly controlled operation located outside India, included in the standalone financial results, which constitute total assets of '' 567 crores and net liabilities of '' 97 crores as at March 31, 2023, total revenue from operations of '' 325 crores, total net loss after tax of '' 33 crores, total comprehensive loss (comprising of loss and other comprehensive loss) of '' 34 crores and net cash outflows amounting to '' 11 crores for the year then ended, have been prepared in accordance with accounting principles generally accepted in their respective countries and have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Companyâs management has converted the financial statements/ financial information of such branches/ jointly controlled operation located outside India from the accounting principles generally accepted in their respective countries to the accounting principles generally accepted in India. We have audited the conversion adjustments, if any, made by the Companyâs management. Our opinion in so far as it relates to the balances and affairs of such branches and jointly controlled operation located outside India, is based on the report of such other auditors and the conversion adjustments prepared by the management of the Company and audited by us. Material uncertainty related to going concern has been reported by two branches and one jointly controlled operation on account of loss incurred during the year by these branches and jointly controlled operation which are not material in relation to the operations of the Company.
Our opinion on the standalone financial statements, and our âReport on Other Legal and Regulatory Requirementsâ below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.
REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS
18. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure B, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
19. 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 best 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 the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches.
(c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by branch
auditors have been sent to us and have been properly dealt with by us in preparing this report.
(d) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches and the financial information/ financial statements received from the jointly controlled operations.
(e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.
(f) On the basis of the written representations received from the directors as on April 1, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 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 to financial statements of the Company and its 40 branches, and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. The standalone financial statements disclose the impact, if any, of pending litigations on the standalone financial position of the Company, its branches and jointly controlled operations - Refer note 57 to the standalone financial statements.
ii. Provision has been made in the standalone financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer note 36 to the standalone financial statements.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.
iv. a) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the notes to these standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer note 9 to the standalone financial statements);
(b) The management has represented that, to the best of its knowledge and belief, as disclosed in the notes to these standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer note 9 to the standalone financial statements); and
(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for books of account to have the feature of audit trail, edit log and related matters in the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 1, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.
20. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016 Chartered Accountants
Partner
Place: Mumbai Membership Number: 045255
Date: May 03, 2023 UDIN: 23045255BGYVVM1375
Mar 31, 2022
OPINION
1. We have audited the accompanying standalone financial statements of KEC International Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31,2022, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information in which are included the Returns for the year ended on that date audited by the branch auditors of the Companyâs 44 branches located at Abu Dhabi, Afghanistan, Algeria, Bangladesh, Bhutan, Burundi, Burkina Faso, Cameroon, Congo, Egypt, Ethiopia, Georgia, Ghana, Guinea, Indonesia, Ivory Coast, Jordan, Kazakhstan, Kenya, Kuwait, Laos, Lebanon, Libya, Malaysia, Mali, Moldova, Morocco, Mozambique, Nepal, Nicaragua, Nigeria, Oman, Papua New Guinea, Philippines, Senegal, Sierra Leone, South Africa, Sri Lanka, Tanzania, Thailand, Togo, Tunisia, Uganda and Zambia and 29 jointly controlled operations consolidated on a proportionate basis (refer Notes 3.3 and 50 to the attached standalone financial statements) (hereinafter referred to as âstandalone financial statementsâ).
2. I n our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on audited financial statements of branches and jointly controlled operations, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs responsibilities for the audit of the standalone financial statementsâ section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained, and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraphs 14 and 15 of the Other Matter Paragraph below, is sufficient and appropriate to provide a basis for our opinion.
4. We draw attention to Note 66 of the standalone financial statements, regarding the Companyâs net exposure aggregating to '' 233 crores from its transmission line projects in Afghanistan as at March 31, 2022, which are currently on hold due to Force Majeure event. The timing of the recovery of the said exposure is dependent upon the geopolitical environment in Afghanistan and negotiations with international funding agencies. Further, the bank guarantees issued by the Company in respect of the aforesaid ongoing projects are also currently not enforceable due to the force majeure event. Our opinion is not modified in respect of this matter.
5. Key audit matters are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter |
How our audit addressed the key audit matter |
|
Estimation of contract cost and revenue recognition |
Our procedures over the recognition of construction revenue |
|
(Refer Notes 38 and 51 to the standalone financial statements) |
included the following: |
|
Contract revenue amounting to '' 11,405.94 crores for engineering, procurement and construction contracts which usually extends over a period of 2-3 years, contract prices are fixed / subject to price variance clauses. |
⢠|
Understood and evaluated the design and tested effectiveness of key internal financial controls, including those related to review and approval of estimated project cost and review of provision for estimated loss by the authorised representatives. |
The contract revenue is measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. |
⢠|
For sample of contracts, we obtained the percentage of completion calculations, agreed key contractual terms back to signed contracts, tested the mathematical accuracy of the cost to complete calculations and re-performed the |
This method requires the Company to perform an initial assessment of total estimated cost and further, reassess the |
calculation of revenue recognized during the year based on the percentage of completion. |
|
total construction cost at each reporting period to determine the appropriate percentage of completion. |
⢠|
For costs incurred to date, we tested samples to appropriate supporting documentation and performed cut |
We considered the estimation of construction contract cost |
off procedures |
|
as a key audit matter given the involvement of significant management judgement which has consequential impact on |
⢠|
To test the forecasted cost to complete, we obtained the breakdown of forecasted costs and tested elements of |
revenue recognition. |
the forecast by obtaining executed purchase orders and agreements, evaluating reasonableness of managementâs judgements / and assumptions using past trends and comparing the estimated costs to the actual costs incurred for the similar completed projects. |
|
⢠|
Assessed the adequacy of presentation and related disclosures in the standalone financial statements. |
|
Based on the procedures performed above, we considered manner of estimation of contract cost and recognition of revenue to be reasonable. |
||
Valuation of accounts receivable in view of risk of credit |
Our audit incorporated the following procedures with regards to |
|
losses |
provisioning of receivables: |
|
(Refer to Notes 10 and 15 to the standalone financial statement) |
⢠|
Understood and evaluated the accounting policy of |
Accounts receivables amounting to '' 5,258.06 crores (including |
the company. |
|
retention receivables) is a significant item in the Companyâs |
⢠|
Evaluated the design and tested the operating effectiveness |
standalone financial statements as at March 31, 2022 and |
of key controls in relation to determination of estimated |
|
assumptions used for estimating the credit loss on receivables is |
credit loss. |
|
an area which is influenced by managementâs judgment. |
⢠|
Inquired with senior management regarding status of |
The Company makes an assessment of the estimated credit |
collectability of the receivable |
|
losses basis credit risk, project status, past history, latest discussion/ correspondence with the customer. |
⢠|
For material balances, the basis of provision was discussed with the audit committee. |
Given the relative significance of these receivables to the standalone financial statements and the nature and extent of audit procedures involved to assess the recoverability of receivables, we determined this to be a key audit matter. |
⢠|
Assessed and challenged the information used by the Management to determine the expected credit losses by considering credit risk of the customer, cash collection, performance against historical trends. |
Based on our work as stated above, no significant deviations were observed in respect of managementâs assessment of valuation of accounts receivables. |
Key audit matter |
How our audit addressed the key audit matter |
|
Assessment of carrying value of investments in subsidiary |
Our audit incorporated the following procedures with regards to |
|
(Refer to Note 9 to the standalone financial statement) |
impairment testing of investments: |
|
The Company has an investment of '' 867.09 crores in KEC Investment Holding, Mauritius, whose wholly owned subsidiary SAE Tower holdings LLC (âSAEâ) is making losses over the past |
⢠|
Evaluated the design and tested the operating effectiveness of key controls in relation to determination of impairment loss. |
few years and the carrying value of the investment is higher than |
⢠|
Assessed and challenged the information used by |
the net assets of SAE. |
Management for impairment assessment of the |
|
This is an indicator of a potential impairment of the investment. |
investments. Performed sensitivity analysis on the Model by analysing the impact of using other possible |
|
Testing for impairment depends on the future results of the |
growth rates and discount rates within a reasonable and |
|
company like estimating future cash flows in the value-in use |
foreseeable range. |
|
discounted cash flow model prepared by the Company (the Model) to support the carrying value, determining the discount and growth rates to be adopted in the Model. |
⢠|
Compared the growth rates used in the Model with historical information, economic and industry forecasts. |
In addition, there is significant scope for judgement in determining the assumptions underlying the forecasted results. |
⢠|
Evaluated the competency and capabilities of the external managementâs valuation expert performing the investment impairment assessment. |
Given the relative significance of this investment to the standalone financial statements and the nature and extent of audit procedures involved in valuation of this investment, we determined this to be a key audit matter. |
⢠|
Evaluated the Companyâs process regarding impairment assessment by involving auditorâs valuation expert to assist in assessing the appropriateness of the impairment model including the independent assessment of the underlying assumptions relating to discount rate, terminal value, etc. |
⢠|
Checked the mathematical accuracy of the impairment model. |
|
⢠|
Obtained results of work performed by the component auditor of the subsidiary in their impairment valuation including, consistency of the operating performance, outlook and assumptions used in the componentâs valuation model. |
|
⢠|
Assessed the adequacy of presentation and disclosures made in the financial statements. |
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Based on the above procedures performed, we observed the managementâs impairment assessment related to investments in subsidiaries to be reasonable. |
OTHER INFORMATION
6. The Companyâs Board of Directors are responsible for the other information. The other information comprises the information included in the annual report but does not include the financial statements and our auditorâs report thereon. The annual report is expected to be made available to us after the date of this auditorâs report.
Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
I n connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing
so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS
7. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements
that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the standalone financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
AUDITORâS RESPONSIBILITIES FOR THE AUDIT OF THESTANDALONE FINANCIAL STATEMENTS
9. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
10. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design 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 Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
11. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such communication.
OTHER MATTER
14. We did not audit the financial statements/ financial information of 40 branches and 28 jointly controlled operations included in the standalone financial statements of the Company, which constitute total assets of '' 3,500 crores and net asset of '' 450 crores as at March 31, 2022, total revenue of '' 3,022 crores, total net profit after tax of '' 92 crores, total comprehensive income (comprising of profit and other comprehensive income) of '' 96 crores and net cash inflows amounting to '' 29 crores for the year then ended. These financial statements/ financial information have been audited by other auditors, whose reports have been furnished to us by the Management and our opinion on the standalone financial statements (including other information) in so far as it relates to the amounts and disclosures included in respect of these branches and jointly controlled operations and our report in terms of sub-section (3) of Section 143 of the Act including report on Other Information insofar as it relates to the aforesaid branches and jointly controlled operations, is based solely on the report of such other auditors.
15. The financial statements/ financial information of 4 branches and 1 jointly controlled operation located outside India, included in the standalone financial statements, which constitute total assets of '' 36 crores and net liabilities of '' 95 crores as at March 31, 2022, total revenue from operations of '' 27 crores, total net loss after tax of '' 71 crores, total comprehensive loss (comprising of loss and other comprehensive income) of '' 71 crores and net cash outflows amounting to '' 3 crores for the year then ended, have been prepared in accordance with accounting principles generally accepted in their respective countries and have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Companyâs management has converted the financial statements/ financial information of such branches and jointly controlled operations located outside India from the accounting principles generally accepted in their respective countries to the accounting principles generally accepted in India. We have audited these conversion adjustments made by the Companyâs management. Our opinion in so far as it relates to the balances and affairs of such branches and jointly controlled operations located outside India, including other information, is based on the report of such other auditors and the conversion adjustments prepared by the management of the Company and audited by us. Material uncertainty related to going concern has been reported by two branches and one jointly controlled operation on account of loss incurred during the year by these branches and jointly controlled operation which are not material to the Company.
Our opinion on the standalone financial statements, and our âReport on Other Legal and Regulatory Requirementsâ below, is not modified in respect of the above matters with respect to our reliance on the work done and the reports of the other auditors.
REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS
16. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure B, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
17. 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 best of our knowledge and belief were necessary for the purposes of our audit.
(b) I n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches and jointly controlled operations.
(c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
(d) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches and financial statements/ financial information of jointly controlled operations.
(e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act.
(f) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 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 to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:
i. The standalone financial statements disclose the impact , if any, of pending litigations on the standalone financial position of the Company, its branches and jointly controlled operations - Refer Note 57 to the standalone financial statements.
ii. Provision has been made in the standalone financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts as at March 31, 2022 -Refer Note 36 to the standalone financial statements. The Company did not have any long-term derivative contracts as at March 31,2022.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year.
iv. a) The management has represented that, to
the best of its knowledge and belief no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 9.8 to the standalone financial statements);
(b) The management has represented that, to the best of its knowledge and belief no funds have been received by the Company from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries (Refer Note 9.8 to the standalone financial statements); and
(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The dividend declared and paid during the year by the Company is in compliance with Section 123 of the Act.
18. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Partner
Place: Mumbai Membership Number: 045255
Date: May 03, 2022 UDIN: 22045255AIIEEP1897
Mar 31, 2019
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
OPINION
1. We have audited the accompanying Standalone financial statements of KEC International Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, the Cash Flow Statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, in which are incorporated 20 jointly controlled operations as referred to in Note 43 in the Standalone financial statements and Returns for the year ended on that date of the Companyâs branches located at Abu Dhabi, Afghanistan, Algeria, Bangladesh, Egypt, Ethiopia, Georgia, Ghana, Guinea, Indonesia, Ivory Coast, Jordan, Kenya, Laos, Lebanon, Libya, Malaysia, Mali, Mozambique, Nepal, Nicaragua, Nigeria, Oman, Papua New Guinea, Philippines, Srilanka, Sierra Leone, Senegal, South Africa, Tanzania, Thailand, Tunisia, Uganda, Bhutan, Cameroon, Congo, Kazakhstan, Kuwait and Zambia.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, and the total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
BASIS FOR OPINION
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph 14 of the Other Matter paragraph below is sufficient and appropriate to provide a basis for our opinion.
EMPHASIS OF MATTER
4. We draw your attention to Note 58 of the Standalone financial statements, regarding delays in recovery of receivable amounting to Rs. 145 Crores from a customer. The recovery of the amount is dependent upon transfer of contract from the customer to a new sponsor.
KEY AUDIT MATTERS
5. Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter |
How our audit addressed the key audit matter |
|
Estimation of contract cost and revenue recognition (Refer note 3.5 and 32 of the standalone financial statements) Contract revenue for engineering, procurement and construction contracts which usually extends over a period of 2-3 years, contract prices are fixed / subject to price variance clauses. The contract revenue is measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. This method requires the Company to perform an initial assessment of total estimated cost and further, reassess the total construction cost at each reporting period to determine the appropriate percentage of completion. On transition to Indian Accounting Standard (IND AS) 115, Revenue from Contracts with Customers w.e.f. April 1, 2018, the management has performed a detailed evaluation of the implications under the new standard and has concluded that there are no material implications on account of applicability of Ind AS 115. We considered the estimation of construction contract cost as a key audit matter given the involvement of significant management judgement which has consequential impact on revenue recognition. |
Our procedures over the recognition of construction revenue included the following: - Understood and evaluated the design and tested effectiveness of key internal financial controls, including those related to review and approval of estimated project cost and review of provision for estimated loss by the authorised representatives. - For sample of contracts, we obtained the percentage of completion calculations, agreed key contractual terms back to signed contracts, tested the mathematical accuracy of the cost to complete calculations and re-performed the calculation of revenue recognized during the year based on the percentage of completion. - For costs incurred to date, we tested samples to appropriate supporting documentation and performed cut off procedures. - To test the forecasted cost to complete, we obtained the breakdown of forecasted costs and tested elements of the forecast by obtaining executed purchase orders and agreements, evaluating reasonableness of managementâs judgements / and assumptions using past trends and comparing the estimated costs to the actual costs incurred for the similar completed projects. - Checked the implications and related disclosures in the financial statements pursuant to applicability of Ind AS 115. Based on the procedures performed above, we considered manner of estimation of contract cost and recognition of revenue to be reasonable. |
|
Key audit matter |
How our audit addressed the key audit matter |
|
Valuation of accounts receivable in view of risk of credit losses (Refer to Note 46 âFinancial Instrumentsâ and Note 8 and 13 âTrade receivablesâ) |
Our audit incorporated the following procedures with regards to provisioning of receivables; - Understood and evaluated the accounting policy of the |
|
Accounts receivables is a significant item in the Companyâs financial statements as at March 31, 2019 and assumptions used for estimating the credit loss on receivables is an area which is influenced by managementâs judgment. The Company makes an assessment of the estimated credit losses basis credit risk, project status, past history, latest discussion/ correspondence with the customer. Given the relative significance of these receivables to the financial statements and the nature and extent of audit procedures involved to assess the recoverability of receivables, we determined this to be a key audit matter. |
- |
company. We evaluated the design and tested the operating effectiveness of key controls in relation to determination of estimated credit loss. Inquired with senior management regarding status of collectability of the receivable For material balances, the basis of provision was discussed with the audit committee. Assessed and challenged the information used by the Management to determine the expected credit losses by considering credit risk of the customer, cash collection, performance against historical trends and the level of credit loss charges over time. |
Based on our work as stated above, no significant deviations were observed in respect of managementâs assessment of valuation of accounts receivables. |
||
Key audit matter |
How our audit addressed the key audit matter |
|
Reliance on controls and processes relating to new IT system and data migration impacting financial reporting The company migrated its transaction and financials systems from JD Edwards to SAP w.e.f. from April 1, 2018. |
We performed following procedures with respect to the new system and data migration: - Obtained understanding and tested the controls over data migration including proper authorization, completeness and |
|
The migration has resulted in a significant change in the companyâs process and the related controls. Data migration, is assumed to have a significant impact on the processes and controls related to the financial reporting and consequently has been considered to be an area of audit focus and accordingly determined to be a key audit matter. |
accuracy. - Tested the migrated balances, for completeness and accuracy as of April 1, 2018. - We evaluated the design and operating effectiveness of the IT General Controls (ITGC), business process controls post migration (both automated and manual) of the new system. We took the above procedures into consideration in planning and executing our audit. |
OTHER INFORMATION
6. The Companyâs Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report, but does not include the financial statements and our auditorâs report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS
7. The Companyâs Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
8. In preparing the financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
AUDITORâS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
9. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
10. As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
11. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
OTHER MATTER
14. We did not audit the financial statements/financial information of 20 jointly controlled operations and 34 branches considered in the preparation of the Standalone financial statements which constitute total assets of Rs. 2,646 Crore and net assets of Rs. 394 Crore as at March 31, 2019, total revenue of Rs. 2,009 Crore, and net cash flows amounting to Rs. 23 Crore for the year then ended. These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us, and our opinion on the Standalone financial statements (including other information) to the extent they have been derived from such financial statements/financial information is based solely on the report of such other auditors.
Our opinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
15. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
16. 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 best of our knowledge and belief were necessary for the purposes of our audit.
(b) I n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and the reports of the other auditors for the branches not audited by us and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.
(c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
(d) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity and dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.
(e) In our opinion, the aforesaid Standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(f) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2019 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ.
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2019 on its financial position in its financial statements - Refer Note 50 to the financial statements;
ii. The Company has made provision as at March 31, 2019, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 18(a) and 30 to the Standalone financial statements. Further, the Company did not have any material foreseeable losses on derivative contracts as at March 31, 2019;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year March 31, 2019;
iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2019.
ANNEXURE A TO INDEPENDENT AUDITORSâ REPORT
Referred to in paragraph 16(g) of the Independent Auditorsâ Report of even date to the members of KEC International Limited on the Standalone financial statements for the year ended March 31, 2019
REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE ACT
1. We have audited the internal financial controls with reference to financial statements of KEC International Limited (âthe Companyâ) as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date, which includes the internal financial controls over financial reporting of the Companyâs 39 branches.
MANAGEMENTâS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
2. The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
AUDITORâS RESPONSIBILITY
3. Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks 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 to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting with reference to financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
6. A companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
7. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial control controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
OTHER MATTER
9. Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls with reference to financial statements insofar as it relates to 34 branches, is based on the corresponding reports of the auditors of such branches. Our opinion is not qualified in respect of this matter.
ANNEXURE B TO INDEPENDENT AUDITORSâ REPORT
Referred to in paragraph 15 of the Independent Auditorsâ Report of even date to the members of KEC International Limited on the standalone financial statements as of and for the year ended March 31, 2019
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of 3 years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.
(c) The title deeds of immovable properties, other than for self-constructed buildings, as disclosed in Note 5 on Property, plant and equipment to the financial statements, are held in the name of the Company, except in respect of Industrial plots situated at Gandhinagar, Gujarat, admeasuring to 4,891.45 sq. meters, Industrial plot situated at Mysore, Karnataka, admeasuring to 80,773 sq. meters, land and building situated at Jabalpur, Madhya Pradesh, admeasuring to 9,000 Sq. feet and a flat at Worli, Mumbai, admeasuring to 1,088.22 sq. feet, having Gross carrying amount aggregating Rs. 26.35 Crore and Net carrying amount aggregating Rs. 25.74 Crore as at Balance Sheet date, the titles of which have been transferred to and vested in the Company, pursuant to schemes of amalgamation/arrangement in the earlier years and the procedural formalities for transfer in the name of the Company in the relevant documents have not been completed.
ii. The physical verification of inventory excluding stocks with third parties have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities. Also refer note 56 to the financial statements regarding managementâs assessment on certain matters relating to provident fund.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods and service tax, which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax as at March 31, 2019 which have not been deposited on account of a dispute, are as follows:
Name of the statute |
Nature of dues | |
Amount (Rs. in Crore) |
Period to which the amount relates |
Forum where the dispute is pending |
The Central Sales Tax Act, 1956 and Local |
Sales tax and value added tax |
0.51 |
1999-2000 to 2015-2016 |
Appellate Tribunal |
Sales Tax Acts |
0.48 |
1994-1995 to 1997-1998 and 2008-2009 |
Rajasthan Tax Board, Ajmer |
|
2.43 |
2003-2004 to 2011-2012 |
Commercial Tax Appellate Board, Madhya Pradesh |
||
18.89 |
2006-2007 to 2013-2014 |
Revisionary Board of Madhya Pradesh & West Bengal |
||
34.58 |
1995-1996 to 2016-2017 |
Appellate Authority - up to Commissionerâs level |
Name of the statute |
Nature of dues |
Amount (Rs. in Crore) |
Period to which the amount relates |
Forum where the dispute is pending |
The Finance Act, 1994 |
Service Tax |
294.13 |
2004-2005 to 2012-2013 |
Customs Excise and Service Tax Appellate Tribunal (CESTAT) |
The Customs Act, 1962 |
Customs Duty |
0.60 |
1995-1996 |
High Court |
The Central Excise Act, 1944 |
Excise Duty |
11.99 |
1994-1995 to 2016-2017 |
Appellate Authority - up to Commissionerâs level |
22.14 |
1988-1989 to 1993-1994, 2004-2005 to 2016-2017 |
Customs Excise and Service Tax Appellate Tribunal (CESTAT) |
||
0.62 |
2001-2002 to 2005-2006 |
Mumbai High Court |
||
0.13 |
2008-2009 to 2009-2010 |
Supreme Court of India |
||
The Income- Tax Act, 1961 |
Income-Tax |
1.93 |
Assessment Year 2007-2008 |
Income Tax Appellate Tribunal |
0.54 |
Assessment Year 2008-2009 |
High Court |
||
The Rajasthan Tax on Entry of Goods into Local Areas Act, 1999 |
Entry Tax |
1.13 |
1995-1996, 2004-2005, 2008-2009 to 2013-2014 |
Appellate Authority - up to Deputy Commissionerâs level |
Entry Tax Act, 1976, Madhya Pradesh |
Entry Tax |
0.29 |
2001-2002 to 2002-2003, 2009-2010 to 2011-2012, 2015-2016 |
Appellate Authority - up to Deputy Commissionerâs level, Board of Appeals, Madhya Pradesh |
*Net of amounts paid including under protest
Note: For the above purpose, only statutory dues payable in India have been considered
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its directors or persons connected with them. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Sarah George
Place: Mumbai Partner
Date: May 08, 2019 Membership Number 045255
Mar 31, 2018
REPORT ON THE STANDALONE INDIAN ACCOUNTING STANDARDS (IND AS) FINANCIAL STATEMENTS
1. We have audited the accompanying standalone Ind AS financial statements of KEC International Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated 20 jointly controlled operations as referred to in Note 42 in the standalone financial statements and the Returns for the year ended on that date of the Companyâs branches located at Abu Dhabi, Afghanistan, Algeria, Bangladesh, Egypt, Ethiopia, Georgia, Ghana, Indonesia, Ivory Coast, Jordan, Kenya, Laos, Lebanon, Libya, Malaysia(2), Mozambique, Nepal(2), Nigeria, Oman, Philippines, Senegal, South Africa, Sri Lanka, Tanzania, Thailand, Tunisia, Uganda, Zambia, Bhutan, Cameroon, Congo, Kazakhstan and Kuwait.
MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITORSâ RESPONSIBILITY
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
OPINION
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
OTHER MATTER
9. We did not audit the Ind AS financial statements/financial information of 31 branches and 20 jointly controlled operations included in the standalone Ind AS financial statements of the Company, which constitute total assets of Rs.264,326.05 lakh and net assets of Rs.49,969.53 lakh as at March 31, 2018, total revenue of Rs.219,863.71 lakh and net cash flows amounting to (Rs.1,355.44 lakh) for the year then ended. These financial statements/financial information have been audited by other auditors whose reports have been furnished to us, and our opinion on the standalone Ind AS financial statements to the extent they have been derived from such financial statements/ financial information is based solely on the report of such other auditors.
10. The Ind AS financial statements of the Company for the year ended March 31, 2017, were audited by another firm of chartered accountants under the Companies Act, 2013 who, vide their report dated May 19, 2017, expressed an unmodified opinion on those financial statements.
Our opinion is not qualified in respect of these matters.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
11. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of subsection (11) of section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
12. 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 best of our knowledge and belief were necessary for the purposes of our audit.
(b) I n our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and the reports of the other auditors for the branches not audited by us and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.
(c) The reports on the accounts of the branch offices of the Company audited under Section 143 (8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
(d) The Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.
(e) I n our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(f) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors of the Company, none of the directors are disqualified as on March 31, 2018 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 to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.
(h) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its standalone Ind AS financial statements - Refer Note 49;
ii. The Company has made provision as at March 31, 2018, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts - Refer Note 29. Further, the Company did not have any material foreseeable losses on derivative contracts as at March 31, 2018.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.
iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.
ANNEXURE âBâ TO INDEPENDENT AUDITORSâ REPORT
Referred to in paragraph 11 of the Independent Auditorsâ Report of even date to the members of KEC International Limited on the standalone Ind AS financial statements as of and for the year ended March 31, 2018
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.
(c) The title deeds of immovable properties, other than for self-constructed buildings, as disclosed in Note 5 on fixed assets to the financial statements, are held in the name of the Company, except in respect of Industrial plots situated at Gandhinagar, Gujarat, admeasuring to 4,891.45 sq. meters, Industrial plot situated at Mysore, Karnataka, admeasuring to 80,773 sq. meters, land and building situated at Jabalpur, Madhya Pradesh, admeasuring to 9,000 Sq. feet and a flat at Worli, Mumbai, admeasuring to 1,088.22 sq. feet, having Gross carrying amount aggregating Rs.2,634.79 lakh and Net carrying amount aggregating Rs.2,578.04 lakh as at Balance Sheet date, the titles of which have been transferred to and vested in the Company, pursuant to schemes of amalgamation/ arrangement in the earlier years and the procedural formalities for transfer in the name of the Company in the relevant documents are in process.
ii. The physical verification of inventory excluding stocks with third parties have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods and service tax, which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise and value added tax as at March 31, 2018 which have not been deposited on account of a dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. in Lakh)* |
Period to which the amount relates |
Forum where the dispute is pending |
The Central Sales Tax Act, 1956 |
Sales tax and |
53.38 |
1999-2000 to 2015-2016 |
Appellate Tribunal |
and Local Sales Tax Acts |
value added tax |
46.66 |
1994-1995 to 1997-1998 and 2008-2009 |
Rajasthan Tax Board, Ajmer |
242.53 |
2003-2004 to 2011-2012 |
Commercial Tax Appellate Board, Madhya Pradesh |
||
3,098.94 |
2006-2007 to 2013-2014 |
Revisionary Boards of Rajasthan and Madhya Pradesh |
||
2,901.88 |
1995-1996 to 2015-2016 |
Appellate Authority - up to Commissionerâs level |
||
The Finance Act, 1994 |
Service Tax |
29,561.44 |
2004-2005 to 2012-2013 |
Customs Excise and Service Tax Appellate Tribunal (CESTAT) |
68.44 |
2008-2009 to 2012-2013 |
Commissioner Appeals |
||
The Customs Act, 1962 |
Customs Duty |
60.12 |
1995-1996 |
Commissioner of Customs (Appeals) |
The Central Excise Act, 1944 |
Excise Duty |
1,419.09 |
1994-1995 to 2015-2016 |
Appellate Authority - up to Commissionerâs level |
2,440.68 |
2004-2005 to 2014-2015 |
Customs Excise and Service Tax Appellate Tribunal (CESTAT) |
||
61.76 |
2001-2002 to 2005-2006 |
Mumbai High Court |
||
13.44 |
2008-2009 to 2009-2010 |
Supreme Court of India |
||
The Income- Tax Act, 1961 |
Income-Tax |
192.80 |
Assessment Year 2007-2008 |
Income Tax Appellate Tribunal |
53.53 |
Assessment Year 2008-2009 |
High Court |
||
The Rajasthan Tax on Entry of |
Entry Tax |
93.46 |
1995-1996, 2004-2005, |
Appellate Authority - up to Deputy |
Goods into Local Areas Act, 1999 |
2008-2009 to 2013-2014 |
Commissionerâs level |
||
Entry Tax Act, 1976, Madhya |
Entry Tax |
29.08 |
2001-2002 to 2002-2003, |
Appellate Authority - up to Deputy Commissionerâs |
Pradesh |
2009-2010 to 2011-2012, 2015-2016 |
level, Board of Appeals, Madhya Pradesh |
* Net of amounts paid including under protest
For the above purpose, only statutory dues payable in India have been considered.
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). Further, the term loans have been applied by the Company during the year for the purposes for which they were obtained.
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Chartered Accountants
Sarah George
Place: Mumbai Partner
Date: May 14, 2018 Membership Number: 045255
Mar 31, 2017
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of KEC INTERNATIONAL LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Companyâs branches located at Abu Dhabi, Afghanistan, Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia, Ghana, Indonesia, Ivory Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya, Malaysia, Nepal, Nigeria, Oman, Philippines, South Africa, Sri Lanka, Tanzania, Thailand, Tunisia, Uganda, and Zambia and which includes 20 Joint Operations referred to in Note 45 in Standalone Ind AS financial Statements.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the branch auditors and other auditors in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the branch auditors and other auditors on separate financial statements / financial information of the branches and joint operations referred to in the Other Matters paragraph below, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matters
(a) We did not audit the financial statements / financial information of 28 branches and 19 joint operations included in the standalone Ind AS financial statements of the Company whose financial statements/financial information reflect total assets of Rs. 106,556.33 lakh as at March 31, 2017 and total revenues of Rs. 121,644.62 lakh for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial statements/financial information of these branches and joint operations have been audited by the branch auditors and other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid branches and joint operations, is based solely on the report of such branch auditors and other auditors.
(b) The comparative financial information for the year ended March 31, 2016 and the transition date opening balance sheet as at April 01, 2015 in respect of 28 branches and 19 joint operations included in this Standalone Ind AS financial statements prepared in accordance with the Ind AS have been audited by the branch auditors and other auditors.
Our opinion on the standalone Ind AS financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143 (3) of the Act, based on our audit and on the consideration of the reports of the branch auditors and other auditors on the separate financial statements/financial Information of the branches, referred to in the Other Matters paragraph above we report, to the extent applicable that:
a) We have sought and obtained all the information and explanations which to the best 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 the Company so far as it appears from our examination of those books and the reports of the other auditors and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.
c) The reports on the accounts of the branch offices of the Company audited under Section 143 (8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report.
d) The Balance Sheet, the Statement of Profit and Loss including other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account and with the returns received from the branches not visited by us.
e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
f) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 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 over financial reporting of the Company and its branches and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Aâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting.
h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 52 to the standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable accounting standards, for material foreseeable losses, on long-term contracts - Refer Note 32 to the standalone Ind AS financial statements. Further, the Company did not have any material foreseeable losses on derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8th November, 2016 of the Ministry of Finance, during the period from 8th November 2016 to 30th December 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by branch auditor and other auditors by the Management.
2. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
Annexure âBâ To The Independent Auditorâs Report
(Referred to in paragraph 2 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date on the standalone Ind AS financial statements for the year ended March 31,2017 of KEC INTERNATIONAL LIMITED)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deeds / transfer deeds / conveyance deeds and other relevant records [including confirmations from trustee of the lenders in respect of immovable properties (land and buildings thereof) whose title deeds have been mortgage as security for loans taken by the Company] provided to us, we report that:
(i) The title deeds of all the freehold immovable properties (land and buildings thereof) are held in the name of the Company as at the balance sheet date, except in respect of lndustrial plots situated at Gandhinagar, Gujarat, admeasuring to 4,891.45 sq. meters, Industrial plot situated at Mysore, Karnataka, admeasuring to 80,773 sq. meters, land and building situated at Jabalpur, Madhya Pradesh, admeasuring to 9,000 Sq. feet and a fiat at Worli, Mumbai, admeasuring to 1,088.22 sq. feet, having Gross carrying amount aggregating Rs.2,634.79 lakh and Net carrying amount aggregating Rs.2,582.45 lakh as at Balance Sheet date, the title of which have been transferred to and vested in the Company, pursuant to the Schemes of Amalgamation / Arrangement in the earlier years and the procedural formalities for transfer in the name of the Company in the relevant documents are in process.
(ii) The leasehold deeds of immovable properties (land and buildings thereof) are in the name of the Company as at Balance Sheet date.
(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.
(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. The Company does not have unclaimed deposits as at March 31, 2017 and accordingly, provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act are not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues applicable to it to the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on March 31, 2017on account of disputes are given below:
Statute |
Nature of Dues |
Forum where Dispute is Pending |
Period to which the amount relates |
Amount involved (Rs. in Lakh) |
Assistant Commissioner / |
||||
Tax/Penalty/ Interest |
Joint Commissioner/Deputy Commissioner/Additional |
1994-1995 to 2015-2016 |
8,904.15 |
|
Sales Tax/Value Added Tax Acts |
Commissioner (Appeal) |
|||
Tax/Penalty/ Interest |
Rajasthan Tax Board, Ajmer |
1994-1995 to 1997-1998 |
46.66 |
|
Tax/Interest |
Appellate Tribunal |
2000-2001 to 2013-2014 |
53.38 |
|
Assistant Commissioner / |
||||
Excise Duty/ Penalty/Interest |
Joint Commissioner / Deputy Commissioner /Additional Commissioner (Appeal) |
1997-1998 to 2015-2016 |
1,632.68 |
|
The Central Excise Act, 1944 |
Excise Duty/ Penalty/Interest |
Custom Excise and Service Tax Appellate Tribunal |
1994-1995 to 2015-2016 |
2,636.91 |
Interest on |
||||
differential duty of |
High Court |
2001-2002 to 2005-2006 |
61.76 |
|
excise |
||||
Excise Duty |
Supreme Court |
2008-2009 to 2009-2010 |
13.44 |
|
Service Tax/Penalty/ Interest |
Commissioner (Appeal) |
2008-2009 to 2012-2013 |
68.44 |
|
The Finance Act, 1994 |
||||
Service Tax/Penalty/ Interest |
Custom Excise and Service Tax Appellate Tribunal |
2003-2004 to 2012-2013 |
28,702.13 |
|
The Customs Act, 1962 |
Customs Duty |
Commissioner of Customs (Appeal) |
1995-1996 |
60.14 |
The Income Tax Act, 1961 |
Income Tax/ Interest |
Income Tax Appellate Tribunal |
AY 2007-2008 |
192.80 |
Income Tax |
High Court |
AY 2008-2009 |
53.53 |
For the above purpose, only statutory dues payable in India have been considered.
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and dues to debenture holders.
(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). Further, the term loans have been applied by the Company during the year for the purposes for which they were raised.
(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the Standalone Ind AS financial statements etc. as required by the applicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions ofSection 192 of the Companies Act, 2013 are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firmâs Registration No. 117365W)
SAIRA NAINAR
Partner
Mumbai, May 19, 2017 (Membership No. 040081)
Mar 31, 2016
We have audited the accompanying standalone financial statements of KEC
INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2016, the Statement of profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information, in which are
incorporated the Returns for the year ended on that date audited by the
branch auditors of the Company''s branches at Afghanistan, Algeria,
Bangladesh, Congo, Egypt, Ethiopia, Georgia, Ghana, Indonesia, Ivory
Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya, Malaysia, Nepal,
Nigeria, Oman, Philippines, South Africa, Sri Lanka, Tanzania, Tunisia,
Uganda, United Arab Emirates and Zambia.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence obtained by us and the audit
evidence obtained by the other auditors in terms of their reports
referred to in the Other Matter paragraph below, is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2016, and its profit and its cash flows for the year ended
on that date.
Other Matter
We did not audit the financial statements of 27 branches included in
the standalone financial statements of the Company whose financial
statements reflect total assets of Rs. 88,049.86 lacs as at March 31,
2016 and total revenues of Rs. 84,738.05 lacs for the year ended on
that date, as considered in the standalone financial statements. The
financial statements of these branches have been audited by the branch
auditors whose reports have been furnished to us, and our opinion in so
far as it relates to the amounts and disclosures included in respect of
these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. 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 best 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 the Company so far as it appears from our examination of those
books and proper returns adequate for the purposes of our audit have
been received from the branches not visited by us.
c) The reports on the accounts of the branch offices of the Company at
Afghanistan, Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia,
Ghana, Indonesia, Ivory Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya,
Malaysia, Nepal, Nigeria, Oman, Philippines, South Africa, Sri Lanka,
Tanzania, Tunisia, Uganda, United Arab Emirates and Zambia, audited
under Section 143 (8) of the Act by the branch auditors have been sent
to us and have been properly dealt with by us in preparing this report.
d) The Balance Sheet, the Statement of profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account and with the returns received from the branches not
visited by us.
e) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards prescribed under Section 133 of the Act.
f) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
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 over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in "Annexure A". Our report
expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting
h) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements- Refer Note 28 to the
standalone financial statements;
ii. The Company has made provision, as required under the applicable
accounting standards, for material foreseeable losses, on long-term
contracts - Refer Note 10 to the standalone financial statements.
Further, the Company did not have any material losses on derivative
contracts.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in "Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order.
(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date on the standalone
financial statements for the year ended March 31, 2016 of KEC
International Limited)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification which,
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deeds / transfer deeds / conveyance deeds and other relevant
records [including confirmation from trustee of the lenders in respect
of immovable properties (land and buildings thereof) whose title deeds
have been mortgage as security for loans taken by the Company] provided
to us, we report that:
(i) The title deeds of all the freehold immovable properties (land and
buildings thereof) are held in the name of the Company as at the
balance sheet date, except in respect of Industrial plots situated at
Gandhinagar, Gujarat, admeasuring to 4,891.45 sq. meters, Industrial
plot situated at Mysore, Karnataka, admeasuring to 80773 sq. meters,
guest house situated at Jabalpur, Madhya Pradesh, admeasuring to 80,773
sq. meters, land and building situated at Jabalpur, Madhya Pradesh,
admeasuring to 9,000 sq feet and a flat at Worli, Mumbai, admeasuring
to 1,088.22 sq. feet, having Gross carrying amount aggregating Rs.
2,634.79 Lacs and Net carrying amount aggregating Rs. 2,586.81 Lacs as
at Balance Sheet date, the title of which have been transferred to and
vested in the Company, pursuant to the Schemes of
Amalgamation/Arrangement in the earlier years and the procedural
formalities for transfer in the name of the Company in the relevant
documents is in process.
(ii) The leasehold deeds of immovable properties (land and buildings
thereof) are in the name of the Company, except in respect of
Industrial plots situated at Raebareli, Uttar Pradesh, admeasuring to
59,017 sq. meters having Gross carrying amount of Rs. 6.14 Lacs and Net
carrying amount of Rs. 5.59 Lacs as at Balance Sheet date, the
leasehold rights of which have been transferred to and vested in the
Company, pursuant to the Schemes of Amalgamation in the earlier year
and the procedural formalities for transfer in the name of the Company
in the relevant documents is in process.
(ii) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals and no material
discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the Register maintained under Section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans,
making investments and providing guarantees and securities, as
applicable.
(v) According to the information and explanations given to us, the
Company has not accepted any deposit during the year. The Company does
not have unclaimed deposits as at March 31, 2016 and accordingly,
provisions of Sections 73 to 76 or any other relevant provisions of the
Companies Act are not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended prescribed by the Central Government under sub-section (1)
of Section 148 of the Companies Act, 2013, and are of the opinion that,
prima facie, the prescribed cost records have been made and maintained
We have, however, not made a detailed examination of the cost records
with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value
Added Tax, cess and other material statutory dues applicable to it to
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance ,Income-tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax, cess and other material
statutory dues in arrears as at March 31, 2016 for a period of more
than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty, and Value Added Tax which have not been deposited as
on March 31, 2016 on account of disputes are given below:
Amount
Statute Nature of Dues Forum where
Dispute is Period to which
the involved
Pending amount relates
(Rs. in
Lacs)
Sales
Tax/Value Tax/Penalty/ Assistant
Commissioner / 1994-1995 to
2013-2014 7,277.48
Added Tax
Acts Interest Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)
Tax/Penalty/ Rajasthan Tax
Board, Ajmer 1994-1995 to
1997-1998 46.66
Interest
Tax/Interest Appellate
Tribunal 2000-2001 to
2012-2013 10.13
Excise Duty/
The
Central
Excise Assistant
Commissioner / 1994-1995 to
2015-2016 1,952.36
Penalty/
Interest
Act,1944 Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)"
Excise Duty/
Custom Excise and
Service Tax 1994-1995 to
2015-2016 2,413.47
Penalty/Interest
Appellate
Tribunal
Interest on High Court 2001-2002 to
2005-2006 61.76
differential
duty of
excise
Excise Duty
Supreme Court 2008-2009 to
2009-2010 13.44
The
Finance
Act, Service Tax/ Commissioner
(Appeal) 2008-2009 to
2012-2013 68.44
1994 Penalty/
Interest
Service Tax/ Custom Excise
and Service Tax 2003-2004 to
2012-2013 28603.01
Penalty/
Interest Appellate
Tribunal
The
Customs Customs Duty Commissioner of
Customs 1995 to 1996 60.14
Act,1962 (Appeal)
The
Income
tax Income Tax/ Commissioner of
Income Tax AY 2007-2008 230.35
Act, 1961 Interest (Appeal)
For the above purpose, only statutory dues payable in India have been
considered.
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of loans or
borrowings to financial institutions, banks and dues to debenture
holders.
(ix) The Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments). Further, the
term loans have been applied by the Company during the year for the
purposes for which they were raised.
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company or no material fraud
on the Company by its officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid / provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is in compliance with Section 177 and 188 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the year the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence reporting under clause (xiv) of CARO 2016 is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or persons connected with him
and hence provisions of Section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm''s Registration No. 117365W)
Saira Nainar
Partner
(Membership No. 040081)
Place: Mumbai
Date: May 06, 2016
Mar 31, 2016
We have audited the accompanying standalone financial statements of KEC
INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2016, the Statement of profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information, in which are
incorporated the Returns for the year ended on that date audited by the
branch auditors of the Company''s branches at Afghanistan, Algeria,
Bangladesh, Congo, Egypt, Ethiopia, Georgia, Ghana, Indonesia, Ivory
Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya, Malaysia, Nepal,
Nigeria, Oman, Philippines, South Africa, Sri Lanka, Tanzania, Tunisia,
Uganda, United Arab Emirates and Zambia.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence obtained by us and the audit
evidence obtained by the other auditors in terms of their reports
referred to in the Other Matter paragraph below, is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2016, and its profit and its cash flows for the year ended
on that date.
Other Matter
We did not audit the financial statements of 27 branches included in
the standalone financial statements of the Company whose financial
statements reflect total assets of Rs. 88,049.86 lacs as at March 31,
2016 and total revenues of Rs. 84,738.05 lacs for the year ended on
that date, as considered in the standalone financial statements. The
financial statements of these branches have been audited by the branch
auditors whose reports have been furnished to us, and our opinion in so
far as it relates to the amounts and disclosures included in respect of
these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. 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 best 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 the Company so far as it appears from our examination of those
books and proper returns adequate for the purposes of our audit have
been received from the branches not visited by us.
c) The reports on the accounts of the branch offices of the Company at
Afghanistan, Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia,
Ghana, Indonesia, Ivory Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya,
Malaysia, Nepal, Nigeria, Oman, Philippines, South Africa, Sri Lanka,
Tanzania, Tunisia, Uganda, United Arab Emirates and Zambia, audited
under Section 143 (8) of the Act by the branch auditors have been sent
to us and have been properly dealt with by us in preparing this report.
d) The Balance Sheet, the Statement of profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account and with the returns received from the branches not
visited by us.
e) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards prescribed under Section 133 of the Act.
f) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
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 over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in "Annexure A". Our report
expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting
h) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements- Refer Note 28 to the
standalone financial statements;
ii. The Company has made provision, as required under the applicable
accounting standards, for material foreseeable losses, on long-term
contracts - Refer Note 10 to the standalone financial statements.
Further, the Company did not have any material losses on derivative
contracts.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in "Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order.
(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date on the standalone
financial statements for the year ended March 31, 2016 of KEC
International Limited)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification which,
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deeds / transfer deeds / conveyance deeds and other relevant
records [including confirmation from trustee of the lenders in respect
of immovable properties (land and buildings thereof) whose title deeds
have been mortgage as security for loans taken by the Company] provided
to us, we report that:
(i) The title deeds of all the freehold immovable properties (land and
buildings thereof) are held in the name of the Company as at the
balance sheet date, except in respect of Industrial plots situated at
Gandhinagar, Gujarat, admeasuring to 4,891.45 sq. meters, Industrial
plot situated at Mysore, Karnataka, admeasuring to 80773 sq. meters,
guest house situated at Jabalpur, Madhya Pradesh, admeasuring to 80,773
sq. meters, land and building situated at Jabalpur, Madhya Pradesh,
admeasuring to 9,000 sq feet and a flat at Worli, Mumbai, admeasuring
to 1,088.22 sq. feet, having Gross carrying amount aggregating Rs.
2,634.79 Lacs and Net carrying amount aggregating Rs. 2,586.81 Lacs as
at Balance Sheet date, the title of which have been transferred to and
vested in the Company, pursuant to the Schemes of
Amalgamation/Arrangement in the earlier years and the procedural
formalities for transfer in the name of the Company in the relevant
documents is in process.
(ii) The leasehold deeds of immovable properties (land and buildings
thereof) are in the name of the Company, except in respect of
Industrial plots situated at Raebareli, Uttar Pradesh, admeasuring to
59,017 sq. meters having Gross carrying amount of Rs. 6.14 Lacs and Net
carrying amount of Rs. 5.59 Lacs as at Balance Sheet date, the
leasehold rights of which have been transferred to and vested in the
Company, pursuant to the Schemes of Amalgamation in the earlier year
and the procedural formalities for transfer in the name of the Company
in the relevant documents is in process.
(ii) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals and no material
discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the Register maintained under Section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans,
making investments and providing guarantees and securities, as
applicable.
(v) According to the information and explanations given to us, the
Company has not accepted any deposit during the year. The Company does
not have unclaimed deposits as at March 31, 2016 and accordingly,
provisions of Sections 73 to 76 or any other relevant provisions of the
Companies Act are not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended prescribed by the Central Government under sub-section (1)
of Section 148 of the Companies Act, 2013, and are of the opinion that,
prima facie, the prescribed cost records have been made and maintained
We have, however, not made a detailed examination of the cost records
with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value
Added Tax, cess and other material statutory dues applicable to it to
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance ,Income-tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax, cess and other material
statutory dues in arrears as at March 31, 2016 for a period of more
than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty, and Value Added Tax which have not been deposited as
on March 31, 2016 on account of disputes are given below:
Amount
Statute Nature of Dues Forum where
Dispute is Period to which
the involved
Pending amount relates
(Rs. in
Lacs)
Sales
Tax/Value Tax/Penalty/ Assistant
Commissioner / 1994-1995 to
2013-2014 7,277.48
Added Tax
Acts Interest Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)
Tax/Penalty/ Rajasthan Tax
Board, Ajmer 1994-1995 to
1997-1998 46.66
Interest
Tax/Interest Appellate
Tribunal 2000-2001 to
2012-2013 10.13
Excise Duty/
The
Central
Excise Assistant
Commissioner / 1994-1995 to
2015-2016 1,952.36
Penalty/
Interest
Act,1944 Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)"
Excise Duty/
Custom Excise and
Service Tax 1994-1995 to
2015-2016 2,413.47
Penalty/Interest
Appellate
Tribunal
Interest on High Court 2001-2002 to
2005-2006 61.76
differential
duty of
excise
Excise Duty
Supreme Court 2008-2009 to
2009-2010 13.44
The
Finance
Act, Service Tax/ Commissioner
(Appeal) 2008-2009 to
2012-2013 68.44
1994 Penalty/
Interest
Service Tax/ Custom Excise
and Service Tax 2003-2004 to
2012-2013 28603.01
Penalty/
Interest Appellate
Tribunal
The
Customs Customs Duty Commissioner of
Customs 1995 to 1996 60.14
Act,1962 (Appeal)
The
Income
tax Income Tax/ Commissioner of
Income Tax AY 2007-2008 230.35
Act, 1961 Interest (Appeal)
For the above purpose, only statutory dues payable in India have been
considered.
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of loans or
borrowings to financial institutions, banks and dues to debenture
holders.
(ix) The Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments). Further, the
term loans have been applied by the Company during the year for the
purposes for which they were raised.
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company or no material fraud
on the Company by its officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid / provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is in compliance with Section 177 and 188 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the year the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence reporting under clause (xiv) of CARO 2016 is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or persons connected with him
and hence provisions of Section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm''s Registration No. 117365W)
Saira Nainar
Partner
(Membership No. 040081)
Place: Mumbai
Date: May 06, 2016
Mar 31, 2016
We have audited the accompanying standalone financial statements of KEC
INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2016, the Statement of profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information, in which are
incorporated the Returns for the year ended on that date audited by the
branch auditors of the Company''s branches at Afghanistan, Algeria,
Bangladesh, Congo, Egypt, Ethiopia, Georgia, Ghana, Indonesia, Ivory
Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya, Malaysia, Nepal,
Nigeria, Oman, Philippines, South Africa, Sri Lanka, Tanzania, Tunisia,
Uganda, United Arab Emirates and Zambia.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence obtained by us and the audit
evidence obtained by the other auditors in terms of their reports
referred to in the Other Matter paragraph below, is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2016, and its profit and its cash flows for the year ended
on that date.
Other Matter
We did not audit the financial statements of 27 branches included in
the standalone financial statements of the Company whose financial
statements reflect total assets of Rs. 88,049.86 lacs as at March 31,
2016 and total revenues of Rs. 84,738.05 lacs for the year ended on
that date, as considered in the standalone financial statements. The
financial statements of these branches have been audited by the branch
auditors whose reports have been furnished to us, and our opinion in so
far as it relates to the amounts and disclosures included in respect of
these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. 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 best 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 the Company so far as it appears from our examination of those
books and proper returns adequate for the purposes of our audit have
been received from the branches not visited by us.
c) The reports on the accounts of the branch offices of the Company at
Afghanistan, Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia,
Ghana, Indonesia, Ivory Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya,
Malaysia, Nepal, Nigeria, Oman, Philippines, South Africa, Sri Lanka,
Tanzania, Tunisia, Uganda, United Arab Emirates and Zambia, audited
under Section 143 (8) of the Act by the branch auditors have been sent
to us and have been properly dealt with by us in preparing this report.
d) The Balance Sheet, the Statement of profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account and with the returns received from the branches not
visited by us.
e) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards prescribed under Section 133 of the Act.
f) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
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 over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in "Annexure A". Our report
expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting
h) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements- Refer Note 28 to the
standalone financial statements;
ii. The Company has made provision, as required under the applicable
accounting standards, for material foreseeable losses, on long-term
contracts - Refer Note 10 to the standalone financial statements.
Further, the Company did not have any material losses on derivative
contracts.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in "Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order.
(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date on the standalone
financial statements for the year ended March 31, 2016 of KEC
International Limited)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification which,
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deeds / transfer deeds / conveyance deeds and other relevant
records [including confirmation from trustee of the lenders in respect
of immovable properties (land and buildings thereof) whose title deeds
have been mortgage as security for loans taken by the Company] provided
to us, we report that:
(i) The title deeds of all the freehold immovable properties (land and
buildings thereof) are held in the name of the Company as at the
balance sheet date, except in respect of Industrial plots situated at
Gandhinagar, Gujarat, admeasuring to 4,891.45 sq. meters, Industrial
plot situated at Mysore, Karnataka, admeasuring to 80773 sq. meters,
guest house situated at Jabalpur, Madhya Pradesh, admeasuring to 80,773
sq. meters, land and building situated at Jabalpur, Madhya Pradesh,
admeasuring to 9,000 sq feet and a flat at Worli, Mumbai, admeasuring
to 1,088.22 sq. feet, having Gross carrying amount aggregating Rs.
2,634.79 Lacs and Net carrying amount aggregating Rs. 2,586.81 Lacs as
at Balance Sheet date, the title of which have been transferred to and
vested in the Company, pursuant to the Schemes of
Amalgamation/Arrangement in the earlier years and the procedural
formalities for transfer in the name of the Company in the relevant
documents is in process.
(ii) The leasehold deeds of immovable properties (land and buildings
thereof) are in the name of the Company, except in respect of
Industrial plots situated at Raebareli, Uttar Pradesh, admeasuring to
59,017 sq. meters having Gross carrying amount of Rs. 6.14 Lacs and Net
carrying amount of Rs. 5.59 Lacs as at Balance Sheet date, the
leasehold rights of which have been transferred to and vested in the
Company, pursuant to the Schemes of Amalgamation in the earlier year
and the procedural formalities for transfer in the name of the Company
in the relevant documents is in process.
(ii) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals and no material
discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the Register maintained under Section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans,
making investments and providing guarantees and securities, as
applicable.
(v) According to the information and explanations given to us, the
Company has not accepted any deposit during the year. The Company does
not have unclaimed deposits as at March 31, 2016 and accordingly,
provisions of Sections 73 to 76 or any other relevant provisions of the
Companies Act are not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended prescribed by the Central Government under sub-section (1)
of Section 148 of the Companies Act, 2013, and are of the opinion that,
prima facie, the prescribed cost records have been made and maintained
We have, however, not made a detailed examination of the cost records
with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value
Added Tax, cess and other material statutory dues applicable to it to
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance ,Income-tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax, cess and other material
statutory dues in arrears as at March 31, 2016 for a period of more
than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty, and Value Added Tax which have not been deposited as
on March 31, 2016 on account of disputes are given below:
Amount
Statute Nature of Dues Forum where
Dispute is Period to which
the involved
Pending amount relates
(Rs. in
Lacs)
Sales
Tax/Value Tax/Penalty/ Assistant
Commissioner / 1994-1995 to
2013-2014 7,277.48
Added Tax
Acts Interest Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)
Tax/Penalty/ Rajasthan Tax
Board, Ajmer 1994-1995 to
1997-1998 46.66
Interest
Tax/Interest Appellate
Tribunal 2000-2001 to
2012-2013 10.13
Excise Duty/
The
Central
Excise Assistant
Commissioner / 1994-1995 to
2015-2016 1,952.36
Penalty/
Interest
Act,1944 Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)"
Excise Duty/
Custom Excise and
Service Tax 1994-1995 to
2015-2016 2,413.47
Penalty/Interest
Appellate
Tribunal
Interest on High Court 2001-2002 to
2005-2006 61.76
differential
duty of
excise
Excise Duty
Supreme Court 2008-2009 to
2009-2010 13.44
The
Finance
Act, Service Tax/ Commissioner
(Appeal) 2008-2009 to
2012-2013 68.44
1994 Penalty/
Interest
Service Tax/ Custom Excise
and Service Tax 2003-2004 to
2012-2013 28603.01
Penalty/
Interest Appellate
Tribunal
The
Customs Customs Duty Commissioner of
Customs 1995 to 1996 60.14
Act,1962 (Appeal)
The
Income
tax Income Tax/ Commissioner of
Income Tax AY 2007-2008 230.35
Act, 1961 Interest (Appeal)
For the above purpose, only statutory dues payable in India have been
considered.
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of loans or
borrowings to financial institutions, banks and dues to debenture
holders.
(ix) The Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments). Further, the
term loans have been applied by the Company during the year for the
purposes for which they were raised.
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company or no material fraud
on the Company by its officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid / provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is in compliance with Section 177 and 188 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the year the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence reporting under clause (xiv) of CARO 2016 is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or persons connected with him
and hence provisions of Section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm''s Registration No. 117365W)
Saira Nainar
Partner
(Membership No. 040081)
Place: Mumbai
Date: May 06, 2016
Mar 31, 2016
We have audited the accompanying standalone financial statements of KEC
INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2016, the Statement of profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information, in which are
incorporated the Returns for the year ended on that date audited by the
branch auditors of the Company''s branches at Afghanistan, Algeria,
Bangladesh, Congo, Egypt, Ethiopia, Georgia, Ghana, Indonesia, Ivory
Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya, Malaysia, Nepal,
Nigeria, Oman, Philippines, South Africa, Sri Lanka, Tanzania, Tunisia,
Uganda, United Arab Emirates and Zambia.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence obtained by us and the audit
evidence obtained by the other auditors in terms of their reports
referred to in the Other Matter paragraph below, is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2016, and its profit and its cash flows for the year ended
on that date.
Other Matter
We did not audit the financial statements of 27 branches included in
the standalone financial statements of the Company whose financial
statements reflect total assets of Rs. 88,049.86 lacs as at March 31,
2016 and total revenues of Rs. 84,738.05 lacs for the year ended on
that date, as considered in the standalone financial statements. The
financial statements of these branches have been audited by the branch
auditors whose reports have been furnished to us, and our opinion in so
far as it relates to the amounts and disclosures included in respect of
these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. 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 best 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 the Company so far as it appears from our examination of those
books and proper returns adequate for the purposes of our audit have
been received from the branches not visited by us.
c) The reports on the accounts of the branch offices of the Company at
Afghanistan, Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia,
Ghana, Indonesia, Ivory Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya,
Malaysia, Nepal, Nigeria, Oman, Philippines, South Africa, Sri Lanka,
Tanzania, Tunisia, Uganda, United Arab Emirates and Zambia, audited
under Section 143 (8) of the Act by the branch auditors have been sent
to us and have been properly dealt with by us in preparing this report.
d) The Balance Sheet, the Statement of profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account and with the returns received from the branches not
visited by us.
e) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards prescribed under Section 133 of the Act.
f) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
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 over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in "Annexure A". Our report
expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting
h) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements- Refer Note 28 to the
standalone financial statements;
ii. The Company has made provision, as required under the applicable
accounting standards, for material foreseeable losses, on long-term
contracts - Refer Note 10 to the standalone financial statements.
Further, the Company did not have any material losses on derivative
contracts.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in "Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order.
(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date on the standalone
financial statements for the year ended March 31, 2016 of KEC
International Limited)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification which,
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deeds / transfer deeds / conveyance deeds and other relevant
records [including confirmation from trustee of the lenders in respect
of immovable properties (land and buildings thereof) whose title deeds
have been mortgage as security for loans taken by the Company] provided
to us, we report that:
(i) The title deeds of all the freehold immovable properties (land and
buildings thereof) are held in the name of the Company as at the
balance sheet date, except in respect of Industrial plots situated at
Gandhinagar, Gujarat, admeasuring to 4,891.45 sq. meters, Industrial
plot situated at Mysore, Karnataka, admeasuring to 80773 sq. meters,
guest house situated at Jabalpur, Madhya Pradesh, admeasuring to 80,773
sq. meters, land and building situated at Jabalpur, Madhya Pradesh,
admeasuring to 9,000 sq feet and a flat at Worli, Mumbai, admeasuring
to 1,088.22 sq. feet, having Gross carrying amount aggregating Rs.
2,634.79 Lacs and Net carrying amount aggregating Rs. 2,586.81 Lacs as
at Balance Sheet date, the title of which have been transferred to and
vested in the Company, pursuant to the Schemes of
Amalgamation/Arrangement in the earlier years and the procedural
formalities for transfer in the name of the Company in the relevant
documents is in process.
(ii) The leasehold deeds of immovable properties (land and buildings
thereof) are in the name of the Company, except in respect of
Industrial plots situated at Raebareli, Uttar Pradesh, admeasuring to
59,017 sq. meters having Gross carrying amount of Rs. 6.14 Lacs and Net
carrying amount of Rs. 5.59 Lacs as at Balance Sheet date, the
leasehold rights of which have been transferred to and vested in the
Company, pursuant to the Schemes of Amalgamation in the earlier year
and the procedural formalities for transfer in the name of the Company
in the relevant documents is in process.
(ii) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals and no material
discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the Register maintained under Section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans,
making investments and providing guarantees and securities, as
applicable.
(v) According to the information and explanations given to us, the
Company has not accepted any deposit during the year. The Company does
not have unclaimed deposits as at March 31, 2016 and accordingly,
provisions of Sections 73 to 76 or any other relevant provisions of the
Companies Act are not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended prescribed by the Central Government under sub-section (1)
of Section 148 of the Companies Act, 2013, and are of the opinion that,
prima facie, the prescribed cost records have been made and maintained
We have, however, not made a detailed examination of the cost records
with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value
Added Tax, cess and other material statutory dues applicable to it to
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance ,Income-tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax, cess and other material
statutory dues in arrears as at March 31, 2016 for a period of more
than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty, and Value Added Tax which have not been deposited as
on March 31, 2016 on account of disputes are given below:
Amount
Statute Nature of Dues Forum where
Dispute is Period to which
the involved
Pending amount relates
(Rs. in
Lacs)
Sales
Tax/Value Tax/Penalty/ Assistant
Commissioner / 1994-1995 to
2013-2014 7,277.48
Added Tax
Acts Interest Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)
Tax/Penalty/ Rajasthan Tax
Board, Ajmer 1994-1995 to
1997-1998 46.66
Interest
Tax/Interest Appellate
Tribunal 2000-2001 to
2012-2013 10.13
Excise Duty/
The
Central
Excise Assistant
Commissioner / 1994-1995 to
2015-2016 1,952.36
Penalty/
Interest
Act,1944 Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)"
Excise Duty/
Custom Excise and
Service Tax 1994-1995 to
2015-2016 2,413.47
Penalty/Interest
Appellate
Tribunal
Interest on High Court 2001-2002 to
2005-2006 61.76
differential
duty of
excise
Excise Duty
Supreme Court 2008-2009 to
2009-2010 13.44
The
Finance
Act, Service Tax/ Commissioner
(Appeal) 2008-2009 to
2012-2013 68.44
1994 Penalty/
Interest
Service Tax/ Custom Excise
and Service Tax 2003-2004 to
2012-2013 28603.01
Penalty/
Interest Appellate
Tribunal
The
Customs Customs Duty Commissioner of
Customs 1995 to 1996 60.14
Act,1962 (Appeal)
The
Income
tax Income Tax/ Commissioner of
Income Tax AY 2007-2008 230.35
Act, 1961 Interest (Appeal)
For the above purpose, only statutory dues payable in India have been
considered.
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of loans or
borrowings to financial institutions, banks and dues to debenture
holders.
(ix) The Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments). Further, the
term loans have been applied by the Company during the year for the
purposes for which they were raised.
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company or no material fraud
on the Company by its officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid / provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is in compliance with Section 177 and 188 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the year the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence reporting under clause (xiv) of CARO 2016 is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or persons connected with him
and hence provisions of Section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm''s Registration No. 117365W)
Saira Nainar
Partner
(Membership No. 040081)
Place: Mumbai
Date: May 06, 2016
Mar 31, 2016
We have audited the accompanying standalone financial statements of KEC
INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2016, the Statement of profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information, in which are
incorporated the Returns for the year ended on that date audited by the
branch auditors of the Company''s branches at Afghanistan, Algeria,
Bangladesh, Congo, Egypt, Ethiopia, Georgia, Ghana, Indonesia, Ivory
Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya, Malaysia, Nepal,
Nigeria, Oman, Philippines, South Africa, Sri Lanka, Tanzania, Tunisia,
Uganda, United Arab Emirates and Zambia.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
prescribed under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in
accordance with the Standards on Auditing specified under Section
143(10) of the Act. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company''s Directors, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence obtained by us and the audit
evidence obtained by the other auditors in terms of their reports
referred to in the Other Matter paragraph below, is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2016, and its profit and its cash flows for the year ended
on that date.
Other Matter
We did not audit the financial statements of 27 branches included in
the standalone financial statements of the Company whose financial
statements reflect total assets of Rs. 88,049.86 lacs as at March 31,
2016 and total revenues of Rs. 84,738.05 lacs for the year ended on
that date, as considered in the standalone financial statements. The
financial statements of these branches have been audited by the branch
auditors whose reports have been furnished to us, and our opinion in so
far as it relates to the amounts and disclosures included in respect of
these branches, is based solely on the report of such branch auditors.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. 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 best 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 the Company so far as it appears from our examination of those
books and proper returns adequate for the purposes of our audit have
been received from the branches not visited by us.
c) The reports on the accounts of the branch offices of the Company at
Afghanistan, Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia,
Ghana, Indonesia, Ivory Coast, Kazakhstan, Kenya, Laos, Lebanon, Libya,
Malaysia, Nepal, Nigeria, Oman, Philippines, South Africa, Sri Lanka,
Tanzania, Tunisia, Uganda, United Arab Emirates and Zambia, audited
under Section 143 (8) of the Act by the branch auditors have been sent
to us and have been properly dealt with by us in preparing this report.
d) The Balance Sheet, the Statement of profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account and with the returns received from the branches not
visited by us.
e) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards prescribed under Section 133 of the Act.
f) On the basis of the written representations received from the
directors as on March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
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 over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in "Annexure A". Our report
expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company''s internal financial controls over
financial reporting
h) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements- Refer Note 28 to the
standalone financial statements;
ii. The Company has made provision, as required under the applicable
accounting standards, for material foreseeable losses, on long-term
contracts - Refer Note 10 to the standalone financial statements.
Further, the Company did not have any material losses on derivative
contracts.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in "Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order.
(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date on the standalone
financial statements for the year ended March 31, 2016 of KEC
International Limited)
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification which,
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) According to the information and explanations given to us and the
records examined by us and based on the examination of the registered
sale deeds / transfer deeds / conveyance deeds and other relevant
records [including confirmation from trustee of the lenders in respect
of immovable properties (land and buildings thereof) whose title deeds
have been mortgage as security for loans taken by the Company] provided
to us, we report that:
(i) The title deeds of all the freehold immovable properties (land and
buildings thereof) are held in the name of the Company as at the
balance sheet date, except in respect of Industrial plots situated at
Gandhinagar, Gujarat, admeasuring to 4,891.45 sq. meters, Industrial
plot situated at Mysore, Karnataka, admeasuring to 80773 sq. meters,
guest house situated at Jabalpur, Madhya Pradesh, admeasuring to 80,773
sq. meters, land and building situated at Jabalpur, Madhya Pradesh,
admeasuring to 9,000 sq feet and a flat at Worli, Mumbai, admeasuring
to 1,088.22 sq. feet, having Gross carrying amount aggregating Rs.
2,634.79 Lacs and Net carrying amount aggregating Rs. 2,586.81 Lacs as
at Balance Sheet date, the title of which have been transferred to and
vested in the Company, pursuant to the Schemes of
Amalgamation/Arrangement in the earlier years and the procedural
formalities for transfer in the name of the Company in the relevant
documents is in process.
(ii) The leasehold deeds of immovable properties (land and buildings
thereof) are in the name of the Company, except in respect of
Industrial plots situated at Raebareli, Uttar Pradesh, admeasuring to
59,017 sq. meters having Gross carrying amount of Rs. 6.14 Lacs and Net
carrying amount of Rs. 5.59 Lacs as at Balance Sheet date, the
leasehold rights of which have been transferred to and vested in the
Company, pursuant to the Schemes of Amalgamation in the earlier year
and the procedural formalities for transfer in the name of the Company
in the relevant documents is in process.
(ii) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals and no material
discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans, secured or unsecured, to
companies, firms, Limited Liability Partnerships or other parties
covered in the Register maintained under Section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
185 and 186 of the Companies Act, 2013 in respect of grant of loans,
making investments and providing guarantees and securities, as
applicable.
(v) According to the information and explanations given to us, the
Company has not accepted any deposit during the year. The Company does
not have unclaimed deposits as at March 31, 2016 and accordingly,
provisions of Sections 73 to 76 or any other relevant provisions of the
Companies Act are not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,
as amended prescribed by the Central Government under sub-section (1)
of Section 148 of the Companies Act, 2013, and are of the opinion that,
prima facie, the prescribed cost records have been made and maintained
We have, however, not made a detailed examination of the cost records
with a view to determine whether they are accurate or complete.
(vii) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Employees'' State Insurance,
Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value
Added Tax, cess and other material statutory dues applicable to it to
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Employees'' State Insurance ,Income-tax, Sales Tax, Service Tax,
Customs Duty, Excise Duty, Value Added Tax, cess and other material
statutory dues in arrears as at March 31, 2016 for a period of more
than six months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs
Duty, Excise Duty, and Value Added Tax which have not been deposited as
on March 31, 2016 on account of disputes are given below:
Amount
Statute Nature of Dues Forum where
Dispute is Period to which
the involved
Pending amount relates
(Rs. in
Lacs)
Sales
Tax/Value Tax/Penalty/ Assistant
Commissioner / 1994-1995 to
2013-2014 7,277.48
Added Tax
Acts Interest Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)
Tax/Penalty/ Rajasthan Tax
Board, Ajmer 1994-1995 to
1997-1998 46.66
Interest
Tax/Interest Appellate
Tribunal 2000-2001 to
2012-2013 10.13
Excise Duty/
The
Central
Excise Assistant
Commissioner / 1994-1995 to
2015-2016 1,952.36
Penalty/
Interest
Act,1944 Joint
Commissioner /
Deputy
Commissioner /
Additional
Commissioner
(Appeal)"
Excise Duty/
Custom Excise and
Service Tax 1994-1995 to
2015-2016 2,413.47
Penalty/Interest
Appellate
Tribunal
Interest on High Court 2001-2002 to
2005-2006 61.76
differential
duty of
excise
Excise Duty
Supreme Court 2008-2009 to
2009-2010 13.44
The
Finance
Act, Service Tax/ Commissioner
(Appeal) 2008-2009 to
2012-2013 68.44
1994 Penalty/
Interest
Service Tax/ Custom Excise
and Service Tax 2003-2004 to
2012-2013 28603.01
Penalty/
Interest Appellate
Tribunal
The
Customs Customs Duty Commissioner of
Customs 1995 to 1996 60.14
Act,1962 (Appeal)
The
Income
tax Income Tax/ Commissioner of
Income Tax AY 2007-2008 230.35
Act, 1961 Interest (Appeal)
For the above purpose, only statutory dues payable in India have been
considered.
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of loans or
borrowings to financial institutions, banks and dues to debenture
holders.
(ix) The Company has not raised moneys by way of initial public offer
or further public offer (including debt instruments). Further, the
term loans have been applied by the Company during the year for the
purposes for which they were raised.
(x) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company or no material fraud
on the Company by its officers or employees has been noticed or
reported during the year.
(xi) In our opinion and according to the information and explanations
given to us, the Company has paid / provided managerial remuneration in
accordance with the requisite approvals mandated by the provisions of
Section 197 read with Schedule V to the Companies Act, 2013.
(xii) The Company is not a Nidhi Company and hence reporting under
clause (xii) of the CARO 2016 is not applicable.
(xiii) In our opinion and according to the information and explanations
given to us, the Company is in compliance with Section 177 and 188 of
the Companies Act, 2013, where applicable, for all transactions with
the related parties and the details of related party transactions have
been disclosed in the financial statements etc. as required by the
applicable accounting standards.
(xiv) During the year the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible
debentures and hence reporting under clause (xiv) of CARO 2016 is not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any
non-cash transactions with its directors or persons connected with him
and hence provisions of Section 192 of the Companies Act, 2013 are not
applicable.
(xvi) The Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1934.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Firm''s Registration No. 117365W)
Saira Nainar
Partner
(Membership No. 040081)
Place: Mumbai
Date: May 06, 2016
Mar 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of KEC
INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the Significant
accounting policies and other explanatory information, in which are
incorporated the Returns for the year ended on that date audited by
branch auditors of the Company''s overseas branches at Afghanistan,
Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia, Ghana, Ivory
Coast, Kazakhstan, Kenya, Lebanon, Libya, Malaysia, Nepal, Nigeria,
Oman, Philippines, South Africa, Sri Lanka, Tanzania, Tunisia, Uganda
and United Arab Emirates.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under the Companies
Act, 1956 ("the Act") (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs)
and in accordance with the accounting principles generally accepted in
India. This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of the
Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best 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 the Company so far as it appears from our examination of
those books and proper returns adequate for the purposes of our audit
have been received from the branches not visited by us.
(c) The reports on the accounts of the Company''s overseas branches at
Afghanistan, Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia,
Ghana, Ivory Coast, Kazakhstan, Kenya, Lebanon, Libya, Malaysia, Nepal,
Nigeria, Oman, Philippines, South Africa, Sri Lanka, Tanzania, Tunisia,
Uganda and United Arab Emirates audited by the branch auditors
appointed under Section 228 of the Act have been forwarded to us and
have been properly dealt with by us in preparing this report.
(d) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account and with the returns received from the branches not
visited by us.
(e) In our opinion, the Balance Sheet, the Statement of Profit and Loss,
and the Cash Flow Statement comply with the Accounting Standards
notified under the Act (which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs).
(f) On the basis of the written representations received from the
directors as on March 31, 2014 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2014
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
Annexure to the Independent Auditors'' Report
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory
Requirements'' section of our report of even date)
(i) Having regard to the nature of the Company''s
business/activities/result during the year, clauses (x), (xiii), (xiv),
(xviii), (xix) and (xx) of paragraph 4 of the Order are not applicable
to the Company.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification which,
in our opinion, provides for physical verification of all the fixed
assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iv) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(v) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business with
regards to the purchase of inventory and fixed assets and for the sale
of goods and services and during the course of our audit, we have not
observed any major weaknesses in such internal control system.
(vi) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
a) The particulars of contracts or arrangements referred to in Section
301 that needed to be entered in the Register maintained under said
Section have been so entered.
b) Where each of such transaction is in excess of Rs. 5 lacs in respect
of any party, the transactions have been made at prices which are prima
facie reasonable having regard to the prevailing market prices at the
relevant time.
(vii) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
(viii) In our opinion, the Company has an adequate internal audit
system commensurate with the size and the nature of its business.
(ix) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that, prima facie, the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(x) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax,
Value added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty,
Cess and other material statutory dues applicable to it with the
appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Value added Tax, Wealth Tax, Service
Tax, Customs Duty, Excise Duty, Cess and other material statutory dues
in arrears as at March 31, 2014 for a period of more than six months
from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
March 31, 2014 on account of disputes are given below:
Name of Nature of
Dues Forum where Dispute is Relating to
various Amount
Statute pending years
comprise involved
in the
period (Rs. in
lacs)
Sales
Tax /
Value Tax/
Penalty
/Interest Assistant Commissioner/ 1994-1995 to 5,431.30
Added
Tax Acts Joint Commissioner /
Deputy 2012-13
Commissioner /
Additional
Commissioner (Appeal)
Tax/
Penalty/
Interest Rajasthan Tax
Board, Ajmer 1994-1995 to 46.66
1997-1998
Tax/
Interest Appellate Tribunal 1989-1990 to 28.03
2007-2008
Tax/
Interest High Court 2002-03 to
2004-05 8.59
The
Central Duty/
Penalty/
Interest Assistant Commissioner 1994-1995 to 88.76
Excise
Act,
1944 / Deputy Commissioner / 2011-2012
Additional
Commissioner /
Commissioner (Appeal)
Duty/
Penalty/
Interest Customs Excise and
Service 1995-1996 to 1,360.75
Tax Tribunal 2012-2013
Interest
on High Court 2001-2002 & 61.76
Differen
-tial
Duty 2005-2006
Duty/
Interest Supreme Court 2008-2009 & 29.51
2009-2010
The
Finance
Act, Service
Tax /
Penalty / Assistant Commissioner 2004-2005 to 11.22
1994 Interest / Deputy Commissioner / 2012-2013
Additional
Commissioner /
Commissioner (Appeal)
Service
Tax /
Penalty / Customs Excise and
Service 2002-2003 to 16,905.15
Interest Tax Tribunal 2010-2012
The
Customs Custom
Duty Commissioner of
Customs 1995-1996 60.14
Act,
1962 (Appeals)
For the above purpose only statutory dues payable in India have been
considered.
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions and banks.
(xii) The Company has not granted loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
(xiii) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by its wholly owned subsidiaries and a joint
venture company from banks are not, prima facie, prejudicial to the
interests of the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained, other than
temporary deployment pending application.
(xv) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet of the
Company, we report that funds raised on short-term basis have, prima
facie, not been used during the year for long- term investment.
(xvi) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm Registration No. 117365W)
Saira Nainar
(Partner)
(Membership No. 040081)
Place: Mumbai
Date: April 30, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of KEC
INTERNATIONAL LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2013, the Statement of Profit and Loss and the Cash
Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information, in
which are incorporated the returns for the year ended on that date
audited by branch auditors of the Company''s overseas branches at
Afghanistan, Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia,
Ghana, Kazakhstan, Kenya, Lebanon, Libya, Malaysia, Nepal, Nigeria,
Oman, Philippines, South Africa, Sri Lanka, Tunisia, Uganda, United
Arab Emirates.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards referred to in Section 211(3C)
of the Companies Act, 1956 ("the Act") and in accordance with the
accounting principles generally accepted in India. This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Company''s internal control. An audit also
includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the
Management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion. Opinion
In our opinion and to the best of our information and according to the
explanations given to us, and based on the consideration of the reports
on the accounts of the Company''s overseas branches at Afghanistan,
Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia, Ghana,
Kazakhstan, Kenya, Lebanon, Libya, Malaysia, Nepal, Nigeria, Oman,
Philippines, South Africa, Sri Lanka, Tunisia, Uganda, United Arab
Emirates audited by the branch auditors which have been forwarded to us
and have been properly dealt with, the aforesaid financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Emphasis of Matter
We draw attention to
1. Note 43 (i) to the financial statements. As stated in the Note, the
Company has made provision for commission to non- executive directors
of Rs. 97.55 lacs (Previous Year Rs. 880 lacs) including Rs. 78.04 lacs
(Previous Year Rs. 695.18 lacs) in excess of 1% of the net profits
computed under Section 349 of the Act, both provisions are subject to
the approval of the Central Government.
2. Note 43 (ii) to the financial statements. As stated in the Note,
the Company has paid and debited to the Statement of Profit and Loss,
managerial remuneration of Rs. 277.74 lacs to the Managing Director
including Rs. 180.19 lacs in excess of the limits specified in Section
309 of the Act which is subject to the approval of the Central
Government.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best 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 the Company so far as it appears from our examination of
those books and proper returns adequate for the purposes of our audit
have been received from the Company''s overseas branches at
Afghanistan, Algeria, Bangladesh, Congo, Egypt, Ethiopia, Georgia,
Ghana, Kazakhstan, Kenya, Lebanon, Libya, Malaysia, Nepal, Nigeria,
Oman, Philippines, South Africa, Sri Lanka, Tunisia, Uganda, United
Arab Emirates audited by other auditors.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account and the audited branch returns.
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
referred to in Section 211(3C) of the Act.
(e) On the basis of the written representations received from the
directors as on March 31, 2013 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2013
from being appointed as a director in terms of Section 274(1)(g) of the
Act.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and
Regulatory Requirements'' section of our report of even date)
(i) Having regard to the nature of the Company''s
business/activities/result during the year, clauses (iii), (v), (vi),
(x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of paragraph 4 of
the Order are not applicable to the Company.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of its inventories:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business with
regards to the purchase of inventory and fixed assets and for the sale
of goods and services and during the course of our audit, we have not
observed any major weaknesses in such internal control system.
(v) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(vi) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(vii) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other
material statutory dues applicable to it with the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues in arrears as at
March 31, 2013 for a period of more than six months from the date they
became payable.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
March 31, 2013 on account of disputes are given below:
Name of Statute Nature of Dues Forum where Dispute is
Pending
Sales Tax / Tax/Penalty/Interest Assistant Commissioner/
Value Added Tax
Acts Joint Commissioner /
Deputy Commissioner /
Additional Commissioner
(Appeal)
Tax/Penalty/Interest Rajasthan Tax Board, Ajmer
Name of Statute Relating to Amount
various years involved
comprise in the (Rs. in lacs)
period
Sales Tax/ Value Added Tax Acts 1995-1996 to 4,379.15
2010-2011
1994-1995 to 46.66
1997-1998
For the above purpose only statutory dues payable in India have been
considered.
(viii) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions and banks.
(ix) In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by its wholly owned subsidiaries and a joint
venture company from banks are not prima facie prejudicial to the
interests of the Company.
(x) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained, other than
temporary deployment pending application.
(xi) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet of the
Company, we report that funds raised on short-term basis have, prima
facie, not been used during the year for long- term investment.
(xii) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
(Firm Registration No. 117365W)
Saira Nainar
(Partner)
(Membership No. 040081)
Place: Mumbai
Date: May 08, 2013
Mar 31, 2010
1. We have audited the attached Balance Sheet of KEC INTERNATIONAL
LIMITED (Ãthe CompanyÃ) as at 31st March 2010, the Profit and Loss
Account and the Cash Flow Statement of the Company for the year ended
on that date, both annexed thereto, in which are incorporated the
Returns from the Companysà overseas branches at Afghanistan, Algeria,
Bangladesh, Egypt, Ethiopia, Ghana, Kazakhstan, Kenya, Lebanon, Libya,
Mali, Namibia, Nigeria, Oman, Tazikistan, Tunisia, United Arab Emirates
and that of Cables Division, Mumbai audited by other auditors. These
financial statements are the responsibility of the CompanyÃs
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates
made by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order on the basis of the
information and explanations received by us and reports received by the
Company from the auditors of the CompanyÃs overseas branches at
Afghanistan, Algeria, Bangladesh, Egypt, Ethiopia, Ghana, Kazakhstan,
Kenya, Lebanon, Libya, Mali, Namibia, Nigeria, Oman, Tazikistan,
Tunisia, United Arab Emirates and that of Cables Division, Mumbai on
which we have relied.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) in our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books and proper returns adequate for the purposes of our audit
have been received from the CompanyÃs overseas branches at Afghanistan,
Algeria, Bangladesh, Egypt,
Ethiopia, Ghana, Kazakhstan, Kenya, Lebanon, Libya, Mali, Namibia,
Nigeria, Oman, Tazikistan, Tunisia, United Arab Emirates and that of
Cables Division, Mumbai audited by other auditors;
(iii) the reports on the accounts of the the CompanyÃs overseas
branches at Afghanistan, Algeria, Bangladesh, Egypt, Ethiopia, Ghana,
Kazakhstan, Kenya, Lebanon, Libya, Mali, Namibia, Nigeria, Oman,
Tazikistan, Tunisia, United Arab Emirates and that of Cables Division,
Mumbai audited by other auditors have been forwarded to us and have
been dealt with by us in preparing this report.
(iv) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account and the audited Branch Returns;
(v) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(vi) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
(b) in the case of the Profit and Loss Account, of the profit of the
Company for the year ended on that date and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
5. On the basis of the written representations received from the
Directors as on 31st March, 2010 taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2010 from being appointed as a Director in terms of Section
274(1)(g) of the Companies Act, 1956.
ANNEXURE TO THE AUDITORSÃ REPORT (Referred to in paragraph 3 of our
report of even date)
(i) Having regard to the nature of the CompanyÃs business / activities
/ result, clauses (iii), (vi), (x), (xii), (xiii), (xiv), (xv),
(xviii), (xix) and (xx) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
such verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during
the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iv) In our opinion and according to the information and explanations
given to us, there are generally adequate internal control systems
commensurate with the size of the Company and the nature of its
business with regards to the purchase of inventory and fixed assets and
for the sale of goods and services. During the course of our audit, we
have not observed any major weaknesses in internal control system.
(v) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs.5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
(vi) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(vii) The books of account maintained for the period 01st March, 2010
(being the Appointed Date of the Scheme of Amalgamation referred to in
Note 1 of Schedule 19) to 31st March, 2010 by the Company pursuant to
the rules made by the Central Government for the maintenance of cost
records under Section 209(1) (d) of the Companies Act, 1956 in respect
of Electric Cables and Conductors have been broadly reviewed and prima
facie the prescribed accounts and records have been made and
maintained. However, a detailed examination of the records has not been
made with a view to determine whether they are accurate or complete. To
the best of our knowledge and according to the information and
explanations given to us, the Central Government has not prescribed the
maintenance of cost records for any other product of the Company.
(viii) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Employeesà State Insurance, Income-tax, Sales Tax, Wealth Tax, Service
Tax, Custom Duty, Excise Duty, Cess and other material statutory dues
applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Income-tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
dues in arrears as at 31st March, 2010 for a period of more than six
months from the date they became payable.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
31st March, 2010 on account of disputes are given below:
Statute Nature of Dues Forum where Dispute is pending
Sales Tax Tax/Penalty/Interest Assistant Commissioner/ Joint
Commissioner/ Deputy Commissioner/
Additional Commissioner (Appeal)
Rajasthan Tax Board
Appellate Tribunal
High Court
The Central Duty/Penalty/Interest Additional Commissioner/Commissioner
Excise Act (Appeals)
Customs Excise & Service Tax Tribunal
High Court
The Finance Service Tax Commissioner (Appeals)
Act, 1994
The Income
Tax Tax/Interest Commissioner of Income Tax (Appeals)
Act
Income Tax Appelleate Tribunal
Statue Relating to various Amount
years comprise in involved
the period Rs. in lacs
Sales Tax 1990-1991 to
385.35
2009-2010
1994-1995 to
41.31
2008-2009
1989-1990 to
157.34
2003-2004
2001-2002 &
10.22
2002-2003
1994-1995 to
208.9
2008-2009
1994-1995 to
335.33
2008-2009
2001-2002 to
61.76
2005-2006
2006-2007 &
24.57
2007-2008
A.Y. 2007-2008 1,467.29
A.Y. 2006-2007 1,382.62
For the above purpose only statutory dues payable in India have been
considered.
(ix) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and financial institutions.
(x) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained.
(xi) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used during
the year for long- term investment.
(xii) To the best of our knowledge and according to the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No.117365W)
U.M.NEOGI
Partner
(Membership No.30235)
Place: Mumbai
Date : 29th April 2010