To the Members of
KINETIC ENGINEERING LIMITED
REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS
Opinion
We have audited the standalone financial statements of Kinetic
Engineering Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2023, and the Statement of Profit and Loss (including other comprehensive
income), Statement of Changes in Equity and Statement of Cash Flows for the year then
ended, and notes to the standalone financial statements, including summary of significant
accounting policies and other explanatory information (hereinafter referred to as
"the standalone financial statements").
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 ("the Act") in the manner so
required and give a true and fair view in conformity with the accounting principles
generally accepted in India including Indian Accounting Standards (‘Ind AS)
specified under section 133 of the Act, of the state of affairs (financial position) of
the Company as at March 31, 2023, and its loss (financial performance including other
comprehensive income), its changes in equity and cash flows for the year ended on that
date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing
(SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are
further described in the Auditors Responsibilities for the Audit of the Standalone
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
standalone financial statements under the provisions of the Act and the Rules there under,
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
is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to the following matters in the Notes to the
Standalone Financial Statements: Refer Note - 44 describing the basis of companys
ability to continue as a Going Concern. Our opinion is not modified in respect of the
above mentioned matter.
Key Audit Matters
Key audit matters (‘KAM) 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.
Other Information
The Companys management and Board of Directors are responsible
for the other information. The other information comprises the information included in the
Companys annual report, but does not include the standalone financial statements and
our auditors report thereon.
Our opinion on the standalone 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 standalone financial statements, our responsibility is to
read the other information 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. 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.
Managements Responsibility for the Standalone Financial
Statements
The Companys management and 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 state of affairs
(financial position), profit or loss (financial performance including other comprehensive
income), changes in equity and cash flows of the Company in accordance with the accounting
principles generally accepted in India, including the Indian Accounting Standards (Ind AS)
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.
In preparing the standalone financial statements, management and Board
of Directors are responsible for assessing the Companys 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. The Board of
Directors is also responsible for overseeing the Companys financial reporting
process.
Auditors Responsibilities for the Audit of the Standalone
Financial Statements
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 auditors 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.
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
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 managements 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
companys ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors 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 auditors 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.
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.
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.
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 auditors 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020
("the Order") issued by the Central Government of India in terms of Section
143(11) of the Act, we give in "Annexure A" a statement on the matters specified
in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the 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; c)
The Balance Sheet, the Statement of Profit and Loss (including other comprehensive
income), the Statement of Changes in Equity and the Statement of Cash Flows dealt
with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply
with the Ind AS specified under Section 133 of the Act;
e) On the basis of the written representations received from the
directors as on March 31, 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;
f) 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 B";
g) With respect to the other matters to be included in the
Auditors 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 as at
March 31, 2023 on its financial position in its standalone financial statements (Refer
Note 38);
ii. The Company did not have any long-term contracts, including
derivative contracts for which there were any material foreseeable losses as at 31 March
2023;
iii. There has been no amount required to be transferred to the
Investor Education and Protection
Fund by the Company during the year ended 31 March 2023;
iv. (a) The management has represented to us 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 person(s) or entity(ies), including foreign entities
("Intermediaries"), 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
("Ultimate Beneficiaries") or provide any guarantee, security
or the like on behalf of the Ultimate
Beneficiaries (Refer Note No. 47);
i. The management has represented to us, that, to the best of its
knowledge and belief no funds have been received by the Company from any person(s) or
entity(ies), including foreign entities
("Funding Parties"), 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 ("Ultimate Beneficiaries") or provide any guarantee, security
or the like on behalf of the Ultimate Beneficiaries (Refer Note No. 47);
ii. Based on the information and explanation given to us and audit
procedures performed as considered reasonable and appropriate in the circumstances,
nothing has come to our notice that has caused us to believe that the representations made
by the management and as mentioned under sub-clause (iv) (a) and (iv) (b) above contain
any material misstatement.
|
For Pawan Jain and Associates |
|
Chartered Accountants |
|
Firms Registration No.: 0107867W |
|
CA Pawan Jain |
| Pune |
Partner |
| May 30, 2023 |
Membership No.: 032900 |
|
UDIN: - 23032900BGXOMH2564 |
Annexure "A" to the Independent Auditors Report
(Referred to in Paragraph 1 under the heading, "Report on Other
Legal and Regulatory Requirements" of our report on even date)
Based on the audit procedures performed for the purpose of reporting a
true and fair view on the financial statements of the Company and taking into
consideration the information and explanations given to us and the books of account and
other records examined by us in the normal course of audit, and to the best of our
knowledge and belief, we report that:
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Property, Plant and
Equipment. The Company is maintaining proper records showing full particulars of
intangible assets;
(b) As informed to us, the fixed assets are being physically verified
by the management at regular intervals based on the programme of verification which in our
opinion is reasonable. All the major Property, Plant and Equipment have been verified by
the management in the current year and discrepancies noticed on such physical verification
were not material and the same have been properly dealt with in the books of account;
(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 deed / transfer
deed / conveyance deed provided to us, we report that, the title deeds, comprising all the
immovable properties of land and buildings which are freehold, are held in the name of the
Company as at the balance sheet date. In respect of immovable properties been taken on
lease and disclosed as Property, Plant and Equipment in the standalone financial
statements, the lease agreements are in the name of the Company, where the Company is the
lessee in the agreement;
(d) The company has/ has not revalued its Property, Plant &
Equipment or Intangible assets or both during the year;
(e) According to the information and explanations provided to us there
are no proceedings have been initiated or are pending against the company for holding any
benami property under the Prohibition of Benami Property Transactions Act, 1988 (as
amended in 2016) and rules made thereunder. Hence, reporting under clause 3(i) (e) of the
Order is not applicable;
ii. (a) Physical verification of inventory has been conducted by the
management during the current year.
In our opinion, the interval of such verification is reasonable. As
informed to us, discrepancies noticed on physical verification were not material and the
same have been properly dealt with in the books of account;
(b) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, the Company has been
sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks
or financial institutions on the basis of security of current assets. In our opinion, the
quarterly returns or statements filed by the Company with such banks or financial
institutions are in agreement with the books of account of the Company;
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. Therefore, clause 3(iii) (a), (b), (c,) (d), (e)
and (f) of the Order are not applicable to the Company; iv. According to the information
and explanations provided to us, in respect of loans, investments, guarantees, and
security; provisions of section 185 and 186 of the Companies Act, 2013 have been complied
with wherever applicable;
v. According to information and explanation provided to us, the Company
has not accepted deposits, hence the directives issued by the Reserve Bank of India and
the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act,
2013 and the rules framed there under, are not applicable to the company. According to the
information and explanation provided to us, no order has been passed by Company Law Board
or National Company Law Tribunal or Reserve Bank of India or any court or any other
tribunal;
vi. As informed to us, the cost records, pursuant to the rules made by
the Central Government for the maintenance of cost records under sub-section (1) of
section 148 of the Companies Act 2013 are not applicable to the company;
vii. (a) According to the records of the company, it is generally
regular in depositing undisputed statutory dues of provident fund, employees state
insurance, income-tax, goods and service tax, duty of customs, cess and any other
statutory dues with the appropriate authorities except depositing dues of Provident Fund
where there are delays;
(b) According to the information and explanation provided to us, there
are no dues of Income-tax or Sales tax or Service tax or Goods and Service tax or duty of
Customs or duty of Excise or Value added tax or entry tax, which have not been deposited
by the Company on account of disputes, except for the following:
Nature of Dues |
Amount in (Rs) Lacs |
Forum where dispute is
pending |
| Income Tax 2000-01 |
1.29 |
ITAT, Pune |
| Income Tax 2011-12 |
0.24 |
CIT Appeals Pune |
Entry Tax 2008-09 |
6.19 |
Dy. Commissioner Commercial
Tax, Indore |
MP VAT Tax 2007-08, 2008-09,
2009-10 |
9.17 |
Appellate Dy. Commissioner
commercial Tax, Indore |
| Excise Duty |
56.39 |
CESTAT, Mumbai and Nagpur |
viii. There are no transactions that are not recorded in the books of
account to be surrendered or disclosed as income during the year in the tax assessments
under the Income Tax Act, 1961;
ix. Based on our Audit procedures and according to the information and
explanation provided to us, the
Company has not defaulted in repayment of dues to a financial
institution, bank or government;
x. (a) According to information and explanation provided to us, the
Company has not raised moneys by way of initial public offer or further public offer
(including debt instruments). The Company has raised moneys by way of term loans from the
bank during the year and were applied for the purposes for which those are raised; (b)
During the year the Company has made preferential allotment of shares are in compliance
with sections 42 and 46 of Companies Act, 2013 wherever applicable and the details have
been disclosed in the Standalone Financial Statements as required;
xi. Based upon the Audit procedures performed by us and according to
the information and explanations provided to us by the management, no fraud by the Company
or any fraud on the Company by its officers or employees has been noticed or reported to
us during the year; xii. The Company is not a Nidhi Company and accordingly, Clause 3(xii)
of the Order is not applicable to the
Company;
xiii. According to the information and explanation provided to us, all
transactions with the related parties are in compliance with sections 177 and 188 of
Companies Act, 2013 wherever applicable and the details have been disclosed in the
Standalone Financial Statements as required by the applicable Indian Accounting Standards;
xiv. The company has an internal audit system commensurate with the
size and nature of its business. The reports of the Internal Auditor for the period under
audit has been considered;
xv. According to the information and explanation provided to us, the
Company has not entered into any non-cash transactions with directors or persons connected
with him;
xvi. (a) According to the information and explanation provided to us,
the Company is not required to be registered under section 45-IA of the Reserve Bank of
India Act, 1934;
(b) According to the information and explanations given to us and
procedures performed by us, we report that the Company has not conducted any Non-Banking
Financial or Housing Finance activities during the year. Therefore, reporting under clause
3(xvi) (b) of the Order is not applicable;
(c) According to the information and explanations given to us and
procedures performed by us, the Company is not Core Investment Company (CIC) as defined in
the regulations made by the Reserve Bank of India, hence reporting under clause 3(xvi) (c)
of the Order is not applicable;
(d) According to the information and explanations given to us and
procedures performed by us, reporting under clause 3(xvi) (d) of the Order is not
applicable;
xvii. The Company has not incurred cash losses during current financial
year and had not incurred cash losses during immediately preceding financial year;
xviii. There has been no resignation by statutory auditors during the
year hence reporting under clause 3(xviii) of the Order is not applicable;
xix. According to the information and explanations given to us and on
the basis of the financial ratios, ageing and expected dates of realization of financial
assets and payment of financial liabilities, other information accompanying the financial
statements, our knowledge of the Board of Directors and management plans and based on our
examination of the evidence supporting the assumptions, nothing has come to our attention,
which causes us to believe that any material uncertainty exists as on the date of the
audit report that the company is not capable of meeting its liabilities existing at the
date of balance sheet as and when they fall due within a period of one year from the
balance sheet date. We, however, state that this is not an assurance as to the future
viability of the company. We further state that our reporting is based on the facts up to
the date of the audit report and we neither give any guarantee nor any assurance that all
liabilities falling due within a period of one year from the balance sheet date, will get
discharged by the company as and when they fall due;
xx. As informed to us, the Company is not liable for any corporate
social responsibility under section 135 of the Companies Act 2013 and therefore, Clause
3(xx) of the Order is not applicable to the Company;
xxi. There are no qualifications or adverse remarks by the respective
auditors in the Companies (Auditors Report) Order (CARO) reports of the companies
included in the consolidated financial statements.
|
For Pawan Jain and Associates |
|
Chartered Accountants |
|
Firms Registration No.: 0107867W |
|
CA Pawan Jain |
| Pune |
Partner |
| May 30, 2023 |
Membership No.: 032900 |
|
UDIN: - 23032900BGXOMH2564 |
Annexure "B" to the Independent Auditors Report
(Referred to in paragraph 1(A) (f) under the heading, "Report on
Other Legal and Regulatory Requirements" of our report on even date)
Report on the Internal Financial Controls Over Financial Reporting
under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the
Act")
We have audited the internal financial controls over financial
reporting of Kinetic Engineering Limited (the
"Company") as of March 31, 2023 in conjunction with our audit
of the Standalone Financial Statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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
respective companys 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.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys
internal financial controls over financial reporting of the Company based on our audit. We
conducted our Audit in accordance with the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting (the "Guidance Note") issued by the
Institute of Chartered Accountants of India and the Standards on
Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent
applicable to an Audit of internal financial controls. Those Standards and the Guidance
Note require that we comply with ethical requirements and plan and perform the Audit to
obtain reasonable assurance about whether adequate internal financial controls over
financial reporting was established and maintained and if such controls operated
effectively in all material respects.
Our Audit involves performing procedures to obtain Audit evidence about
the adequacy of the internal financial controls system over financial reporting and their
operating effectiveness. Our Audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial controls over financial
reporting, 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 Auditors judgement, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or
error.
We believe that the Audit evidence we have obtained is sufficient and
appropriate to provide a basis for our Audit opinion on the Companys internal
financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting 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 companys internal financial control
over financial reporting includes those policies and procedures that a) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; b) 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 c) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial
Reporting
Because of the inherent limitations of internal financial controls over
financial reporting, 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 over
financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the
explanations given to us, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2023, based on the
criteria for internal financial control over financial reporting established by 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 ICAI.
|
For Pawan Jain and Associates |
|
Chartered Accountants |
|
Firms Registration No.: 0107867W |
|
CA Pawan Jain |
| Pune |
Partner |
| May 30, 2023 |
Membership No.: 032900 |
|
UDIN: - 23032900BGXOMH2564 |
+91-9892691696
