Statutory
Audit &
Assurance
KCM serves several large players in different industrial segments, which signifies the depth as well as breadth of KCM’s Statutory Audit function.
Banking Sector

Audited India’s largest bank (Fortune 500 company) as its statutory auditor. This bank had more than 15000 branches under Core Banking Solution with very complex multi-sector diverse loan, deposit and service portfolio. The bank had INR 8.50 trillion as advance and INR 10 trillion as deposit. Considering the special skills of KCM audit team, the bank involved KCM in doing the review of internal control systems and information technology risk as special focus area directed by the Audit Committee of the Board. As a part of its assignment, KCM carried out audit of a very large treasury operation of the bank.

Infrastructure - Ports

Audited a joint venture company which has set up a commercial port (jetty) and storage terminal, dedicated for handling liquid & gaseous chemicals, including petroleum products. The company has implemented SAP. The company had undergone financial debt restructuring and capital reduction for which necessary guidance was provided relating to its accounting effect and statutory disclosures.

Infrastructure - Power

Audited a listed power generation company having multi location lignite and gas based power generating units with aggregate generating capacity of over 800MW in the state of Gujarat. The company is also engaged in lignite mining. The company has implemented SAP. During our tenure as statutory auditors, the company had commenced expansion of additional lignite based power plants budgeted at over INR 10 billion funded through debt and equity. As a part of corporate governance practice we carried out quarterly limited reviews of financial results, briefed audit committee of our findings and also issued fund utilization certificates under the SEBI directives.

Infrastructure - Construction

Our client is into execution of all types of construction contracts like bridges, flyovers, industrial plants, specialized structures for Thermal Power Plants, Ports, residential and commercial complexes. The company has also forayed into construction of roadbed, major & minor bridge and facilities, supply & installation of tracks, signaling and Railway electrification work. The company has also engaged itself as developer of real estate projects. The recognition of revenue based on percentage of completion method is done in diverse working environment of this company

Oil and Gas Industry

This foreign owned company is in exploration of oil and gas in India. The on-shore and off-shore exploration is carried out by asset specific joint ventures and Production Sharing Contracts (PSC) with the Government. This requires certification of financial statements of the operator and review of allocation of expenses into recoverable / non-recoverable costs of exploration, development and production and ascertaining government’s share of Profit Petroleum.

Public Sector Undertakings

KCM is empanelled as a Category 1 audit firm by the Comptroller & Auditor General of India. The firm has been appointed by C&AG for statutory audit of companies engaged in electricity transmission, electricity distribution, implementation of soil and water conservation programmes, Public Distribution System and manufacturing petrochemical and polymers.

Real Estate

The firm has wide experience in real estate sector and has several real estate development projects as clients. The experience involves application of percentage completion method for revenue recognition. The real estate projects are either residential projects or commercial projects.

FMCG

The firm has as its client a listed company manufacturing dry cell batteries and having distribution network throughout the country. This company is a subsidiary of a Japanese headquartered global FMCG group. For global consolidation the company sends audited financial statements within 7 days of the close of the accounting year. Being a listed company quarterly limited reviews of financial results, attending meetings of audit committees and representing before independent directors are also part of our scope.

NGOs

The firm provides its services to various Non-Government Organisations (NGOs). The NGOs that the firm is associated with are reputed non-political, secular community development organisations working for the upliftment of urban poor, education, health and sanitation, economic, environment improvement and development of local leadership. They also work with disadvantageous population groups e.g. disabled, street and working children, senior citizens etc.

The firm is also empanelled as auditor with National Agricultural Innovation Project which supports accelerated and sustainable transformation of Indian agriculture by collaborative development and application of agricultural innovation by the public research organizations in partnership with farmers’ groups, private sector, civil society organizations and other stakeholders.

Subsidiaries, Associates, Joint Ventures of Foreign Companies

The firm has as its several clients which are subsidiaries, associates or joint ventures of multinational enterprises. The area of activities of these ventures include manufacturing of engineering products; FMCG goods; power transformers; epoxy coatings and adhesives and services of software development, IT enabled services and business process outsourcing. The foreign holding companies originate from across the globe including United States of America, Canada, China, Japan, Malaysia, Hong Kong, UAE, Italy, Germany, Austria, Denmark, Cyprus, Switzerland, United Kingdom, etc. Many of these companies require us to restate financial statements in terms of global reporting packages by applying the International Standards on Auditing.

Overseas Audits

Indian companies having subsidiaries abroad are required to consolidate their financial statements in accordance with the legal corporate requirements and Indian Accounting Standards. The subsidiaries in Africa, of our Indian client, are involved in exploration and mining of minerals and manufacturing of metals. We also audit a subsidiary in United States of America of a leading EPC contractor in power sector. The financial statements of these subsidiaries are audited in accordance with the applicable accounting standards and GAAP to enable their holding companies to consolidate the same in their financial statements.

Financial Due Diligence

The firm been actively involved in carrying out due diligence including financial, legal and tax due diligence of Indian and foreign companies. The projects handled by the firm not only included the due diligence of Indian companies but also led multi-country team doing due diligence process of foreign companies as a part of acquisition. The firm has provided its due diligence services not only to its Indian clients but also to foreign companies / groups. The clients of the firm include groups based in USA, Germany, UK, Finland, Austria, the Netherlands, Canada, etc.

Share Exchange Ratio

The firm has provided its services in arriving at share exchange ratios in various schemes of mergers, share swaps or acquisitions. Depending upon the facts and circumstances, the firm has used various methods like Discounted Cash Flow, Profit Earning Capacity Value, Stock Market Price, Net Asset Value, Market Value of assets, Dividend yield, etc. The share exchange ratio also take into consideration the relative value of two enterprises in merged entity including IPRs and other intangibles. The share exchange ratio worked out by the firm has been accepted by the courts, government authorities and other stakeholders.

Valuation

The firm has done many projects of valuation of businesses, equities, intangibles and group of assets. Varied methods of valuation including Discounted Cash Flow, Profit Earning Capacity Value, Stock Market Price, Net Asset Value, Market Value of assets, Dividend yield, etc. are applied. For valuation of intangibles methods like International comparables search, saving of cost approach, etc. are also applied.

IFRS Convergence

The firm has successfully carried out various assignments of convergence project for complying with IFRS which included assessing full impact of switchover to IFRS, development of detailed implementation program, training, transformation of accounting process, ERP related changes and preparation of financial statements under IFRS. The clients of the firm include Indian companies requiring to converge as part of compliance and foreign companies requiring to restate financial statement under IFRS for global compliance.