To Members of Kay Power And Paper Limited
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Kay Power And PaperLimited ("the Company") which comprise the Balance Sheet as at March 31 2017and the Statement of Profit and Loss and Cash Flow Statement for the year ended as on thatdate and a summary of significant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act) with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 The Act read with rule 7 of the Companies (Accounts) Rules 2014. This responsibilityalso includes maintenance of adequate accounting records in accordance of the provisionsof the Act for safeguarding the assets of the company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of internal control relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. These Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement. An audit involves performingprocedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement in the financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Company's preparation and fair presentation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing an opinionon whether the Company has in place an adequate internal financial control system overfinancial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by management as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(a) in the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2017
(b) in the case of the Statement of Profit and Loss of the profit for the year endedon that date and
(c) in the case of the Cash Flow Statement of the cash flows for the year ended onthat date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of Section 143 of the Act we give in theAnnexure a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act we report that:
(a) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
(c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;
(d) In our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of Companies (Accounts) Rules 2014 except AS15 regarding 'Accountingfor retirement benefits' on account of non-provision for terminal benefits like gratuitypayable to employees as described in the para 9 of Notes to accounts.
(e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of sub-section (2) ofSection 164 of the Companies Act 2013
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B;
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company did not have any pending litigation having material impact on itsfinancial position.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The company had provided requisite disclosure in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period form 8th November2016 to 30th December 2016 and these are in accordance with the books of accountsmaintained by the company.
Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'Section of our Report of even date to the Members of Kay Power And Paper Limited for theyear ended on 31st March 2017 i. a) The Company has maintained proper records showingfull particulars including quantitative details and situation of the fixed assets.
b) As per our information and explanations given to us fixed assets have beenphysically verified by the management during the year and no material discrepancies werenoticed on such verification.
c) The title deeds of immovable properties are held in the name of the company;
ii. According to information and explanations given to us The physical verification ofinventory has been conducted at reasonable intervals by the management and no materialdiscrepancies were noticed during such verification.
iii. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships and other parties covered in the register maintained under Section189 of the Companies Act 2013.
iv. In respect of loans investments guarantees and security the provisions ofsection 185 and 186 of the Companies Act 2013 have been complied with.
v. In our opinion and according to information and explanations given to us theCompany does not have any deposits accepted from the public during the year under audit.
vi. The Company is maintaining cost records as prescribed under Section 148 (1) of theCompanies Act 2013. However we have not verified the same for completeness or accuracy.
vii. a. According to records of Company is regular in depositing with appropriateauthorities undisputed statutory dues including provident fund dues and Profession tax. Noamount is outstanding as at 31/3/2017 for a period more than 6 months from the date theybecome payable.
viii. According to information and explanations given to us no undisputed amountspayable in respect of income tax sales tax excise duty were in arrears as at 31/ 3/2017for a period more that six months from the date they became payable.
ix. In our opinion and according to information and explanations given to us theCompany had defaulted in repayment of dues to IREDA earlier and it has made agreement forOne Time settlement scheme for the repayment of the loan taken from IREDA. The Company haspaid all installments due as per scheme of OTS sanctioned by IREDA during the year.
x. According to information and explanations given to us The company has not raised anymoneys by way of initial public offer or further public offer (including debt instruments)and term loans during the year
xi. Based upon the audit procedures performed and information and explanations given bythe management we report that no fraud by the company or any fraud on the Company by itsofficers or employees has been noticed or reported during the year
xii. The company has not paid or provided for any Managerial Remuneration referred bythe provisions of section 197 read with Schedule V to the Companies Act; xiii. The companyis not a Nidhi Company;
xiv. Based upon the audit procedures performed and information and explanations givenby the management all transactions with the related parties are in compliance withsections 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the Financial Statements etc. as required by the applicable accountingstandards;
xv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review;
xvi. Based upon the audit procedures performed and information and explanations givenby the management the company has not entered into any non-cash transactions withdirectors or persons connected with him within the meaning of the provisions of section192 of Companies Act 2013;
xvii. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Kay Powerand Paper Limited ("the Company") as of 31 March 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia.
Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch controls operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Company's internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For GODBOLE & COMPANY |
| ||Chartered Accountants |
|Place : Satara ||A. G. Godbole |
|Date : 30th May 2017 ||Proprietor |
| ||Mem. No. 104822 |
| ||FRN : 117969W |