The Members of
KGN INDUSTRIES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of KGN INDUSTRIES LIMITED("the Company) which comprise the Balance Sheet as at 31st March2016 the statement of Profit & Loss and Cash Flow Statement for the year ended and asummary of Significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the financial statements.
The procedures selected depend on the auditors judgment including the assessmentof the risks of material misstatement of the financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Companys preparation of the financial statements that give a trueand fair view in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on whether the Company hasin place an adequate internal financial controls system over financial reporting and theoperating effectiveness of such controls. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Companys Directors as well as evaluating the overallpresentation of the financial statements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner 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 stateof affairs of the company as on 31st March 2016. b.) In the case of the Profit& Loss Account Statement Balance of the profit for the year ended on 31st March2016. c.) In the case of the Cash Flow Statement of the Cash Flows for the year ended on31st March 2016.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") as amended issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we enclose in the Annexure hereto a statementspecified in paragraph 4 and 5 of the said order.
2. As required by section 143 (3) of the Act we report that:
(i) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit ;
(ii) In our opinion proper books of accounts as required by law have been kept by thecompany so far as it appears from our examination of those books;
(iii) The Balance Sheet and Profit & Loss Statement Balance dealt with by thisreport are in agreement with the books of account;
(iv) On the basis of written representations received from the directors as on March31 2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164 (2) of theAct.
(v) in our opinion the aforesaid (Standalone) financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(vi) In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016.
For Kirit & Co.
Date: 30th May 2016
ANNEXURE TO INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) The Fixed Assets have beenphysically verified by the management in a phased manner designed to cover all the itemsover a period of three years which in our opinion is reasonable having regard to thesize of the company and nature of its business. Pursuant to the program a portion of thefixed asset has been physically verified by the management during the year and no materialdiscrepancies between the books records and the physical fixed assets have been noticed.(c) The title deeds of immovable properties are held in the name of the company.
2. (a) The Inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable. (b) The discrepancies noticed onphysical verification of the inventory as compared to books records which has beenproperly dealt with in the books of account were not material.
3. (a) The Company has granted unsecured loan to its Subsidiary Companies and partiesin the register maintained under Section 189 of the Companies Act 2013. The Maximumamount granted during the year and year end balance of loan to such subsidiaries were asper details given below. The terms and conditions of such loans are not prima facieprejudicial to the interest of the Company.
|Name of the Party ||Relation with the Company ||Maximum Outstanding (in Rs) ||Closing Balance As on 31/03/2016 (in Rs) |
|1. KGN Projects Limited ||Subsidiary Company ||1610317/- ||1610317/- |
|KGN Enterprises || || || |
|2. Limited ||Associates ||144277868/- ||141766985/- |
(b) The Company has not taken loans secured or unsecured from the companies or otherparties covered in the register maintained u/s 189 of the Companies Act 2013
4. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013In respect of loans investments guarantees and security.
5. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
6. As informed to us the maintenance of Cost Records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
7. (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-Tax Sales tax Service Tax Duty of Customs Duty of Excise Valueadded Tax Cess and any other statutory dues with the appropriate authorities. Accordingto the information and explanations given to us no undisputed amounts payable in respectof the above were in arrears as at March 31 2016 for a period of more than six monthsfrom the date on when they become payable.
b) According to the information and explanation given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute.
8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloan either from financial institutions or from the government and has not issued anydebentures.
9. Based upon the audit procedures performed and the information and explanations givenby the management the company has not raised moneys by way of initial public offer orfurther public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
10. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
11. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
12. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
13. In our opinion all transactions with the related parties are in compliance withsection 177 and
188 of Companies Act 2013 and the details have been disclosed in the FinancialStatements as required by the applicable accounting standards.
14. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
15. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
16. In our opinion the company is not required to be registered under section 45 IA ofthe Reserve
Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) of the Orderare not applicable to the Company and hence not commented upon.
For Kirit & Co.
M. No. 038047
FRN : 132282W
Date: 30th May 2016