To the Members of Kingfa Science & Technology (India) Limited (Formerly Hydro S&S Industries Limited)
Report on the Financial Statements
We have audited the accompanying financial statements of Kingfa Science and TechnologyIndia Limited ("the Company") which comprise the Balance Sheet as at March 312017 the Statement of Profitand Loss Cash Flow Statement for the year then ended and asummary 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 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 speci ed underSection 133 of the Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
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 accordance with the Standards on Auditing speci ed underSection 143(10) of the Act. Those 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 performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. 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. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation 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 anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial 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 of the state of affairs of the Company as at March31 2017 and its Profitand its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended and issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspeci ed in paragraphs 3 and 4 of the Order.
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 bestof our knflowledge 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 it appears from our examination of those books;
c. The Balance Sheet the Statement of Profitand Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account
d. In our opinion the aforesaid (Standalone) financial statements comply with theAccounting Standards speci ed under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e. On the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disquali ed as onMarch 31 2017 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 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 has disclosed the impact of pending litigations on its financialposition in its financial statements
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For and on behalf of
P. SRINIVASAN & CO. Chartered Accountants Firm No. 004054S
Membership No. : 02090
Place : Chennai
Date : 26.05.2017
ANNEXURE A TO AUDITORS' REPORT
Annexure to Independent Auditors' Report of even date
I) a) The Company has maintained proper records cashflowing full particulars includingquantitative details and situation of fixed assets.
b) These fixed assets have been physically veri ed by the management at the end of thefinancial year which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. According to the information and explanations given to usno material discrepancies were noticed on such verification.
c) According to the information and explanations given and on the basis of examinationof the records of the Company the title deeds of immovable properties are held in thename of the company.
ii) (a) As explained to us inventories held by the Company were physically veri edduring the year at reasonable intervals by the management.
(b) In our opinion and according to the information and explanations given to us thediscrepancies noticed on physical verification of the inventory as compared to booksrecords has been properly dealt with in the books of account and were not material.
iii) The Company has not granted any loans secured or unsecured to companies rmslimited liability partnerships or other parties covered in the Register maintained undersection 189 of the Act.
iv) 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.
v) The Company has not accepted any deposits from the public during the year to whichthe directives issued by the Reserve Bank of India and the provisions of sections 73 to 76or any other relevant provisions of the Companies Act and the rules framed there under areapplicable.
vi) The maintenance of cost records has not been prescribed by the Central Governmentunder subsection 1 of Section 148 of the Companies Act.
vii) (a) According to the records of the Company the Company is regular in depositingundisputed statutory dues including provident fund employee's state insurance incometax sales tax service tax duty of customs duty of excise value added tax and anyother statutory dues applicable to it with the appropriate authorities during the year.According to the information and explanations given to us no undisputed amounts payablein respect of the above were in arrears as at March 31 2017 for a period of more than sixmonths from the date on when they become payable.
(the extent of arrears of outstanding statutory dues as at the last day of thefinancial year for a period of more than 6 months from the date they became payable to beindicated)
(b) there are no dues of income tax or sales tax or wealth tax or service tax or dutyof customs or duty of excise or value added tax which have not been deposited on accountof any dispute except the follflowing pending in appeals :
(i) Income tax of ` 37.82 lakhs before the first appellate authority
(ii) Customs duty of ` 26.78 lakhs before the first appellate authority
(iii) Sales tax of ` 12.94 lakhs before the first appellate authority and
(iv) Central Excise and Service tax before the first appellate authority ` 23.70 lakhs.
viii) On the basis of records produced and in our opinion and according to theinformation and explanations given to us the Company has not defaulted in repayment ofthe dues to bank. The Company has not availed borrflowing facilities from financialinstitution Government or dues to debenture holders.
ix) The company has not raised moneys by way of initial public offer or further publicoffer including debt instruments and term Loans. Hflowever the Company made rights issueduring the year under audit. In our opinion and on the basis of the audit proceduresperformed and the information and explanations given by the management the moneys raisedby the Company through its rights offer were applied for the purposes for which those wereraised.
x) On the basis of the audit procedures carried out by us and information andexplanations given by the management we state that no material fraud on or by the Companyhas been noticed or reported during the course of our audit.
xi) On the basis of 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;
xii) In our opinion the Company is not a Nidhi Company and therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the Financial Statements as required by the applicable accounting standards.
xiv) 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 under audit.
xv) In our opinion on the basis of the audit procedures performed and the informationand explanations given by the management the company has not entered into any non-cashtransactions with directors or persons connected with him. xvi) In our opinion thecompany is not required to be registered under section 45 IA of the Reserve Bank of IndiaAct 1934. for and on behalf of
P. Srinivasan & Co. Chartered Accountants FRN: 004054S
Place : Chennai
Date : 26.05.2017
|P. Srinivasan |
|M. No.: 02090 |
"Annexure B" to the Independent Auditor's Report of even date on theStandalone Financial Statements of Kingfa Science and Technology India Limited Report onthe Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of KingfaScience and Technology India Limited ("the Company") as of March 31 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
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 ef cient 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 ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an undefirst anding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 March 31 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 and on behalf of
P. Srinivasan & Co. Chartered Accountants FRN: 004054S
P. Srinivasan Partner M. No.: 02090
Place : Chennai
Date : 26.05.2017