To the Members of KKV Agro Powers Limited (Formerly Known as Nachas Wind Energy PrivateLimited)
Report on the Financial Statements
We have audited the accompanying financial statements of KKV Agro Powers Limited(Formerly Known as Nachas Wind Energy Private Limited) ("the Company")which comprise the Balance Sheet as at March 31 2017 the Statement of Profit and Lossthe Cash Flow Statement for the year then ended and a summary of significant accountingpolicies 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 these financial statementsthat give a true and fair view of the financial position financial performance and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls and ensuring their operatingeffectiveness and the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fairview and are free from material misstatement whether due 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 there under.
We conducted our audit in accordance with the Standards on Auditing specified 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 anddisclosures in the financial statements. The procedures selected depend on the auditors'judgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof 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 31stMarch 2017 its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of
India in terms of sub-section (11) of Section 143 of the Act we give in "Annexure1" a statement on the matters specified in paragraphs 3 and 4 of the Order to theextent applicable.
(2) As required by Section 143(3) of the Act we report that:
a. We have sought and except for matter stated in paragraph (g) (iv) below obtained allthe information and explanations which to the best of our knowledge and belief werenecessary for the purposes 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 Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
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 Section 164 (2) of theAct;
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls we give ourseparate Report in "Annexure 2".
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 opinion and to the best of ourinformation and according to the explanations given to us:
(i) The Company does not have any pending litigations which would impact its financialposition;
(ii) The Company did not have any long-term contracts including derivative contracts.Hence the question of any material foreseeable losses does not arise;
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
(iv)The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016. However we are unable to obtainsufficient and appropriate audit evidence to report on whether the disclosures are inaccordance with books of account maintained by the Company and as produced to us by theManagement (Refer Note No. 2.31 to the financial statements).
For Haribhakti & Co. LLP Chartered Accountants
ICAI Firm Registration No.103523W/W100048
C.S. Sathyanarayanan Partner Membership No.028328 Coimbatore 25-05-2017.
ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of KKVAgro Powers Limited (Formerly Known as Nachas Wind Energy Private Limited) on thefinancial statements for the year ended 31-03-2017]
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of the fixed assetswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. However during the year fixed assets have not been physicallyverified by the management as per the programme of verification.
(c) The title deeds of immovable properties recorded as fixed assets in the books ofaccount of the Company are held in the name of the Company.
(ii) The Company holds inventory in the nature of renewable energy certificates andhence reporting under this clause is not applicable.
(iii) As informed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Accordingly paragraph 3 (iii)(a) 3 (iii)(b) and3 (iii)(c) of the Order are not applicable to the Company.
(iv) Based on information and explanation given to us in respect of loans investmentsguarantees and securities the Company has complied with the provisions of Section 185 and186 of the Act.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under.
(vi) The Central Government has not prescribed the maintenance of cost records for anyof the products of the Company under sub-section (1) of Section 148 of the Act and therules framed there under.
(a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax value added tax customs duty excise duty cess and anyother material statutory dues applicable to it however there have been slight delay infew cases / delays in deposit have not been serious.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxservice tax value added tax customs duty excise duty cess and any other materialstatutory dues applicable to it were outstanding at the year end for a period of morethan six months from the date they became payable.
(b) According to the information and explanation given to us there are no dues withrespect to income tax sales tax service tax value added tax customs duty excise dutywhich have not been deposited on account of any dispute.
(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to financial institution(s) bank(s)government(s) or dues to debenture holder(s).
(ix) According to the information and explanations given to us the Company has raisedby way of initial public offer and term loan have been applied by the company except for
|Purpose of funds S.No raised through ||Details of default / delay ||Amount as per prospectus ||Amount utilized |
|IPO || ||(` in Lakhs) ||(` in Lakhs) |
|1 Setting up of .8 MW wind energy project in Tamilnadu ||Delay on account of setting up the project. Advance Amount paid to vendor for 1.6 MW of wind energy project in Andhra Pradesh instead of .8 MW wind energy project in Tamilnadu ||475.00 ||544.00 |
|2 Erection of 33 KV Electricity Transmission Line ||Delay on account of setting up the project ||50.00 ||Nil |
|3 Repayment of Term Loan ||Pre-closure of Loan to reduce the interest cost. ||320.00 ||338.61 |
|4 General Corporate Purpose ||Nil ||42.61 ||5.00 |
|5 IPO Expenses ||Nil ||28.43 ||28.43 |
| ||Total ||916.04 * ||916.04 |
* Difference between amount as per prospectus and amount raised have beenadjusted against IPO
Expenses and general corporate purpose.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.
(xi) According to the information and explanations given to us managerial remunerationhas been paid in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company.
Therefore paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to the information and explanation given to us all transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 of Act where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable accounting standards.
(xiv) The Company has made preferential allotment of shares during the year underreview and in our opinion and according to the information and explanations given to usthe requirement of Section 42 of the Act have been complied with and the amount raisedhave been used for the purposes for which the funds were raised.
(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him duringthe year.
(xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
For Haribhakti & Co. LLP
ICAI Firm Registration No. 103523W/W100048
C.S. Sathyanarayanan Partner Membership No. 028328