INDEPENDENT AUDITOR'S REPORT
To the Members of HKGLimited
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited theaccompanying Standalone Ind AS financial statements of HKG Limited(the Company) which comprise the Balance Sheet as at 31st March2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as theStandalone Ind AS financial statements).
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 (the Act) in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 and profitincluding other comprehensive incomechanges in equity and its cash flows for the yearended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the Standalone Ind AS financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the standalone financialstatements and our auditor's report thereon. Our opinion on the standalone financialstatements does not cover the other information and we do not express any form ofassurance conclusion thereon. In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated. If based on the work we have performed we conclude thatthere is a material misstatement of this other information; we are required to report thatfact. We have nothing to report in this regard.
Responsibility of Management for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended. 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 that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the company's financialreporting process. Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure A of this report a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
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 knowledge and belief were necessary for the purposes of our audit of the aforesaidInd AS financial statement.
(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 the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.
(d) In our opinion the aforesaid Standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended.
(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in termsof 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 does not have any pending litigation which would impact its financialposition.
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.
For Ashar and Pathak
UDIN: : 21116933AAAAAN8301
Annexure A to the Independent Auditors' Report on Standalone Ind AS financialstatements of HKG Limited as on 31st March 2020 referred to in paragraph 1under Report on Other Legal and Regulatory requirement section of our reportof even date we report the following:
(i) The company's business is trading of share and securities and accordingly therequirement under clause 3(i) and 3 (ii) of the Order is not applicable to the Company andhence not commented upon.
(ii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 (the Act'). Accordingly the provisions of clause 3(iii)(a) (b)and (c) of the Order are not applicable to the Company and hence not commented upon.
(iii) In our opinion and according to the information and explanations given to usthere are no loans guarantees and securities given in respect of which provisions ofsections 185 and 186 of the Act are applicable and hence not commented upon. In ouropinion and according to the information and explanations given to us provisions ofsection 186 of the Act in respect of investments made have been complied with by theCompany.
(iv) The Company has not accepted any deposits within the meaning of sections 73 to 76of the Act and the Companies (Acceptance of Deposits) rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable to the Companyand hence not commented upon.
(v) To the best of our knowledge and as explained the Company is not in the businessof sale of any goods. Therefore in our opinion the provisions of clause 3(vi) of theOrder are not applicable to the Company and hence not commented upon.
(vi) a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including income-tax goods and service tax cess and other statutory duesapplicable to it. The provisions relating to provident fundduty of customs employees'state insurance are not applicable to the Company.
b) According to the information and explanations given to us no undisputed amountspayable in respect of income-tax goods and service tax cess and other statutory dueswere outstanding at the year end for a period of more than six months from the date theybecame payable.
c) According to the records of the Company the no dues of income-tax goods andservice tax cess and other statutory dues on account of any dispute.
(vii) According to the information and explanations given to us there are no loans orborrowings payable to government financial institutions and banks. The company has notissued any debentures.
(viii) According to the information and explanations provided to us and as per therecords of the company examined by us company has not raised funds by way of publicissue/ follow-on offer (including debt instruments) and term loans.
(ix) To the best of our knowledge and belief and according to the information andexplanation given to us no fraud by the Company or any fraud on the Company by itsofficers/ employees has been noticed or reported during the year.
(x) There are no payments made to managerial persons.
(xi) In our opinion and according to information and explanations given to is Companyis not a Nidhi Company.
(xii) According to the information and explanation given to us and based on ourverification of the records of the Company and on the basis of review and approval by theBoard the transactions with related parties are in compliance with Section 177 and 188 ofthe Act where applicable and the details of such transactions have been disclosed in theStandalone Ind AS financial statements as required by the applicable Indian accountingstandards.
(xiii) During the year under review the company has not made any preferential allotment/ private placement of shares or fully or partly convertible debentures.
(xiv) During the year under review the company has not entered into any non-cashtransactions with directors or persons connected with him as referred to in section 192 ofthe Act.
(xv) The company is Core Investment company (CIC) with an asset size of less thanRs.100 crores
and hence is not required to be registered under section 45-IA of Reserve Bank of IndiaAct 1934.
For Ashar and Pathak
ANNEXURE B to Independent Auditors' Report on the Standalone Ind AS Financial Statementof HKG Limited Report on the Internal Financial Controls under Clause (i) of Sub-section3 of Section 143 of the Act referred to in paragraph 2(f) under Report on OtherLegal and Regulatory requirement section of our report of even date.
We have audited the internal financial controls over financial reporting of HKG Limited(the Company) as of 31st March 2020 in conjunction with our auditof the Standalone Ind AS 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 responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
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 Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 understanding 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 judgment 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 authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 31st March 2020based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
For Ashar and Pathak