You are here » Home » Companies » Company Overview » Kingfa Science & Technology (India) Ltd

Kingfa Science & Technology (India) Ltd.

BSE: 524019 Sector: Industrials
NSE: KINGFA ISIN Code: INE473D01015
BSE 00:00 | 30 Jul 1079.60 -4.65
(-0.43%)
OPEN

1089.80

HIGH

1116.85

LOW

1070.00

NSE 00:00 | 30 Jul 1079.65 -0.30
(-0.03%)
OPEN

1100.00

HIGH

1113.00

LOW

1070.40

OPEN 1089.80
PREVIOUS CLOSE 1084.25
VOLUME 530
52-Week high 1321.00
52-Week low 415.25
P/E 245.92
Mkt Cap.(Rs cr) 1,307
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1089.80
CLOSE 1084.25
VOLUME 530
52-Week high 1321.00
52-Week low 415.25
P/E 245.92
Mkt Cap.(Rs cr) 1,307
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kingfa Science & Technology (India) Ltd. (KINGFA) - Auditors Report

Company auditors report

To the Members of Kingfa Science & Technology (India) Limited

Report on the Audit of the Standalone Indian Accounting Standards (IndAS) FinancialStatements

Opinion

We have audited the standalone Financial Statements of Kingfa Science & Technology(India) Limited(“the Company”) which comprise the Balance Sheet as atMarch 312020 and the Statement of Profit and Loss (including Other Comprehensive Income)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the Financial Statements including a summary of Significant Accounting Policiesand other explanatory information(hereinafter referred to as “the Standalone IndASFinancial Statements”).

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Financial Statements give the information requiredby the Companies Act 2013 (‘the Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestandalone state of affairs of the Company as at March 312020 and its standalone profit(including Other Comprehensive Income) standalone changes in equity and its standalonecash flows for the year endedonthatdate.

Basis forOpinion

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 standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone Financial Statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements andthe CodeofEthics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis forour opinion.

EmphasisofMatter

We draw your attention to Note No.33to the financial statement which describesuncertainty of impact due to COVID-19 pandemic on Company's financial performance whichis dependent on future developments

Ourauditopinion is not modified in respectof these matters.

OtherInformation

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management and Discussion AnalysisShareholder Information and Director's report but does not include the standalone Ind ASFinancial Statements and our auditor's reportthereon.

Our opinion on the standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone Financial Statements or our knowledge obtainedin the audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to reportthatfact.

We have nothing to report in this regard.

KeyAudit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

KeyAudit Matters How ouraudit addressed the key audit matters
Valuation ofTrade Receivable - We have evaluated and tested the Company's process for trade receivables including the provisioning and collection process.
As outlined in Note 6 there were trade receivables as at 31 March 2019 more than 180 days past dues. The collectability of the Companies trade receivables and the valuation of the allowance for impairment of the trade receivables is a key audit matter due to thejudgement involved.
- We tested on sample basis that trade receivables were subsequently collected.
- Where there were indicators that the trade receivables were unlikely to be collected within contracted payment terms we assessed the adequacy of the allowance for impairment of trade receivables. To do this:
a. We assessed the aging of trade receivables quantum ofclaims with and from the customers.
b. We have evaluated the independent confirmations from customers and performed alternate audit procedures on sample basis.
c. We considered the historical accuracy of forecasting the allowance for impairment of trade receivables.
Valuation ofInventory - We have evaluated and tested the design of internal controls relating to the process of inventory recording andvaluation.
At the 31 March 2020 the value of inventory amounted to Rs.11108.77 lakhs representing 31.87% of total equity and 18.63% of total assets. Inventories have been considered key audit matter due to the size of the balance nature of the product price volatility of raw material and finished product process of manufacture and management judgements involved. Refer note 32.4.12 to the Standalone Ind AS Financial Statementsforaccounting policyforvaluationofinventories.
- We have conducted physical verification of inventory on a sample basis at the year-end in order to test the assertion ofexistence.
- We have conducted analysis of net realisable value (NRV) and cost of inventory on a sample basis in order to ascertain that inventory is carried at lower of NRV and Cost.
- We have evaluated on a test check basis the process followed by the management to identify non-moving slow moving obsolete inventory and we have evaluated on a test check basis the appropriateness of the estimates for impairment (if any) accounted for on such inventory.
- We have conducted cut off procedures on a test check basis to ensure completeness of inventory recorded in thebooksof account.
- We have tested on a sample basis compliance of the cost formulae as specified in the accounting policy adopted by the company.
KeyAudit Matters How ouraudit addressed the key audit matters
Completeness and Valuation of Property plant and equipment - We have tested on sample basis the capitalisation done by the Company during the year to assure the completeness and valuation assertion by verifying the date of capitalisation amount of capitalisation classification under appropriate category of Property Plantand Equipment
As at 31 March 2020 the capital WIP is Rs. 11454.06 Lakhs which is 19.21 % of the total assets of the company. During the yearCompanyhas capitalised partofChakan project
- We have test checked on sample basis additions to capitalworkinprogress.
- We have performed Perform analytical procedures on depreciation and amortization expense.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 Financial Statementsthat give a true and fair view of the standalone financial position standalone financialperformance (including other comprehensive income) standalone changes in equity andstandalone cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions oftheActforsafeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Financial Statements that give a true and fair view and are free frommaterialmisstatementwhetherduetofraudor error.

In preparing the standalone Financial Statements the management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standaloneFinancial 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 standalone Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout theaudit.

We also:

• Identify and assess the risks of material misstatement of the standaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 system in place and the operating effectivenessofsuch 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 ourauditor's report to the related disclosures in thestandalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standaloneFinancial Statements including the disclosures and whether the standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 ouraudit.

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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Financial Statementsof the current period and are therefore the key audit matters.We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. 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

Act we give in the Annexure A; a statement on the matters specified in paragraphs 3and 4 of the Order to theextentapplicable.

2. AsrequiredbySection 143(3) of the Act we reportthat:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and beliefwere necessary for the purposes ofouraudit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears fromour examination ofthose books.

c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone Financial Statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015asamended.

e) On the basis of the written representations received from the directors as on March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312020 from being appointed as a directorin terms ofSection 164 (2) oftheAct.

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 Reportin “Annexure B”.

g) As required by section 197 (16) of the Act; in our opinion and according toinformation and explanation provided to us the remuneration paid by the company to itsdirectors is in accordance with the provisions of section 197 oftheAct and remunerationpaid to directors is not in excess of the limit laid down underthis section.

h) 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 - Refer Note 32.5.1 to the Financial Statements;

(ii) The Company has long-term contracts including derivative contracts as at March 312020 for

which there were no material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund bythe Company.

(iv) The reporting on disclosures relating to Specified Bank Notes is not applicable tothe Company for the year ended March 312020

For M/s P G Bhagwat
Chartered Accountants
Firm Registration Number: 101118W
Purva Kulkarni
Partner
Membership Number: 138855
UDIN:20138855AAAADG8723
Place: Pune
Date:June 222020

Annexure A to Independent Auditors' Report

Referred to in paragraph 1 of the Independent Auditors' Report of even date to themembers of Kingfa Science & Technology (India) Limited on the standalone Ind ASfinancial statements as of and for the year ended 31 March 2020

i. (a) The Company is maintaining proper records

showing full particulars including quantitative details and situation of fixedassets.

(b) The fixed assets of the Company have not been physically verified by the Managementduring the year. Accordingly the discrepancies if any could not be ascertained andtherefore we are unable to comment on whether the discrepancies if any have beenproperly dealt with in the books ofaccount.

(c) The title deeds of immovable properties as disclosed in Note 1on fixed assets tothe financial statements are held in the name of the Company.

ii. The physical verification of inventoryhave been conducted at reasonable intervalsby the Management during the year.The discrepancies noticed on physical verification ofinventory as compared to book records werenot material.

iii. The Company has not grantedany loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186. Therefore theprovisions of Clause 3(iv) of the said Orderare notapplicable totheCompany.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 7475 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act inrespectofits products.

We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete.

vii. (a) According to the information and explanations

given to us and the records of the Company examined by us in ouropinion exceptforduesin respect of Profession Tax the Company is generally regular in depositing undisputedstatutory dues including provident fund employees' state insurance income tax salestax service tax duty of customs duty of excise value added tax Goods and Service Taxcess and other material statutory dues as applicable with the appropriate authorities.The extent of the arrears ofstatutory dues outstanding as at March 31 2020 for a periodof more than six months from the date they became payable are as follows:

Name of the statute Nature of dues Amount (Rs. In Lakhs) Period to which the amount relates Due date Date of Payment
Profession Tax Employee Profession tax 0.46 FY 2018-19 March 312019 NA

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income tax sales tax service taxduty ofcustoms and duty ofexcise duty value added tax Goods and ServiceTax as at31March 2020 which have not been deposited on account ofa dispute are as follows:

Name of the statute Natureofdues Amount (' inlakhs) Period towhich the amount relates Forum where the disputeispending
IncomeTaxAct 1961 IncomeTax 44.36 AY2007-08AY 2008-09 AY2010-11 andAY 2011-12 Appeal to Commissionerof IncomeTax
SalesTaxAct and VAT Laws Sales Tax 29.83 FY2014-15 Joint Excise and Taxation CommissionerAppeal
Transit pass 14.57 FY 2005-06 to FY2014-15 First AppellateAuthority issue
Central Excise Act 1944 Excise Duty 4.17 FY2012-13 Assistant Commissionerof Central Excise
Excise Duty 8.06 FY2009-15and FY2016-17 Commissioner (Appeals) of Central Excise
FinanceAct 1994 ServiceTax 5.35 FY2015-16 Commissioner(Appeals) of Service Tax
ServiceTax 25.91 FY2017-18to 2018-19 Assistant Commissioner ofGSTand Central Excise
ServiceTax 6.23 FY 2015-16to June 2017 Assistant Commissioner ofGST and Central Excise

viii. viii.According to the records of the Company examined by us and the informationand explanation given to us the Company has not defaulted in repayment of loans orborrowings to any financial institution or bank or Government or dues to debenture holdersas at the balancesheetdate.

ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans.Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.

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 acrossanyinstance of fraud

by the Company or on the Company by its officers or employees noticed or reportedduring the year nor have we been informed of any such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance withtherequisite approvals mandated by the provisions of Section 197 read with ScheduleVtotheAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related party

transactions have been disclosed in the financial statements as required under Ind AS24 Related Party Disclosures specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are notapplicable totheCompany.

xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For M/s. P. G. Bhagwat
Firm Registration Number: 101118W
Chartered Accountants
Purva Kulkarni
Partner
Membership Number 138855
UDIN : 20138855AAAADG8723
Pune
June 22 2020

Annexure B to the Independent Auditors' Report

Referred to in paragraph 2 (f) of the Independent Auditors' Report of even date to themembers of Kinfga Science & Technologies (India) Limited on the standalone Ind ASfinancial statements forthe yearended 31 March 2020

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection143 oftheAct

We have audited the internal financial controls with reference to financial statementsof Kingfa Science & Technologies (India) Limited (“the Company”) as of 31March2020 in conjunction with our audit of the standalone Ind AS financial statements ofthe Company for the yearended 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 controls with reference to financial statementscriteria established by the Company considering the essential components of internalcontrols stated in the Guidance Note on Audit of Internal financial controls overfinancial reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the CompaniesAct 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements

based on our audit. We conducted our audit in accordance with the Guidance Note onAudit of Internal financial controls over financial reporting (the “GuidanceNote”) and the Standards on Auditing to the extent applicable to an audit ofinternal financial controls 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 with reference to financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls withreference to financial statements assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal controls basedon the assessed risk. The procedures selected depend on the auditor's judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.

We believe that the audit evidence we have obtained and the audit evidence obtained bythe other auditor in terms of their report referred to in the Other Matter paragraphbelow is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls with reference to financial statements.

Meaning of Internal financial controls with reference to financial statements

A Company's internal financial controlswith reference to financial statements is aprocess designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A Company's internal financial controlswith reference to financialstatements 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 ordisposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal financial controls with reference to financialstatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequate

because of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls with reference to financial statements and such internal financialcontrols with reference to financial statements were operating effectively as at 31 March2020 based on the internal controls with reference to financial statements criteriaestablished by the Company considering the essential components of internal controlsstated in the Guidance Note on Audit of Internal financial controls over financialreporting issued by the Institute of Chartered Accountants of India.

For M/s. P. G. Bhagwat
Firm Registration Number: 101118W
Chartered Accountants
Purva Kulkarni
Partner
Membership Number: 138855
Pune UDIN:20138855AAAADG8723
June 222020