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KKV Agro Powers Ltd.

BSE: 538368 Sector: Infrastructure
NSE: KKVAPOW ISIN Code: INE239T01016
BSE 05:30 | 01 Jan KKV Agro Powers Ltd
NSE 05:30 | 01 Jan KKV Agro Powers Ltd

KKV Agro Powers Ltd. (KKVAPOW) - Auditors Report

Company auditors report

To the Members of KKV Agro Powers Limited (Formerly known as Nachas Wind Energy PrivateLimited)

Report on the Audit of Financial Statements

Opinion

We have audited the accompanying financial statements of KKV Agro Powers Limited ("theCompany") which comprises the Balance Sheet as at March 31 2019 the Statement ofProfit and Loss and the Cash Flow Statement for the year ended on that date and notes tothe financial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as " the FinancialStatements").

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 theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding the Accounting Standards prescribed under section 133 of the Act read with Rule7 of the Companies (Accounting) Rules 2014 of the state of affairs of the Company as atMarch 31 2019 and its profit and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on the FinancialStatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

We have determined that there are no key audit matters to communicate in our report.

Information Other than the Financial Statements and Auditor's Report

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the AnnualReport for example Board's Report including Annexures to Board's Report but does notinclude the financial statements and our auditor's report thereon. The other informationis expected to be made available to us after the date of our audit report.

Our opinion on the financial statements does not cover the other information and we donot 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 financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.

When we read the other information as stated above which is expected to be receivedafter the date of our audit report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance andtake necessary actions as applicable under applicable laws and regulations.

Responsibility of Management for the Financial Statements

The Company's Board of Directors are responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateimplementation and maintenance of accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement 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 Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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.

Other matter

The comparative figures and financial information of the company for the year ended 31stMarch 2018 included in these financial statements are based on the previously issuedstatutory financial statements prepared in accordance with the Companies (Accounts) Rules2014 audited by the predecessor auditor whose report for the year ended 31stMarch 2018 dated 25th May 2018 expressed an unmodified opinion.

Our Opinion is not modified in respect of this matter.

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 Companies Act 2013 we give in Annexure 1 a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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 knowledge and belief were necessary 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 theAct read with Rule 7 of the Companies(Accounts) Rules 2014.

e. With respect to reporting of disqualification of appointment as director we statethat:

One of the Independent Directors of the Company Mr. Gnanasekaran Thiyagarajan (DIN -00904018 ) and who has since resigned from the Board w.e.f. 31.03.2019 is disqualifiedfrom being appointed as a director in terms of section 164 (2) of the Companies Act 2013.

As far as the others directors are concerned on the basis of the writtenrepresentations received from the directors as on March 31 2019 and taken on record bythe Board of Directors we report that none of the other directors are disqualified as onMarch 31 2019 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 2".

g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its Directors during the year is inaccordance with the provisions of section 197 of the Act.

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 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.

For M/s. VKS Aiyer & Co.

Chartered Accountants

ICAI Firm Registration No. 000066S

Sd/-

V.S.Srinivasan

Partner

Membership No.013729

Place: Coimbatore

Date: 28.05.2019

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 KKV AgroPowers Limited ( Formerly known as Nachas Wind Energy Private Limited) on the financialstatements for the year ended March 31 2019]

(i) a) The Company has maintained proper records showing full particularsincluding quantitative 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 inventory has been physically verified by the management during the year.In our opinion the frequency of verification is reasonable. As informed no materialdiscrepancies were noticed on physical verification carried out during the year.

(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 loansinvestments guarantees and securities the Company has complied with the provisions ofSection 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to usthe Company has not accepted any deposits from the public within the provisions ofSections 73 to 76 of the Act and the rules framed there under.

(vi) The Central Government has not prescribed the maintenance of cost records forany products of the Company under sub-section (1) of Section 148 of the Act and the rulesframed thereunder.

(vii) a) The Company is generally regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income tax goods and service tax customs duty cess and any other materialstatutory dues applicable to it except in the case of depositing of GST dues were therewere delays ranging upto 403 days.

AND

b) According to the information and explanations given to us undisputed dues inrespect of provident fund employees' state insurance income tax goods and service taxcustoms duty cess and any other material statutory dues applicable to it which wereoutstanding at the year end for a period of more than six months from the date theybecame payable are as follows:

Name of the statute Nature of The Dues Amount Period to which The amount relates Due Date Date of Payment
Goods and Service Tax Act GST Rs. 792400/- April' 18 - Aug ‘18 20th of Subsequent Months. 28.05.2019

c) According to the information and explanation given to us there are no dues withrespect to income tax sales tax service tax value added tax goods and service taxcustoms duty excise duty which have not been deposited on account of any dispute.

(viii) According to the information and explanations given to us the Company hasnot defaulted in repayment of loans or borrowings to financial institution(s) bank(s)government(s) or dues to debenture holder(s).

(ix) The Company has neither raised money by way of public issue offer nor hasobtained any term loans. Therefore paragraph 3(ix) of the order is not applicable to thecompany.

(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 nor reported during the year nor have we been informed of any such instance bythe management.

(xi) According to the information and explanations given to us managerialremuneration has been paid in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to usthe Company is not a Nidhi Company. Therefore paragraph 3(xii) of the Order is notapplicable 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 not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeparagraph 3(xiv) of the Order is not applicable to the Company.

(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 VKS Aiyer & Co. Chartered Accountants

Firm Regn.No. 000066S

Sd/-

V.S.Srinivasan

Partner

Membership No.013729

Place: Coimbatore

Date: 28.05.2019

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of KKV AgroPowers Limited ( Formerly known as Nachas Wind Energy Private Limited) on the financialstatements for the year ended March 31 2019]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the Internal Financial Controls over Financial Reporting of KKV AgroPowers Limited (Formerly known as Nachas Wind Energy Private Limited) ("theCompany") as of March 31 2019 in conjunction with our audit of the financialstatements of the Company for the year 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"). 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 Companies Act 2013 ( " the Act " )

Auditors' Responsibility

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") issued by the ICAI and the Standards on Auditing specifiedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

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 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 or disposition of thecompany's assets that could have a material 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.

Opinion

In our opinion to the best of our information and according to the explanation givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the ICAI.

For VKS Aiyer & Co. Chartered Accountants

Firm Regn.No. 000066S

Sd/-

V.S.Srinivasan

Partner

Membership No.013729

Place: Coimbatore

Date: 28.05.2019

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