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Hanung Toys and Textiles Ltd.

BSE: 532770 Sector: Industrials
NSE: HANUNG ISIN Code: INE648H01013
BSE LIVE 15:16 | 18 Aug 4.09 -0.21
(-4.88%)
OPEN

4.20

HIGH

4.30

LOW

4.09

NSE 15:30 | 18 Aug 4.05 -0.10
(-2.41%)
OPEN

4.15

HIGH

4.35

LOW

3.95

OPEN 4.20
PREVIOUS CLOSE 4.30
VOLUME 12167
52-Week high 8.55
52-Week low 3.42
P/E
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.09
Sell Qty 1369.00
OPEN 4.20
CLOSE 4.30
VOLUME 12167
52-Week high 8.55
52-Week low 3.42
P/E
Mkt Cap.(Rs cr) 13
Buy Price 0.00
Buy Qty 0.00
Sell Price 4.09
Sell Qty 1369.00

Hanung Toys and Textiles Ltd. (HANUNG) - Auditors Report

Company auditors report

TO THE MEMBERS OF HANUNG TOYS AND TEXTILES LIMITED

1. Report on the Financial Statements

We have audited the accompanying financial statements of HANUNG TOYS AND TEXTILESLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss and the Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.

2. 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 standalone financial statements that give a true and fair view of the financialposition financialperformance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing 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.

3. Auditors’ Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatements.

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 ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal control relevant to the Company’s preparation andpresentation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and to the operating effectiveness of suchcontrol. An audit also includes evaluating the appropriateness of the accounting policiesused and the reasonableness of the accounting estimates made by theManagement/Company’s Directors as well as evaluating the overall presentation of thefinancial statements.

We believe that the audit evidence we have obtained is sufficientand appropriate toprovide a basis for our audit opinion on the standalone financial statements.

4. Opinion

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 2016 and its loss and its cash flows for the year ended on that date.

5. Emphasis of Matter

Without qualifying our opinion we draw attention to note no. 3.1 to the financialstatement. We report that the Company has incurred a net loss of Rs. 109348.41 Lacsduring the year ended March 31 2016 and the accumulated losses of the Company as at March31 2016 amount to Rs. 257236.70 Lacs leading to erosion of its entire net worth. Thecurrent liabilities of the Company as at the same date exceed its current assets by Rs.77314.86 Lacs . These conditions indicate the existence of a uncertainty and castsignificant doubt about the Company’s ability to continue as a going concern whichis dependent on the Company being supported by its lenders and achieving a profitablelevel and state of operation.

6. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in the "Annexure A" a statement on the matters specified in paragraphs 3and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

a) We have obtained all the information and explanations which to the best of ourknowledge 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 standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e) On the basis of the written representations received from the directors as on March31 2016 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164 (2) ofthe 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"; and

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 in accordance with the generally accepted accounting practicedisclosed the impact of pending litigations on its financial position in its financialstatements- Refer Note 14 and 30 to the financial statements.

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses under the applicable law oraccounting standard.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company .

For RAVINDRA SHARMA & ASSOCIATES
Chartered Accountants
(CA Ravindra Sharma)
Date : May 30 2016 Partner
Place : Noida Membership No.: 085271

ANNEXURE-A TO THE INDEPENDENT AUDITORS’ REPORT

The Annexure referred to in Independent Auditors’ Report to the members of theCompany on the financial statements for the year ended March 31 2016 we report that:

(i) In respect of fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The Company has a regular system of verification of fixed assets at the end of eachyear which in our opinion is reasonable having regard to the size of the Company and thenature of its assets. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.

c) According to information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The inventory was physically verified during the year by the Management andindependent Auditors appointed by bank at reasonable interval during the year. In ouropinion and according to the information and explanation provided to us the procedure andfrequency of verification of inventories carried out by the management is reasonable andadequate in relation to the size of the Company and nature of its business. As explainedto us the observation of Stock Auditors and discrepancies noticed on physicalverification as compared to book records have been properly dealt with in the books ofaccount for the year ended March 31 2016.

(iii) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted/taken any loans securedor unsecured to/from companies firms or other parties covered in the register maintainedunder Section 189 of the Companies Act 2013 and accordingly the provisions of clauses(iii) of paragraph 3 of the Order are not applicable to the Company.

(iv) In our opinion and according to information and explanations given to us theCompany has complied with the provision of section 185 and 186 of the Companies Act 2013with respect to the loans and investments made.

(v) According to the information & explanation given to us the Company has notaccepted any deposits and accordingly the provision of clause (v) of paragraph 3 of theOrder are not applicable to the Company.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant toRule made by the Central Government for the maintenance of cost records under Section 148of the Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.

(vii) According to the information & explanation given to us and on the basis ofour examination of the records of the Company in respect of statutory dues;

a) The Company has not been generally regular in depositing undisputed statutory duesincluding provident fund employees’ state insurance income tax sales tax servicetax duty of customs duty of excise value added tax cess and other material statutorydues applicable to it with appropriate authorities during the year. Details of theoutstanding statutory dues as at March 31 2016 have been given in the note no. 7.1 of thefinancial statements. According to the information and explanation given by the Companythere are some undisputed amounts payable in respect of Employee’s state insuranceEmployee’s provident fund Tax deducted at source Sales Tax Service Tax of Rs.117.82 lacs Rs. 237.30 lacs Rs. 47.40 lacs Rs. 153.68 lacs and Rs. 3.26 lacsrespectively which were outstanding as at March 31 2016 for a period of more than sixmonths from the date they became payable.

b) According to information and explanation given to us and the records of the Companyexamined by us there are no dues of service tax sales tax duty of custom duty ofexcise value added tax cess and any other statutory dues which have not been depositedon account of any dispute. The particular of dues of income tax as at March 31 2016 whichhas not been deposited on account of any dispute are as follow-

Name of the statute Nature of dues Amount Rs. in lacs Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income tax including interest as applicable 196.23 Assessment Year 2010-11 Income-tax Appellate Tribunal

(viii) According to information and explanations given to us and based on ourexamination of the records of the Company we are of the opinion that the Company haddefaulted in repayment of dues to financial institution and banks particulars of whichare as follow:

Amount of defaults(Rs. In lacs)
Name of Bank Nature More than 365 days Less than 365 days
Allahabad Bank Interest 327942207 266715631
Andhra Bank Interest 60530669 36492186
Bank of Baroda Interest 255137462 168363488
Bank of India Interest 215071921 154930216
Bank of Maharastra Interest 57658387 68783540
Central Bank of India Interest 404528679 264897336
Exim Bank Interest 119593520 76105363
ICICI Bank Interest 537002154 219044790
Karnataka Bank Interest 60087266 15276407
Karur Vysa Bank Interest 46323316 41444085
Oriental Bank of Commerce Interest 215827956 133385699
Punjab National Bank Interest 781457927 730774952
State Bank of India Interest 278657850 173961927
Syndicate Bank Interest 190045971 119013299
Union Bank Of India Interest 191320507 114320506
UCO Bank Interest 164134171 109218974

We further report that during the financial year covered by our audit most of the bankshave classified the accounts of the Company either Sub-Standard or NPA the balances as onMarch 31 2016 is as per books of account due to non-availability of statements frombanks. The Company had not issued any debenture during the year and hence there is nodefault as such to be reported.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instrument) and term loan during the year. Accordingly theprovision of clause (ix) of paragraph 3 of the Order is not applicable to the Company.

(x) To the best of our knowledge and according to the information and explanationsgiven to us and considering the size and nature of the Company’s operations nofraud of material significance by the Company or on the Company by its officers oremployee has been noticed or reported during the course of our audit.

(xi) According to information and explanations given to us and based on our examinationof the records of the Company the Company has paid/ provided for managerial remunerationin accordance with the requisite approvals mandated by the provision of section 197 readwith Schedule V of the Companies Act 2013.

(xii) In our opinion and according to information and explanations given to us theCompany is not a nidhi company. Accordingly the provision of clause (xii) of paragraph 3of the Order is not applicable to the Company.

(xiii) According to information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with sections 177 and 188 of the Companies Act 2013 where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

(iv) According to information and explanations given to us and based on our examinationof the records of the Company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debenture during the year.

(xv) According to information and explanations given to us and based on our examinationof the records of the Company the Company has not entered into non cash transactions withdirectors or persons connected with him. Accordingly the provision of clause (xv) ofparagraph 3 of the Order is not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of Reserve Bankof India Act 1934.

For RAVINDRA SHARMA & ASSOCIATES
Chartered Accountants
(CA Ravindra Sharma)
Date : May 30 2016 Partner
Place : Noida Membership No.: 085271

ANNEXURE- B TO THE INDEPENDENT AUDITORS’ REPORT

Report on the Internal Financial Controls under clause (i) of sub-section 3 of section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Hanung Toysas of March 31 2016 in conjunction with our audit of the financial statements of theCompany 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’). Theseresponsibility 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 safeguardingof its 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.

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 Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standard andGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether over financial reporting was adequateinternal established and maintained and if such controls operated financialeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about adequacy of theinternal financial controls systems 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 and 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company’s internal financial control over financial reporting is processdesigned to provide reasonable assurance regarding the reliability of financial reportingand preparation of financial statements for accepted accounting principles. ACompany’s internal financial control over financial reporting includes those policiesand 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 their receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company;

3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea 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 to be detected.Also projections of any evaluation of 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 change in conditions or thatthe degree of compliance with policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financialcontrolsover financial reporting were operating effectively as at March 31 2016 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 RAVINDRA SHARMA & ASSOCIATES
Chartered Accountants
(CA Ravindra Sharma)
Date : May 30 2016 Partner
Place : Noida Membership No.: 085271