To the Members of M/s Hittco Tools Limited
Report on the Financial Statements
We have audited the accompanying Standalone Financial Statements of M/s HITTCO TOOLSLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2017the Statement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the standalone Financial Statements
The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these Standalone Financial Statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 (as amended). This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act; for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and the design implementation and maintenanceof adequate internal financial control that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.
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 issued by the Institute of CharteredAccountants of India as specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the standalone financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thestandalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the standalone financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our qualified auditopinion on the standalone Financial Statements.
Basis for Qualified Opinion
1. The Finished goods are valued at estimated cost. The estimated cost is arrived bydeducting adhoc percentage towards margin from the selling price. We are unable to obtainsufficient appropriate audit evidence about approximation to the actual cost as requiredby the Accounting Standard-2Valuation of inventory from the records maintainedby the company. Consequently we were unable to determine the impact of deviation on thefinancial statements for the year ended 31st March 2017.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matters described in the Basis forQualified Opinion paragraph the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and gives a true and fair viewin conformity with the accounting principles generally accepted in India
1. In the case of the Balance Sheet of the state of affairs of the company as at 31stMarch 2017; 2. In the case of the statement of profit or loss of the loss for the yearended on that date; 3. In the case of the cash flow statement of the cash flows for theyear ended on that date
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 subsection (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.
2. As required by Section 143 (3) of the Act we report that:
i) We have sought and except for the matters described in the Basis for Qualifiedopinion paragraph above obtained all the information and explanations which to thebest of our knowledge and belief were necessary for the purpose of our audit;
ii) Except for the possible effects of the matter described in the Basis forQualified opinion paragraph above in our opinion proper books of account asrequired by law have been kept by the Company so far as appears from our examination ofthose books;
iii) The balance sheet statement of profit and loss and cash flow statement dealt withby this report are in agreement with the books of account;
iv) Except for the possible effects of the matter described in the Basis forQualified opinion paragraph in our opinion the aforesaid the balance sheetstatement of profit and loss and cash flow statement comply with the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014;
v) The matter described in the Basis for qualified opinion paragraph abovein our opinion will not have any adverse effect on the functioning of the company. vi) Onthe basis of written representations received from the directors as on March 31 2017 andtaken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2017 from being appointed as a director in terms of Section 164(2) of the Act;vii) The qualifications relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for qualified opinion paragraphabove. viii)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 Annexure B'. our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the company's financial controls over financial reporting ix)With respect to the other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information and according to the explanations given to us: a. theCompany does not have any pending litigations which would impact its financial position
b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses
c. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company
For Mishra & Co.
CA Nilamadhab Mishra
Annexure A referred to in paragraph 1 under the heading " Report on Other Legaland Regulatory Requirements " of our report of even date
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. (b) All fixed assets have beenphysically verified by the management at reasonable intervals. No material discrepancieswere noticed on such verification. All the title deeds of immovable properties are held inthe name of the Company.
ii. (a) The management has conducted physical verification of inventory at reasonableintervals during the year. (b) The procedures of physical verification of inventoryfollowed by the management are reasonable and adequate in relation to the size of theCompany and the nature of its business. (c) The Company is maintaining proper records ofinventory and no material discrepancies were noticed on physical verification.
iii. (a) The Company has not granted secured/unsecured loan to parties covered in theregister maintained under section 189 of the Companies Act 2013 during the financial year2016-17.
iv. In respect of loans investments guarantees and securities as per the informationand explanation provided to us the provisions of section 185 and 186 of The CompaniesAct 2013 have been complied with.
v. According to the information and explanations given to us the Company has notaccepted any deposits from the public during the year.
vi. The Central Government has not prescribed maintenance of cost of records by theCompany under section 148(1) of the Companies Act 2013 for any of the products. Hence nocomment on the maintenance of cost records is required.
vii. (a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax salestax excise duty wealth tax service tax customs duty cess and other material statutorydues applicable to it. (b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome tax wealth tax service tax sales tax customs duty excise duty value addedtax cess and other material statutory dues were outstanding at the year end for aperiod of more than six months from the date they became payable. (c) According to therecords of the Company there are no dues outstanding of income tax sales tax wealthtax service tax customs duty excise duty value added tax and cess on account of anydispute.
viii. Based on our audit procedures and as per the information and explanations givenby the management we are of the opinion that the Company has not defaulted in repaymentof dues to a financial institution bank or debenture holders. The Company has notborrowed any funds from the government.
ix. Based on information and explanations given to us by the management term loanswere applied for the purpose for which the loans were obtained. There was no money raisedby way of initial public offer or further public offer (including debt instruments) duringthe financial year 2016-17.
x. Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given bythe management we report that no fraud by the Company and no material fraud on theCompany by its officers or employees has been noticed or reported during the year. xi.According to the information and explanation provided to us and based on our examinationof the records of the company the company has paid/provided managerial remuneration inaccordance with requisite approval mandated by the provisions of section 197 read withschedule V of the Act
xii. In our opinion and according to explanation provide to us the Company is not aNidhi Company. Accordingly paragraph 3(xii) of the order is not applicable.
xiii. According to the information and explanation provided to us for all transactionswith the related parties and the details of related parties and the details of relatedparty transactions are in compliance with sections 177 & 188 of the Act whereverapplicable and details of such transaction have been disclosed in the financial statementsas required by the applicable Accounting Standard.
xiv. The Company has not made any preferential allotment/ private placement of sharesor fully or partly convertible debentures during the financial year 2016-17. Thereforethe provisions of clause 3(xiv) of the order are not applicable.
xv. According to the information and explanation provided to us the company has notentered into any non-cash transaction with its Directors or persons connected with him andhence provisions of section 192 of the Act are not applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For Mishra & Co.
CA Nilamadhab Mishra
ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT
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 HittcoTools Limited (the Company) as on 31st March 2017 in conjunction with ouraudit of the financial statements 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 control over financial reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to the Company's policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
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 Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the 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 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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.
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 2017based 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 Mishra & Co.
CA Nilamadhab Mishra