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Heera Ispat Ltd.

BSE: 526967 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE025D01013
BSE 00:00 | 12 Apr 0.96 0
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NSE 05:30 | 01 Jan Heera Ispat Ltd
OPEN 0.96
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VOLUME 2898
52-Week high 3.13
52-Week low 0.96
P/E 0.71
Mkt Cap.(Rs cr) 1
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 0.96
CLOSE 0.96
VOLUME 2898
52-Week high 3.13
52-Week low 0.96
P/E 0.71
Mkt Cap.(Rs cr) 1
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Heera Ispat Ltd. (HEERAISPAT) - Auditors Report

Company auditors report

To the members of Heera Ispat Limited

Report on the Audit of the Financial Statements

We have audited the financial statements of Heera Ispat Limited ("theCompany") vide certificate of incorporation no: L27101GJ1992PLC018101 which comprisethe balance sheet as at 31st March 2020 and the statement of profit and loss statementof changes in equity and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information [herein to referred as "the financial statements"]

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 India of thestate of affairs of the Company as at March 31 2020 and its profit/loss changes inequity 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 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.

Basis for Qualified Opinion

a. As discussed in Note 21 the Company has Rs. Nil (Previous year Rs. Nil) revenuefrom operations. The company has been unable to conclude negotiation or obtain businessorders. In view of the management's expectation of the successful business agreement innear future the financial statements have been prepared on a going concern basis. Thissituation indicates that a material uncertainty exists that may cast significant doubt onthe Company's ability to continue as a going concern. The financial statements do notadequately disclose this matter.

b. As discussed in Note 22 the company has recognized impairment loss ofRs. 72.21 lakhs comprising of Rs. 31.08 lakhs for investment in preference shares and Rs.41.13 lakhs for loans and advances. The assessment involves significant managementjudgment and estimates on the valuation methodology. In view of aforesaid we are unableto obtain sufficient appropriate audit evidence regarding basis of management estimation.

Key Audit Matters

Key audit matters are those matters that in our professional judgment 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. Wehave determined the matters described below to be key audit matters to be communicated inour report.

Description of key audit Matter Auditors' Response
Impairment of Loans and Advances:
The Company has advanced loan to Heavy Metal & Tubes Ltd. The party has undergone into liquidation and filed petition with NCLT. Given the process is ongoing the Management applies significant judgement when considering whether and how much to provide for the potential exposure of such loan amount. We discussed the status of significant known actual and potential litigation with management and directors who have knowledge of this matter. We challenged the decision and rationale for decisions not to record provisions.
We focused on this area given the number complexity and magnitude of potential exposures across the Company the judgement necessary to determine whether and what amounts to provide for and/or to disclose. The ongoing process of liquidation of related party is pending at NCLT and the company has recognized impairment loss of Rs. 72.21 lakhs. The assessment involves significant management judgment and estimates on the valuation methodology. In view of aforesaid we are unable to obtain sufficient appropriate audit evidence regarding basis of management estimation.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

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 financial statements that give a true and fair view of the financial positionfinancial performance (changes in equity) and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the financial statements the Board of Directors 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 unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic 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 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness 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.

• Obtain sufficient appropriate audit evidence regarding the financial informationof the entities or business activities within the Group to express an opinion on thefinancial statements. We are responsible for the direction supervision and performance ofthe audit of the financial statements of such entities included in the financialstatements.

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 materially 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 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 our independence and whereapplicable 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.

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 the "Annexure B" statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.

(c) The reports on the accounts of the branch offices of the Company audited underSection 143(8) of the Act by branch auditors have been sent to us and have been properlydealt with by us in preparing this report.

(d) The Balance Sheet the Statement of Profit and Loss (the Statement of Changes inEquity) and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account and with the returns received from the branches not visited by us.

(e) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(f) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164(2) of the Act.

(g) 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".

(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 forwhich there were any material foreseeable losses.

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

For Naresh J. Patel & Co. Chartered Accountants
(FRN: 123227W)
Place: Ahmedabad Chintan N. Patel
Date: 30th June 2020 (Partner)
UIDN: 20110741AAAAAN8771 Membership No: 110741

ANNEXURE A TO THE AUDITOR'S REPORT

Referred to in Paragraph 1 under 'Report on other Legal & Regulatory Requirements'section of our report to the members of HEERA ISPAT LIMITED of even date

1. The company has no fixed assets thus the clause 3(I) (a) (b) and (c) are notapplicable to the company.

2. As explained to us the company has not been engaged during the year in any activitywhich involves inventory hence verification of stock and other related matters are notapplicable.

3. According to the information and explanation given to us and on the basis of ourexamination of books of account the company has not granted any loans secured orunsecured to the parties covered in the register maintained U/s 189 of the companies act2013. Accordingly clause (III)

(a) (b) and (c) of the order are not applicable.

4. According to the information and explanation given to us the Company has notgranted any loans or made any investments or provided any guarantees or security to theparties covered under Section 185 and 186 of the Act. Accordingly the provisions of Clause3(iv) of the order are not applicable to the company.

5. According to the information and explanation given to us and on the basis of ourexamination of books of account the company has not accepted deposits hence thedirectives issued by the Reserve Bank of India and the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act 2013 and the rules framed there underare not applicable.

6. The central government has not prescribed the maintenance of cost records undersection 148(1) of the Act in respect of any of the company's products and hence clause VIof CARO 2016 is not applicable.

7. (a) According to the records of the company undisputed statutory dues includingprovident fund income tax service tax value added tax cess excise duty and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company did not have any dues onaccount of employees' state insurance & custom duty. According to the information andexplanations given to us no undisputed amounts payable in respect of the aforesaid dueswere outstanding as at 31 March 2020 for a period of more than six months from the datethey became payable.

(b) According to the information and explanations given to us there are no materialdues of income tax or sales tax or service tax or duty of customs or duty of excise orvalue added tax which have not been deposited with the appropriate authorities on accountof any dispute.

8. The company has neither taken any loans or borrowing from a financial institutionbank Government nor has issued debentures.

9. The company has not raised any moneys by way of initial public offer further publicoffer (including debt instruments) and term loans. Accordingly the provision of Clause3(ix) of the order are not applicable to the company.

10. 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 explanation given to us we have neither come across anyinstances of material fraud by the company by its officers or employees noticed orreported during the year nor we have been informed of any such case by the management.

11. According to the information provided managerial remuneration has been paid inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

12. The company is not declared as Nidhi Company moreover the company does not functionon the lines of Nidhi company hence the said clause of the Order is not applicable.

13. As per the information and explanation provided the company has not entered intoany transactions with the related parties that require approval under section 177 and 188of Companies Act 2013 and the rules thereunder. Hence clause (xiii) of the order is notapplicable.

14. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and hence theclause XIV is not applicable.

15. The company has not entered into any non-cash transactions with directors orpersons connected with him and hence the provisions of section 192 of Companies Act 2013are not applicable.

16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Hence this clause is not applicable.

For Naresh J. Patel & Co.
Chartered Accountants
(FRN: 123227W)
Place: Ahmedabad Chintan N. Patel
Date: 30th June 2020 (Partner)
UIDN: 20110741AAAAAN8771 Membership No: 110741

Annexure B to the Independent Auditors' Report of even date on financial statements ofHeera Ispat Limited- 31 March 2020.

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 Heera IspatLimited ("the Company") as of 31 March 2020 in conjunction with our audit of thefinancial 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 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.

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") and the Standards on Auditing issued by ICAI and deemedto be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both 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 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 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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting:

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that:

(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the Company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting:

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion:

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 31 March 2020 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 Naresh J. Patel & Co.
Chartered Accountants
(FRN: 123227W)
Place: Ahmedabad Chintan N. Patel
Date: 30th June 2020 (Partner)
UIDN: 20110741AAAAAN8771 Membership No: 110741

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