The Members of HEM HOLDINGS AND TRADING LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of HEM HOLDINGS AND TRADINGLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2017and the Statement of Profit and Loss and Cash Flow Statement for the year then ended anda summary of significant accounting policies and other explanatory information.
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 Act2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014("the Rules"). This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding 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 design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on whether the Company hasin place an adequate internal financial controls system over financial reporting and theoperating effectiveness of such controls. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(a) In the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2017;
(b) In the case of the Statement of Profit and Loss of the profit for the year endedon that date; and
(c) In the case of the Cash Flow Statement of the cash flows for the year ended onthat date. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2015 issued by the CentralGovernment of India in terms of Sub-section (11) of section 143 of the Companies Act 2013we give in the
Annexure a statement on the matters specified in paragraphs 3 and 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 appears from our examination of those books.
c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.
d. In our opinion the Balance Sheet Profit & Loss Account and Cash Flow Statementcomply with the Accounting Standards referred to in Section 133 of the Act read with Rule7 of the Companies (Accounts) Rules 2014.
e. On the basis of written representations received from all the directors as on March31 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of section164(2) of the Companies Act 2013.
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. In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014
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; thequestion of commenting on any material foreseeable losses thereon does not arise
iii There has not been an occasion in case of the Company during the year under reportto transfer any sums to the Investor Education and Protection Fund. The question of delayin transferring such sums does not arise
Iv. The company did not have any holdings or dealings in specified bank notes duringthe period from 8m November 2016 to 31 December. 2016.
ANNEXURE A TO THE AUDITORS REPORT
The annexure referred to in Independent Auditors' report to the members of the Companyon the Standalone financial statements for the year ended 31st March 2017 we reportthat:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The Company has a program for the physical verification of fixed assets at periodicintervals. In our opinion the period of verification is reasonable having regard to thesize of the company and nature of its assets. No significant discrepancies were noticed onsuch verification.
c) We have inspected the original deeds of the immovable properties of the company heldas fixed assets which are in the custody of the Company. Based on our audit procedures andthe information and explanation received by us we report that all title deeds ofimmovable properties of the company held as fixed assets are held in the name of theCompany. However we express no opinion on the validity of the title of the Company tothese properties.
ii) The paragraphs relating to inventory are not applicable since the Company is notmaintaining any inventories.
iii) The Company has not granted any loans or advances in the nature of Loans toparties covered in the register maintained under section 189 of the Companies Act 2013.Hence the question of reporting whether the terms and conditions of such loans areprejudicial to the interest of the Company whether reasonable steps for recovery ofoverdue of such loans are taken does not arise.
iv) The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under Section 189 of the Companies Act2013 and therefore no comments thereon.
v) The Company has not accepted any deposits from public.
vi) According to the information and explanations provided by the management theCompany is not engaged in production of any such goods or provision of any such servicesfor which Central Govt has prescribed particulars relating to utilization of material orlabour or other items of cost. Hence the provisions of section 148(1) of the Act do notapply to the Company. Hence in our opinion no comment on maintenance of cost recordsunder section 148(1) of the Act is required.
vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccounts in respect of undisputed statutory dues including income tax sales tax wealthtax service tax custom duty excise duty cess Provident Fund and other materialstatutory dues applicable to it have been regularly deposited during the year by theCompany with the appropriate authorities. As informed to us the Employees State InsuranceAct Investor Education & Protection Fund Act are not applicable to the Company andhence they do not have any dues on these account.
b) As informed to us Provident fund State Insurance Sales Tax (VAT) Service TaxCustom Duty
Excise Duty and cess are not applicable to the Company.
viii) According to the records of the Company the Company has not borrowed fromfinancial institutions or banks or government issued debentures till 31st March 2017.Hence in our opinion the question of reporting on defaults in repayment of loans orborrowing to a financial institutions bank government or dues to debenture holders doesnot arise.
ix) The Company did not raise any money by way of initial public offer of furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3(ix) of the order is not applicable.
x) During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India we have neithercome across any instance of fraud on or by the Company noticed and reported during theyear nor have we been informed of such case by the Management.
xi) According to the records of the Company the Company has not paid or provided forManagerial remuneration for the financial year ended 31st March 2017. Accordinglyparagraph 3(xi) of the order is not applicable.
xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
xiii) According to the information and explanations given to us and based on outexamination of the records of the Company transactions with the related party are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected to him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934
ANNEXURE B TO THE AUDITORS REPORT
[Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" of our Report of even date to the members of HEM HOLDINGS AND TRADINGLIMITED on the accounts of the company for the year ended 31 ** March 2017]
We have audited the internal financial controls over financial reporting of HEMHOLDINGS AND TRADING LIMITED ("the Company") as of March 31 2017 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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 India9.] 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 company's policies the safeguarding of its assets theprevention 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") 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 and 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 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 selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement 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 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.
A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the Company's annual financial statements will not beprevented or detected on a timely basis.
In our opinion except for the effects/possible effects of the material weaknessdescribed above on the achievements of the objectives of the control criteria the Companyhas maintained in all material respects an adequate internal financial controls systemover financial reporting and such internal financial controls over financial reportingwere operating effectively as at March 31 2017 based on the internal control overfinancial 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 Institute of Chartered Accountants ofIndia.
We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2017financial statements of the Company and the material weakness does not affect our opinionon the financial statements of the Company.
| ||FOR AGRAWAL SHUKLA & CO. |
| ||CHARTERED ACCOUNTANTS |
| ||(PANKAJ JAIN) |
| ||PARTNER |
| ||M.N0.40791 |
| ||Firm Rag. No.326151E |
|PLACE: RAIPUR || |
|DATED: 27/06/2017 || |