TO THE MEMBERS OF HEMANG RESOURCES LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of HEMANG RESOURCES LIMITED ("theCompany") which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the 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 Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting 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. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement 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 there under.
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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the 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 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 2019 and its profit/loss and its cash flows for the year 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 the powers conferred by subsection(11) of section 143 of the Companies Act2013 we give in the Annexure-A a statement onthe matters specified in paragraph 3 and 4 of the Order.
(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 ofthose 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 accounts.
(d) 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.
(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164 (2) of the Act.
(f) With respect to adequacy of the Internal Financials control over FinancialReporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure-B
(g) With respect to other matters to be included in the Auditors report in accordancewith rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingforward derivative contracts
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For Sathish Kumar & Associates
Name: Sathish Kumar M
M No: 240966
ANNEXURE "A" TO THE AUDITORS' REPORT
The Annexure referred to in our report to the members of HEMANG RESOURCES LIMITED(the Company') on the financial statements for the year ended 31st March2019. We report that:
(i) (a) The Company has maintained Proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of 3 years. In accordancewith this programme certain fixed assets have been verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable.
(c) According to the information and explanations given to us and on the basis of theexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) The inventory has been physically verified during the year by the management andno material discrepancies were noticed on such verification.
(iii) The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnership or other parties covered in the register maintained underSection 189 of the Companies Act 2013.
(iv) According to the information and explanations given to us the Company has nottaken nor given any loan to its directors hence the provisions of Sec 185 and 186 of theAct with respect to the Loans and Investments made is not applicable.
(v) The Company has not accepted any deposits from the public.
(vi) The Central Government has not prescribed the maintenance of cost records underSection 148(1) of the Companies Act 2013 for any of the products of the Company.
(vii) (a) According to the information and explanation given to us and on the basis ofour examination of the records of the Company amount deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Income taxSales Tax Wealth Tax Service Tax Customs Duty and Excise Duty Value added tax cessand any other material statutory dues have been regularly deposited during the year by theCompany with the appropriate authorities. According to the information and explanationsgiven to us no undisputed amounts payable in respect of Provident Fund Income tax SalesTax Wealth Tax Service Tax Customs Duty and Excise Duty Value added tax cess andother material statutory dues were in arrears as at 31st March 2019 for aperiod of more than six months from the date they became payable.
(b) According to the information and explanations given to us the following statutorydues which have not been deposited on account of dispute.
There are no statutory dues/litigation pending against the company other than thefollowing amounts involved as dues of Income Tax Commercial Tax and other materialstatutory dues and against which no material amount is deposited on account of pendency ofdispute. The details are as below: -
|Statute ||Forum where Dispute is Pending ||Amount Involved ||Financial year to which the amount relates |
|Income Tax Act ||CIT (Appeals) ||110000/- ||1995-96 |
|Commercial Tax (Surat) ||Deputy Commissioner ||3667832/- ||2006-07 |
|Sales Tax (Maharashtra) ||Deputy Commissioner ||28340/- ||2007-08 |
|Sales Tax (Surat) ||Deputy Commissioner ||103342468/- ||2012-13 |
|Custom Duty ||Commissioner (Appeals) ||27754116/- ||2012-13 |
|Maharashtra Vat ||Deputy Commissioner ||5271446/- ||2010-11 |
|Custom Duty ||CESTAT (Appeals). ||8191647/- ||2013-14 |
|Customs Duty ||CESTAT (Appeals-Bangalore). ||6361616/- ||2014-15 |
|Sales Tax (Surat) ||DCCT ||114482001/- ||2013-14 |
|Sales Tax (Chennai) ||Assistant Commissioner ||23185/- ||2010-11 |
|Sales Tax (Chandrapur) ||Deputy Commissioner ||148674/- ||2013-14 |
|Sales Tax (Surat) ||Deputy Commissioner ||196560/- ||2012-13 |
|Customs (Ahmedabad) ||CESTAT (Appeals) ||5278214/- ||2012-13 |
1. Repayment of Due to Financial Institutions and Banks:
We confirm that the company has not delayed in repayment of dues to FinancialInstitutions Banks or debenture holders except LC not honored to the tune of R 17.45Crore from Bank ofIndia and R 18.44 Crore from Central Bank ofIndia.
The Bank account of the company Central Bank of India has become NPA on 06/05/2018 andBank of India on 31/03/2018.
(viii) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and any term loans from banks. Accordinglyparagraph 3(ix) of the order is not applicable.
(ix) According to the information and explanations given to us no material fraud bythe Company or on by its officers or employees has not been noticed or reported during theyear.
(x) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has provided for managerialremuneration. His remuneration has been approved by shareholders under the provisions ofSection 197 read with Schedule V to the Companies Act is not applicable.
(xi) 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.
(xii) According to the information and explanations given to us and based on ourexamination of the records of the Company the transactions with the related parties arein compliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails of such transactions have been disclosed in the Financial Statements as requiredby the applicable accounting standards.
(xiii) 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.
(xiv) 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 any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe order not applicable.
(xv) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For Sathish Kumar & Associates
Name: Sathish Kumar M
M. No: 240966
ANNEXURE "B" TO THE 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 HemangResources Limited ("the Company") as of 31 March 2019 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
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.
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 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 2019based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
|Place: Chennai ||For Sathish Kumar & Associates ||Sd/- |
|Date: 13/05/2019 ||Chartered Accountants ||Name: Sathish Kumar M |
| ||FRN: 017448S ||Proprietor |
| || ||M. No:240966 |