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Him Teknoforge Ltd.

BSE: 505712 Sector: Auto
NSE: N.A. ISIN Code: INE705G01021
BSE 00:00 | 24 Jan 46.75 -2.30
(-4.69%)
OPEN

45.15

HIGH

48.70

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45.10

NSE 05:30 | 01 Jan Him Teknoforge Ltd
OPEN 45.15
PREVIOUS CLOSE 49.05
VOLUME 1502
52-Week high 173.00
52-Week low 38.60
P/E 4.76
Mkt Cap.(Rs cr) 37
Buy Price 46.50
Buy Qty 5.00
Sell Price 48.00
Sell Qty 116.00
OPEN 45.15
CLOSE 49.05
VOLUME 1502
52-Week high 173.00
52-Week low 38.60
P/E 4.76
Mkt Cap.(Rs cr) 37
Buy Price 46.50
Buy Qty 5.00
Sell Price 48.00
Sell Qty 116.00

Him Teknoforge Ltd. (HIMTEKNOFORG) - Auditors Report

Company auditors report

To

The Members of

HIM TEKNOFORGE LIMITED

(Formerly known as Gujarat Automotive Gears Limited)

Report on the audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Ind AS financial statements of HIMTEKNOFORGE LIMITED(Formerly known as Gujarat Automotive Gears Limited)("theCompany") which comprise the Balance Sheet as at March 31 2019the Statement ofProfit and Loss (including other comprehensive income) the Cash Flow Statement theStatement of Changes in Equity for the year then ended and a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2019 its profit andtotal comprehensive income changes in equity and its cash flow for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Companies Act2013. Our responsibility under those standards are further described in the Auditor'sResponsibilities for the audit of the standalone financial statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the standalone Ind AS financial statements under theprovisions of the Companies Act 2013 and the Rules made thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Revenue Recognition: Our audit procedures include the following:
The Company has recognised revenue from contracts with the customers amounting to Rs.323.79 crores. Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that as principal it controls the goods or services before transferring them to the customer. Assessed the Company's revenue recognition policy prepared as per the Ind As 115 ‘Revenue from contracts with customers'
Assessed the design and tested the effectiveness of internal controls which are operating with respect to revenue recognition discounts and rebates.
The variety of terms that define when control are transferred to the customer as well as the high value of the transactions give rise to the risk that revenue is not recognized in the correct period. Revenue is measured net of returns and allowances cash discounts trade discounts and volume rebates. There is risk that these discounts and rebates are incorrectly recorded as it requires a certain degree of estimation resulting in understatement of the associated expenses and accruals. The Company focuses on revenue as a Key Performance measure which could create an incentive for revenue to be recognized before the risk and rewards have been transferred. Accordingly due to the significant risk associated with the revenue recognition in accordance with the terms of Ind As 115 ‘Revenue from contracts' it was determined to be a key audit matter in our audit of the Ind AS Financial statements. Performed sample tests of individual sales transaction and traced to sales invoices sales orders and other related documents. Further in respect of sample checked that the revenue has been recognized as per the shipping terms.
To test cut off selected sample of sales transaction made pre and post year end agreeing the period of revenue recognition to third party support such as transporter Invoice and customer confirmation of receipt of goods.
Obtained confirmation from customers on sample basis to support existence assertion of trade receivables and assessed the relevant disclosures made in the financial statements to ensure revenue from contracts with customers are in accordance with the requirements of relevant accounting standards.

Information Other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprise the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to the Board's ReportBusiness Responsibility Report Corporate Governance and Shareholders' information butdoes not include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with standalone Ind AS financial statementsor our knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of 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 total comprehensive income cash flows and changes in equity of theCompany in accordance with Ind AS and other accounting principles generally accepted inIndia.

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 standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is responsible for overseeing the Company's reporting process.

Auditors' Responsibilities for the audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis high level of assurance but is not a guarantee that an audit conducted in accordancewith the SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in aggregatethey could reasonably be expected to influence the economic decision of users taken on thebasis of these standalone Ind AS 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 standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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 standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone 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 ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 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:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose 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 purpose of our audit.

c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of Companies Act 2013 read with Rule 7of the Companies (Accounts) Rules 2014 as amended.

e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164(2) of theCompanies 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'. Our report expresses an unmodified opinion on theadequacy and operating effectiveness of the Company's Internal financial controls overfinancial reporting.

g) In our opinion the managerial remuneration for the year ended March 31 2019 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with schedule-V to the Act.

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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note No.38 to the standalone financialstatements;

ii. The Company did not have any material foreseeable losses on long term contractsincluding derivatives contracts;

iii. There has been no delay in transferring amounts which were required to betransferred to the Investor Education and Protection Fund by the Company.

For PRA Associates
Chartered Accountants
FRN: 2355N
Sd/-
Deepak Gupta
Place: Chandigarh Partner
Date:May 30 2019 Membership No. 89597

‘ANNEXURE A' TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 1 of ‘Report on other Legal and RegulatoryRequirements' in our Report of even date on the accounts of HIM TEKNOFORGE LIMITED(Formerly known as Gujarat Automotive Gears Limited) for the year ended March 312019.

i. (a) The Company is generally maintaining proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the Management in accordance with aphased programme designed to cover all the items over a period of three years which inour opinion is reasonable having regard to the size of the Company and the nature of itsassets. According to the information and explanations given to us pursuant to theprogramme a portion of the fixed assets has been physically verified by the Managementduring the year and no material discrepancies were noticed on such verification.

(c) According to the 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. During the year the inventories have been physically verified by the management.In our opinion the frequency of verification is reasonable . The discrepancies noticed onphysical verification of inventories as compared to the book records were not material andhave been properly dealt with in the books of accounts.

iii. As informed to us the Company has not granted loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Act. Therefore clauses 3(iii) and sub clause (a) to(c) of clause 3(iii) are not applicable to the Company.

iv. The Company has complied with provisions of Section 186 of the Companies Act2013in respect of investments made and guarantees provided for loans taken by others andsection 185 of the Companies Act2013 is not applicable as there were no such loanssecurities or guarantees provided during the year.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the rules framed thereunder to the extentnotified and therefore clause 3(v) is not applicable.

vi. The Central Government has prescribed maintenance of cost records for the companyunder sub section (1) of section 148 of the Companies Act 2013 and such accounts havebeen made and maintained by the company. However no detailed examinations of such recordsand accounts have been carried out by us.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us the Company is generally regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax CustomsDuty Cess Goods and Services Tax and other statutory dues applicable to it with theappropriate authorities. According to information and explanation given to us noundisputed amount were in arrears as on March 31 2019 for a period of more than sixmonths from the date they became payable.

(b) According to the information and explanation given to us and the records of theCompany examined by us there are no dues of Service Tax Cess and Customs Duty which havenot been deposited on account of any dispute.

The disputed amounts that have not been deposited in respect of Value Added Tax IncomeTax Sales Tax Excise Duty are as under:

Sr. Name of the Statute No. Nature of Dispute Amount (Rs. in Lacs) Period to which dispute relates Forum where dispute is pending
1 M. P. VAT Act 2002 and Central Sales Tax Act 1956 Sales tax demand 152.80 29.03.2004 to 31.03.2007 Honorable Supreme Court of India.
2 Central Excise Act 1944 Excise Duty demand 0.76 2010-11 CESTAT
3 Central Excise Act1944 Excise Duty demand 20.85 July 2006 to March 2016 Commissioner (Appeals)

viii. According to the records of the Company examined by us and information andexplanation given to us the Company has not defaulted in repayment of dues to financialinstitutions and banks during the year. The Company has not taken any loan or borrowingfrom government and has not issued debentures during the year.

ix. The Company has not raised any money by way of public issue/ further offer(including debt instruments). Further money raised by term loans has been applied for thepurpose for which it was raised.

x. Based upon the audit procedures performed and information and explanation given bythe management we report that no fraud by the Company and no fraud on the Company by itsofficers or employees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with schedule V to the CompaniesAct 2013.

xii. In our opinion and according to the information and explanations given to us thenature of the activities of the Company does not attract any special statue applicable toa Nidhi Company. Accordingly clause 3(xii) of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sec 177 and 188 of Companies Act 2013 where applicable and details ofsuch transactions have been disclosed in the financial statements as required by theIndian Accounting Standards(Ind AS 24 "Related Party Disclosures") specifiedunder Section 133 of the Act.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Accordingly clause 3(xiv) ofthe Order is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intoany non-cash transactions with directors or persons connected with him. Accordinglyclause 3(xv) of the Order is not applicable to the Company.

xvi. The Company is not required to be registered under Sec 45-IA of the Reserve Bankof India Act 1934. Accordingly clause 3 (xvi) of the Order is not applicable to theCompany.

For PRA Associates
Chartered Accountants
FRN: 2355N
Sd/-
Deepak Gupta
Place: Chandigarh Partner
Date:May 30 2019 Membership No. 89597

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 HIMTEKNOFORGE LIMITED (Formerly known as Gujarat Automotive Gears Limited) ("theCompany") as of March 31 2019 in conjunction with our audit of the Standalone

financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued 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.

Auditor's 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 and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 Standalone financial statements whether due to fraud orerror.

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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial 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.

For PRA Associates
Chartered Accountants
FRN: 2355N
Sd/-
Deepak Gupta
Place: Chandigarh Partner
Date:May 30 2019 Membership No. 89597