To the Members of
HITTCO TOOLS LIMITED
We have audited the Standalone Ind AS Financial Statements of HITTCO TOOLS LIMITED("the Company") which comprise the Balance Sheet as at 31st March2021 the Statement of Profit and Loss (including other comprehensive income) statementof changes in equity and the statement of cash flows for the year then ended and asummary of significant accounting policies and other explanatory information (hereinafterreferred as standalone financial statements)
In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the Basis forQualified Opinion section of our audit report the aforesaid financial statements give theinformation required by the Companies Act 2013 in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("lnd AS") accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2021 and its loss (Includingother comprehensive Income)changes in equity and its cash flows for the year ended onthat date.
Basis for Qualified Opinion:
Members' attention is invited to
1. Note (4) - The finished goods and work-in progress have been valued at estimatedcost. The estimated Cost has been arrived by deducting certain percentage towards marginfrom the estimated selling price. We are unable to obtain sufficient and appropriate auditevidence about approximation of the estimated cost to the Actual cost as required by theInd AS - 2 "Inventories" from the records maintained by the company.Consequently we are unable to determine the impact of the same on the financialstatements for the year end 31 st March 2021.
2. Balance confirmations have not been received from Trade receivables Other Financialassets and Other Financial liabilities against balance outstanding as on 31stMarch 2021. In the absence of such confirmations we are unable to comment on the impactarising out of reconciliation/ adjustments if any on the financial statements for theyear end 31st March 2021.
3. Confirmation for balances of fixed deposits have not been provided for ourverification. In the absence of such confirmations we are unable to comment on the impactarising out of reconciliation/ adjustments if any on the financial statements for theyear end 31st March 2021.
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 theStandalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the standalone financial statements under the provisions of the CompaniesAct 2013 and the rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and ICAI's Code of ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.
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.
|S.N. ||Key Audit Matter ||Auditor's Response |
|1 ||Issue of going concern and dependency on automobile sector ||Our audit procedures related to and include the following: |
| ||The Company's revenue is significantly dependent on the automobile sector. ||We enquired about the Management's future plans and its ability to mitigate the present situation on near term basis. |
| ||The sector is witnessing down turn along with the present situation of COVID19 pandemic it has resulted in sinkage of revenue during the financial year 2020-21. ||Although the Company's revenue has been dependent on automobile sector; the Management is confidant of its efforts to mitigate the present situation as the Company has an established track record of accessing diverse customer base across markets in India and abroad. |
| ||The uncertainty of the present situation in the normal course of business may cast significant doubt on the Company's ability to continue as a going concern in near term. ||We have additionally sought and studied the company's future business projections submitted by the management to external credit institutions. However there can be no assurance of the success of management's plans. |
Emphasis of Matter- Corona developments
The developments surrounding the Corona (Covid-19) virus have a profound impact onpeople's health and on our society as a whole as well as on the operational and financialperformance of organizations. The situation changes on a daily basis giving rise toinherent uncertainty. The Company is confronted with this uncertainty as well which hasbeen disclosed in the Note 29. (1).(a). (4) to the Ind AS financial results together withits evaluation thereof. We draw attention to these disclosures. Our opinion is notmodified in respect of this matter.
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 the act with respect to the preparation of these standalone IND AS financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the IND AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing 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 standalonefinancial statements that give a true and fair view and are free from materialmisstatement 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 Responsibility for the Audit of the Standalone 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 assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with the SAs will always detect material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in aggregate they could reasonably be expected to influence the economicdecisions of the user taken on the basis of the these standalone IND AS financialstatements.
As part of an audit in accordance with the SAs we exercise professional judgement andmaintain Professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial 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 audit 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 controls 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 financial controls system in place and the operating effectiveness ofsuch controls
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures by the 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained upto the date ofauditor's report. However future events or conditions may cause the company to cease tocontinue as going concern .
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
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 financial statements may be influenced. We considerquantitative materiality 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 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 financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 subsection (11) of Section 143 ofthe Act we give in the Annexure A a statement on the matters specified inparagraphs 3 and 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 forQualified opinion" paragraph above obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;
ii) Except for the possible effects of the matters described in the "Basis forQualified opinion" paragraph above in our opinion proper books of accounts asrequired by law have been kept by the Company so far as appears from our examination ofthose books;
iii) The balance sheet the statement of profit and loss including Other Comprehensiveincome statement of changes in equity and the statement of cash flows dealt with by thisreport are in agreement with the books of account;
iv) Except for the possible effects of the matters described in the "Basisfor Qualified opinion" paragraph the aforesaid standalone financial statementscomply with the Indian Accounting Standards specified under Section 133 of the CompaniesAct 2013.
v) The matters described in the "Basis for Qualified opinion" paragraphabove in our opinion may not have an adverse effect on the functioning of the company.
vi) On the basis of written representations received from the directors of the companyas on 31st March 2021 none of the directors is disqualified to be appointed asdirector 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 a 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 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:
a. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements under note 29.2. (i).
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.
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 records of fixed assets showing value location andnature of assets. However description and quantitative details of fixed assets have beenmaintained.
(b) The Company has not conducted physical verification of fixed assets during thefinancial year. All the title deeds of immovable properties are held in the name of theCompany.
ii. (a) According to the information and explanations given to us the company hadconducted physical verification of inventory on reasonable interval. However the nationwide lock down due to the COVID19 pandemic the company could not conduct physicalverification of inventory on the reporting date. Accordingly The quantity rate per unitlocation condition the carrying value of Inventory has been considered as certificatedby the Management on the reporting date.
(b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) The Company is maintaining proper records of inventory and no materialdiscrepancies 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 financialyear.
iv. In our opinion and according to the information and explanation provided to us theprovisions of section 185 and 186 of The Companies Act 2013 in respect of grant of loansmaking investments and providing guarantees and securities as applicable have beencomplied subject to certain transactions which require special resolution at generalmeeting to bring into conformity with the rules of these sections on the reporting date.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public during the year and therefore theprovisions of the clause 3(V) of the order is not applicable to the company.
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. Hencereporting under clause 3(vi) of the order is not applicable to the company.
vii. According to the information and explanations given to us :
(a) The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income-tax goods andservice tax customs duty cess and other material statutory dues applicable to it.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax goods andservice tax customs duty cess and other material statutory dues were outstanding at theyear end for a period of more than six months from the date they became payable.
(c) According to the records of the Company there are no dues outstanding ofincome-tax goods and service tax customs duty and cess on account of any dispute.
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 2020-21.
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 ourexamination of the records of the company the company has paid/provided managerialremuneration in accordance with requisite approval mandated by the provisions of section197 read with schedule 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 to the company.
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 Companies Act2013 wherever applicable for all transactions with the related parties and the details ofsuch related party transactions have been disclosed in the financial statements asrequired by the applicable Indian Accounting Standards.
xiv. The Company has not made any preferential allotment/ private placement of sharesor fully or partly convertible debentures during the financial year. Therefore theprovisions of clause 3(xiv) of the order is 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 to itsdirectors and hence provisions of section 192 of the Companies Act 2013 are notapplicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 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 2021 inconjunction with our audit of the Standalone financial statements of the company for theyear 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 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 authorisations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
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 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 31st March 2021 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 BOTHRA NIRMAL ASSOCIATES |
| ||Chartered Accountant |
| ||F.R.N 322103E |
|7/1B GRANT LANE ||Sd/- |
|SHYAM KUNJ ||Nirmal Kumar Bothra |
|1st FLOOR R.N. 15 ||Partner |
|KOLKATA-700012 ||Membership No. 052248 |
|Date: 30/06/2021 ||UDIN:21052248AAAAF17179 |