To the Members of Mewar Hi-Tech Engineering Limited Udaipur
Report on the Financial Statements
We have audited the accompanying financial statements of Mewar Hi-Tech EngineeringLimited Reg. Off :-- 1- Hawa Magri Industrial Area Sukher Udaipur ("theCompany") which comprise the Balance Sheet as at 31st March 2019 the Statement ofProfit & Loss (including other comprehensive income) and the Cash Flow Statement forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.
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 March31 2019 and profit/loss and its cash flows for the year ended on that date. [Subjectto comments in Note-1 & 2 of Accounting Policy & Note on Account]
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 Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the consolidated financial statements of the current period.These matters were addressed in the context of our audit of the consolidated financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
The following has been considered as Key Audit Matters:-
The company has borrowed loan from Dewan Housing Financial Corporation Ltd.against hypothecation of house of Director Shri C.S. Rathore and Smt Reena Rathore and thesame has been considered under the head unsecured in the Balance Sheet. In our opinionbeing a borrower said loan should be considered as secured.
On the basis of books of account it is observed that the company has irregularin deposits statutory dues viz GST TDS I.Tax. In our opinion persuasive steps requiredto avoid the interest/ huge penalty and prolonged litigation.
The Commercial Taxes Department ( Now GST) has raised net demand of Rs 8321580vide order passed for F.Y.2016-17 dated 07.01.2019 on account of non submission of C-Forms there is no provision in the books of account. In our opinion considering thequantum of demand either company should take initiative action with regard to submissionof prolonged pending C-Forms or made provision for liability.
Investment of Rs. 559467 in the name of M/s Kingson Africa P. Ltd. broughtforwarded since long year we have not got letter of confirmation during the course ofaudit.
The large amount incurred on account of R & D expenses i.e. Rs. 5278159/-during the year the incurred expenses has to be w/off within 10 years. Considering theperpetual nature of expenses in our opinion certificate from appropriate valuer should betaken to justify incurred expenses.
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 preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flow of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards referredspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes the maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting the frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation band presentation ofthe 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.
That Board of Directors is also responsible for overseeing the company's financialreporting process.
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.
We did not audit/obtained the financial statements/ information of three branches (Aasam Belgaon and Jhansi) as at 31st March 2019 and the total figures incorporated in thebooks of account for the year ended on that date the disclosures included in respect ofbranches is based solely on the information provided management in the books of account.Our opinion is not modified in respect of these matters.
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 B " a statement on the matters specified inthe paragraph 3 and 4 of the Order to the extent applicable.
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 of those books.
(c) The Balance Sheet and the Statement of Profit and Loss and the cash flow statementdealt with by this Report are in agreement with the books of account.
(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 terms of Section164 (2) of the Act.
(f) With respect to the adequacy of the internal financial control over financialreporting of the company and the operating effectiveness of such control refer to ourseparate
Report in "Annexure A". Our report expresses an opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting.
(g) 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. TheCompany does not have any pending litigation on its financial position in its financialstatement.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which required to be transferred by the Company to theInvestor Education and Protection Fund.
|Place: Udaipur ||For: SAGAR GOLCHHA & CO. |
|Dated: July 3 2019 ||Chartered Accountants |
| ||Firm Regn No.- 007755C |
| ||[CA. Sagar Golchha ] |
| ||M.No.- 076797 |
| ||Proprietor |
The Annexure A referred to in our Independent Auditors' Report to the members of theMewar Hi-Tech Engineering Limited Udaipur on the financial statements for the yearended 31 March 2019 we report that:
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 MewarHi-Tech Engineering Limited ("the Company") as of 31 March 2019 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 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 deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 31 March 2019 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. [Subject to comments in Note-1 & 2 of Accounting Policy &Note On Account]
|Place: Udaipur ||For: SAGAR GOLCHHA & CO. |
|Dated: July 3 2019 ||Chartered Accountants |
| ||Firm Regn No.- 007755C |
| ||[CA. Sagar Golchha ] |