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Mewar Hi-Tech Engineering Ltd.

BSE: 540150 Sector: Engineering
NSE: N.A. ISIN Code: INE957U01011
BSE 00:00 | 26 May Mewar Hi-Tech Engineering Ltd
NSE 05:30 | 01 Jan Mewar Hi-Tech Engineering Ltd
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VOLUME 3000
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Mewar Hi-Tech Engineering Ltd. (MEWARHITECH) - Auditors Report

Company auditors report

To the Members of

Mewar Hi-Tech Engineering Limited Udaipur

Report on the Financial Statements

Opinion

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 2021 the Statement ofProfit & Loss (including other comprehensive income) and the Cash Flow Statement forthe year then endedand 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 2021 and profit/loss and its cash flows for the year ended on that date. [Subject tocomments in Note-1 & 2 of Accounting Policy & Note on Account]

Basis for Opinion

Weconducted 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 financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

The following has been considered as Key Audit Matters:-

Key Matters Auditor Observation
Transaction with related party As a part of the business activity the Company deals with entities which are related parties and significant revenue sources /expenses are from/to related parties also.
The Arm's length pricing of the transactions with Related Parties risks of material misstatement associated with related party relationships and transactions may have significant impact on the interest of the Company and true and fair presentation of related party relationships and transactions in the financial statements of the Company.
Loan from Deewan Housing Finance Corp. Ltd Company has borrowed loan from Dewan Housing Financial Corporation Ltd. against hypothecation of house of Director Shri C.S. Rathore and Smt Reena Rathore.
This loan has been considered under the head unsecured in the Balance Sheet. In our opinion being a borrower said loan should be considered as secured.
Statutory Liability It is observed the company has irregular in deposits statutory dues viz ESI PF GST TDS (I.T.). In our opinion persuasive steps required to avoid the interest/late fee/penalty and prolonged litigation.
Inventory /WIP The maintained inventory record is neither adequate nor feasible for our audit. In our opinion persuasive inventory record must be maintained on account of proper verification and safeguard of the company at least for major items..
Hence it is certified by the management only
Entry Tax Liability (Under Raj. Vat Act) Demand regarding entry tax for the financial year 2013- 14 of Rs 42660/- vide order dtd 22.03.2016 financial year 2014-15 of Rs. 51490 vide order dated 04.11.2016 has been raised by the commercial taxes department under Rajasthan VAT (E T Tax) Act.
The company did not make any provision for denoted liability in their books of account also not challenged.

Other Matters

The continuous spreading of COVID -19 across India has resulted in restriction onfrequently physical visit to the client locations and the need for carrying outalternative audit procedures as per the Standards on Auditing prescribed by the Instituteof Chartered Accountants of India (ICAI). As a result of the above the audit was alsocarried out with based on remote access of the data as provided by the management of theCompany. We have been represented by the management of the Company that the data providedfor our audit purposes is correct complete reliable and are directly generated by theaccounting system of the Company without any further manual modifications.

We bring to the attention of the users that the audit of the financial statements hasbeen also performed in the aforesaid conditions.

Our audit opinion is not modified in respect of the above.

Information other than the Financial Statements and Auditors' Report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report and the related annexures but does not include the financial statementsand our Auditors' Report thereon. Our opinion on the financial statements does not coverthe other information and we do not express any form of assurance conclusion thereon. Inconnection with our audit of the Financial statements our responsibility is to read theother information and in doing so consider whether the other information is materiallyinconsistent with the Financial statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

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 and 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.

Auditors' Responsibility

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.

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 Financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• 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 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 auditors' 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 auditors'report. 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Financial statements thatindividually 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 audit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the financialstatements. We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards. From the matters communicatedwith those charged with governance we determine those matters that were of mostsignificance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditors' report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest 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 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 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 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 adequacyand operating 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. The Company does not have any pending litigation on its financial position in itsfinancial statement.

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.

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 2021 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 2021 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 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.

Auditors' 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 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 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 authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 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 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. [Subject to comments in Note-1 & 2 of Accounting Policy &Note on Account]

The Annexure - B referred to in our Independent Auditors' Report to the members of theMewar Hi-Tech Engineering Limited on the financial statements for the year ended 31 March2021 we report that:

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2021 we report that:

1. In respect of fixed assets:

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b. As explained us the fixed assets have been physically verified by the managementaccording to a phase programmed which in our opinion is reasonable having regard to thesize of the company and nature of its assets. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us the title deeds ofimmovable properties are held in the name of the company and the same have been disclosedas fixed assets in the financial statement. Details are as under:-

Particulars of assets Date of Purchases Description Mortgage / Pledged Book Value As On 31.03.2021 (Rs.)
Factory Land 26.06.2008 Araji No.1863/414 Area 0.21 Hectare With Corporation Bank 11318796/-
Factory Land 18.06.2010 Araji No.1862/414 Area 3 Bigha's With Corporation Bank

2. In respect of Inventories:-

As explained to us the inventories of finished goods work in progress store &consumables (excluding third parties) were physically verified during the year by themanagement at reasonable intervals and according to the information and explanations givento us no material discrepancies were noticed on physical verification.

However in our observation it is found that the company needs significant method tomaintain inventory records. The persuasive inventory record must be maintained on accountof proper verification and safeguard of the company at least in case of major items. Inour opinion the maintained records is insufficient hence we have not verified. Themanagement has valued / verified inventory taken in the Balance Sheet.

It is observed that no record have been produced for our verification of service workin progress hence not verified. According to financial statement there is no service(repairing / job) in WIP at the end of the year.

3. 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.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

5. According to the information and explanations given to us and record of the companyexamined by us the Company has not accepted any deposits from the public during the year.The company has complied with the provision of sec. 73 to 76 or any other relevantprovisions of the Companies Act 2013.

6. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.

7. a. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including GST Income Tax TDS and othermaterial statutory dues have been noticed irregular to deposits during the year by theCompany with the appropriate authorities.

According to information and explanations given to us the following statutory dueswere in arrears as at 31 March 2021 for a period of more than six months from the datethey became payable.

Nature of dues Amount outstanding as on 31.03.2021 (Rs) Amount Pending more than six months (Rs) Related period Remarks
1 TDS 1544876 576269 FY 20-21
2 TCS 313246 - FY 20-21
3 PF Payable 2809606 332034 FY 20-21
4 ESI Payable 443213 101422 FY 20-21
5 GST (Net) 9437612 - FY 20-21
6 VAT 64399 64399 FY 17-18
7 GST-Belgaon Branch 18027 18027 FY 17-18
8 FBT Payable 59024 59024 Old Law
8 Income Tax For A Y. 2021-22 [Provision made in books] 1000000 500000 Considered for two quarter June 20 and Sept 20

b. According to the information and explanations given to us details of dues ispayable which has been quantified by the any Govt. Authority.

Name of the statute Nature of dues Amount Payable (in Rs) Period to which the amount relates (F.Y.) Forum where dispute is pending /Remarks
Income Tax Tax and interest 579050 2013-14 ITAT -CIT
Income Tax Tax and interest 325000 2013-14 Penalty CIT-appeal Udaipur
Income Tax Tax and interest 690000 2014-15 Penalty CIT-appeal Udaipur
Income Tax Tax and interest 944210 2017-18 Regular CIT-appeal Udaipur
Entry Tax Tax 42660 2013-14 CTO
Entry Tax Tax 51490 2014-15 CTO

8. According to the records of the company examined by us and the information andexplanation given to us the company has not defaulted in repayment of dues to financialinstitutions or Bank.

9.

10. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyclause (ix) of the Order is not applicable.

11.

12. During the course of our examination of the books and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud on or by the company notice or reported during the year nor we havebeen informed of such case by the management.

13. Managerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V to the CompaniesAct.

14. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly clause (xii) of the Order is not applicable.

15. All transactions with the related parties are in compliance with Section 188 and177 of Companies Act 2013 where applicable and the details have been disclosed in theFinancial Statements etc. as required by the accounting standards and Companies Act 2013.

16. The company has not made any preferential allotment / private placement of sharesor fully or partly convertible debentures during the year under review. Accordinglyclause (xiv) of the Order is not applicable.

17. The company has not entered into non-cash transactions with directors or personsconnected with him.

18. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

Place: Udaipur For: SAGAR GOLCHHA & CO.
Dated: July 05 2021 Chartered Accountants
Firm Regn No.- 007755C
[CA. Sagar Golchha]
M.No.- 076797
Proprietor

.