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The Hi-Tech Gears Ltd.

BSE: 522073 Sector: Auto
NSE: HITECHGEAR ISIN Code: INE127B01011
BSE 12:12 | 18 Jun 241.45 -13.05
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NSE 12:04 | 18 Jun 242.75 -11.55
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OPEN 263.60
PREVIOUS CLOSE 254.50
VOLUME 7303
52-Week high 266.00
52-Week low 95.90
P/E 22.27
Mkt Cap.(Rs cr) 453
Buy Price 240.50
Buy Qty 25.00
Sell Price 242.50
Sell Qty 10.00
OPEN 263.60
CLOSE 254.50
VOLUME 7303
52-Week high 266.00
52-Week low 95.90
P/E 22.27
Mkt Cap.(Rs cr) 453
Buy Price 240.50
Buy Qty 25.00
Sell Price 242.50
Sell Qty 10.00

The Hi-Tech Gears Ltd. (HITECHGEAR) - Auditors Report

Company auditors report

TO THE MEMBERS OF THE HI-TECH GEARS LIMITED Report on the Audit of the StandaloneFinancial Statements Opinion

We have audited the accompanying standalone financial statements of THE

HI-TECH GEARS LIMITED ("the Company") which comprise the Balance

Sheet as at March 31 2020 the Statement of Profit and Loss (including

Other Comprehensive Income) the Statement of Changes in Equity and the Statement ofCash Flows for the year ended on that date and notes to the financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") 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 ("Ind AS") and other accounting principles generally accepted in

India of the state of affairs of the Company as at March 31 2020 its profit andtotal comprehensive income changes in equity and its cash flows for the year ended onthat date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor's Responsibilitiesfor the Audit of the Standalone Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficientand on thestandalone financial statements.

Emphasis of matter

We draw attention to Note 46 to the standalone financial statements which describesthe possible effect of pandemic on the Company's financial performance as assessed by themanagement.

Our opinion is not modified in respect matter . ofthe above

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.

Key audit matters Auditor's Response
1. Contingent liabilities
There are legal and tax cases against the Company which have been identified as a key audit matter due to the uncertainties involved in these tax and legal claims and significant judgement is required. Audit procedures in respect of this area: We gained an understanding of the process of identification of legal and tax cases and evaluated the design and implementation of controls in respect of these contingent liabilities.
Refer to the note no.38 "Contingent liabilities" to the notes to the standalone financial statements. For legal and tax matters our procedures included testing key controls surrounding litigation and tax procedures; discussing matters with the Company's litigation and tax teams; and assessing management's conclusions through understanding precedents set in similar cases. Validated the completeness and appropriateness of the related disclosures with regard to the facts and circumstances of the legal and tax matters.
2. Borrowings
The Company had a borrowing liability (current and non-current) of Rs1898.32 million as at 31st March 2020. Audit procedures in respect of this area: We have gone through the agreements between the Company and its lenders.
The borrowings are under agreements with terms and conditions detailed in notes no. 19A and 19B to the notes of the standalone financial statements. We obtained confirmations from the Company's banks/financial institutions to confirm the outstanding balances.
Where debt is regarded as non-current we tested whether the Company has the unconditional
right to defer payment such that there were no repayments required within 12 months from
Keeping in view the size of the borrowings the the balance date.
Company's borrowings is considered as key audit matter.
We further considered whether the disclosures related to the borrowings in the standalone
financial statements are appropriate in all material respects.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion & AnalysisReport and Board's Report including Annexures to Board's Report but does not include thestandalone financial statements and our auditor's report thereon. The Management

Discussion & Analysis Report and Board's Report including Annexures to Board'sReport is expected to be made available to us after the date of this auditor's report.

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

In connection with our audit of the standalone financialstatementsour of the Companyin responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read the Management Discussion & Analysis Report and Boards Report if weconclude that there is a material misstatement therein we are required to communicate thematter to those charged with governance.

Management's Responsibility for the Standalone 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 financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity accordance andcashflows with the Ind AS and otheraccounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the

Company and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequateinternalfinancial controls that were operatingeffectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financialstatements management 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. The Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 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 controls relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

? Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

? Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

? Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.

2. As required by Section 143(3) of the Act based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement ProfitandLoss including

Other Comprehensive Income Statement of Changes in Equity and the Statement of CashFlow dealt with by this Report are in agreement with the relevant books of account. d) Inour opinion the aforesaid standalone financial statements comply with the Ind ASspecified 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 ason March 31 2020 taken on record by the Board of

Directors none of the directors is disqualified as on March 31

2020 from being appointed as a director in terms of Section 164 (2) of the Act. f) Withrespect to the adequacy of the internal financial controls over financial reporting of theCompany and the operating effectiveness of such controls refer to our separate Report in"Annexure B". g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Act asamended: In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act. h) With respect tothe other matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 as amended in our opinion and to the best ofour information and according to the explanations given to us:-a) The Company hasdisclosed the impact of pending litigations on its financial position in its standalonefinancial statements-Refer Note 38 to the standalone financial b) The Company did not haveany long-term contracts including derivative contracts for which there were any materialforeseeable losses. c) There has been no delay in transferring amount required to beTransferred to the Investor Education and Protection Fund by the Company.

For O.P. Dadu & Co. Chartered Accountants FRN. 001201N

(Amit Gupta ) Partner M.No. 094202

Place : New Delhi Dated : 26th June 2020 UDIN: 20094202AAAAAX5908

Annexure ‘A' To the Independent Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended

March 31 2020 we report that:

(i) In respect of Company`s Fixed Assets

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

(b) The Company has a regular programme of verification of fixed assets. All the fixedassets except furniture and fixtures and equipments have been physically verified by themanagement during the year which in our opinion is reasonable having regard to size ofthe Company and nature of fixed assets. No material discrepancies were noticed on suchverification.

(c) On the basis of information and explanation provided by the management the titledeeds of immovable properties are held in the name of the Company.

(ii) According to information and explanation given to us inventories have beenphysically verified by the management during the year except for stock-in-transit. In ouropinion the frequency of such verification is reasonable. No material discrepancies werenoticed on physical verification of inventories by the management.

(iii) According to the information and explanations given to us the Company has notgranted any loan secured or unsecured to companies firms

Limited Liability Partnerships (LLPs) or other parties covered in the registermaintained under Section 189 of the Act. Accordingly the provisions of paragraphs3(iii)(a) 3(iii)(b) and 3(iii)(c) of the Order are not applicable to the Company.

(iv) According to the information and explanations given to us the Company has notentered into any transaction covered under Sections 185 of the Act. The company hascomplied with the provisions of Sections 186 of the Act in respect of investments made.The Company has not granted any loans and has not provided any guarantees or securitiesto parties covered under Section 186 of the Act.

(v) In our opinion and according to the information and explanation given to us theCompany has not accepted any deposits from the public in accordance with the provisions ofSections 73 to 76 of the Act and the rules framed there under. Accordingly paragraph 3(v)of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for the maintenance of cost recordsunder sub section (I) of Section 148 of the Act and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However we have notmade a detailed examination of the records.

(vii) According to the information and explanations given to us in respect ofstatutory dues: (a) The Company is generally regular in depositing undisputed statutorydues including provident fund employees' state insurance income tax duty of customsgoods and service tax cess and other applicable statutory dues with the appropriateauthorities.

There were no undisputed amounts payable in respect of provident fund employees' stateinsurance income tax sales tax service tax value added tax duty of excise duty ofcustoms goods and service tax cess and other applicable statutory dues in arrears as atMarch 31 2020 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax value added tax service tax goods and service tax duty ofcustoms duty of excise which have not been deposited with the appropriate authorities onaccount of any dispute other than those mentioned as under:

Name of the Statue Nature of Dues Period to which the amount relates Amount (Rs. In Mn) Forum Where Dispute is Pending
Income Tax Act 1961 Income Tax A.Y. 2012-13 0.23 Commissioner of Income Tax Appeal /ITAT Delhi
Income Tax Act 1961 Income Tax A.Y. 2018-19 7.51 Asst-Commissioner of Income Tax Delhi
Income Tax Act 1961 Income Tax A.Y.2012-13 0.23 Commissioner of Income Tax (Appeals) Delhi
Income Tax Act 1961 Income Tax A.Y 2019-20 0.05 Assistant Commissioner of Income Tax (TDS)

(viii) Based on our audit procedures and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of dues to any bank orto any financial institution. The

Company has not borrowed any loan from Government. The Company has not issued anydebentures.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments). Based on our audit procedures and on theinformation given by the management we report that term loans have been utilized for thepurpose for which they have been raised.

(x) According to the information and explanations given to us no fraud on or by thecompany has been noticed or reported during the course of our Audit.

(xi) The Company has paid or provided for managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V toAct.

(xii) The Company is not a nidhi Company. Accordingly paragraph 3(xii) of the Order isnot 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 section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable Indian Accounting Standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Accordingly paragraph3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable tothe Company.

For O.P. Dadu & Co. Chartered Accountants FRN. 001201N

(Amit Gupta ) Partner M.No. 094202

Place : New Delhi Dated : 26th June 2020 UDIN: 20094202AAAAAX5908

Annexure ‘B' To the Independent Auditors' Report

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to the Members of the Company)

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of

The Hi-Tech Gears Limited ("the Company") as of March 31 2020 inconjunction 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 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 (‘ICAl'). 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 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 financialreportingassessing 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 appropriate to provide a basisfor our audit opinion on the Company's

. internalfinancial controls reporting system over financial

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 financial reporting includes those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect 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) providereasonable assurance regarding prevention or timely detection of unauthorised acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial 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 2020 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For O.P. Dadu & Co. Chartered Accountants FRN. 001201N

(Amit Gupta ) Partner M.No. 094202

Place : New Delhi Dated : 26th June 2020 UDIN: 20094202AAAAAX5908