HEG Auditors Report

Report on the Standalone Ind AS Financial Statements


We have audited the accompanying standalone Ind AS financial statements of HEG Limited (“the Company”) which comprise the balance sheet as at 31st March, 2017, the statement of profit and loss (including other comprehensive Income), the statement of cash flows and the statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information.


Management’s Responsibility for the Standalone Financial Statements


The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rule, 2015 as amended.


This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation, and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


Auditor’s Responsibility


Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.


We conducted audit of standalone financial statements in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Standalone Ind AS financial statements are free from material misstatement.


An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of the material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors as well as evaluating the overall presentation of the financial statements.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.


Opinion


In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017 its loss including the other comprehensive losses, its cash flows and changes in equity for the year ended on that date.


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 143(11) of the Act, we give in the Annexure ”A” a statement on the matters specified in paragraphs 3 and 4 of the Order;


2. As required by section 143(3) of the Act, we report that:


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


b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;


c. The balance sheet, statement of profit and loss including statement of other comprehensive Income, the statement of cash flow and the statement of changes in equity dealt with by this Report are in agreement with the books of account;


d. In our opinion, the aforesaid standalone IND AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended;


e. On the basis of written representations received from the directors as on 31st March 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2017, from being appointed as a director in terms of section 164(2) of the Act;


f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure “B” to this report; and


g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:


i) The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements- Refer Note 38 to the standalone Ind AS financial statements;


ii) As explained to us, the company did not have any long term contracts, therefore the Company was not required to make including derivative contracts for which there were any provision for material foreseeable losses.


iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and


iv) The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management -Refer Note 55 to the standalone Ind AS financial statements.


ANNEXURE “A” to the Independent Auditors’ Report to the members of HEG Limited, dated May 30, 2017 Report on the matters specified in paragraph 3 of the Companies (Auditor’s Report) Order, 2016 (“the Order’) issued by the Central Government of India in terms of section 143(11) of the Companies Act, 2013 (“the Act") as referred to in paragraph 1 of ‘Report on Other Legal and Regulatory Requirements’ section.


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


(b) Physical verification of fixed assets is being conducted by the management based on a program designed to cover all assets over a period of three years which, in our opinion, is reasonable having regard to the size of the company and nature of its business. Discrepancies noticed on such verification as compared to book records were not material and have been properly adjusted in the books of account.


(c) According to the information and explanation given to us and on the basis of our examination of the records of the Company, the title deed of immovable properties are held in the name of the company.


(ii) The inventories have been physically verified by the management during the year at all its locations, except stocks located outside India, lying with third parties and in transit which have been verified with reference to correspondence of third parties or subsequent receipt of goods. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at year end and no material discrepancies were noticed in respect of such confirmations.


(iii) According to the information and explanations given to us, the company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a) to (c) of the Order are not applicable to the company and hence not commented upon.


(iv) In our opinion and according to the information and explanations given to us, the company has given a guarantee jointly with another company to a financial institution for loan taken by others from the financial institution, which are covered under the provisions of section 185 and 186 of the Act, the terms and conditions of which are not, prima facie, prejudicial to the interest of the company. .


(v) The Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Act and hence the rules framed thereunder are not applicable.


(vi) We have broadly reviewed the books of account relating to materials, labour and other items of cost records maintained by the Company as specified by the Central Government of India under section 148(1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate and complete.


(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, employees’ state insurance, income tax, sales tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. Further, there were no undisputed amounts outstanding at the year-end for a period of more than six months from the date they became payable.


(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of Custom Duty, and Cess which have not been deposited on account of any dispute, except the following in respect of Income Tax, Excise Duty, Service Tax and Sales Tax which have not been deposited on account of any dispute, are as follows:-






















































































































































S.No



Name of the Statute



Nature of Dues



Amount (Rs. in Lacs)



Period to which the amount relates



Forum where the dispute is pending



1



Central Excise Act, 1944



Excise Duty



276.22



2002-03, 2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2014



CESTAT, New Delhi



1.42



2004-05



Hon’ble High Court, Jabalpur



2.15



2013-14



Commissioner (Appeal), Bhopal



2



Income Tax Act,1961



Income Tax



1064.75



Assessment year 2008-09, 2012-13, 2013-14, 2014-15



CIT (Appeals), Bhopal



516.00



Assessment year 2003-04, 2004-05



Hon’ble High Court, Jabalpur



Income Tax Penalty



140.00



Assessment year 2000-01, 2010-11, 2011-12



CIT (Appeals), Bhopal



Income Tax



106.82



Assessment year 2015-16



CIT (Appeals), Ahmedabad



3



Finance Act, 1994



Service Tax and penalty



1503.11



2006-07, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13, 2013-14



CESTAT, New Delhi



Service Tax and penalty



109.64



2012-13



Commissioner of Excise and Customs, Bhopal



4



Central Sales Tax Act, 1956



Central Sales Tax



21.30



2003-04



Hon’ble High Court, Jabalpur



5



Madhya Pradesh Parvesh Kar Adhiniyam,1976



Entry Tax



2.35



2014-15



Commissioner (Appeals), Bhopal



382.27



2007-08, 2008-09, 2009-10, 2010-11, 2012-13



Appellate Tribunal, Bhopal



20.11



1997-98, 2003-04



Hon’ble High Court, Jabalpur



6



Chhattisgarh Commercial Tax



VAT



3.03



2006-07



Commissioner (Appeals) Raipur



1.51



1992-93



Appellate Tribunal, Raipur



Entry Tax



9.79



2005-06



Appellate Tribunal, Raipur



Entry Tax



12.00



2006-07



Commissioner (Appeals) , Raipur



(viii) According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of its dues to Governments, banks and financial institutions. The Company has not taken any loans from debenture holders.


(ix) Based on our audit procedures and according to the information and explanations given to us, the Company has not raised any money by way of initial public offer / further public offer. Further, based on our audit procedures and according to the information and explanations given to us and on an overall examination of the balance sheet, we report that monies raised by way of term loans were applied for the purposes for which those were raised.


(x) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company by its officers or employees noticed or reported during the year, nor have we been informed of such case by the management.


(xi) Based on our audit and according to the information and explanations given to us, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.


(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.


(xiii) Based on our audit procedures and according to the information and explanations given to us, transactions with the related parties are in compliance with section 177 and 188 of Act where applicable and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable accounting standards.


(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the company and, not commented upon.


(xv) Based on our audit procedures and according to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Act.


(xvi) According to the information and explanations given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.


For S. S. Kothari Mehta & Co. For Doogar & Associates


Chartered Accountants Chartered Accountants


Firm Regn. No. 000756N Firm Regn. No. 000561N


Sunil Wahal Mukesh Goyal


PARTNER PARTNER


Membership No. 087294 Membership No. 081810


Place: Noida (U.P.)


Date: 30th May, 2017

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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