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Auditor Report of Hemang Resources Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of HEMANG RESOURCES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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 design, Implementation and maintenance of adequate internal financial controls, 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 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 there under.

We conducted our audit in accordance with the Standards on Auditing 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 financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the 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 financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on internal control on financial statements.

An audit also includes evaluating the appropriateness of the 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 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 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 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 purposes of our audit.

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

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards 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 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) 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 financial statements – Refer Note 2.7(b) to 2.7(i) & 2.11 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any 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.

Annexure A" to the Auditor's Report as referred in paragraph first of our report of even date to the members of Hemang Resources Limited for the year ended 31st March 2015

As required by the Companies (Auditor's Report) Order issued by the Central Government in the terms of Section 143(11) of the Companies Act, 2013, we further report that:-

(1) Fixed Assets:-

(a) As informed to us, the company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As per information and explanation given to us these fixed assets have been physically verified by the management at reasonable intervals no material discrepancies were observed.

(2) Inventories: -

(a) As explained to us, physical verification of Inventories has been conducted at reasonable interval by the management.

(b) In our opinion and according to the information and explanation given to us, procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of its inventories and no material discrepancies have been noticed on such physical verification by the management.

(3) Loan Granted:-

(a) According to the information and explanation given to us, the Company has granted unsecured loans to parties covered under section 189 of the Act. The number of parties and amount involved in the transactions are as under:

(Amount in R)

Maximum balance Balance as on S. No. Name of Parties during the year 31/03/2015

1. Bhatia Global Trading Limited 21,32,00,000/- NIL

(b) The rate of interest and other terms and conditions of such loan are not prima facie prejudicial to the interest of the company.

(c) As per the terms of the agreement provided to us the receipt of principal and interest are as per the terms of the agreement.

(d) As explained & informed to us, no amount is overdue as at the end of the year.

(4) Internal Control Procedure: -

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and other assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct major weakness in the internal control system of the company in respect of these areas.

(5) Public Deposit: -

In our opinion and according to the information and explanation given to us, the company has neither accepted nor invited any deposit from public within the provision of Section 73 to 76 of Companies Act, 2013 and rules made there under.

(6) Cost Record: -

As informed to us, the Central Government has not prescribed the maintenance of cost record under Section 148(1) of the Companies Act, 2013.

(7) Statutory Dues: -

(a) According to the information and explanation given to us, the Company has been generally regular in depositing undisputed dues relating to Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duties of Customs, Duties of Excise, Value Added Tax, Cess and other material statutory dues applicable to it with appropriate authorities. Following are undisputed statutory dues payable which are outstanding as at 31-03-2015 for a period of more than 6 months from the date they become payable.

(Amount in R)

Name of the Statute Nature of Amount Period to which Dues the amount relates

Employee's Provident Employee's and 8984 July 2014 Fund & miscellaneous Employers' Provisions Act, 1952 Contribution to PF

Employee's Provident Employee's and 8984 August 2014 Fund & miscellaneous Employers' Provisions Act, 1952 Contribution to PF

Name of the Statute Due Date Date of

Employee's Provident 20th August Not Paid Fund & miscellaneous 2014 Provisions Act, 1952

Employee's Provident 20th September Not Paid Fund & miscellaneous 2014 Provisions Act, 1952

(b) As informed and explained to us, there are dues of Income Tax, Commercial Tax and other material statutory dues which have not been deposited on accounts of dispute, which are detailed as below:-

(Amount in R)

Amount Financial Year to Statue Forum where Dispute is involved which the amount pending relates

Income Tax Act CIT (Appeals) 110,000/- 1995-96

Stamp Duty Act High Court 10,62,000/- 2004-05

Commercial Tax Joint Commissioner 36,67,832/- 2006-07 (Surat)

Sales Tax Deputy Commissioner 38,340/- 2007-08 (Maharashtra)

Custom Duty Commissioner (Appeals) 2,35,04,116/- 2012-13

Maharashtra Vat Deputy Commissioner 52,71,446/- 2010-11

As informed to us the order was received at the end of the Custom Duty year, the Company is in 81,91,647/- 2013-14 process of filing of appeal with CESTAT.

(c) As per the information and explanations given to us there is no amount that is required to be transferred to Investor Education and Protection Fund in accordance with relevant provisions of Companies Act, 1956 (1 of 1956) and rules made hereunder.

(8) Accumulated Cash Losses: -

The Company has no accumulated losses at the end of the reporting period. Further, the Company has not incurred any cash losses during the period covered by the report and immediately preceding the financial year.

(9) Default in repayment of dues to Financial Institutions, Banks or debenture holders: -

According to information and explanation given to us, the company has delayed in repayment of dues of Letter of Credit and Buyers' Line of Credit to various Banks. The details of the delay are given as under:

(Amount in R)

Actual Date S. No. Party Amount Due Date of payment Delay in Days

1 Bank Of India 116545450 10-Feb-14 12-May-14 91

2 Bank Of India 43584065 15-Feb-14 16-May-14 90

3 Bank Of India 13178225 19-Feb-14 17-May-14 87 4 Bank Of India 112087031 26-Aug-14 09-Sep-14 14

5 Central Bank 55680174 23-Apr-14 01-May-14 8 of India

6 Central Bank 113445040 23-May-14 26-Jun-14 34 of India

7 Central Bank 42772411 23-May-14 03-Jul-14 6 of India

8 Central Bank 84944926 03-Oct-14 09-Oct-14 6 of India

(10) Guarantee given by the Company for Loan taken by others: -

As informed and explained to us, the company has given corporate guarantee on behalf of group Company. In absence of terms, conditions and interest for continuance of such guarantee by the company, we are unable to comment on its effect on the interest of the company. The name of the receiving party, nature of guarantee and amount involved therein are detailed as below:

S. No. Name of the company Type of Guarantee Name of Bank / Amount Party (In Rupees)

1 Bhatia Global Trading Corporate Guarantee Union Bank of 181,66,00,000/- Limited. for credit facility India

(11) Utilization of Terms Loans: -

According to information and explanation given to us, no term loan has been obtained by the company either in current financial year or in preceding financial years; hence the clause is not applicable.

(12) Fraud Noticed or Recorded: -

To the best of our knowledge and belief and according to the information& explanation given to us, no fraud on or by the Company was noticed or recorded during the period.

FOR: R.S. BANSAL & COMPANY

CHARTERED ACCOUNTANTS

FRN 000939C



Sd/-

(VIJAY BANSAL)

(PARTNER)

M.No. 075344



Date: 28th May 2015

Place: Indore


Mar 31, 2014

We have audited the accompanying financial statements of Bhatia Industries and Infrastructure Limited ("the company), Registered Address BCC House,8/5, Manoramaganj, NavratanBagh Main Road, Indore (Madhya Pradesh), which comprise the Balance Sheet as at 31 March, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("The Act"). This responsibility includes the design, implementation and maintenance of internal control 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.

Auditors'' Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2014;

(b) In the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and

(c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 2.14 to the financial statements regarding non confirmation of balance from sundry debtors and debtor of Rs. 6,902,634/- On which legal proceedings for recovery have been initiated by the company. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a) We have 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, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on 31 March, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditor''s Report as referred in paragraph first of our report of even date to the members of Bhatia Industries & Infrastructure Limited for the year ended 31stMarch 2014.

As required by the Companies (Auditor''s Report) Order issued by the Central Government in the terms of Section 227 (4A) of the Companies Act, 1956, we further report that:- (1) Fixed Assets: - As informed to us, the company does not have any fixed asset; hence this clause is not applicable.

(a) As informed to us, the company does not have any fixed asset; hence this clause is not applicable.

(b) In view of Paragraph (a)above, this clause is not applicable.

(c) In view of Paragraph (a) above, this clause is not applicable.

(2) Inventories: -

(a) As explained to us, physical verification of Inventories has been conducted at reasonable interval by the management.

(b) In our opinion and according to the information and explanation given to us, procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of its inventories andno material discrepancies have been noticed on such physical verification by the management.

(3) Loan Granted: -

(a) According to the information and explanation given to us, the Company has granted unsecured loans to parties covered under section 301 of the Act.

The Number of parties and amount involved in the transactions are as under:- (Amount in Rs.)

S. No. Name of Parties Maximum balance Balance as on during the year 31/03/2014

1. Bhatia Global Trading Limited 242,293,581/- NIL

(b) The rate of interest and other terms and conditions of such loan are not prima facie prejudicial to the interest of the company.

(c) As per the terms of the agreement provided to us the receipt of principal and interest are as per the terms of the agreement.

(d) As explained & informed to us, no amount is overdue as at the end of the year.

Loan Taken: -

According to the information and explanation given to us, the Company has not obtained any secured and/or unsecured loan from parties covered in the register maintained under Section 301 of The Companies Act, 1956; hence this clause is not applicable.

(4) Internal Control Procedure: -

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and other assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct major weakness in the internal control system of the company in respect of these areas.

(5) Transaction with Parties u/s 301: -

(a) As explained and informed to us, Company has entered all transaction, which are required to be entered in the register maintained in pursuant of the section 301 of the Companies Act, 1956.

(b) As per information and explanation and other relevant record provided before us these transaction have been entered at prevailing market prices.

(6) Public Deposit: -

In our opinion and according to the information and explanation given to us, the company has neither accepted nor invited any deposit from public within the provision of Section 58A, 58AA of Companies Act, 1956 and rules made there under.

(7) Internal Audit System:-

In our opinion & according to the information & explanation given to us, there is adequate internal audit system commensurate with the size of the company & the nature of its business.

(8) Cost Record: -

As informed to us, the Central Government has not prescribed the maintenance of cost record under Section 209 (1) (d) of the Companies Act, 1956

(9) Statutory Dues: -

(a) According to the information and explanation given to us, the Company has been generally regular in depositing undisputed dues relating to Provident Fund, Employees'' State Insurance, Investor Education & Protection Fund, Wealth Tax, Service Tax, Cess and other material statutory dues applicable to it with appropriate authorities. During the year there were some delays found in depositing undisputed dues in respect of Service Tax &Sales Tax from the respective due dates. There are no undisputed statutory dues payable which are outstanding as at 31-03-2014 for a period of more than 6 months from the date they become payable.

(b) As informed and explained to us, there are some dues of Income Tax, Commercial Tax and other material statutory dues which have not been deposited on accounts of some dispute, which are detailed as below:-

(Amount in Rs.)

Statute Forum where Dispute is pending Amount Financial Year to which the involved amount relates

Income Tax Act CIT (Appeals) 110,000/- 1995-96

Income Tax Act CIT (Appeals) 12,58,354/- 2007-08

Stamp Duty Act Revenue Board, Gwalior 1,062,000/- 2004-05

Commercial Tax(Surat) Joint Commissioner 3,667,832/- 2006-07

Sales Tax (Maha.) Deputy Commissioner 18,340/- 2007-08

Sales Tax (Maha.) High Court (Nagpur) 2,218,141/- 2009-10

Custom Duty (Penalty) Commissioner of Customs (Jamnagar) 70,000/- 2012-13

Custom Duty Order received at the end of the year, 22,804,116/- 2012-13 Company is in process of filing of appeal.

(10) Accumulated Cash Losses: -

The Company has no accumulated losses at the end of the reporting period. Further, the Company has not incurred any cash losses during the period covered by the report and immediately preceding the financial year.

(11) Default in repayment of dues to Financial Institutions or Banks: -

According to information and explanation given to us, the company has delayed in repayment of dues of Letter of Credit and Buyers'' Line of Credit to various Banks. The details of the delay are given as under:

(Amount in Rs.)

S. No. Party Amount Due Date

1 Bank Of India 95007913.00 24-Jan-2014

2 Bank Of India 66755907.00 2-Feb-2014

3 Bank Of India 26830282.00 3-Feb-2014

4 Bank Of India 27198542.00 10-Feb-2014

5 Bank Of India 116545450.00 10-Feb-2014

6 Bank Of India 43584065.00 15-Feb-2014

7 Bank Of India 13178225.00 19-Feb-2014

8 Central Bank of India 35199672.00 1-Nov-2013

9 Central Bank of India 59775707.00 1-Nov-2013

10 Central Bank of India 66884217.00 5-Dec-2013

11 Central Bank of India 66203774.00 12-Dec-2013

Party Actual Date Delay in Of Payment Days

Bank Of India 4-Feb-2014 11

Bank Of India 12-Feb-2014 10

Bank Of India 13-Feb-2014 10

Bank Of India 26-Mar-2014 44

Bank Of India 12-May-2014 91

Bank Of India 16-May-2014 90

Bank Of India 17-May-2014 87

Central Bank of India 4-Nov-2013 3

Central Bank of India 4-Nov-2013 3

Central Bank of India 23-Dec-2013 18

Central Bank of India 31-Dec-2013 19

(12) Granting of Loans and Advances:-

According to the information & explanation given to us, the company has not given any Loans & Advance on the basis of security by way of pledge of shares, debentures and other securities.

(13) Chit Fund/Nidhi/Mutual benefit/Society Activities: -

According to the information & explanation given to us, provisions relating to any special statute applicable to chit fund are not applicable to the company.

Company not being Nidhi/Mutual Benefit Fund/Society hence this clause is not applicable.

(14) Dealing or Trading in Shares: -

Company is not dealing or trading in investments but purchased investments with a view to hold such investments to earn income from dividend or interest thereon;hence this clause is not applicable.

(15) Guarantee given by the Company for Loan taken by others:-

As informed and explained to us, the company has not given any guarantees for loans taken by others from banks or financial institutions; hence this clause is not applicable to the company.

(16) Utilization of Terms Loans: -

According to information and explanation given to us, no term loan has been obtained by the company either in current financial year or in preceding financial years; hence the clause is not applicable.

(17) Application for short terms fund utilized for long terms investment: -

According to the information and explanation given to us and books and records examined by us during the course of audit of the company, we report that no fund has been raised on short term basis have been used for long term investment by the company.

(18) Preferential Allotment of Shares: -

We are informed that, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of Act, during the year.

(19) Creation of Securities for Debentures issue: -

According to the information and explanation given to us and the record examined by us, the company has not issued any debentures; hence this clause is not applicable to the company.

(20) Money raised by Public Issue: -

The Company has not raised any money by public issue of shares during the period.

(21) Fraud Noticed or Recorded: -

To the best of our knowledge and belief according to the information& explanation given to us, no fraud on or by the Company was noticed or recorded during the period.

For: R. S. Bansal & Company Chartered Accountants

Firm Regi. No. : 000939C Sd/-

Vijay Bansal

Partner

Membership No. : 075344

Place: Indore

Date : 22nd May, 2014


Mar 31, 2013

Report on the Financial Statements:

We have audited the accompanying financial statements of Bhatia Industries and Infrastructure Limited Registered Address BCC House, 8/5, Manoramaganj, Navratan Bagh Main Road, Indorc (Madhya Pradesh), which comprise the Balance Sheet as at 31 March, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year ended 31 March, 2013 and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial

performance and cash flows of the Company in accordance with the Accounting Standards referred to In Sub-Seclion(3C) of Section 211 of the Companies Act, 1956 ("The Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements mat give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility:

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements 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 management, 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

Opinion:

In our opinion and to the best of our information and according to the explanations given to us, the 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2013;

(b) in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Sub- Section(4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a) We have 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 ofProfit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement ofProfit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2013, from being appointed as a director in terms of clause (g) of Sub- Section(l) of Section 274 of the Companies Act, 1956.

As required by the Companies (Auditor''s Report) Order issued by the Central Government in the terms of Section 227 (4A) of the Companies Act, 1956, we further reportthat:-

(1) Fixed Assets: -As informed to us, the company does not have any fixed asset; hence this clause is not applicable.

(2) Inventories: -

(a) As explained to us, physical verification of Inventories has been conducted at reasonable interval by the management.

(b) In our opinion and according to the information and explanation given to us, procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of its inventories and it is informed to us that stock of 3599 Metric Tonne of coal lying at one of the branch has become obsolete and same has been properly dealt with in books of accounts.

(3) Loan Granted: -

(a) According to the information and explanation given to us, the Company has granted unsecured loans to parties covered in register maintained under Section 301 of the Act.

The Number of parties and amount involved in the transactions are detailed as below:-

(Amount in i) S. No Name of Parties Maximum balance Balance as on during the year 31/03/2013

1. Asian Natural Resources (India) Limited 345,067,229 Nil

2. Bhatia Global Trading Limited 257,300,000 36,311,449

(b) The rate of interest and other terms and conditions of such loan are not prima facie prejudicial to the interest of the company.

(c) As per the terms of the agreement provided to us the receipt of principal and interest are as per the terms of the agreement.

(d) As explained & informed to us, no amount is overdue as at the end of the year.

Loan Taken:-

According to the information and explanation given to us, the Company has not obtained any secured and/or unsecured loan from parties covered in the register maintained under Section 301 of the Companies Act, 1956; hence this clause is not applicable.

(4) Internal Control Procedure: - In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and other assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct major weakness in the internal control system of the company in respect of these areas.

(5) Transaction with Parties u/s 301: -

(a) As explained and informed to us, the Company has entered all transaction, which are required to be entered in the register maintained in pursuant to the Section 301 of the Companies Act, 1956.

(b) As per information and explanation and other relevant record provided before us these transactions have been entered at prevailing market prices.

(6) Public Deposit: - In our opinion and according to the information and explanation given to us, the company has neither accepted nor invited any deposit from public within the provisions of Section 58A, 58AA of Companies Act, 1956 and rules made there under.

(7) Internal Audit System:- In our opinion & according to the information & explanation given to us, there are adequate internal control procedures commensurate with the size of the company & the nature of its business.

(8) Cost Record: - As informed to us, the Central Government has not prescribed the maintenance of cost record under Section 209 (l)(d) of the Companies Act, 1956.

(9) Statutory Dues: -

(a) According to the information and explanation given to us, the Company has been generally regular in depositing undisputed dues relating to Investor Education & Protection Fund, Wealth Tax, Service Tax, Cess and other material statutory dues applicable to it with appropriate authorities. There are no undisputed statutory dues payable which are outstanding as at 31 -03-2013 for a period of more than 6 months from the date they become payable.

(b) As informed and explained to us, there are some dues of Income Tax, Commercial Tax and other material statutory dues which have not been deposited on accounts of some dispute, which are detailed as below:-

(Amount in Rs.)

Statute Forum where Dispute is pending Amount Financial Year to which the involved amount relates

Income Tax Act CIT (Appeals) 110000 1995-96

Income Tax Act ITAT 54520 2001-02

Income Tax Act ITAT 108824 2003-04

Stamp Duty Act Revenue Board, Gwalior 1062000 2004-05

CommercialTax Joint Commissioner 3667832 2006-07

Sales Tax Deputy Commissioner 18340 2011-12

(10) Accumulated Cash Losses: - The Company has no accumulated losses. Further, the Company has not incurred any cash losses during the period covered by the report and immediately preceding the financial year.

(11) Default in repayment of dues to Financial Institutions or Banks: - According to information and explanation given to us, the company has not defaulted in repayment of any dues to any Financial Institution or Bank or Debenture holders.

(12) Granting of Loans and Advances:- According to the information & explanation given to us, the company has not given any Loans & Advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) Chit Fund/Nidhi/Mutual benefit/Society Activities: -

According to the information & explanation given to us, provisions relating to any special statute applicable to chit fund are not applicable to the company.

The Company not being Nidhi/Mutual Benefit Fund/Society hence this clause is not applicable.

(14) Dealing or Trading in Shares: - The Company is not dealing or trading in investments but purchased investments with a view to hold such investments to earn income from dividend or interest thereon; hence this clause is not applicable.

(15) Guarantee given by the Company for Loan taken by others:- As informed and explained to us, the company has not given any guarantees for loans taken by others from banks or financial institutions; hence this clause is not applicable to the company.

(16) Utilization of Terms Loans: - According to information and explanation given to us, no term loan has been obtained by the company either in current financial year or in preceding financial years; hence the clause is not applicable.

(17) Application for short terms fund utilized for long terms investment: - According to the information and explanation given to us and books and records examined by us during the course of audit of the company, we report that no fund raised on short term basis have been used for long term investment by the company.

(18) Preferential Allotment of Shares: -We are informed that, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of Act, during the year.

(19) Creation of Securities for Debentures issue: -According to the information and explanation given to us and the record examined by us, the company has not issued any debentures; hence this clause is not applicable to the company.

(20) Money raised by Public Issue: - The Company has not raised any money by public issue of shares during the period.

(21) Fraud Noticed or Recorded: -To the best of our knowledge and belief according to the information & explanation given to us, no fraud on or by the Company was noticed or recorded during the period.

For: R. S. Bansal & Company

Chartered Accountants Firm Regi. No.: 000939C Sa/-

Vyjay Bansal Partner

Membership No. : 075344

Place: Indore Date: 31 May, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of Bhatia Industries & Infrastructure Ltd. having Registered Office at "BCC House, 8/5 Manoramaganj, Navratan Bagh, Main Road, Indore as at 31st March, 2012 and also Statement of Profit & Loss and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Accounting Standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. [a] As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 (here-in-after referred to as the Act), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we give in the annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order, to the extent applicable to the Company.

[b] Subject to above, and read with statement on notes to Balance Sheet and Statement of Profit & Loss forming parts of accounts.

2. Further to our comments in the annexure referred to paragraph 1 above:- [a] We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit.

[b] In our opinion proper books of accounts as required by law have been kept by the Company so far as appears from our examination of the books.

[c] The Balance Sheet, Statement of Profit & Loss and Cash Flow statements dealt with by this report are in agreement with the books of accounts.

[d] In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the accounting standard referred to in Sub-Section (3C) of Section 211 of Companies Act, 1956.

[e] On the basis of written representations received from the Directors, as on 31st March, 2012 and taken on record by the Board of Directors we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as Director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

[f ] In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement together with notes thereon and, gives the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :- i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2012 and

ii) In the case of the Statement of Profit & Loss, of the Profit of the Company for the year ended on 31st March, 2012 and

iii) In the case of the Cash Flow statement of the cash flows for the year ended on 31st March, 2012.

ANNEXURE TO THE AUDITOR'S REPORT AS REFERRED IN PARAGRAPH FIRST OF

OUR REPORT OF EVEN DATE TO THE MEMBERS OF

BHATIA INDUSTRIES & INFRASTRUCTURE LIMITED FOR THE YEAR ENDED 31ST MARCH 2012.

As required by the Companies (Auditors' Report) Order,2003 issued by the Central Government in term of Section 227 (4A) of the Companies Act,1956,we further report that-

FIXED ASSETS : -

1. As informed to us, the Company has been maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. [Paragraph 4(i) (a) ]

2. As informed to us the Company has physically verified the fixed assets during the year at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification. [Paragraph 4(i) (b) ]

3. In our opinion and according to the information and explanation given to us, the Company has not disposed off any substantial fixed assets during the year, which affects the going concern status of the company. [Paragraph 4(i) (c)]

INVENTORIES :-

4. As per explanation given to us, physical verification of inventories has been conducted at reasonable intervals by the management. [Paragraph 4(ii) (a) ]

5. In our opinion and according to the information and explanation given to us, the procedure of physical verification of inventories followed by the Management is reasonable and adequate in relation to the size of the company and the nature of its business. [Paragraph 4(ii) (b) ]

6. In our opinion and according to the information and explanation given to us the Company has maintained proper records of its inventories and no material discrepancies were noticed on such physical verification. [Paragraph 4(ii) (c) ]

Loan Granted :-

7. (a) According to the information and explanation given to us, the Company has granted unsecured loans to Companies or parties covered in the register maintained u/s 301 of Companies Act, 1956.The required details are as under: [Paragraph 4 (iii) (a)]

Name Maximum Amount Amount Outstanding (Rs in Millions) (Rs in Millions)

Bhatia International Limited 345.37 345.07

Bhatia Global Trading Limited 346.66 NIL

(b) The rate of interest and other terms and conditions of such loan are not prima facie prejudicial to the interest of the company. [ Paragraph 4 (iii) (b)]

(c) As per the terms of the agreement provided to us the receipt of principal and interest are as per the terms of the agreement. [ Paragraph 4 (iii) (c)]

(d) As explained & informed to us no amount is overdue as at the end of the year. [Paragraph 4 (iii) (d)]

Loan Taken :-

8. (a) According to the information and explanation given to us, the Company has obtained unsecured loans from following persons covered under section 301. [Paragraph 4 (iii) (e)]. The details are as under :-

Name Maximum Amount Amount Outstanding (Rs in Millions) (Rs in Millions)

Bhatia International Limited 0.10 NIL

Bhatia Global Trading Limited 9.00 NIL

(b) The rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the Company. [ Paragraph 4 (iii) (f)]

(c) As per the terms of the agreement provided to us the payment of principal and interest are as per the terms of the agreement. [ Paragraph 4 (iii) (g)]

Internal Control Procedures:-

9. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business of inventory and fixed assets and for the sale of Goods & Services. [Paragraph 4 (iv)]

10. As informed to us the Company has entered all the transactions in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

[Paragraph 4 (v) (a)]

11. As per information and explanation provided to us and documents produced before us the transaction have been entered into during the financial year at the prices which are reasonable having regards to the prevailing market prices at the relevant time. [Paragraph 4 (v) (b)]

Public Deposit :-

12. In our opinion and according the information and explanation given to us, the Company neither accepted nor invited any deposits from Public within the provisions of Section 58A of Companies Act, 1956 and rules made there under.

[Paragraph 4 (vi)]

Internal Audit System

13. As explained and informed to us, company has its own internal audit system which in our opinion is adequate and commensurate with the size and nature of its business. [Paragraph 4 (vii]

Cost Record :-

14. As informed to us, the Central Government has not prescribed the maintenance of cost record under Section 209 (1) (d) of the Companies Act, 1956.

[Paragraph 4 (viii)]

Statutory Dues :-

15. According to the information and explanation given to us there are no undisputed statutory dues payable in respect of Provident Fund, Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess, which are outstanding as at 31.03.2012 for a period of more than six months from the date they became payable. [Paragraph 4 (ix)(a)]

16. It has been explained & informed to us that all dues toward sales tax / income tax / custom duty / wealth tax / excise duty / Cess, if any are properly accounted for in the books & no dispute towards aforesaid dues exist, except following:

[Paragraph 4 (ix)(b)]

S.No Particulars Financial Year Forum where Pending Amount which it relates (In Rs Millions)

1. Income Tax 1995-96 CIT (Appeals) 0.11

2. Income Tax 2001-02 ITAT 0.054

3. Income Tax 2003-04 ITAT 0.11

4. Stamp Duty 2004-05 Revenue Board, Gwalior 1.06

5. Commercial Tax 2006-07 Joint Commissioner 3.67

Accumulated Cash Losses: -

17. The Company has no accumulated losses. Further, the Company has not incurred any cash losses during the period covered by the report and immediately preceding the financial year. [Paragraph 4 (x)]

Default in Repayment of dues to Financial Institutions or Bank

18 Based on our audit procedures and on the information and explanation given by the management, company has not defaulted in the repayment of loans from the financial institutions or banks, hence this clause is not applicable. [Paragraph 4 (xi)]

19. According to the information and explanation given to us, the Company has not given any loans and advances on the basis of security by way of Pledge of Shares, debentures and other securities. [Paragraph 4 (xii)]

Chit Fund Nidhi Mutual Benefit Society Activities :-

20. Provisions relating to any special statute applicable to chit fund are not applicable to the Company. [Paragraph 4 (xiii) first part]

21. Company not being Nidhi Mutual Benefit fund Society hence this clause is not applicable. [Paragraph 4 (xiii) second part]

Dealing or trading in Shares : -

22. According to the information and explanation given to us, no transaction in trading of shares is being done by the company during the year. [Paragraph 4 (xiv)]

Guarantee given by the Company for Loan taken by others :-

23. As informed and explained to us the Company has not given any guarantee in respect of loans taken by others from any bank or financial institutions.

[Paragraph 4 (xv)]

Utilization of Term Loan :-

24. As per information and explanation given to us, the company has not taken any term loans. [Paragraph 4 (xvi)] Application of Short Term Fund for Long Term Investments :-

25. As explained and explanation given to us, fund raised on short term basis have not been used for long term investment. [Paragraph 4 (xvii)] Preferential Allotment of Shares:-

26. According to information and explanation given to us, the company has not made any preferential allotment of Shares to the parties covered in the Register maintained under section 301 of the Act during the year. [Paragraph 4 (xviii)]

Creation of Securities for Debentures Issue :-

27. According to the information and explanation given to us and the records examined by us, the company has not issued debentures and hence regarding creation of securities in respect of debentures issued does not arises. [Paragraph 4 (xix)]

Money raised by Public Issue: -

28. The Company has not raised any money by public issue of shares during the year-ended review.[Paragraph 4 (xx)]

Fraud Notice or Reported: -

29. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year-ended review. .[Paragraph 4 (xxi)] For R.S. Bansal & Co.

Chartered Accountants

FRN:000939C

Sd/-

(Vijay Bansal)

Place: Indore Partner

Date: 30th April, 2012 Membership No.075344

 
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