Corporate Information

1. Hemang Resources Limited (Formerly Bhatia Industries And Infrastructure Limited) (the Company) having CIN L65922MP1993PLC007767 was incorporated on 08/07/1993 under laws of Republic of India. The Company is mainly engaged in Trading of all type of Coal, Stevedoring, Logistic services & Trading in land.

2. During the year under review the company has changed its name from Bhatia Industries & Infrastructure Limited to "Hemang Resources Limited" w.e.f 12th March 2015.

3. During the year under review the company has filed an application for shifting of its registered office from the State of Madhya Pradesh to the State of Tamil Nadu within the jurisdiction of Registrar of Companies, Chennai and the same is under process.

NOTE - 1

SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Preparation of Financial Statements:

The Financial Statements are brpared under the historical cost convention on ongoing concern basis in accordance with the Generally Accepted Accounting Principles in India to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and the applicable provision of the Companies Act, 1956 and Companies Act 2013. The Company has followed the mercantile system of accounting and recognized income and expenditure on accrual basis. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year.

1.2 Use of estimates

The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

1.3 Revenue Recognition:

a. Coal Trading:

Sale of coal has been recorded and recognized on the basis of dispatches made to customers, which is considered as transfer of ownership and rebrsents amount billed for goods sold excluding Sales Tax/ VAT.

b. Revenue from High Seas Sales are accounted for on the basis of date of agreement entered with the customers during the year.

c. Further, Other Income received through cargo handling charges is the amount recovered in excess of the amount paid by the company for the services in Proportion of the quantity dispatched.

d. Dividend income is accounted when the right to receive it is established.

1.4 Fixed Assets & Capital work-in-progress:

a. Fixed Assets are stated at cost less accumulated debrciation except otherwise stated. Costs of Fixed assets are arrived at after including therein attributable expenses for bringing the respective assets to working condition.

b. The company does not have any Capital Work-in-Progress.

1.5 Debrciation:

Debrciation on Fixed Assets is provided using Straight Line Method. The Fixed Assets are debrciated over the useful life brscribed in Schedule II of the Companies Act, 2013. Debrciable amount is calculated after considering 5% of original cost as residual value. No Debrciation has been charged on Land held as Investment Property.

1.6 Inventories:

a. Imported Coal: At Cost (including Direct Expenses with specific identification method) or Market Price, whichever is lower.

b. Indigenous Coal: At Cost (including Direct Expenses) using FIFO Method or Market Price, whichever is lower.

c. Goods In Transit/ Unclear Stock: At Cost.

d. Land: Valued at Cost including Registration Expenses.

1.7 Retirement Benefits:

a. The Company has provided for value of unutilized leave due to employees at the end of the year.

b. In the opinion of the Board of Directors, Company does not fall under the purview of the retirement benefits like, Gratuity, Due to the fact that none of the employees completed 5 years service in the company and therefore no provision for the same is provided in the books.

1.8 Investment:

Non Current Investments are shown at Cost. No provision has been made for diminution in the value of investments.

1.9 Earning Per Share

Basic earnings per share is computed by dividing the Profit / (Loss) for the period after tax (including the post tax effect of extraordinary items, if any) attributable to equity shareholders after deducting brference dividends and any attributable tax thereto by the weighted average number of equity shares outstanding during the year.

1.10 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.11 Foreign Currency Transaction:

a. Transaction in foreign currency is accounted for at the exchange spot rate on the date of transaction. Receivable and payables are translated at the closing rate of exchange brvailing on Balance Sheet date. The difference because of fluctuation in the rate of exchange is recognized in the Profit & Loss account.

b. Transactions covered by cross currency swaps and options contracts to be settled on future dated recognized at the year-end rates of the underlying foreign currency. Effect arising of the swap contract is being adjusted on the date of settlement.

c. Transaction covered by Forward contracts to be settled on future date recognized at the Hedged Rate of the underlying foreign currency at the year end.

d. Premium & Bank Margin incurred on Forward contracts to be settled on future date are proportionately recognized at the year end.

1.12 Borrowing Costs:

Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying assets are capitalized up to the date when such assets are ready for its intended use. All other borrowing costs are charged to Profit & Loss account.

1.13 Provisions and Contingent Liabilities:

A provision is recognized when an enterprises has a brsent obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to brsent value and are determined based on best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent Liabilities are not provided for in the accounts and are disclosed by way of Notes.

1.14 Provision for Current and Deferred Tax: Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961. Deferred Tax liabilities and assets are recognized at substantively enacted tax rates, subject to the consideration of prudence, on timing difference, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent period.

NOTE -2

OTHER NOTES ON FINANCIALS STATEMENTS

2.1 Prior Period Adjustments includes prior period expenses of Rs. 7.74 Lacs (P.Y. Rs. 4.10 Lacs) netted off with excess provision for income tax and other expenses, made in brvious year, of Rs. 2.90 Lacs (P.Y. Rs. 3.38 Lacs) written off during the year.

2.2 Segment (AS - 17)

The Company's operations comprises of Trading of Coal and Infrastructure/ Trading of Land. Reporting of these segments has been done as required in Accounting Standard - 17 "Segment Report" brscribed under Companies (Accounting Standard) Rules, 2006.

b. Collector of Stamp, Khargaon (MP) raised demand u/s. 33 read with section 48(b) of the Indian Stamp Act for Stamp Duty of R 10.62 Lacs against the Sand Mine Contract allotted to the Company for Maheshwar Group by State Mining Corporation Limited, Bhopal. The Company has filed an appeal before the court of Hon'ble Revenue Board, Gwalior (MP) for setting aside the impugned order so passed by Collector of Stamp. The Management is of the opinion that no provision is required for such liability. During The year 2014-15 the company has deposited R. 5.34 lacs in high court.

c. An Appeal is pending before Joint Commissioner against the demand of Rs. 36.67 Lacs for A.Y. 2006-07 by the Deputy Commissioner of Commercial Tax Surat. The Management is of the opinion that no provision is required for such liability.

d. The Deputy Commissioner of Sales Tax (VAT Adm.) Chandrapur has issued Penalty order of Rs. 0.28 Lacs under section 61 (2) of MVAT Act towards late submission of VAT Audit report for the financial year 2007-08. The Company did not accept the above demand and filed an appeal before Joint Commissioner of Sales Tax (Appeal), Nagpur. The appeal is pending before the Joint Commissioner. Meanwhile, The Company has paid sum of Rs. 0.10 Lacs, being part payment towards pending demand, which is pending for decision.

e. The Assistant Commissioner of Sales Tax, has passed Assessment order on dated 31.07.2014 and issued demand notice for Rs. 52.70 Lacs towards Sales Tax and Interest U/S 30 (3) of MVAT for F.Y 2010-11. The Company has paid sum of Rs. 5.00 Lacs being part payment of pending demand , which is pending for decision.

f. Income Tax Department has raised a demand of Rs. 0.11 Lacs for the assessment year 1996-97. The Company has filed an appeal before appropriate authorities against above demand. The Management is of the opinion that no provision is required for such liability.

g. The Company has received orders from Custom department for differential duty on the coal, considering the "Steam Coal" imported by Company as "Bituminous Coal" of Rs. 182.30 Lacs. The Company has not accepted the above orders and is arranging to file appeal.

h. The Company has received Show Cause Notices (SCN) from custom department for differential duty on the coal, considering the "Steam Coal" imported by company as "Bituminous Coal" of Rs. 52.74 Lacs. The company has filed reply for above show cause notices.

i. The Customs department has passed order and demanded differential duty, Interest and penalty on the ground of fake certificate of country of origin was produced based on which benefit of exemption has taken of Rs. 81.91 Lacs. The Company has not accepted the above order and arranging to file appeal. The Company has already paid Bank Guarantee of Rs. 75.00 Lacs with self-renewal clause.

2.3 Considering the Market scenario, In brvious year Board of directors of the company has proposed for increase in the period of redemption of 2% Cumulative Preference Shares from 7 year to 14 year. Pursuant to Section 106 of the Companies Act, 1956, all (100%) brference shareholders have consented in writing vide their letter dated 15/02/2014 for increase in the redemption period from 7 years to 14 years.

2.4 Company has created Capital Redemption Reserve out of the retained earnings of Rs. 457.09 Lacs (Previous year Rs. 399.95 Lacs) for the redemption of the 2% Cumulative Redeemable Preference Share. The allocation is in proportion of the Preference Share Capital to the redemption period.

2.5 During the year the company has booked an amount of Rs. 844.72 Lacs in Selling & Distribution Expenses, which includes an amount of Rs. 610.77 Lacs against rate and quality deduction which was made by customers in earlier years, but the same was disputed by the company and not accepted. However looking to the long term association and future business relation with customer, the Company has accepted those deductions and charged to profit & Loss Account.

2.7 The Company had allotted the Sand Mines contract for Maheshwar Group by State Mining Corporation Ltd., Bhopal for the period of 01.02.2004 to 31.01.2005. As per terms of the Contract, Company has deposited Rs. 72.15 Lacs as Earnest Money. The company continued mining of sand till October 10, 2004. The Company had received the notice from Collector, Khargone on October 11, 2004 to stop the mining work from October 13, 2004. Due to said notice, the Company had suffered and not fulfilled the conditions of said contracts. The State Mining Corporation had forfeited the amount of Earnest money deposited by the Company. The Company had no choice except to file the case in Arbitration Tribunal. The case had filed with Arbitration Tribunal but Tribunal had issued the award in favor of State Mining Corporation Ltd., Bhopal. The Company has filed an appeal with Session Court, Bhopal for setting aside the impugned order so passed by Arbitration Tribunal, which has also rejected on August 08, 2007. The Company has filed a writ petition with Hon'ble High Court of Jabalpur on September 25, 2008 against the order of Session Court, Bhopal. The writ petition filed by the Company has been admitted and is pending for hearing.

The Management is of the opinion that no provision is required for such amount shown as Deposit with MPSMCL in the Balance Sheet. As soon as the case will be listed and argued finally, order will be in favor of the Company.

2.8 The Company is in process of obtaining information from its suppliers/vendors and service providers and Company has written confirmation letters to parties for disclosure as required under Micro, Small and Medium Enterprises Development Act, 2006. As per information to the extent available with the Company, there are no Micro, Small and Medium Enterprises to whom the Company owes dues, which are outstanding for more than 45 days as at 31 March, 2015.

2.9 During the earlier years, the Company has made sales of Rs. 7,483.87 Lacs against 'C' Form, for which 'C' Forms amounting to Rs. 7181.84 Lacs has been received from the customers. Based on the past experience, the management is confident to receive balance 'C' Forms from the customers till the finalization of assessment and therefore it has not been treated as Contingent Liability.

2.10 The balances of Sundry Debtors, other deposits and advances are subject to confirmation from respective parties. Letter seeking confirmations have been sent by the Company but some parties are still to confirm the balances. In view of confirmation not having been received from all customers, the balances under these heads have been shown as per the books of accounts and are subject to reconciliation, if any. However, in the opinion of the management, the respective assets have been shown in the Balance Sheet are according to their realizable value. The adjustment, if any on reconciliation which in the opinion of the management would not be material, would be made once the accounts are fully reconciled.

Sundry Debtors amounting to Rs. 1,346.98 Lacs are outstanding more than 180 days. The management is of the opinion that whole amount will be recovered from parties so that the company has not created any provision on such debtor.

2.11 The brvious year figures are regrouped and rearranged wherever necessary, in order to make it comparable with current year.

As per our separate report attached

For: R. S. BANSAL & CO.

CHARTERED ACCOUNTANTS

FRN 00939C

Sd/- Vijay Bansal

Partner

M. No. 075344

For and on behalf of the Board

For HEMANG RESOURCES LIMITED

(FORMERLY KNOWN AS BHATIA INDUSTRIES AND INFRASTRUCTURE LIMITED)

Sd/- J.K. JAIN Director DIN: 00051878

Sd/- KOMAL THAKKER Whole Time Director DIN: 07062825

Sd/- B.L. KAKRECHA CEO

Sd/- M.S. BALAJI RAO CFO

Sd/- RAMANDEEP KAUR BHATIA Company Secretary

Place : Indore

Date : May 28, 2015