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Ansal Housing & Construction Ltd.

BSE: 507828 Sector: Infrastructure
NSE: ANSALHSG ISIN Code: INE880B01015
BSE LIVE 15:40 | 22 Nov 22.95 -0.05
(-0.22%)
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22.70

HIGH

23.00

LOW

22.55

NSE 15:41 | 22 Nov 22.60 -0.20
(-0.88%)
OPEN

23.10

HIGH

23.25

LOW

22.55

OPEN 22.70
PREVIOUS CLOSE 23.00
VOLUME 10625
52-Week high 36.00
52-Week low 15.65
P/E
Mkt Cap.(Rs cr) 136
Buy Price 0.00
Buy Qty 0.00
Sell Price 22.95
Sell Qty 450.00
OPEN 22.70
CLOSE 23.00
VOLUME 10625
52-Week high 36.00
52-Week low 15.65
P/E
Mkt Cap.(Rs cr) 136
Buy Price 0.00
Buy Qty 0.00
Sell Price 22.95
Sell Qty 450.00

Ansal Housing & Construction Ltd. (ANSALHSG) - Auditors Report

Company auditors report

To the Members of

Ansal Housing and Construction Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Ansal Housing &Construction Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation. Management's Responsibility for the Standalone Financial Statements TheCompany's Board of Directors is responsible for the matters stated in Section 134(5) ofthe Companies Act 2013 (''the Act") with respect to the preparation and presentationof these standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand 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 adequate internalfinancial controls that were operating effectively 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its loss and its cash flows for the year ended onthat date.

Emphasis of Matter

Attention is invited to Note No. 37 to the standalone financial statements regardingCompany's investment of Rs.491.67 lacs in a wholly owned subsidiary company in Sri Lanka.The subsidiary company has filed an arbitration claim against the Board of Investment ofSri Lanka (BOI).

The BOI has terminated the agreements for development of integrated township betweenthe subsidiary and the BOI. The Management is of the opinion the subsidiary has enoughassets to redeem the said investment and writedown of investment is not required at thisstage.

Our opinion is not modified in respect of this matter.

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 subsection (11) of Section 143 ofthe Act we give in the Annexure a statement on the matters specified in paragraphs 3 and4 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 bestof our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion proper books of account as required by the law have been kept bythe 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 Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in 'Annexure - A'.

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

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer to Note No. 28.1 to the standalonefinancial statements.

ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There have been no delays in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the standalone financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8th November 2016 to 30th December 2016. Based on auditprocedures performed and the representations provided to us by the management we reportthat the disclosures are in accordance with the books of account maintained by the Companyand as produced to us by the Management. Refer Note No. 40 to the standalone financialstatements.

For Khanna & Annadhanam
Chartered Accountants
(Firm Registration No. 001297N)
(Jitender Dhingra)
Place : New Delhi Partner
Date : 29th May 2017 Membership No. 90217

(Referred to in paragraph 1 under the heading 'Report on Other legal and RegulatoryRequirements' of our report of even date)

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books and accounts and other recordsexamined by us in the normal course of audit we report that:

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

b) As explained to us the fixed assets have been physically verified by the managementin accordance with a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and nature of its assets. According to theinformation and explanations given to us no material discrepancies were noticed on suchphysical verification.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in fixed assets of the Company are held in the name of the Company.

2. As per information and explanations given to us the inventory of buildingmaterials stores and spares restaurant's provisions beverages etc. land andflats/shops/ houses etc. at major locations has been physically verified during the yearby the management. In our opinion the frequency of verification is reasonable. Accordingto the information and explanations given to us keeping in view the nature of theoperations of the Company inventory of work-in-progress cannot be physically verified. Asexplained to us there were no material discrepancies noticed on physical verification ofinventory.

3. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Companies Act 2013. Therefore the provisions of Cluase 3(iii)(a)(b)and (c) of the said Order are not applicable to the Company.

4. I n our opinion and according to the information and explanations given to us thereare no loans and securities granted in respect of which provisions of Section 185 and 186of the Companies Act 2013 are applicable. In our opinion and according to the informationand explanations given to us the Company has complied with provisions of section 186 ofthe Companies Act 2013 in respect of guarantees given and investments made.

5. During the year the Company approached the National Company Law Tribunal (NCLT)New Delhi under section 74(2) of the Companies Act 2013 seeking approval for extensionof time to repay the deposits which was received vide NCLT's order dated 3rdOctober 2016. The total outstanding deposits at the time of Company's application to theNCLT amounting to ' 8457.47 lacs are generally being repaid by the Company as per theterms of NCLT Orders though there are some overdue amounts. However the NCLT vide videits order dated 10th April 2017 has permitted the overdue deposits of 31stMarch 2017 to be paid by 30th June 2017. The Company is in the process ofcomplying with the above NCLT orders (Refer No. No. 4.7 to the standalone financialstatements). Further in our opinion and according to the information and explanationsgiven to us the provisions of sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 and the rules framed thereunder wherever applicable have beencomplied with by the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have however not made a detailedexamination of the same.

7. a) According to the information and explanations given

to us and the records of the Company examined by us in our opinion there have beendelays in deposit of undisputed statutory dues relating to provident fund employees stateinsurance income-tax sales tax wealth tax service tax value added tax labour cessand other material statutory dues wherever applicable to the appropriate authorities. Weare informed that the Company's operations during the year did not give rise to anyliability for customs duty and excise duty.

Other than for undisputed amount of value added tax of ' 657.09 lacs service tax of '268.81 lacs and income tax Rs 3.29 lacs there are no undisputed amounts payable inrespect of these dues which have remained outstanding at 31st March 2017 for aperiod of more than six months from the date they became payable. In respect of labourcess the amount outstanding for a period of more than six months as on 31stMarch 2017 has not been quantified.

b) According to the information and explanations given to us and the records of theCompany examined by us the disputed amounts payable in respect of income-tax sales taxvalue added tax service tax and other applicable statutory dues not deposited with theappropriate authorities are as follows:

Name of the statute Nature of dues Amount (' In lacs) Period to which the amount relates Forum where dispute is pending
Income Tax Act Income Tax 807.45 Various Assessment Years Supreme Court
Income Tax Act Income Tax 55.69 Assessment Years 2011-12 and 2012-13 Commissioner of Income Tax (Appeals) New Delhi
UP Sales Tax Act Sales Tax 76.13 Assessment Years 2004-05 to 2007-08 Tribunal Commercial Tax Ghaziabad
UP Value Added Tax Act Sales Tax 247.98 Assessment Years 2007-08 to 2013-14 Tribunal Commercial Tax Ghaziabad
MP Value Added Tax Act Sales Tax 5.00 Assessment Year 2008-09 Tribunal Commercial Tax Bhopal
Employees Provident Fund Act Provident Fund 33.39 June 1994 to March 2006 Delhi High Court
The Finance Act 1994 Service Tax 183.77 October 2003 to March 2010 Custom Excise and Service Tax Appellate Tribunal New Delhi

* The amounts are net of payments made under protest to the authorities.

8. According to the records of the Company examined by us and the information andexplanations given to us the Company has defaulted in the repayment of dues includinginterest to banks and financial institutions covered by the Order during the year. Whilethere were delays in repayment on different occasions during the year the relevantamounts have been paid to the respective banks and financial institutions during the yearor loans have been restructured during the year. The delays which have remainedoutstanding at the year end are given below:

Particulars

Amount of default of repayment (' in lacs)

Period of default
Principal Interest
Due to Banks:
-Punjab National Bank 17.76 - 1 to 60 days
Due to Financial Institutions:
-IFCI Ltd 1242.56 261.56 15 to 167 days
-IndiaBulls Housing Finance Ltd.

-

293.93 10 to 69 days

Further the Company does not have any debentures and loan from government.

9. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. According to the informationand explanations given to us and the records examined by us terms loans obtained forfinancing real estate projects in our opinion were used for the real estate projects onan overall basis.

10. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

11. In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid/ provided formanagerial remuneration for the current year in accordance with the requisite approvalsmandated by the provisions of Section 197 read with Schedule V to the Companies Act 2013.Further during the year 2015-16 the Company had paid managerial remuneration to theChairman and Managing Director (CMD) which was in excess of the limit provided in Section197 read with Schedule V to the Companies Act 2013 by ' 111.79 lacs. The Company hadapplied to the Central Government for waiver of excess remuneration paid to the CMD.However during the year the Ministry of Corporate Affairs Government of India hasrejected the application of the Company. Consequently the Company has recovered theexcess amount paid from the CMD during the year which has been adjusted against salariesof the current year. (Refer Note No. 25.1 to the standalone financial statements).

12. In our opinion the Company is not a nidhi company. Accordingly paragraph 3(xii)of the Order is not applicable.

13. 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 Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

14. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year and hence not commented upon.

15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him.

16. According to the information and explanations given to us the provisions ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For Khanna & Annadhanam
Chartered Accountants
(Firm Registration No. 001297N)
(Jitender Dhingra)
Place : New Delhi Partner
Date : 29th May 2017 Membership No. 90217

ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF ANSAL HOUSING AND CONSTRUCTION LIMITED

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

To the Members of Ansal Housing and Construction Limited We have audited the internalfinancial controls over financial reporting of Ansal Housing and ConstructionLimited("the Company") as of 31stMarch 2017 in conjunction with our audit ofthe 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditor's 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 as specified under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Khanna & Annadhanam
Chartered Accountants
(Firm Registration No. 001297N)
(Jitender Dhingra)
Place : New Delhi Partner
Date : 29th May 2017 Membership No. 90217