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Himachal Futuristic Communications Ltd.

BSE: 500183 Sector: Telecom
NSE: HFCL ISIN Code: INE548A01028
BSE LIVE 15:48 | 22 Sep 29.40 -1.50
(-4.85%)
OPEN

29.40

HIGH

29.40

LOW

29.40

NSE 15:48 | 22 Sep 29.40 -1.50
(-4.85%)
OPEN

29.40

HIGH

29.40

LOW

29.40

OPEN 29.40
PREVIOUS CLOSE 30.90
VOLUME 146737
52-Week high 35.95
52-Week low 11.09
P/E 35.42
Mkt Cap.(Rs cr) 3,644
Buy Price 0.00
Buy Qty 0.00
Sell Price 29.40
Sell Qty 2172765.00
OPEN 29.40
CLOSE 30.90
VOLUME 146737
52-Week high 35.95
52-Week low 11.09
P/E 35.42
Mkt Cap.(Rs cr) 3,644
Buy Price 0.00
Buy Qty 0.00
Sell Price 29.40
Sell Qty 2172765.00

Himachal Futuristic Communications Ltd. (HFCL) - Auditors Report

Company auditors report

TO THE MEMBERS OF

Himachal Futuristic Communications Limited

1. Report on the Financial Statements

We have audited the accompanying financial statements of himachal futuristiccommunications limited ("the Company") which comprise the Balance Sheet asat March 31 2016 and the Statement of Profit and Loss and Cash Flow Statement for theyear then ended and a summary of the significant accounting policies and otherexplanatory information.

2. Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

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 financial statements are free from material misstatement.

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

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

4. opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the company as at March312016 and its profit and its cash flows for the year ended on that date.

5. Report on other Legal and Regulatory Requirements

A. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure-A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

B. 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 law have been kept by theCompany so far as it appears from our examination of those books;

(c) the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

(d) in our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014;

(e) On the basis of the written representations received from the directors as on March31 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of Section164(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 B"; and

(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 financial statements - Refer Note 28 to the financial statements.

ii. The Company has made provision as required under any law or accounting standardsfor material foreseeable losses if any on long term contracts including derivativecontracts - Refer Note 28(b) and

(c) to the financial statements.

iii. There has been no any delay in transferring amounts required to be transferredto the Investor Education and Protection Fund by the Company.

For KHANDELWAL JAIN & CO.

Chartered Accountants Firm Registration No.: 105049W

Manish Singhal

Partner

Membership No: 502570

Place: New Delhi Dated: 10th May 2016

ANNEXURE - A TO THE AUDITORSRs REPORT

[Referred to in above the AuditorsRs Report of even date to the HIMACHAL FUTURISTICCOMMUNICATIONS LIMITED on the Financial Statements for the year ended 31st March 2016]

1. (a) The Company has maintained proper records showing

full particulars including quantitative details and situations of its Fixed Assets.

(b) Fixed assets have been physically verified by the management during the year andthere is a regular program of verification which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets and as informed nomaterial discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanation given to us thetitle deeds of immovable properties are held in the name of the company except thefollowing

Particular of Assets Gross Value of Assets WDV of Assets Remark
Leasehold Land at Solan

Rs 2829496/-

Rs 2188400/-

Refer Note No. 10

2. As per the information furnished the Inventories have been physically verified bythe management at reasonable intervals during the period. In our opinion having regard tothe nature and location of stocks the frequency of physical verification is reasonable.

3. As per the information furnished the Company has not granted any secured orunsecured loans to companies firms Limited Liability Partnerships or other partiescovered in the register maintained under Section 189 of the Act.

In view of the above provisions of clause 3(iii)(b) and (c) of the Order are notapplicable.

4. In our opinion and according to the information and explanations given to us thecompany has in respect of loans investments guarantees and security provisionscomplied with section 185 and 186 of the Companies Act 2013.

5. According to the information and explanation given to us The Company has notaccepted any deposits whether the directives issued by the Reserve Bank of India and theprovisions of Section 73 to 76 or any other relevant provisions of the Companies Act2013. Hence the provisions of clause 3(v) are not applicable to the Company.

6. Pursuant to the rules made by the Central Government the maintenance of CostRecords have been prescribed u/s. 148(1) of the Companies Act 2013. We are of the viewthat prima facie the prescribed accounts and records have been maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.

7. (a) According to the information and explanations given to us and records examinedby us the Company has been regular in depositing undisputed statutory dues with theappropriate authorities in respect of provident fund employeesRs state insuranceincome-tax VAT service tax excise duty and other material statutory dues thoughthere have been a slight delay in a few cases.

According to the information and explanations given to us no undisputed arrears ofstatutory dues were outstanding as at 31st March 2016 from the date they become payable.

(b) According to the records of the Company the dues of Sales Tax/VAT Income TaxExcise Duty and Service Tax which has not been deposited on account of disputes and theforum where the dispute is pending are as under:

Name of the Statute Nature of the dues Amount in ' Period to which the amount relates Forum where dispute is pending
1. Sales Tax Act Sales Tax 18742719 1997-1998 & 1998-1999 Hon'ble High Court of Punjab & Haryana.
2. Value Added Tax Act VAT 19476838 2009-2010 & 2010-2011 Addl. Commissioner Department of Trade & Taxes New Delhi
3. Central Excise Act Excise Duty 24380673 2003-2004 & 2004-2005 Central Excise and Service Tax Appellate Tribunal New Delhi
4. Service Tax Service Tax 1397894 2006-2007 & 2007-2008 Central Excise and Service Tax Appellate Tribunal New Delhi
5. Central Excise Act Excise Duty 8217348 2006-2007 Central Excise and Service Tax Appellate Tribunal Mumbai

8. According to the information and explanations given to us and records examined byus the Company has not defaulted in repayment of dues to financial institution or banksor government or debenture holders as to the Balance Sheet date in view of the ReworkedPackage approved by the Corporate Debt Restructuring (CDR) Empowered Group as explained inNote. 33.

9. Based on our examinations of the records and information and explanations given tous the Company has applied the term loans for the purpose for which they were obtained.Also during the year the Company has raised inter corporate loans which on an overallbasis have been applied for the purposes for which they were obtained.

10. To the best of our knowledge and belief and according to the information andexplanations given to us no fraud on or by the Company has been noticed or reportedduring the course of our audit.

11. According to the information and explanation given to us and the books of accountsverified by us the Managerial remuneration has been paid or provided in accordance withthe requisite approvals mandated by the provisions of section 197 read with the Schedule Vto the Companies Act.

12. The Company is not a Nidhi Company hence the provisions of clause 3(xii) are notapplicable to the Company.

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 in compliance with Sections 177 and188 of Companies Act 2013 where applicable and details of such transactions have beendisclosed in the Financial Statements as required by the applicable accounting standards.

14. According to information and explanations given to us the Company during the yearhas not made any preferential allotment as private placement of shares or fully or partlyconvertible debentures hence the provision of clause 3(xiv) are not applicable to theCompany.

15. According to the information and explanation given to us and the books of accountsverified by us the company has not entered into any non-cash transaction with directorsor persons connected with him.

16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For KHANDELWAL JAIN & CO.

Chartered Accountants Firm Registration No. 105049W

Manish Singhal

Partner

Membership No: 502570

Place: New Delhi Dated: 10th May 2016

ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF HIMACHAL FUTURISTIC COMMUNICATIONS LIMITED AS ON 31ST March 2016

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

To the Members of

HIMACHAL FUTURISTIC COMMUNICATIONS Limited

We have audited the internal financial controls over financial reporting of HIMACHALFUTURISTIC COMMUNICATIONS LIMITED ("the Company") as of March 31 2016 inconjunction with our audit of the standalone financial statements of the company for theyear 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 control 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 the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the 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 Institute of Chartered Accountants of India. Those standards and the guidancenote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate Internal financial controls overfinancial reporting were 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 control 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is 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 of records in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with the generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company;

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 March 31 2016 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 KHANDELWAL JAIN & CO.

Chartered Accountants Firm Registration No. 105049W

Manish Singhal

Partner

Membership No: 502570

Place: New Delhi Dated: 10th May 2016