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Himachal Futuristic Communications Ltd.

BSE: 500183 Sector: Telecom
NSE: HFCL ISIN Code: INE548A01028
BSE 15:59 | 19 Jan 32.45 1.55
(5.02%)
OPEN

31.20

HIGH

32.65

LOW

30.90

NSE 15:50 | 19 Jan 32.50 1.45
(4.67%)
OPEN

31.10

HIGH

32.80

LOW

30.85

OPEN 31.20
PREVIOUS CLOSE 30.90
VOLUME 2954132
52-Week high 36.65
52-Week low 11.85
P/E 39.10
Mkt Cap.(Rs cr) 4,022
Buy Price 32.45
Buy Qty 22382.00
Sell Price 0.00
Sell Qty 0.00
OPEN 31.20
CLOSE 30.90
VOLUME 2954132
52-Week high 36.65
52-Week low 11.85
P/E 39.10
Mkt Cap.(Rs cr) 4,022
Buy Price 32.45
Buy Qty 22382.00
Sell Price 0.00
Sell Qty 0.00

Himachal Futuristic Communications Ltd. (HFCL) - Auditors Report

Company auditors report

TO THE MEMBERS OF

HIMACHAL FUTURISTIC COMMUNICATIONS LIMITED

1. Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Indian Acccounting Standards (Ind AS)financial statements of HIMACHAL FUTURISTIC COMMUNICATIONS LIMITED ('the Company') whichcomprise the balance sheet as at 31 March 2017 the statement of profit and loss(including other comprehensive income) the statement of cash flows and the statement ofchanges in equity for the year then ended and a summary of the significant accountingpolicies and other explanatory information (herein after referred to as "standaloneInd AS financial statements").

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 standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act read with relevant rules issued thereunder.

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 standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

3. Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

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 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 Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit

evidence about the amounts and the disclosures in the standalone Ind AS financialstatements. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the standalone Ind AS financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thestandalone Ind AS 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 Ind AS 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 Ind AS financial statements.

4. Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31 March 2017 and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear 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 the statement of profit and loss the statement of cash flowsand the statement of changes in equity dealt with by this Report are in agreement with thebooks of account;

(d) in our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder;

(e) on the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 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 standalone Ind AS financial statements - Refer Note 43 to the financialstatements.

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 43 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.

iv. the Company has provided requisite disclosures in its standalone Ind AS financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016 and these are in accordance with the books ofaccounts maintained by the Company. Refer Note 60 to the standalone Ind AS financialstatements.

For KHANDELWAL JAIN & CO.

Chartered Accountants Firm Registration No. 105049W

Manish Kumar Singhal

Partner

Membership No: 502570

Place: New Delhi

Dated: 10th May 2017

ANNEXURE - A TO THE AUDITOR'S REPORT

The Annexure referred to in Independent Auditor's Report to the members of the Companyon the standalone Ind AS financial statements for the year ended 31 March 2017 we reportthat:

1. (a) The Company has maintained proper records showing full particulars includingquantitative 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. 11

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

Name of the Statute Nature of the dues Amount in Rs. 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 806000 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 3492343 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. 58.

the Order are not applicable.

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 examined by us the Company has been regular in depositing undisputedstatutory dues with the appropriate authorities in respect of provident fund employees'state insurance income-tax VAT service tax excise duty and other material statutorydues though there have been a slight delay in a few cases. According to the informationand explanations given to us no undisputed arrears of statutory dues were outstanding asat 31st March 2017 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:

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 incompliance with Sections 177 and 188 of Companies Act 2013 where applicable and details ofsuch transactions have been disclosed in the Financial Statements as required by theapplicable 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 and hence the provision of clause 3(xv) are not applicableto the Company.

16. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and hence the provision of clause 3(xvi) are not applicable to theCompany.

For KHANDELWAL JAIN & CO.

Chartered Accountants Firm Registration No. 105049W

Manish Kumar Singhal

Partner

Membership No: 502570

Place: New Delhi

Dated: 10th May 2017

ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF HIMACHAL FUTURISTIC COMMUNICATIONS LIMITED AS ON 31ST MARCH 2017.

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 2017 inconjunction with our audit of the Standalone Ind AS financial statements of the companyfor 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 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 testing and evaluating the design andoperating 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 Standalone Ind AS financial statements whether due to fraudor 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 ofrecords 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 the generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the Company; (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 March 31 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 KHANDELWAL JAIN & CO.

Chartered Accountants Firm Registration No. 105049W

Manish Kumar Singhal

Partner

Membership No: 502570

Place: New Delhi

Dated: 10th May 2017