TO THE MEMBERS OF HINDUSTHAN URBAN INFRASTRUCTURE LIMITED (Formerly HindusthanVidyut Products Limited)
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Hindusthan UrbanInfrastructure Limited (the Company) which comprise the balance sheet asat 31 March 2016 the statement of profit and loss and the cash flow statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.
Managements Responsibility for the Standalone Financial Statements
The Companys 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 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 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 financial statements that give a true and fair view and are free whether due to fraudor error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account 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 theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessments;the auditor considers internal financial control relevant to the Companyspreparation 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 Companys Directors as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe standalone financial statements.
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 31 March 2016 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 (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure A a statement on the mattersspecified in the paragraph 3 and 4 of the Order to the extent applicable.
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 law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from branches not visited by usand report has been received from the Guwahati Works audited by the Branch Auditors.
(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 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act; and
(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 Auditors 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 no. 36(12)
. ii. the Company did not have any Long Term contracts including Derivative contractsfor which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For K. M. Agarwal & Co.
Annexure A to the Independent Auditors Report
Referred to in Para 2(f) Report on Other Legal and other RegulatoryRequirements in our Independent Auditors Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2016.
Statement on Matters specified in paragraphs 3 & 4 of the Companies (AuditorsReport) Order 2016.
(i) a. The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
b. As informed to us the Company has a regular programme for physical verificationof its fixed assets at periodic intervals whereby fixed assets are verified in a phasedmanner to cover all items over a period of 3 years. In programme a portion of fixedassets has been verified by the management during the year and as informed todiscrepancies were noticed on such verification. In our opinion the periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets.
c. The title deeds of immovable properties as disclosed in the financialstatements are held in the name of the Company.
(ii) a. As explained to us inventories (except stock lying with thirdparties and stock in transit) have been physicallyverifiedduring the year by themanagement at reasonable intervals.
b. In our opinion and according to information and explanation given to us thecompany has maintained proper records of inventory and no material discrepancies werenoticed on physical verification as compared with the books of account
(iii) The Company has not granted any loans secured or unsecured to companiesfirms limited liability partnerships or other parties covered in the register maintainedunder Section 189 of the Act. Consequently the requirement of clause (iii) (a) to clause(iii) (c) of paragraph 3 of the Order is not applicable to the Company.
(iv) in our opinion and according to the information and explanations given to usthe Company has complied with the provisions of Section 185 and 186 of the Companies Act2013 in respect of the loans and investments made and guarantees provided by it. There isno security provided by the company to parties covered under section 185 and 186.
(v) The Company has not accepted any deposits from the public as mentioned in thedirectives issued by Reserve Bank of India and hence provisions of sections 73 to 76 orany other relevant provisions of the Companies Act and the rules framed there under arenot applicable to the company.
(vi) Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records asspecified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
(vii) a. According to the information and explanations given to us and on the basisof our examination of the records of the Company amounts deducted/ accrued in the booksof account in respect of undisputed statutory dues including provident fundemployees state insurance income tax sales tax service tax duty of customs dutyof excise value added tax cess and other material statutory dues have been generallyregularly deposited during the year by the Company with the appropriate authorities. Therewas no material undisputed outstanding statutory dues as at 31st March 2016for a period of more than six months from the date they became payable.
b. According to the information and explanations given to us and the records of theCompany examined by us dues of income tax sales tax service tax Custom duty and Exciseduty not deposited on account of dispute are as follows:
|Name of the statute ||Nature of dues ||Amount (in Rs) (net of amount paid) ||Period to which the amount relates ||Forum where dispute is pending |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax Haryana ||1720197.00 ||2004-05 ||Tribunal Chandigarh |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax U.P. ||64307.00 ||1985-86 ||Assistant Commissioner (Assessment) Ghaziabad |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax U.P. ||488619.00 ||1995-96 ||Assistant Commissioner (Assessment) Ghaziabad |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax U.P. ||925200.00 ||2001-02 ||Honble High Court Allahabad |
|Municipal Corporation Faridabad ||Development Charges at Faridabad Work Land ||9285750.00 || ||Honble High Court Chandigarh |
|Central Excise ||No Proper Endorsement On Bill of Entry ||31869030.00 || ||Tribunal New Delhi |
|Income Tax Department ||Income Tax ||1840570.00 ||2005-06 ||ITAT New Delhi |
|Income Tax Department ||Income Tax ||1876070.00 ||2010-11 ||CIT Appeals New Delhi |
|Income Tax Department ||Income Tax ||111045.00 ||2012-13 ||CIT Appeals New Delhi |
(viii) According to the records of the company examined by us and the informationand explanation given to us the company has not defaulted in repayment of loans orborrowings to any financial institution bank or government. However the company has notraised any funds by issue of debentures.
(ix) The Company has not raised any monies by way of initial public offer orfurther public offer (including debt instruments). However the company has utilized theterm loans for the purposes for which they were raised.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
(xi) The Company has paid/provided for managerial remuneration in accordance withthe requisite approvals mandated by the provisions of Section 197 read with Schedule-V tothe Act.
(xii) As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it the provisions of Clause 3(xii) of the Order are not applicable to theCompany.
(xiii) The Company has entered into transactions with related parties in compliancewith the provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard (AS)18RelatedPartyDisclosuresspecifiedunder Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly the provisions of Clause 3(xiv) of the Order are not applicable to theCompany. (xv) The Company has not entered into any non-cash transactions with itsdirectors or persons connected with him. Accordingly the provisions of Clause 3(xv) ofthe Order are not applicable to the Company.
(xvi) The Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Orderare not applicable to the Company.
Annexure B to the Independent Auditors Report
Referred to in Para 1 Report on Other Legal and other RegulatoryRequirements in our Independent Auditors Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2016.
Statement on Matters specified in paragraphs 3 & 4 of the Companies (AuditorsReport) Order 2016.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls overfinancialreporting of HindusthanUrban Infrastructure Limited (the Company) as of 31st March 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial control system over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors judgment including the assessment of the risks of materialmisstatement of the financialstatements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Companys internal financial control system over financialreporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial (1) pertain to the maintenance of records that in reasonable detail accuratelyand fairly reflect 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 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; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the companys assets that could have a material effect on thefinancial 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internalfinancialcontrolsoverfinancialreporting were operating effectively as at 31 March 2016based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
| ||For K. M. Agarwal & Co. |
| ||Chartered Accountants |
| ||Firms registration number: 000853N |
| ||Sd/- |
| ||(D.K. Agarwal) |
|Place : New Delhi ||Partner |
|Date : 23rd May 2016 ||Membership number: 016952 |