TO THE MEMBERS OF HINDUSTHAN URBAN INFRASTRUCTURE LIMITED REPORT ON THE STANDALONEFINANCIAL STATEMENTS
1. We have audited the accompanying standalone financial statements of HINDUSTHANURBAN INFRASTRUCTURE LIMITED ("the Company") which comprise the BalanceSheet as at 31st March 2017 the Statement of Profit and Loss and the Cash Flow Statementfor the year then ended and a summaryofsignificantaccounting policies and otherexplanatory information which we have signed under reference to this report.
Management's responsibility for the Financial Statements
2. 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 preparationand presentationofthesestandalonefinancialstatements that give a true financialperformance and andfairviewof thefinancial cash flows of the Company in accordance withthe accounting 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 provision 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. Our responsibility is to express an opinion on these financial statements based onour the provisions of the Act the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rulesmade there under. We conducted our audit in accordance with the Standards on Auditingspecified under Section143 (10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amountsand 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 control relevant to the Company's preparation and fairpresentation of the financial statements in order to design the audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and reasonableness of the accounting estimates made by themanagement as well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
6. In our opinion and to the best of our information and according to the explanationsgiven to us the financialstatements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India: (i) in the case of the Balance Sheet of the stateof affairs of the Company as at 31st March 2017;
(ii) in the case of the Statement of Profit and Loss of the Loss of the Company forthe year ended on that date; and (iii) in the case of Cash Flow Statement of the cashflows of the Company for the year ended on that date.
We did not audit the financial statements of Guwahati Unit of the Company included inthe standalone financial statement whose financial statement reflect total assets of Rs.564097462/-as at 31st March revenues & profit before tax of Rs.1460753897/-& Rs 132169607/-respectively for the financial considered in thestandalone financial statement. These financial statements have been audited by the otherauditor whose report has been furnished to us by the management and our opinion on thestandalone Statement in so far as it relates to the amounts and disclosure included inrespect of Guwahati Unit is based solely on the report of the other auditor.
Report on Other Legal and Regulatory Requirement
7. As required by the Companies (Auditor's Report) Order 2016 (Order') issuedby the Central Government of India in terms of sub-section (11) of section 143 of the Actwe enclose in the Annexure A' a statement on the matters specified in paragraphs 3and 4 of the said Order.
8. As required by Section143 (3) of the Act we report that: a. we have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit; b. in our opinion proper books ofaccounts as required by the law have been kept by the Company so far as appears from ourexamination of those books and report received from the branch auditor of Guwahati unit;c. the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt with bythis report are in agreement with the books of account; d. In our opinion the aforesaidfinancial statements referred to in section 133 of the Companies Act 2013; e. on thebasis of written representations received from the directors as on 31st March 2017 andtaken on record by the Board of Directors we report that none of the directors isdisqualified as on 31st March 2017 from being appointed as director in terms of section164(2) of the Companies Act 2013 ; f. With respect to the adequacy of the InternalFinancial Controls over the financial reporting of the Company and operating effectivenessof such controls refer to our separate Report in "Annexure B"; and g. Withrespect to the other matters to be included in the Auditor's Report in accordance withRule11 of the
Companies (Audit and Auditors)Rules2014in our opinion and to the best of ourinformation and according to the explanations given to us: I. The Company has disclosedthe impact of pending litigation on its financial position in its financial statement(Refer note 25 to the financial statement);
II. The Company did not have any foreseeable losses on long term contracts and had noderivative contracts outstanding as at 31st March 2017; III. There has been no delay intransferring amounts required to be transferred to Investor Education and Protection Fundby the company; and
IV. The Company had provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and these are in accordance with the books of accountsmaintained by the company. (Refer note 33 to the financial statements).
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
The Annexure "A" referred to in paragraph 7 of our report of even date to themembers of Hindusthan Urban Infrastructure Limited on the financial statements forthe year ended 31st March 2017.
i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us physical verification of fixed assets has been carried out bythe Company and no material discrepancies were noticed on such verification. In ouropinion the frequency of verification is reasonable having regard to the size of theCompany and nature of its business.
(c) Title deeds of immovable properties of the company are held in the name of theCompany.
ii) (a) The inventories have been physically verified during the year by the managementat reasonable intervals.
(b) In our opinion no material discrepancies were noticed on physical verification ofstocks.
iii) According to the information and explanations given to us the Company has duringthe year granted unsecured loans to its wholly owned subsidiary company covered in theregister maintained under section 189 of the companies Act 2013. The terms and conditionsof the grant of such loans are not prejudicial to the company's interest. The principalamount is repayable on demand & borrower has been regular in paying interest on loanand there is no overdue principal amount at the year end.
iv) According to the information and explanation given to us the company has compliedwith provision of Section 185 & 186 of the Act in respect of making Investment grantof Loans and providing guarantees.
v) The Company has not accepted any deposits during the year and hence paragraph 3(v)of the Order is not applicable to the Company.
vi) Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified 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 records examined by us the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees state insurance income tax sales tax service tax duty of customduty of excise value added tax cess and other statutory dues wherever applicable.
According to the information and explanations given to us no undisputed arrears ofstatutory dues were outstanding as on the last date of the financial year for a period ofmore 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.) ||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 ||2004-05 ||Sales Tax Tribunal Chandigarh |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax U.P. ||552926 ||1995-96 ||Assistant Commissioner (Assessment) Ghaziabad |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax U.P. ||925200 ||2001-02 ||Hon'ble High Court Allahabad |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax U.P. ||70678 ||1985-86 ||Tribunal Ghaziabad |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax Gwalior ||3474512 ||2013-14 ||Commissioner of VAT (Appeal) Gwalior |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax Gwalior ||8594714 ||2014-15 ||Commissioner of VAT (Appeal) Gwalior |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax Bhopal ||603441 ||2013-14 ||MP Commerical tax Appeal Board Bhopal |
|Central Sales Tax Act 1956 & Sales ||Sales Tax Bhopal ||2857782 ||2011-12 ||MP Commerical tax |
|Tax/Vat Act of Various States || || || ||Appeal Board Bhopal |
|Central Sales Tax Act 1956 & Sales ||Sales Tax Bhopal ||1783192 ||2012-13 ||MP Commerical tax |
|Tax/Vat Act of Various States || || || ||Appeal Board Bhopal |
|Central Sales Tax Act 1956 & Sales ||Sales Tax Bhopal ||434478 ||2014-15 ||MP Commerical tax |
|Tax/Vat Act of Various States || || || ||Appeal Board Bhopal |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax Bhopal ||1515021 ||2015-16 ||MP Commerical tax Appeal Board Bhopal |
|Municipal Corporation Faridabad ||Development Charges at Faridabad Work Land ||13712183 ||2013-14 ||Hon'ble High Court Chandigarh |
|Central Excise ||No Proper Endorsement On Bill of Entry ||31869030 ||Feb 2009- Aug 2009 ||Hon'ble Custom Excise & Service Tax Appellate Tribunal New Delhi |
|Central Excise ||No Proper Endorsement On Bill of Entry ||11969731 ||2009-10 ||Hon'ble Custom Excise & Service Tax Appellate Tribunal New Delhi |
|Central Excise ||Evaded payment of Central Excise Duty and cess against Duty on VAT Remission ||6782510 ||2012-13 ||The Commissioner (Appeals) Customs & Central Excise Guwahati. |
|Central Excise ||Evaded payment of Central Excise Duty and cess against Duty on VAT ||2852394 ||2014-15 ||The Commissioner (Appeals) Customs & Central Excise Guwahati. |
| ||Remission || || || |
|Income Tax Department ||Income Tax ||1840570 ||2005-06 ||ITAT New Delhi |
|Income Tax Department ||Income Tax ||148860 ||2007-08 ||CIT Appeals Kolkata |
|Income Tax Department ||Income Tax ||3170477 ||2010-11 ||CIT Appeals Kolkata |
|Income Tax Department ||Income Tax ||7378430 ||2011-12 ||CIT Appeals Kolkata |
|Income Tax Department ||Income Tax ||833127 ||2013-14 ||CIT Appeals Kolkata |
|Income Tax Department ||Income Tax ||426998 ||2014-15 ||CIT Appeals Kolkata |
Apart from these dues the Company has received demand of Rs. 66927117/-from IncomeTax department related to assessment year 13-14 & 14-15 however the credit of advanceIncome tax of Rs. 46600000/- has not been adjusted against liability at the time ofassessment but the same is reflecting in records of Income tax department (As perstatement of 26AS) and balance demand is due to interest charged on the above. The companyhas filed rectification for the said demand.
viii) Based on our audit procedures and according to the information given by themanagement the company has not defaulted in repayment of loans or borrowings from anyfinancial institution bank or government during the year.
ix) In our opinion and according to the information and explanations given to us theCompany has taken term loan and applied for the purpose for which they were raised andmoney has not been raised by way of initial public offer or further public offer(including debt instrument) during the year.
x) Based upon the audit procedures performed and to the best of our knowledge andaccording to the information and explanations given to us by the management we reportthat no fraud by the Company or any fraud on the company by its officer or employees hasbeen noticed or reported during the course of our audit.
xi) The managerial remuneration has been paid / provided (by the Company)are inCompliance with Section 197 read with schedule V to the Companies Act 2013. xii) In ouropinion and according to the information and explanations given to us the Company is nota Nidhi Company and hence paragraph 3 (xii) of the Order is not applicable to the Company.
xiii) As explained to us and as per the records of the company in our opinion thetransactions with the related parties are in Compliance with Section 177 and Section 188of the Companies Act 2013 and the details have been disclosed in the financial statementsas required by the applicable accounting standard. xiv) According to the records thecompany it has not made any preferential allotment of shares or private placement ofshares or fully/partly convertible debentures during the year under report. Accordinglyparagraph 3 (xiv) of the Order is not applicable to the Company.
xv) During the year the Company has not entered into any non-cash transaction withDirector or person connected with him. Hence paragraph 3 (xv) of the Order is notapplicable to the Company.
xvi) The Company is not required to be registered under section 45-1A of the ReserveBank of India Act 1934 and hence paragraph 3 (xvi) of the Order is not applicable to theCompany.
ANNEXURE "B"TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF HINDUSTHAN URBAN INFRASTRUCTURE LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") controlsWehaveauditedtheinternalfinancial over financial reporting of Hindusthan UrbanInfrastructure Limited ("the Company") as of March 31 2017 in conjunctionwith our audit of the 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 Reporting issuedby the Institute of Chartered Accountants of
India". These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficientconduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
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 accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting
(the "Guidance Note") and the Standards on Auditing issued by ICAI anddeemed to 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 of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to Obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively 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 financialstatements of the whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficientand appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial 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 financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial such internal financial controls over financial reporting were operating overfinancial reporting criteria established by the Company considering
Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India"
| ||FOR K.N. GUTGUTIA & COMPANY |
| ||CHARTERED ACCOUNTANTS |
| ||FRN 304153E |
| ||(B.R. GOYAL) |
|PLACE: NEW DELHI ||PARTNER |
|DATE: 15TH MAY 2017 ||M.NO. 12172 |