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Hubtown Ltd.

BSE: 532799 Sector: Infrastructure
NSE: HUBTOWN ISIN Code: INE703H01016
BSE LIVE 15:42 | 21 Aug 115.15 0.85
(0.74%)
OPEN

117.00

HIGH

122.25

LOW

114.15

NSE 15:49 | 21 Aug 114.10 0.25
(0.22%)
OPEN

116.00

HIGH

122.00

LOW

113.50

OPEN 117.00
PREVIOUS CLOSE 114.30
VOLUME 88796
52-Week high 173.00
52-Week low 81.55
P/E 104.68
Mkt Cap.(Rs cr) 838
Buy Price 115.50
Buy Qty 332.00
Sell Price 0.00
Sell Qty 0.00
OPEN 117.00
CLOSE 114.30
VOLUME 88796
52-Week high 173.00
52-Week low 81.55
P/E 104.68
Mkt Cap.(Rs cr) 838
Buy Price 115.50
Buy Qty 332.00
Sell Price 0.00
Sell Qty 0.00

Hubtown Ltd. (HUBTOWN) - Auditors Report

Company auditors report

To

The Members of Hubtown Limited

Report on the Financial Statements

We have audited the accompanying standalone financial statements of HUBTOWN LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in S ection134 (5) of the Companies Act 2013 ("the Act") with respect to the preparationof these 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. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

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 and the Rulesmade thereunder including the Accounting Standards and matters which are required to beincluded in the audit report. We conducted our audit in accordance with the Standards onAuditing specified under Section 143(10) of the Act and other applicable authoritativepronouncements issued by the Institute of Chartered Accountants of India. Those Standardsand pronouncements require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether the financial statements are freefrom 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’ judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial controls relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company’s Directors as wellas evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is suficient and appropriate toprovide a basis for our audit opinion on the financial statements.

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 31stMarch 2016 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to:

(a) Note 2 (III) (A) (ii) and (iii) in the financial statements with regard torecognition of expense and income for ongoing projects which is based upon estimatedcosts as per the judgement of the management which have been relied upon by us thesebeing technical matters.

(b) Note 4 (footnote b) in the financial statements with regard to non-creation ofinvestments to the extent of 15% of the value of the redeemable debentures which isrequired to be created and earmarked in the manner prescribed under Rule 18 (7) (c) of theCompanies (Share Capital and Debentures) Rules 2014 notified by the Ministry of CorporateAffairs.

(c) Note 17 (footnote b) of the financial statements regarding the status of theprojects and the opinion framed by the Company’s management regarding realizablevalue of the costs incurred being a technical matter relied upon by us.

(d) Note 32 (i) (B) regarding guarantees issued and securities provided aggregatingRs. 90099.69 lakhs by the Company to banks and financial institutions on behalf of variousentities which are significant in relation to the profits for the year and the net worthof the Company. In the opinion of the Management these are not expected to result intoany financial liability to the Company.

(e) Note 32 (footnote b) of the financial statements with regard to reliance placed bythe auditors on certification received from the management with regard to the disclosureof contingent liabilities given by the Company.

(f) Note 39 of the financial statements with regard to balances that are subject toconfirmations reconciliation and adjustments if any.

(g) Note 14 of the financial statements with regard to amounts deposited with theHon’ble Sessions Court Mumbai as deposits on account of an ongoing case inconnection with a commercial transaction with an erstwhile associate company. Inconnection with the above a bank account of the Company has been attached by theMaharashtra State CID. Considering the facts of the matter and its pendency we are unableto express any opinion on the same as the matter is sub-judice.

(h) Note 27 (footnote c) of the financial statements with regard to corporate socialresponsibility (CSR) expense which is subject to cheque realization by the recipient.

(i) The Company has not charged interest on advances given to various group entitiesdeveloping real estate projects in which the Company has a business interest.

Our opinion is not qualified in respect of the above matters.

Other Matters

Attention is invited to:

(a) The Statement of Profit and Loss of the Company which includes share of loss (net)from investments in partnership firms / joint ventures aggregating Rs. 4.75 lakhs arebased on the financial statements of the joint ventures / firms as audited by otherauditors whose reports have been furnished to us which have been relied upon by us.Further the Statement of Profit and Loss of the Company includes share of loss frominvestments in partnership firms / joint ventures aggregating Rs. 720.93 lakhs are basedon the financial statements of the joint ventures / firms as prepared by the managementand presented to us on which we have relied.

(b) Note12 (footnote e) regarding the Company’s investments in certainsubsidiaries jointly controlled entities and associates as at 31st March 2016 which haveincurred losses and have negative net worth as at March 31 2016.

Report on Other Legal and Regulatory Requirements

I. As required by the provisions of ‘the Companies (Auditor’s Report) Order2016’ issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act (hereinafter referred to as the "Order") and on thebasis of such checks of the books and records of the Company as we considered appropriateand according to the information and explanations given to us we give in Annexure A astatement on the matters specified in paragraphs 3 and 4 of the Order; II. As required bySection 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

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

(e) On the basis of the written representations received from the Directors as on 31stMarch 2016 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 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 controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure B.

(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 knowledge and belief and according to the information andexplanations given to us :

i. The Company has disclosed the impact if any of pending litigations as at March 312016 on its financial position in its standalone financial statements.

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

iii. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended March 312016.

For Dalal Doshi & Associates
Firm Registration Number: 121773W
Chartered Accountants
Dinesh Doshi
Place : Mumbai Partner
Date : 22nd June 2016 Membership No.: F-9464

ANNEXURE TO AUDITORS’ REPORT

ANNEXURE "A" REFERRED TOIN O UR REPORT TO THEMEM BERS OF HUBTOWNLIMITED ONTHE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2016;

On the basis of such checks as we considered appropriate and in terms of theinformation and explanations given to us we state that: -

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) The fixed assets have been physically verified by the Management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the Company and nature of its assets.Pursuant to the program a portion of the fixed assets has been physically verified by themanagement during the year and no material discrepancies between the book records and thephysical fixed assets have been noticed;

(c) The title deeds of immovable properties are held in the name of the Company;

(ii) The physical verification of inventory has been conducted at reasonable intervalsby the Management during the year. The discrepancies noticed on physical verification ofinventory as compared to book records were not material and have been appropriately dealtwith in the books of accounts;

(iii) The Company has granted unsecured loan to one company covered under the registermaintained under Section 189 of the Act;

(a) In respect of the aforesaid loan as per the terms and conditions the same isinterest free and repayable on demand;

(b) The terms and conditions of the loan are prima facie not prejuducial to theinterest of the Company and

(c) As the loan is repayable on demand the question of overdue amount does not arise;

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of the loans and investments made and guarantees and security provided byit;

(v) The Company has not accepted any deposits during the year from the public withinthe meaning of Sections 73 74 75 and 76 of the Act and the Rules framed thereunder tothe extent notified;

(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. We havebroadly reviewed the cost records maintained by the Company in respect of projects and areof the opinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete;

(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion except for dues in respect of Income TaxProvident Fund Profession Tax Tax Deducted at Source Value Added Tax and Service Taxthe Company is generally regular in depositing undisputed statutory dues includingEmployees’ State Insurance Wealth Tax duty of customs duty of excise and othermaterial statutory dues as applicable with the appropriate authorities. The extent ofarrears of statutory dues outstanding as at the Balance Sheet date for a period exceedingsix months from the date they became payable are Rs. 2382.12 lakhs relating to Income TaxDeducted at Source Rs. 0.07 lakhs relating to Provident Fund Rs. 0.06 lakhs relating toProfession Tax Rs. 697.58 lakhs relating to Value Added Tax and Rs. 330.02 lakhs relatingto Service Tax;

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of Income Tax Value Added Tax and Cess asat the Balance Sheet date which have not been deposited on account of a dispute are asfollows:

Statute and nature of dues Financial Year Amount (Rs. in lakhs) Forum where dispute is pending
Income Tax Act 1961
Income Tax 2003-04 17.48 Mumbai High Court
Income Tax 2004-05 21.31 Mumbai High Court
Income Tax 2005-06 20.92 Mumbai High Court
Income Tax 2009-10 6.46 Income Tax Appellate Tribunal Mumbai
Income Tax 2010-11 431.4 Income Tax Appellate Tribunal Mumbai
Income Tax 2011-12 29.64 Commissioner of Income Tax (Appeals) Mumbai
Income Tax 2012-13 2235.04 Commissioner of Income Tax (Appeals) Mumbai
Maharashtra Value Added Tax Act 2002
MVAT 2006-07 15.49 Joint Commissioner of Sales Tax (Appeals) – 3
MVAT 2007-08 0.26 Joint Commissioner of Sales Tax (Appeals) – 3
MVAT 2008-09 92.94 Deputy Commissioner of Sales Tax (Appeals) - 6
MVAT 2009-10 8.64 Joint Commissioner of Sales Tax (Appeals) – 3
MVAT 2010-11 5.31 Joint Commissioner of Sales Tax (Appeals) – 3
MVAT 2011-12 4.53 Joint Commissioner of Sales Tax (Appeals) – 3

(viii) On the basis of the records examined by us and the information and explanationsgiven to us the Company has delayed in repayment of dues to banks financial institutionand debentures holders. Attention is invited to footnote "f" to Note 5 withregards to banks footnote "g" to Note 8 with regards to financial institutionand footnote "c" to Note 10 with regards to debentures for the amounts andperiod of delays in payment of principle and interest thereon;

(ix) In our opinion and according to the information and explanations given to us theterm loans have been applied on an overall basis for the purposes for which they wereobtained;

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practice 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. Attention is however invited to Note 14 to accounts in connection with acommercial transaction with an erstwhile associate company;

(xi) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act 2013;

(xii) As the Company is not a nidhi company the provisions of clause 3 (xii) of theOrder are not applicable to the Company;

(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 partytransaction have been disclosed in the financial statements as required under AccountingStandard AS 18 - Related Party Disclosures specified under Section 133 of the CompaniesAct 2013 read with Rule 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 debenture during the year under review. Accordinglythe provisions of Clause 3(xiv) of the Order are not applicable to the Company;

(xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with them. 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 45IA of the ReserveBank of India Act 1934 and accordingly the provisions of clause 3(xvi) of the Order arenot applicable to the Company.

For Dalal Doshi & Associates
Firm Registration Number: 121773W
Chartered Accountants
Dinesh Doshi
Place : Mumbai Partner
Date : 22nd June 2016 Membership No.: F-9464

"ANNEXURE B" TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF HUBTOWN LIMITED

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 over financial reporting of HubtownLimited ("the Company") as of March 31 2016 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 controlsstated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued 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 eficientconduct of its business including adherence to the Company’s policies thesafeguarding 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 Act.

Auditors’ 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 both issued by ICAI anddeemed to be prescribed under Section 143 (10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of internal financialcontrols and both issued by ICAI. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 controls based on the assessed risks. Theprocedures selected depend on the auditor’s judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is suficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial controls 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 controls over financialreporting includes those policies and procedures that :

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly 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) 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 controlsover 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 controls over financial reporting criteria established by the Company consideringthe essential components of internal controls stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Dalal Doshi & Associates
Firm Registration Number: 121773W
Chartered Accountants
Dinesh Doshi
Place : Mumbai Partner
Date : 22nd June 2016 Membership No.: F-9464