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HB Estate Developers Ltd.

BSE: 532334 Sector: Infrastructure
NSE: N.A. ISIN Code: INE640B01021
BSE 00:00 | 17 Jan 10.46 0.49
(4.91%)
OPEN

10.40

HIGH

10.46

LOW

10.40

NSE 05:30 | 01 Jan HB Estate Developers Ltd
OPEN 10.40
PREVIOUS CLOSE 9.97
VOLUME 2131
52-Week high 20.55
52-Week low 7.32
P/E
Mkt Cap.(Rs cr) 20
Buy Price 10.46
Buy Qty 225.00
Sell Price 10.46
Sell Qty 764.00
OPEN 10.40
CLOSE 9.97
VOLUME 2131
52-Week high 20.55
52-Week low 7.32
P/E
Mkt Cap.(Rs cr) 20
Buy Price 10.46
Buy Qty 225.00
Sell Price 10.46
Sell Qty 764.00

HB Estate Developers Ltd. (HBESTATEDEVEL) - Auditors Report

Company auditors report

TO THE MEMBERS OF HB ESTATE DEVELOPERS LIMITED

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statement of HB ESTATEDEVELOPERS LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2019 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Cash Flow Statement for the year then ended anda summary of Significant Accounting Policies and other explanatory information.

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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under Section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31 March 2019 and its loss totalComprehensive Income its cash flows and the changes in Equity for the year ended on thatdate.

Basis of Opinion

We conducted our Audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our Audit of the Standalone Financial Statementsunder the provisions of the Companies Act 2013 and the Rule thereunder and we havefulfilled our ethical responsibilities in accordance with these requirements and the Codeof Ethics. We believe that the Audit evidence we have obtained is sufficient andappropriate to provide a basis of our opinion.

Key Audit Matters

We have determined that there are no key Audit matter to communicate in our report.

Information other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe Standalone Financial Statements and our Auditor's Report thereon. The Annual Report isexpected to be made available to us after the date of this Auditors' Report. Our opinionon the Standalone Financial Statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.

In connection with our Audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone Financial Statementsthat give a true and fair view of the Financial position Financial performance includingother Comprehensive Income cash flows and changes in Equity of the Company in accordancewith the IND AS and other Accounting Principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 Standalone FinancialStatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Financial Statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibility

Our Objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an Auditor's Report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an Audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

As part of an Audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the Audit. We also:

• Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform Audit proceduresresponsive to those risks and obtain Audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of InternalControl.

• Obtain an understanding of Internal Control relevant to the Audit in order todesign Audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate Internal Financial Controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of Accounting Policies used and the reasonablenessof accounting estimates and related disclosures made by the Management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the Audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our Auditor's Report to the related disclosures inthe Standalone Financial Statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the Audit evidence obtained up to the date of ourAuditor's Report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the Audit and significant Audit findings including anysignificant deficiencies in internal control that we identify during our Audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the Audit of the Standalone Financial Statementsfor the Financial Year ended March 312019 and are therefore the key Audit matters. Wedescribe these matters in our Auditor's Report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. 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 Act we give in the Annexure ‘A' a statement on the matters specified inthe 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;

(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Change in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account;

(d) In our opinion the aforesaid Standalone Financial Statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2015;

(e) On the basis of the written representations received from the Directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a Director in terms of Section 164 (2) of theAct.

(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 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 information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31stMarch 2019 on its financial position in its Financial Statements - Refer Note No 49

ii. The Company did not have any long-term contracts including derivative contracts asat 31st March 2019

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended on 31stMarch 2019.

(h) With respect to the matter to be included in the Auditor's Report under Section197(16):

The Company has not paid any managerial remuneration for the year ended 31st March2019 to its Directors.

FOR G. C. AGARWAL & ASSOCIATES
Chartered Accountants
Firm Registration No.: 017851N
Sd/-
G C AGARWAL
PLACE : Gurugram (PROPRIETOR)
DATED : 27/05/2019 Membership No. 083820

ANNEXURE-A

The Annexure referred to in our report of even date to the members of HB EstateDevelopers Limited on the accounts for the year ended March 312019

1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Fixed Assets;

(b) As explained to us the management during the year has physically verified theFixed Assets in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its Assets. No material discrepancies werenoticed on such physical verification.

(c) The title deeds of Immovable Property are held in the name of the Company and thesame are lying with the bank in connection with the borrowings made by the Company.

2. As explained to us Inventories have been physically verified by the management atreasonable intervals during the year. As explained to us the discrepancies noticed onphysical verification of Inventory as compared to the book records were not material.

3. (a) The Company has not granted during the year any Loans Secured or Unsecured toCompanies Firms Limited Liability Partnership or other parties covered in the Registermaintained under Section 189 of the Companies Act 2013 (‘the Act'). However inrespect of one Company the outstanding recoverable as at the beginning of the year was'14196182/- (Including interest receivable) and the maximum amount outstanding at anytime during the year and year end balance is Rs. 26476182/- including interestreceivable.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provision of Section 185 and 186 of the Act as applicableto it with respect to the Loans and Investment made to the extent applicable to theCompany. As per the information and explanation given to us the Company has not given anyGuarantee or provided any Security in connection with a loan to any other body corporateor person.

5. The Company has not accepted any Deposits from the Public.

6. The nature of the Company's business/activities is such that maintenance of CostRecords under Section 148(1) of the Act is not applicable to the Company.

7. (a) According to the records of the Company undisputed Statutory Dues includingProvident Fund Employees' State Insurance Income Tax Sales-Tax Service Tax Goods& Service

Tax Customs Duty Excise Duty Value added tax Cess and other Statutory Dues to theextent and as applicable to the Company have been generally regularly deposited by theCompany during the year with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of the aforesaid dueswere outstanding as at 31st March 2019 for a period of more than six months from the dateof becoming payable. b. According to the records of the Company the disputed StatutoryDues that have not been deposited on account of the matters pending before appropriateauthorities as on 31st March 2019 are as under:-

(i) Property tax demand of Rs. 6802674/- against which the Company had filed WritPetition before Hon'ble Delhi High Court and the Company had been granted stay by theHon'ble Court from the payment of said amount and the Hon'ble Court has directed the MCDto recompute the tax (refer note no.43.(i))

(ii) Vacant Land tax demand of Rs. 228616/- which is being contested by Company inDelhi High Court. (refer note no.43.(i))

(iii) Ground Rent as explained in note no.43.(ii)

(iv) VAT/Sales tax demand of Rs. 161709502/- in note no. 43(i)

8. In our opinion and according to the information and explanation given to us theCompany has not defaulted in repayment of Loans/Borrowings from Bank/ Financialinstitution. There are no Loans or Borrowings taken by the Company from Government orDebenture Holders during the year.

9. The Company did not raise any money by way of Initial Public Offer or Further PublicOffer (including Debt Instruments) during the year. The Term Loans were applied for thepurpose for which those were raised.

10. In our opinion and according to the information and explanation given to us nofraud by the Company or on the Company by its Officers or Employees has been noticed orreported during the course of our Audit.

11. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has not paid any managerialremuneration during the year.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly Paragraph 3(xii) of the order is notapplicable.

13. According to the information and explanations given to us and based on orexaminations of the records of the Company transactions with the Related Parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransaction have been disclosed in the Financial Statements as required by the applicableAccounting Standards.

14. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has made private placement ofPreference shares during the year in compliance with the provision of Section 42 of theAct and the amount raised have been used for the purpose for which the funds were raised.

15. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has not entered into non-cashtransactions with Directors or persons connected with him. Accordingly Paragraph 3(xv) ofthe order is not applicable.

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

FOR G. C. AGARWAL & ASSOCIATES
Chartered Accountants
Firm Registration No.: 017851N
Sd/-
G C AGARWAL
PLACE : Gurugram (PROPRIETOR)
DATED : 27/05/2019 Membership No. 083820

ANNEXURE-B

Annexure referred to in our report of even date to the members of HB EstateDevelopers Limited on the Accounts for the year ended 31st March 2019

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 HBEstate Developers Limited ("the Company") as of 31st March 2019in conjunction with our Audit of the Standalone Financial Statements of the Company forthe 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 and the components of Internal Control stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India (ICAI). These responsibilities include thedesign implementation and maintenance of adequate Internal Financial Controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to Company's policies the safeguarding of its Assets the preventionand detection of frauds and errors the accuracy and completeness of the Accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

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 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 ICAI. 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 was 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 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 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 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 Standalone Financial Statements for external purposes in accordance withGenerally Accepted Accounting Principles. A Company's Internal Financial Control overFinancial Reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the Assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneFinancial Statements in accordance with Generally Accepted Accounting Principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of management and Directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's Assets that could have a material effect on the FinancialStatements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of Internal Financial Control 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 Control 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 Control system over Financial Reporting and such Internal Financial Control overFinancial Reporting were operating effectively as at 31st March 2019 based onthe Internal Control over Financial Reporting criteria established by the Company and thecomponents of Internal Control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the ICAI.

FOR G. C. AGARWAL & ASSOCIATES
Chartered Accountants
Firm Registration No.: 017851N
Sd/-
G C AGARWAL
PLACE : Gurugram (PROPRIETOR)
DATED : 27/05/2019 Membership No. 083820