To the Members of The Hindustan Housing Company Limited
Report on the Audit of Financial Statements
We have audited the accompanying Financial Statements of M/s The HindustanHousing Company Limited ("the Company") which comprise the BalanceSheet as at March 31 2019 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information.
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 under theCompanies Act2013 (the 'Act') in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India including IndianAccounting Standards ('Ind AS') specified under Section 133 of the Act of the state ofaffairs (financial position) of the Company as at 31 March 2019 and its Profit(financial performance including other comprehensive income)its Cash Flows and theChanges in Equity for the year ended on that date.
Basis of Opinion
We conducted our audit in accordance with Standards on Auditing specified under Section143(10) of the Act. Our responsibilities under those standards are further described inthe Auditors Responsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ('ICAI') together with the ethicalrequirements that are relevant to our audit of financial statements under the provisionsof the Act and the Rules thereunder and we have fulfilled our ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Key Audit Matters
Key Audit Matters (KAM) are those matters that in our professional judgment were ofmost significance in our audit of the financial statements for the financial year ended 31stMarch2019. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. For each matter below our description of how auditaddressed the matter is provided in that context.
We have determined the matters described below to be the KAM to be communicated in ourreport.
|Key Audit Matters ||How our Audit addressed the key audit matter |
|1. Defined benefit obligation || |
|The valuation of the retirement benefit schemes in the Company is determined with reference to various actuarial assumptions including discount rate future salary increases rate of inflation mortality rates and attrition rates. A small change in these assumptions can have a material impact on the estimated defined benefit obligation. ||Our audit procedures include the following: |
|Refer Note no 28 to the Financial Statements. || We have examined the key controls over the process involving member data formulation of assumptions and the financial reporting process in arriving at the provision for retirement benefits. |
| || We tested the controls for determining the actuarial assumptions and the approval of those assumptions by senior management. We found these key controls were designed implemented and operated effectively and therefore determined that we could place reliance on these key controls for the purposes of our audit. |
| || We tested the employee data used in calculating the obligation and where material we also considered the treatment of curtailments settlements past service costs benefits paid and any other amendments made to obligations during the year. From the evidence obtained we found the data and assumptions used by management in the actuarial valuations for retirement benefit obligations to be appropriate. |
Information other than the 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 financial statements and our Auditor's Report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material mis-statement of this other informationwe are required to report that fact. We have nothing to report in this regard.
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 Financial Statements to give a true and fair view of the Financial PositionFinancial Performance (including other Comprehensive Income) Cash Flows and Changes inEquity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing 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 are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the Ind AS FinancialStatements that give a true and fair view and are free from material mis-statementwhether due 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 theManagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors of the Company are responsible for overseeing the Company'sfinancial reporting process.
Auditors' Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the FinancialStatements as a whole are free from material mis-statement whether due to fraud or errorand to issue an Auditor's Report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with theStandards on Auditing (SA) will always detect a material misstatement when it exists.Mis-statements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these 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 mis-statement of the FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material mis-statement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions mis-representations or the override of internal control.
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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate Internal Financial Controls System in place and the operatingeffectiveness of such 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 the Management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our Auditor's Report to therelated disclosures in the Financial Statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our Auditor's Report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of the FinancialStatements including the disclosures and whether the financial Statements represent theunderlying transactions and events in a manner to achieve fair presentation.
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 Financial Statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourAuditor's Report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because of the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of the Section 143 of the Act(hereinafter referred to as "the Order") and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the "Annexure A" astatement on the matters specified in paragraph 3 and 4 of the Order.
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 purpose 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 Statement of Profit and Loss (including Other ComprehensiveIncome) Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d. In our opinion the aforesaid Financial Statements comply with the Indian AccountingStandards specified under Section 133 of the Act.
e. On the basis of written representations received from the Directors as on 31stMarch 2019 and taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2019 from being appointed as a Director in terms ofSection 164(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" attached herewith.
g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended : in ouropinion and to the best of our information and according to the explanations given to US/no remuneration is paid by the Company to any Managerial Persons during the year inaccordance with the provisions of Section 197 of the Act.
h. 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 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 31stMarch 2019 on its financial position in its ind AS Financial Statements.
ii. The Company has made provision as at 31st March2019 as required under theapplicable law or accounting standards for material foreseeable losses if any onlong-term contracts. The Company has not entered into any Derivative Contracts during thefinancial year.
iii. There were no amount which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended 31st March 2019.
GIRISH M. PATHAK
Membership No. 102016
For and on behalf of
K.K.MANKESHWAR & CO.
"ANNEXURE A" TO INDEPENDENT AUDITORS' REPORT
(The Annexure referred to in our report to the members of The HindustanHousing Company Limited for the year ended 31st March 2019.)
(i) In respect of its Fixed Assets:
(a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As per the explanation given to us the Fixed Assets were physically verified bythe Management in accordance with a regular programme covering all the assets over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. Pursuant to the programme the Management duringthe year has physically verified a portion of the fixed assets and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and nature ofits assets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in property plant and equipment/ fixed assets are held in the name of theCompany.
(ii) The Company is a Service Company primarily rendering various administrative andallied services. Accordingly it does not hold any Inventory. Consequently clause (ii) ofparagraph 3 of the Order is not applicable to the Company.
(iii) In our opinion and according to information and explanations given to us theCompany has not granted any loans secured or unsecured to Companies firms or otherparties covered in the Register maintained under Section 189 of the Act during the year.Consequently clauses (iii) (a) (iii) (b) and (iii) c of paragraph 3 of the Order are notapplicable to the Company.
(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities granted in respect of whichprovisions of Section 185 and 186 of the Act are applicable and hence not commented upon.
(v) The Company has not accepted deposits from the public of the nature covered underthe provisions of Sections 73 to 76 of the Act and the Rules framed thereunder to theextent notified.
(vi) The Central Government has not prescribed the maintenance of cost records underSection 148(1) of the Act for any of the services rendered by the Company.
(vii) In respect of Statutory Dues:
(a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including Provident Fund Income Tax Goods and Service TaxCess and other material statutory dues applicable to it with the appropriate authorities.There were no dues towards Investor Education and Protection Fund Employees' StateInsurance Custom Duty and Excise Duty during the year.
(b) According to information and explanations given to us there were no undisputedamounts payable in respect of Income Tax Goods and Service Tax Cess and other materialstatutory dues in arrears as on 31st March2019 for a period of more than six months fromthe date they become payable.
(c) According to information and explanations given to us upon our enquiries in thisregard and records of the Company the Company has no dues that has not been deposited bythe Company on account of any dispute.
(viii) According to the records of the Company examined by us and information andexplanations given to us the Company has no dues to any financial institution or banks.The Ccompany has not issued any debentures.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyclause (ix) of paragraph 3 of the Order is not applicable.
(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 on or by the Company noticed or reported during the year norhave we been informed of such case by the Management.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid any managerialremuneration during the year. Accordingly clause (xi) of paragraph 3 of the Order is notapplicable.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly clause (xii) of paragraph 3 of the Order isnot applicable.
(xiii) 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 the Act where applicable. The details of relatedparty transactions have been disclosed in the Financial Statements as required by theapplicable accounting standard.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into noncashtransactions with Directors or persons connected with him. Accordingly clause ofparagraph 3 of the Order is not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of clause (xvi) of paragraph 3 of theOrder are not applicable to the Company.
GIRISH M. PATHAK
Membership No. 102016
For and on behalf of
K.K.MANICESHWAR & CO.
FRN- 106009W Mumbai20th May 2019
"ANNEXURE B" TO INDEPENDENT AUDITORS' REPORT
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 TheHindustan Housing Company Limited ("the Company") as of 31st March 2019 inconjunction with our audit of the Financial Statements of the Company for the year endedon 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 (the"Guidance Note") issued by the Institute of Chartered Accountants of India(TCAT). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct 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 ("theAct").
Our responsibility is to express cin opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing deemed to be prescribed under Section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and both issued by ICAI. 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 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 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 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 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 internal financial controlsover financial reporting were operating effectively as at 31st March 2019 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.
GIRISH M. PATHAK
Membership No. 102016
For and on behalf of
K.K.MANKESHWAR & CO.
Mumbai 20th May 2019