To The Members of Hmdusthan Udyog Limited
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the Standalone Ind AS Financial Statements of Hindusthan Udyog Limited(the Company) which comprise the Balance Sheet as at 31st March 2019 andthe statement of Profit and Loss (including Other Comprehensive Income) Statement of Changesin Equity and statement of Cash Flows for the year then ended and notes to the IndAS Financial Statements including 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 Standalone Ind AS Financial Statements give the informationrequired by the Companies Act 2013 in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and its loss changes in equity andits cash flows for the year ended on that date.
Basts for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of the IndAS Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of the Ind ASFinancial Statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to the following matters in the Notes to the Financial Statements:
(a) Note No. 2 to the Financial Statements which describes that no provision foramortization has been made for long term Leasehold Land at Durgapur.
(b) The company filed a lawsuit against Mahanadi Coalfields Ltd. For recovery of Rs91.93 lacs at Cuttack High court for which no provision has been made in the accounts.
Key Audit Matters
Key audit matters are those matters that In our professional judgment were of mostsignificance in our audit of the Ind AS Financial Statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS Financial Statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
We have determined that there are no key audit matters to communicate in our report.
Information Other than the Inti AS 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 Board's Report including Annexuresto Board's Report and Shareholder's Information but does not include the Ind ASFinancial Statements anti 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 Ind AS Financial Statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the Ind AS Financial Statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management anti Those Charged with Governance for the Standaloneinti AS financial Statement.
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 Standalone Ind AS Financial Statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standard specified under Section 133 of the Act This responsibility alsoIncludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgements and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant of the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the Ind AS Financial Statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do So.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process. Auditor's Responsibilities for the Audit of the ind AS FinancialStatements
Our objectives are to obtain reasonable assurance about whether the Ind AS FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue and auditor's report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theyCould reasonably be expected to influence the economic decision of user taken on the basisof these Statements
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of materia! misstatement of the Ind AS 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 misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations 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 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 Ind AS 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 Ind AS Financialstatements including the disclosures and whether the Ind AS Financial Statementsrepresent 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 interna! 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.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Centra! Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure 'A' a statement on the matters specifiedin paragraphs 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 Standalone Balance Sheet the Standalone Statement of Profit and Loss includingOther Comprehensive Income Standalone Statement of Changes in Equity and the Cash FlowStatement dealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid Standalone Ind AS Financial Statements comply withthe Ind AS 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 2019 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 of Section164 (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".
(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 on its financialposition in its Ind AS Financial Statements - Refer Note 24.1 to the Ind AS FinancialStatements.
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There were no amount which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For Salarpuria & Partners
Chartered Accountants Firm ICAI Reg. No. 302113E