TO THE MEMBERS OF HINDUSTHAN URBAN INFRASTRUCTURE LIMITED
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 312019
We have audited the accompanying Standalone Financial Statements of Hindusthan UrbanInfrastructure Limited ("the Company") which comprise the Balance Sheet asat March 31 2019 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearended on that date and notes to the standalone financial statements including asummaryofthesignificantaccounting policies and other explanatory information (herein afterreferred to as "the standalone financial statements") In our opinion and to thebest of our information and according to the explanations given to us the aforesaidStandalone Financial Statements give the information required by the Companies Act 2013("the Act") in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended("IndAS") and other accounting principles generally accepted in India of thestate of affairs (financial position) of the Company as at March 31 2019the Profit(financial performance including other comprehensive income) changes in equity and itscash flows for the ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 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 with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements andCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined in our report that there are nomatter which is required to be described as key audit matter to be communicated in ourreport
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Management and the Board of Directors are responsible for the preparationof the other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the Standalone Financial Statements and our auditor's report thereon. Ouropinion on the standalone financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon In connection with our audit ofthe standalone financial statements our responsibility is to read the other informationand in doing so consider whether the other information is materially inconsistent withthe standalone financial statements or our knowledge obtained during the course of ouraudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true affairs (financial position) profit or loss(financialperformance including other comprehensive income) changes in equity and cash flows of theCompany in accordance with the IndAS and other accounting principles generally accepted inIndia.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were the accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the standalone financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud or. In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
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:
i) Identify and assess the risks of materialmisstatementofthestandalonefinancialstatements whether due to fraud or error design andperform audit procedures responsive to those risks and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error asfraud may involve collusion forgery intentional omissions misrepresentations or theoverride of internal control.
ii) Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in the operating effectiveness ofsuch controls.
iii) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
iv) Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may doubt on the Company's ability to continueas a going concern. If we conclude that a material castsignificant uncertainty exists weare required to draw attention in our auditor's report to the related disclosures in thestandalone financial statements or if such disclosures are inadequate to modify ouropinion. Our are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
v) Evaluate the overall presentation structure and content of the standalone financialdisclosures and whether the standalone financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually orin aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be quantitativemateriality and qualitative factors in (i) planning the scope of our audit work and ininfluenced. evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the standalone financial statements.
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
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 statementsof the current period and are therefore the key audit matters.
We describe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so 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 in terms of Section 143(11) of the Act we give in "AnnexureA" a statementonthemattersspecifiedin paragraphs 3 and 4 of the Order to theextent applicable.
A As required by Section 143(3) of the Act based on our audit we report that:
a We have sought and obtained all the information and explanations which to the best ofour 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 Changes in Equity and the Statement of Cash Flow dealt with bythis Report are in agreement with the relevant books of account.
d In our opinion the aforesaid standalone financial statements comply with the IndASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules2014.
e On the basis of the written representations received from the directors as on March31 2019 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 ourseparate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
B 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 our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act. C With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 as amended in our opinion and to the best of our information andaccording to the explanations given to us:
i) The Company has disclosed the impact of pending litigations as at March 31 2019 onits financial position under Note No. 31 of its standalone financial statements
ii) The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses and
iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
| ||For K.N. Gutgutia & Company |
| ||Chartered Accountants |
| ||FRN 304153E |
| ||(B.R. Goyal) |
|Place: New Delhi ||Partner |
|Date: 28th May 2019 ||M.No. 12172 |
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
The Annexure "A" referred to in the Independent Auditors Report to themembers of Hindusthan Urban Infrastructure Limited on the Standalone FinancialStatements for the year ended March 31 2019 we report the following:
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 this periodicity and manner of physical verification is reasonable having regardto the size of the company and the nature of its assets.
(c) According to the information and explanations given to us title deeds of immovableproperties of the company are held in the name of the Company.
ii) (a) The inventories have been physically verified during the year lying at variousproject sites by the management at 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 hasgranted unsecured loan to its subsidiary company covered in the register maintained underSection 189 of the Act. The terms and conditions of the grant of such loans are notprejudicial to the company's interest. The borrower has been regular in paying interest onloan and there is no overdue principal amount at the year end.
iv) According to the information and explanation given to us the company has compliedwith the provisions of section 185 and 186 of the Act in respect of making Investmentgrants of Loans and providing guarantees and securities.
v) The Company has not accepted any deposits from the public during the year and henceparagraph 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 opinion that prima faciethe prescribed accounts and records have been made and maintained. We have not howevermade a detailed examination of the records with a view to determine whether they areaccurate 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 Goods & ServiceTax Duty Of Custom Duty Of Excise Value Added Tax Cess and other statutory dueswherever applicable.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Income Tax Sales Tax Value Added Tax Duty OfCustoms Service Tax GST Cess and other material statutory dues were in arrears as at 31stMarch 2019 for a period of more than six months from the date they became payable.
(b) According to the records and information and explanations given to us and therecords of the company examined by us dues of Income Tax Sales Tax Service Tax Goods& Service Tax Duty Of Customs Duty of Excise Value Added Tax Cess and otherstatutory dues which have not been deposited on account of disputes are as follows:
|Name of the Statute ||Nature of dues ||Amount (in Rs.) (net of amount paid) ||Period to which the amount relates (FY) ||Forum where dispute is pending |
|Central Sales Tax Act 1956 & |
Sales Tax/Vat Act of Various States
|Sales Tax Haryana ||1720197 ||2003-04 ||Sales Tax Tribunal Chandigarh |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax U.P. ||488619 ||1994-95 ||Hon'ble High Court Allahabad. Remanded to Assistant Commissioner (Assessment) Ghaziabad. |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax U.P. ||925200 ||2000-01 ||Hon'ble High Court Allahabad |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax U.P. ||70678 ||1984-85 ||Tribunal Ghaziabad |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Central Excise Guwahati ||6782510 ||2012-13 ||Commissioner of Central Excise- (Appeal) Guwahati |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Central Excise Guwahati ||2852394 ||2014-15 ||Commissioner of Central Excise- (Appeal) Guwahati |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax Gwalior ||17373201 ||2015-16 ||Appeal filed before Commissioner of VAT Gwalior |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Sales Tax Gwalior ||1481400 ||2011-12 ||Appeal filed before Commissioner of ET Gwalior |
|Central Sales Tax Act 1956 & ||GST & Central ||2055175 ||2012-13 ||Appeal filed with Commissioner |
|Sales Tax/Vat Act of Various States ||Excise Khurda || ||2014-15 ||(Appeals) GST & Central Excise against order of Commissioner (Audit)-GST & Central Excise |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||VAT Khurda ||286973 ||2017-18 ||Appeal filed before STO CT & GST CIRCLE |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Central Sale Tax Khurda ||7392174 ||2017-18 ||Appeal filed before STO CT & GST CIRCLE |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||GST & Central Excise Khurda ||364182 ||2016-17 ||Superintendent of GST & Central Excise |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Central Sale Tax Khurda ||27443798 ||2015-16 ||Appeal filed before STO CT & GST CIRCLE |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Central Sale Tax Khurda ||29261576 ||2016-17 ||Appeal filed before STO CT & GST CIRCLE |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Central Sale Tax Bhopal ||3744237 ||2014-15 ||Stay filed with Commissioner Bhopal |
|Central Sales Tax Act 1956 & Sales Tax/Vat Act of Various States ||Central Sale Tax Bhopal ||1492893 ||2015-16 ||Stay filed with Commissioner Bhopal |
|Income Tax Department ||Income Tax ||148860 ||2008-09 (AY) ||CIT Appeals Kolkata |
|Income Tax Department ||Income Tax ||164980 ||2009-10 (AY) ||CIT Appeals Kolkata |
|Income Tax Department ||Income Tax ||59106 ||2010-11 (AY) ||CIT Appeals Kolkata |
|Income Tax Department ||Income Tax ||64155425 ||2013-14 (AY) ||CIT Appeals Kolkata |
|Income Tax Department ||Income Tax ||1271693 ||2014-15 (AY) ||CIT Appeals Kolkata |
|Income Tax Department ||Income Tax ||585215 ||2015-16 (AY) ||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 the 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 repayment in respect of any loans or borrowingsfrom any financial institution bank government. The company did not have any outstandingdebentures during the year.
ix) In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of any initial public offer or further public offer(including debt instrument) and the monies raised by way of term loans were applied forthe purpose for which the loans were obtained.
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) On the basis of records and information and explanations made available and basedon the examination of the records of the company managerial remuneration which has beenpaid or provided is in accordance with the provisions of Section 197 read with schedule Vto the Act.
xii) The Company is not a Nidhi Company and hence 3 (xii) of the Order is notapplicable to the Company.
xiii) As per the information and explanations and records made available by themanagement of the company and audit procedure performed for the related partiestransaction entered during the year the company has complied with the provisions of sec177 and 188 of the act wherever applicable. As explained as per records and details madeavailable to us such related parties transactions have been disclosed in the note no. 34of standalone financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations given to us and based on ourexamination of the records the Company has made preferential allotment of shares duringthe year. The Company has complied with the requirement of Section 42 of the Act and theamount raised have been used for the purposes for which the funds were raised.
xv) According to information and explanation given to us and based on the examinationof the records of the company the Company has not entered into any non-cash transactionwith Director 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.
| ||For K.N. Gutgutia & Company |
| ||Chartered Accountants |
| ||FRN 304153E |
| ||(B.R. Goyal) |
|Place: New Delhi ||Partner |
|Date: 28th May 2019 ||M.No. 12172 |
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE Ind AS FINANCIAL STATEMENTS OF HINDUSTHAN URBAN INFRASTRUCTURE LIMITED.
(Referred to in paragraph 1(A)(f) under Report on other Legal and RegulatoryRequirements' section of our report of even date)
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 HindusthanUrban Infrastructure Limited ("the Company") as of March 31 2019 in conjunctionwith our audit of the standalone financial statements of 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 Reportingissued 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 andefficientconduct of its business including adherence to 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.
Our responsibility istoexpress financialcontrols over financialreporting basedon our opinion theCompany'sinternal audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143 (10) of the Act to the extent applicable to anauditofinternalfinancialcontrols 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 wereestablished and maintained and ifsuch controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud 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 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 that theinternal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial Controls system over financial reporting and such internalfinancialcontrolsoverfinancialreporting were operating effectively as at March 31 2019 based on "theinternal control overfinancialreporting 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 ICAI.