You are here » Home » Companies » Company Overview » Hubtown Ltd

Hubtown Ltd.

BSE: 532799 Sector: Infrastructure
NSE: HUBTOWN ISIN Code: INE703H01016
BSE 12:04 | 08 Dec 34.05 1.60
(4.93%)
OPEN

33.35

HIGH

34.05

LOW

32.40

NSE 12:20 | 08 Dec 34.25 1.60
(4.90%)
OPEN

32.65

HIGH

34.25

LOW

32.55

OPEN 33.35
PREVIOUS CLOSE 32.45
VOLUME 2810
52-Week high 44.90
52-Week low 12.29
P/E
Mkt Cap.(Rs cr) 248
Buy Price 34.05
Buy Qty 5126.00
Sell Price 0.00
Sell Qty 0.00
OPEN 33.35
CLOSE 32.45
VOLUME 2810
52-Week high 44.90
52-Week low 12.29
P/E
Mkt Cap.(Rs cr) 248
Buy Price 34.05
Buy Qty 5126.00
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 Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Hubtown Limited("the Company") which comprise the Balance Sheet as at March 31 2020 theStatement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statementof Cash Flows for the year ended on that date and a summary of the significant accountingpolicies and other explanatory information (hereinafter referred to as "thestandalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph below the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian Accountin g Standards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020the loss and other comprehensive income changes in equity and its cash flows for the yearended on that date.

Basis for Qualified Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independentof 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 the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the asdit evidence we have obtained issuffic ient and appropriateto provide a basis for our qualified opinion on the standalone financial statements.

a) As stated in Foot note (a) to Note 28 to the standalone financial statements of theCompany for the year with regards the Company not having provided for Interest expenseamounting to Rs. 28366.53 lakhs on certain Inter-corporate deposits. Consequent to abovefinance cost for the year ended 31st March 2020 has been understated by Rs. 28366.53lakhs resulting in a consequential decrease in the losses for the year ended 31st March2020 to that extent. Our Opinion o n the Standalone financial state ments for the yearended March 2019 was also modified in respect of this matter.

b) As stated in Footnote (c) to Note 23 to the standalone financial statement of theCompany for the year ended 31st March 2020 with regards the Company not ha vin grecognized finance Income fro m Deep Disco u nt bon ds held in one of its Joint Ventureent it i e s. Consequently Finance Income for the year ended 31st March 2020 is understated by Rs. 26209.80 lakhs. Further losses for the year ended 31st March 2020 isoverstated to that extent. Our Opinion on the Standalone financial statements for the yearended March 2019 was also modified in respect of this matter.

Emphasis of Matters

We draw Attention to:

a) Note 2 (II) (b) (ii) of the standalone financial statements regarding torecognition of expense for ongoing projects which based upon estimated costs is as perthe judgment of the management and have been relied upon by us these being technicalmatters.

b) Note 42 of the standalone financial statements which describes the effects ofuncertainties relating to COVID-19 pandemic outbreak on the Company's Eperation andmanagement's evaluation of its impact on the accompanying Statement as at 31st March2020 the impact of which is significantly dependent on future developments.

c) Footnote (a) to Note 13 to the standalone financial statements regarding the statusof the projects and the opinion framed by the Company's management regarding fealizablevalue of the costs incurred which being a technical matter is relted upon by us.

d) Note 36 (i) (B) of the standalone financial statements regarding Corporateguarantees issued and securities provided aggregating Rs. 130662.05 lakhs by the Companyto banks and financial institutions on behalf of various entities which are significantin relation to the losses for the year an d the net wo rth of the Company. In the opinionof the Management these are not expected to result in to any financial liability to theCompany.

e) Footnote (c) to Note 3(2 of the standalone financial statements regarding the a bovecorporate g uara ntees i ssued and securities provided are disclosed at amountsoutstanding as at 31st March 2020. The financial liabilities on account of such financialguarantee contracts have not been measured at fair value as management is of the opinionthat there is no material benefit which is expected to accrue to the borrowers on behalfoh whom the Company has provided the corporate guarantees.

f) Footnote (b) to Note 36 of the standalone financial statements regarding relianceplaced by the auditors on certification received from the management with regard to thedisclosure of contingent liabilities of the Company.

g) Note 41 of the standalone financial statements regarding balances that are subjectto confirmations reconciliation and adjustments if any.

h) Footnote (b) to Note 9 of the standalone financial statements regarding the Companynot having charged interest on advances given by it to various group entities developingreal estate projects in which the Company has a commercial and business interest.

i) Footnote (a) to Note 19 of the standalone finaocial ftatements regarding theCompany's default in redemption of non-convertible debentures along with interestamounting to Rs. 1441.67 lakhs. We are however informed by the management that theCompany is in the process of negotiation foe settlement / redemption ofthe saiddebeotures.

j) Footnote to Note 17 of standalone financial statements regarding theCompany has not created investments to the extent of " 15% of the valueof the such debentures which is required to be created and earmarked in the mannerprescribed under Rule 18(7)(c) of the Companies (Share Capital and Debentures) Rules 2014notified by the Ministry of Corporate Affairs.

k) Footnote (h) to Note 6 of the standalone fina ncial statements regarding theCompany's in vestments i n certain subsidiaries jointly controlled entities andassociates as at 31st March 2020 which have incurred losses and carry an eroded net worthas at 31st March 2020.

l) Footnote (b) to Note 30 ofthe standalone financial statements regarding C ompanyhavi ng spen t Rs. 1 6.65 La khs lower amoun t for Corporate Social Responsibility duringthe year than that required under Section 135 of the Act.

m) Footnote (g) to Note 6 of the standalone financial statements regarding non-receiptof financial statements of one of its partnership firm for year tnded 31st /March 2020.In the opinion of m a n ag e ment share of profit/(loss) of such partnership will nothave any material impact on the financial statements.

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

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 the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter How the matter was addressed in our audit
I. Revenue Recognition I. Our audit procedures included but were not limited to the following :
Refer Note 2(NI) to standalone fina nc ial statemen t s
Revenues from sale of residential units represent the largest portion or the total reven ues of the Company. Revenue i s recog nized upo n transfer of control of residential units to customers for an amount that reflects the consideration which the Company expects to receive in exchangt for those units. the poi nt of revenue recogn i ti on i s no rmall y on handover of the unit to the customer on completion of the project post which the contract becomes non-cancellable by the parties. • Evaluating that the Company's revenue recognition accounting policies are in line with the applicable Indian accounting standards and their a pplication to customer contracts in cluding consistent application;
The Company' records revenue at a point in time upo n tran sfer of contro l of residential units to the customers. Due to the large volume of the Co m pany 's projects there is a r i sk that revenue could be overstated or understated. Since revenue recognition has direct impact on the Company's profitability this matter has been identified as Key Audit Matter for the current year audit. • Identify a nd test o perating effectiveness of key controls around approvals of contracts milestone billing intimation of possession letters and controls over collection from customers;
• For samples selected verifying underlying documents like handover letter sale agreement signed by the customer and the collections;
• Cut off procedure for determination of revenue in the appropriate reporting period;
• Conducting site visit during the year for selected projects to understand the scope nature and status of the projects and to assess the progress of the projects; and
• Considering the adequacy of disclosure in notes to the standalone financial statements in respect of the judgments taken in recognizing revenue.
II. Investment (n Subsidiaries Jo i nt ven tures an d Assoc iates I I . Our aud it procedu res inclu ded but were not l i mited to the following:
The carrying amount of the investments in subsidiaries Joint Ventures and Associates held at cost less impairment if any represents a srgnificant portion of the Company's total assets. • Comparing the carrying amount of Investments in the Company's books with the respective subsidiaries Joint Ventures and Associates audited / unaudited financial statements to identify whether their net as set s ( being an ap proximation of their minim um recoverable amount ) were in excess of their carrying value.
The Company has investments in subsidiaries Joint Ventures and Associates. These investments are car ri ed at cost les s an y di minution in value of such investments.
The investments are reviewed for impairment at each reporting date by comparing the carrying value of investments in theCompany's books wit h the net a ssets of the relevant subsidiaries joint ventures and associates balance sheet. • Assess historic profitability of the subsidiaries joint ventures and associ a te co mpanies
Further the Company's review includes assessment of the projected cash flows oE the real estate projects in these underlyin g entities which involve significant estimates and judgment due to the inherent uncertainty involved in forecasting future cash flows. In addition considering the materiality oS the investments in subsidiaries joint ventures and associates vis-a-vis the total assets of the Company this is considered to Pe significant to our overall audit. • For the Investments where the carrying amount exceeded the Company's share of net assets value enquired status of projects. Further the ca rrying amount of investments was compared by projected cash flows and profitability of the project in that respective subsidiaries joint ventures and associate companies
• Verified adequacy of disclosures in respect of the Investments in subsidiaries joint ventures and associates.

Other Matter

Attention is further invited to the Statement of Profit and Loss of the Company whichincludes share of loss from investments in partnership firms / joint ventures aggregatingto Rs.326.94 lakh state are based on the financialstatements of the firms/joint ventures as fare pared bythe management and presented to us on which we have relied.

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

Information Other than the Standalone Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the; AnnualReport taut does not include the stand alo n e fina n cial statement s and o u r a uditor's repor t thereo n .

Our opinion on the standalone financial statements does not cover the other informationand we do not express 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 during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information; we are required to report that fact. We have nothing to reportin this regard.

Responsibility of the management and those charged with Governance for the StandaloneFinancial 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 state of affairs (financial position) profit andloss (financial performance including other comprehensive income) changes i n equity andcas h flows of the Co m pany i n accord a nce wit h other a ccount in g principlesgenerally a ccepted in India including the Ind AS 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 the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and appliaation ofappropriate accounting policies; ma king judgmen ts a nd estimates that are reason a bl ea nd prudent; a nd d esign implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatementwhether due to fraud or er ror.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern discloring as applicablematters related to going concern and usi ng the goin g concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors is also responsible for over seeing 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 Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economicdecisionsot usors taken on the basis of these standalonefinancial statements.

As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain 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 procedu re sresponsive to those ris ks an d o btain audit evidence that is su fficient an d a p propri a te to provide a bas i s for o ur opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal controls relevant to the audit in order todesign audit procedures that are app ropriate 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 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 appropriate n e ss of ma na gement's use of the going concernbas is of a ccount i n g and ba sed o n the a u di t evidence obtainedwhether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company's ability to continue as a going concern. If we concludethat a material uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements car if such pisclosuresare inadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluates the overall presentation structu re and content of" thestandalone financial statements including the disclosures andwhether the standalone financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.

Wecommunicata with those charged with governance regard in g am o ng other ma tter sthe planned sco pe a nd 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 rel evant ethica l requiremen ts rega rding independence and to eommunicate withthem all aelationahips and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matteos cemmunicated wit h those cha rged wit h governance. we determ i n ethose matte rs that were of most s i g nifican ce in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communioated in our repora because the ad verse cons eq uence s of d oing sowould reasonably be expected to outweigh the public 1 nterest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act.

2. Asrequired by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143 (11) of the Act we givein the "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.

3. Aa required by Section 143( 3 ) of the Act ba sed on o ur audit we report t ha t:

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 o ur 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 Rnancial Statements dealt with by this Report are in agreement withthe books of account;

d) Except for the matter described in the Basis for Qualified Opinion paragraph abovein our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Ac t;

e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a di rector in terms of Section 164 (2) of theAct;

f) We have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31st March 2020 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport as per Annexure B expressed an unmodified opinion;

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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition 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 tothe Investor Education and Protection Fund by the Com pa ny.

FO R M.H DALAL & ASSOCIAUES
Firm Registration No.: 112449W
Chartered Accountants
DEVANG DALAL
Partner
Member sh ip No.: 109049
UDIN: 20109049AAAALT5601
Plscea Mumbai
Date: July 30 2020

ANNEXURE "A" REFERRED TO IN OUR REPORT TO THE MEMBERS OF IHU BTOW N LI M I ITEE D ON T IH EE S TANDALO N IE FI N AN C I A L STATEMENTS FOR THE YEAR ENDED 31ST MARCH2020;

On the basis of such checks as we considered app ropriate 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 Property Plant and Equipment.

(b) The Property Plant and Equipment have been physically verified by the Managementin a phased manner designed to cover all the items over a period of three years which inour opinion is reasonable having regard to the size of the Company and nature of itsassets. Pursuant to the prog ra mE a por tion of the fixed as sets has beenphysically verified by the management during the year and no material discrepanciesbetween the book records and the physical 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 account;

(iii) The Company has granted unsecured loan to three companies covered under theregister maintained under Section 189 of the Act;

(a) The terms and condition of the loan are prima facie not prejudicial to the interestof the Company and

(b) The schedule of repayment of principal and interest if any has been stipulated asper terms of the arrangement;

(c) As per the terms and conditions of the arrangement the amount of the loan is notoverdue;

(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 a ccepted any deposits during the year from the public with inthe meaning of Sections 73 to 76 of the Act and the Rules framed thereunder to the extentnotified; Further attention is invited to footnote (g) to Note 18.

(vi) Pursuant to tile rules mad e by the Central Government of I ndia the Company isrequired to ma i ntaE n 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 deter mine whether they a re a ccurate o r 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 and Goods and Service Tax theCompany is generally regular in depositing undisputed statutory dues includingEmployees' State Insurance Wealth Tax duty of customs duty of excise and other materialstatutory dues as applicable with the appropriate authorities. The extent of arrears ofstatutory dues outstanding including Interest as at the Balance Sheet date for a periodexceeding six months from the date they became payable are Rs. 523.46 lakhs relating toIncome Tax Deducted at Source Rs. 522.34 lakhs relating to Value Added Tax Rs. 615.90lakhs relating to Service Tax and Rs. 9.42 lakhs relating to Goods and Service Tax.

(b) According to the icforcatioc and explanati ons given to us and the records of theCompany examined by us the particulars of dues of Income Tax Value Added Tax and ServiceTax as at the Balance Sheet date which have not been deposited on account of a disputeare as follows:

Statute and nature of dues Financial Year Amount (Rs. in lakhs) Forum where dispute is pending
Inco me Tax Act 1961
Income Tax 2003-04 17.48 Mumbai High Court
I ncome Tax 2004-05 21.3 1 Mum ba i High Co u rt
Income Tax 2005-06 20.92 Mumbai High Court
Income Tax 2011- 12 74.88 Commissioner of Income Tax (Appeal)
Maharashtra Value Added Tax Act 2002
Maharashtra Value Added Tax Service Tax (Finance Act 1994) 2006-07 1.64 Joint Commissioner of Sales Tax (Appeals)
Service Tax 2011-12 481.60 Commissioner of Service Tax
Service Tax 2012-13 451.00 Commissioner of Service Tax
Service Tax 2013-14 520.83 Commissioner of Service Tax
Servich Tax 2014-15 727.52 Com mE ssl oner of Ser vi ce Tax (Appeals)

(viii) On the basis of the records examined by us and the information andexpIanations given to us the Company has delayed in repayment of dues tobanks financial institution and debentures holders. Attention is invited to footnote (f)to Note 18-Non-Current Borrowings with regards to banks footnote (f) to Note 18 -Current Borrowings with regards to financial institution and footnote (b) to Note 19 withregards to debentures for the amounts and period of delays in payment of principle andinterest thereon;

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable to the Company.

(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 in formation an d expl a nations g iven to us we h ave neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the management.

(xi) Based upon the audit procedures performed a nd the information an d explanationsgiven by the ma nag ement 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 suchrelated partytransactionshave been disclosed in the standalone financial statements as required by theapplicable accounting standards;

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Accordingly theprovision of clause 3 (xi v) of the Order are n ot applica ble 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 45 IA of the ReserveBank of India Act 1934 and accordingly the provisions of clause 3(xvi) of thr Ord e r are not ap p l i cable to the Com pa ny.

FOR M.H DALAL & ASSOCIATES
Firm Registration No.: 112449W
Chartered Accountants
DEVANG DALAL
Partner
Membership No.: 109049
UDIN: 20109049AAAALT5601
Place: Mumbai
Date:July 302h20

ANNEXURE B TO THE I ND EP E ND E N T AUDITOR'S R EP O R T OF E V E N DATE TO THE M EMBE RS OF HUBTOWN LIMITED ON THE STANDALONE FINANCIAL STATEMENTS

Independent Auditors Report on the Internal Financial ControIs under CIause (i) ofSub-section 3 of Section 143 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 2020 in conjunction with our audit ofthe standalone financial statements of the? Company for the year ended on that date.

Management's Responsibility for Inte rn al F i nancial Con trols

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablishfd by the Co m pany co n sider in g the essential components of internal controlstated 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 efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation 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 Guida nce Note on Audit of Internal Financial Controls Over Financial Repor ting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply withethical requirements and plan and perform the audit toobtain reaoonable assurance about whether adequate internal financial controls overfinancial repor ting was establis h ed and mainta in ed and if such controls operatedeffectively in all material respects.

Our audit involves performing proced u res to obtain audit evidence about the adequacyof the internal financial cont rols system o ver 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 ris ks. The p rocedures sel ected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

Wefelievf that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our a udit o pinion on the Company's internal financialcontrols system over 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 reportinsand the preparatios of financial statemests forexternal purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting 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 co m pany; an d

(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 coftrols over financialreEorting to ffturo periods are subCect 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 controls system over financial reporting and such internal financial controlsover financial reporting we reoperating effectively as at March 31 2020based on the internal controIs over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India.

FO R M.H DALAL & ASSOCIATES
Firm Registration No.: 112449W
Chartered Accountants
DEVANG DALAL
Partner
Membership No.: 109049
UDIN: 20109049AAAALT5601
Place: Mumbai
Date: July 30 2020

.