Mar 31, 2022
Report on Audit of the Standalone Financial StatementsOpinion
We have audited the accompanying standalone financial statements of Hathway Cable and Datacom Limited
(âthe Companyâ), which comprise the Balance Sheet as at March 31, 2022, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statementsâ).
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, its profit (including other comprehensive income), its changes in equity and its cash flows for the year ended on that date.
j Basis for Opinion
| We conducted our audit of standalone financial statements in | accordance with the Standards on Auditing (âSAsâ) specified I under section 143(10) of the Act. Our responsibilities under those I Standards are further described in the Auditor''s Responsibilities | for the Audit of the Standalone Financial Statements section | of our report. We are independent of the Company in | accordance with the Code of Ethics issued by the Institute of j Chartered Accountants of India (âICAIâ) together with the ethical | requirements that are relevant to our audit of the standalone i financial statements under the provisions of the Act and the | Rules made thereunder, and we have fulfilled our other ethical j responsibilities in accordance with these requirements and the | Code of Ethics issued by ICAI. We believe that the audit evidence | we have obtained is sufficient and appropriate to provide a basis | for our opinion on the standalone financial statements.
| Key Audit Matters
i Key audit matters are those matters that, in our professional | judgment, were of most significance 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 financial | statements as a whole, and in forming our opinion thereon, j and we do not provide a separate opinion on these matters. j We have determined the matters described below to be the key audit matters to be communicated in our report
Sr. No |
Key Audit Matter |
How our audit addressed the Key Audit Matter |
1. |
Contingent liabilities: The Company is in receipt of certain demands from Statutory authority including show cause notice from licensing authority. The Company has disputed such claims. The review of claims involve high degree of judgement to determine the possible outcome, and estimates relating to the timing and the amount of outflow of resources embodying economic benefits. The audit of Contingent Liabilities is significant to our audit as any adverse outcome may have material impact on this Company. |
Our audit procedures included the following: a) We obtained summary of all tax, regulatory and litigation including management''s assessment. b) We obtained an understanding, evaluated the design, and tested the operating effectiveness of the controls related to management''s risk assessment process for taxation, regulatory and legal matters. c) We obtained and read external legal opinions (where considered necessary) and other evidences provided by management to corroborate management''s assessment of the regulatory and legal matters. d) Assessed the relevant accounting policies and disclosures in the standalone financial statements for compliance with the requirements of accounting standards. |
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in Annual report but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the standalone financial statements i or our knowledge obtained in the audit or otherwise appears to i be materially misstated.
If, based on the work we have performed, we conclude that | there is a material misstatement of this other information, we i are required to report that fact. We have nothing to report i in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the j matters stated in section 134(5) of the Act with respect to the | preparation of these standalone financial statements that give a | true and fair view of the financial position, financial performance i (including other comprehensive income), changes in equity | and cash flows of the Company in accordance with the Ind AS | and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act i for safeguarding the assets of the Company and for preventing i and detecting frauds and other irregularities; selection | and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and i design, implementation and maintenance of adequate internal i financial controls, that were operating effectively for ensuring | the accuracy and completeness of the accounting records, | relevant to the preparation and presentation of the standalone | financial statements that give a true and fair view and are free i from material misstatement, whether due to fraud or error:
In preparing the standalone financial statements, management | is responsible for assessing the Company''s ability to continue i as a going concern, disclosing, as applicable, matters related to i going concern and using the going concern basis of accounting i unless management either intends to liquidate the Company or | to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the i Company''s financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about i whether the standalone financial statements as a whole | are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, j but is not a guarantee that an audit conducted in accordance i with SAs will always detect a material misstatement when it i exists. Misstatements can arise from fraud or error and are j considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)
(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of the misstatement in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in; (i) planning the scope of our audit work and evaluating the results of our work; and (ii) to evaluate the effects of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably 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, 2020 (âthe Orderâ), issued by the Central Government of India in terms of section 143 (11) of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in the paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
(i) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;
(ii) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
(iii) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account;
(iv) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under section 133 of the Act, read with relevant rules issued thereunder and relevant provisions of the Act;
(v) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of section 164(2) of the Act;
(vi) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ;
(vii) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended:
I n our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act;
(viii) With respect to the other matters to be included in the Auditor''s Report in accordance with rule
II of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations as at March 31, 2022 on its financial position in its standalone financial statements - Refer Note 4.02(f) to the standalone financial statements;
b) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 4.02(e) to the standalone financial statements;
c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;
d) (i) The Management has represented that,
to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(ii) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate
Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(iii) Based on the audit procedures performed by us that has been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) above, contain any material mis-statement; and
e) The Company has neither declared nor paid any dividend during the year.
Mar 31, 2018
INDEPENDENT AUDITOR''S REPORT
To the Members of Hath way Cable and Datacom Limited
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Hath way Cable and Datacom Limited (''the Company''), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as "standalone financial statementsâ).
MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) specified under section 133 of the Act read with the relevant rules issued there under and relevant provisions of the Act.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITOR''S RESPONSIBILITY
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters, which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act and other applicable pronouncements issued by the Institute of Chartered Accountants of India (âICAIâ). Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Ind AS, of the state of affairs of the Company as at March 31, 2018, and profit including (Other Comprehensive Income), its cash flows and the changes in equity for the year ended on that date.
OTHER MATTERS
The standalone financial statements of the Company for the year ended March 31, 2017 were audited by predecessor auditor who expressed an unmodified opinion on those statements on May 30, 2017.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor''s Report) Order,
2016 (âthe Orderâ), issued by the Central Government of India in terms of section 143(11) of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in the 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 best of 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 the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under section 133 of the Act read with relevant rules issued there under and relevant provisions of the Act;
e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ; and
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone financial statements. Refer Note 4.02 to the standalone financial statements;
ii. The Company did not have any material foreseeable losses on long term contracts including derivative contracts; and
iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund.
(i) (a) The Company has maintained records of Property,
Plant and Equipment showing particulars of assets including quantitative details and location except in case of certain types of distribution equipments like cabling, line equipments, access devices with end users. In view of the management, nature of such assets and business is such that maintaining location-wise particulars is impractical;
(b) Distribution equipments like cabling and other line equipments of selected networks were verified. The management plans to verify balance networks in a phased manner. Property, Plant and Equipment, other than distribution equipments and access devices with the end users were physically verified during the year based on verification programme adopted by the management. As per this programme, all assets will be verified at least once in a period of three years. The management has represented that physical verification of access devices with the end users is impractical; however, the same can be tracked, in case of most of the networks, through subscribers management system;
The Company is in the process of reconciling book records with outcome of physical verification, wherever physical verification was carried out and have accounted for the discrepancies observed on such verification;
In our opinion, frequency and procedure for verification of distribution equipments and subsequent reconciliation with book records need to be strengthened;
(c) The Company does not hold any immovable properties. Accordingly, the paragraph 3(i)(c) of the Order regarding title deeds of immovable properties is not applicable;
(ii) (a) Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable;
(b) The discrepancies noticed on physical verification as compared to the book records were not material having regards to size and nature of operations and have been properly dealt with in the books of account;
(iii) (a) The Company has granted unsecured loan to parties covered in the register maintained under section 189 of the Act;
(b) In our opinion, the terms and conditions on which the loans had been granted to the companies listed in the register maintained under section 189 of the Act were not, prima facie, prejudicial to the interest of the Company
(c) According to the information and explanations given to us, no repayment schedules have been specified in respect of such loans granted and accordingly, the question of regularity in repayment of principal amount does not arise;
(d) There is no amount which is overdue for more than ninety days in respect of such loans.
(iv) Based on the audit procedures applied by us, during the year under audit, the Company has not granted loans, guarantee and security or made investments which require compliance in terms of the provisions contained in the section 185 or section 186 of the Act. The Management has, based on legal opinion, represented that overdue book debts are not in the nature of loan and hence do not fall within the scope of section 185 of the Act. In such circumstances, para 3(iv) of the Order is not applicable;
(v) In our opinion and according to the information and explanation given to us, the Company has not accepted deposits from the public and therefore, the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under are not applicable to the Company. We have been informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard;
(vi) The Central Government has prescribed maintenance of cost records under section 148(1) of the Act, for the products manufactured by the Company. We have broadly reviewed the books of account maintained and in our opinion; prima facie, the prescribed accounts and records have been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete;
* Amount demanded is fully paid
(vii) (a) The Company has generally been regular in depositing with appropriate authorities undisputed statutory dues such as provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax, cess and other applicable statutory dues. According to information and explanations given to us, no undisputed statutory dues payable were in arrears as at March 31, 2018, for a period of more than six months from the date they became payable;
(b) The details of dues of income tax, sales tax, service tax, duty of customs, duty of excise or value added tax or cess which have not been deposited with the concerned authorities on account of dispute are given below:
Sr No |
Name of the Statute |
Nature of the Dues |
Amount involved (in crores) |
Period to which the amount relates |
Forum where dispute is pending |
1 |
Finance Act, 1994 |
Service Tax |
0.04 |
April 2003 to March 2004 |
Commissioner (Appeals), Service Tax |
2 |
Central Sales Tax Act, 1958 |
Central Sales Tax |
0.02* |
2011-12 |
Deputy Commissioner Appeals |
3 |
Finance Act, 1994 |
Service Tax |
3.70 |
2003-04 to 2006-07 |
Additional Commissioner Service Tax |
(viii) Based on our audit procedure and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institutions, bank, and government. The Company has not issued any debentures;
(ix) In our opinion and according to the information and explanations given to us and based on overall examination of records, the term loans have been applied for the purpose for which the loans were obtained; The Company did not raise any money by way of initial public offer or further public offer (including debt instruments);
(x) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year;
(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197, read with Schedule V to the Act;
(xii) In our opinion and according to information and explanation given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3 (xii) of the Order is not applicable to the Company;
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards;
(xiv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company;
(xv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements, the Company has not entered into any noncash transactions with directors. We have been informed that no such transactions have been entered into with person connected with directors. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company; and
(xvi) The Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934.
REPORT ON The INTERNAL FINANCIAL CONTROLS UNDER SECTION 143(3)(i) OF THE ACT
We have audited the internal financial controls with reference to financial statement of the Company as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
management''s responsibility for internal financial controls
The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (''Guidance Note'') issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
auditor''s responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statement based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statement was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statement and their operating effectiveness. Our audit of internal financial controls with reference to financial statement included obtaining an understanding of internal financial controls with reference to financial statement, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system with reference to financial statement.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS
A company''s internal financial control with reference to financial statement is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control with reference to financial statement includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company''s assets that could have a material effect on the standalone financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL
controls with reference to financial
STATEMENTS
Because of the inherent limitations of internal financial controls with reference to financial statement, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statement to future periods are subject to the risk that the internal financial control with reference to financial statement may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
OPINION
In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statement and such internal financial controls with reference to financial statement were operating effectively as at March 31, 2018 based on the internal control with reference to financial statement criteria established by the Company considering the essential components of internal control stated in the Guidance Note.
For Nayan Parikh & co.
Chartered Accountants
Firm Registration No. 107023W
K.Y. Narayana
Place: Mumbai Partner
Dated: May 28, 2018 Membership No. 060639
Mar 31, 2017
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Hathway Cable and Datacom Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone financial statementsâ).
MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) specified under Section 133 of the Act read with the relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
AUDITORâS RESPONSIBILITY
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters, which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
OPINION
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, including the Ind AS, of the state of affairs of the Company as at March 31, 2017, and its losses including (other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
EMPHASIS OF MATTER
We draw attention to note no. 4.20 to the accounts relating to manner and basis of recognition of subscription income in respect of Cable Television business.
Our opinion is not qualified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in the 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 best of 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 the Company so far as it appears from our examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rules issued thereunder;
e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ; and
g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, by the Companies (Audit and Auditors) Rules, 2017, in our opinion and 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 financial position in its standalone financial statements. Refer Note 4.02 to the standalone financial statements;
ii. The Company did not have any material foreseeable losses on long term contracts including derivative contracts;
iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund, except for delay in transferring an amount of Rs.29,375 (Amount in â) in respect of unclaimed share application money as explained in Note 4.24 to the standalone financial statements; and
iv. The Company has provided requisite disclosures in its standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note 2.11 to the standalone financial statements.
ANNEXURE A TO THE INDEPENDENT AUDITORâS REPORT
Referred to in paragraph 1 under the heading âReport on Other Legal & Regulatory Requirementsâ of our report on even date to the financial statements of the Company for the year ended March 31, 2017
(i) (a) The Company has maintained records of Property, Plant and Equipment showing particulars of assets including quantitative details and location except in case of certain types of distribution equipments like cabling, line equipments, access devices with end users. In view of the management, nature of such assets and business is such that maintaining location-wise particulars is impractical;
(b) Distribution equipments like cabling and other line equipments of selected networks were verified. The management plans to verify balance networks in a phased manner. Property, Plant and Equipment, other than distribution equipments and access devices with the end users were physically verified during the year based on verification programme adopted by the management. As per this programme, all assets will be verified at least once in a period of three years. The management has represented that physical verification of access devices with the end users is impractical; however, the same can be tracked, in case of most of the networks, through subscribers management system;
The Company is in the process of reconciling book records with outcome of physical verification, wherever physical verification was carried out and have accounted for the discrepancies observed on such verification;
In our opinion, frequency and procedure for verification of distribution equipments and subsequent reconciliation with book records need to be strengthened;
(c) The Company does not hold any immovable properties. Accordingly, the paragraph 3(i)(c) of the Order regarding title deeds of immovable properties is not applicable;
(ii) (a) Inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable;
(b) The discrepancies noticed on physical verification as compared to the book records were not material having regards to size and nature of operations and have been properly dealt with in the books of account;
(iii) (a) The Company has granted unsecured loan to parties covered in the register maintained under Section 189 of the Act;
(b) In our opinion, the terms and conditions on which the loans had been granted to the companies listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company
(c) According to the information and explanations given to us, no repayment schedules have been specified in respect of such loans granted and accordingly, the question of regularity in repayment of principal amount does not arise;
(d) There is no amount which is overdue for more than ninety days in respect of such loans.
(iv) Based on the audit procedures applied by us, during the year under audit, the Company has not granted loans, guarantee and security or made investments which require compliance in terms of the provisions contained in the section 185 or section 186 of the Act. The Management has, based on legal opinion, represented that overdue book debts are not in the nature of loan and hence do not fall within the scope of section 185 of the Act. In such circumstances, para 3(iv) of the Order is not applicable;
(v) In our opinion and according to the information and explanation given to us, the Company has not accepted deposits from the public and therefore, the provisions sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder are not applicable to the Company. We have been informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard;
(vi) The Central Government has prescribed maintenance of cost records under Section 148(1) of the Act, for the products manufactured by the Company. We have broadly reviewed the books of account maintained and in our opinion; prima facie, the prescribed accounts and records have been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete;
(vii) (a) The Company has generally been regular in depositing with appropriate authorities undisputed statutory dues such as provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other applicable statutory dues. According to information and explanations given to us, no undisputed statutory dues payable were in arrears as at March 31, 2017, for a period of more than six months from the date they became payable;
(b) The details of dues of income tax, sales tax, service tax, duty of customs, duty of excise or value added tax or cess which have not been deposited with the concerned authorities on account of dispute are given below:
Sr No |
Name of the Statute |
Nature of the Dues |
Amount involved (in crores) |
period to which the amount relates |
Forum where dispute is pending |
1 |
Finance Act, 1994 |
Service Tax |
0.04 |
April 2003 to March 2004 |
Service Tax Department |
2 |
Central Sales Tax Act, 1958 |
Central Sales Tax |
0.02 |
2011-12 |
Deputy Commissioner Appeals |
3 |
Finance Act, 1994 |
Service Tax |
3.70 |
2003-04 to 2006-07 |
Additional Commissioner Service Tax |
(viii) Based on our audit procedure and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institutions, bank, and government. The Company has not issued any debentures;
(ix) In our opinion and according to the information and explanations given to us and based on overall examination of records, the term loans have been applied for the purpose for which the loans were obtained; The Company did not raise any money by way of initial public offer or further public offer including debt instruments;
(x) During the course of our examination of the books and records of the Company carried out in accordance with generally accepted auditing practices in India and according to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year;
(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197, read with Schedule V to the Act;
(xii) In our opinion and according to information and explanation given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3 (xii) of the Order is not applicable to the Company;
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards;
(xiv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company;
(xv) Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements, the Company has not entered into any noncash transactions with directors. We have been informed that no such transactions have been entered into with person connected with directors. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company; and
(xvi) In our opinion, the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provision of clause 3(xvi) of the Order are not applicable to the Company.
For G. M. Kapadia & Co.
Chartered Accountants
Firmâs Registration No: 104767W
Viren Thakkar
Mumbai Partner
Dated: May 30, 2017 Membership No: 49417
Mar 31, 2016
We have audited the accompanying standalone financial statements of
HATHWAY CABLE & DATACOM LIMITED (''the Company''), which comprise the
Balance Sheet as at March 31, 2016, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under section 133 of the Act, read with rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Company''s
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
the accounting policies used and the reasonableness of the accounting
estimates made by the Company''s Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at March 31, 2016, and its loss and its cash flows for the year ended
on that date.
Emphasis of Matter
a. We draw attention to note no. 4.27 to the accounts relating to
manner and basis of recognition of subscription income in respect of
Cable Television business.
b. Attention is also invited to note no. 4.29 regarding managerial
remuneration paid during the year to the Managing Director and CEO
where approval from the Central Government is pending.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order"), as amended, issued by the Central Government of India in terms
of section 143(11) of the Act, we give in the "Annexure A" statement on
the matters specified in the 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 best of 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 the Company so far as it appears from our examination of those
books;
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards 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 March 31, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2016
from being appointed as a director in terms of section 164(2) of the
Act;
(f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditor''s
Report in accordance with rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and 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
financial position in its financial statements. Refer note 4.01 to the
financial statements;
ii. The Company has made provision as required under the applicable
law or accounting standard for material foreseeable losses, if any, on
long- term contracts including derivative contracts. Refer note 4.20
to the financial statements; and
iii. There were no amounts, which were required to be transferred to
the Investor Education and Protection Fund by the Company.
Referred to in Paragraph 1 under the heading "Report on Other Legal and
Regulatory Requirements" of our report of even date to the financial
statements of the Company for the year ended March 31, 2016:
i. (a) The Company has maintained records of fixed assets showing
particulars of assets including quantitative details and location
except in case of certain types of distribution equipments like
cabling, line equipments, access devices with subscribers/ local cable
operators. In view of the management, nature of such assets and
business is such that maintaining location-wise particulars is
impractical;
(b) Distribution equipments like cabling and other line equipments of
selected networks were verified. The management plans to verify balance
networks in a phased manner. Fixed assets, other than distribution
equipments and access devices with the subscribers / local cable
operators were physically verified during the year based on
verification programme adopted by the management. As per this
programme, all assets will be verified atleast once in a period of
three years. The management has represented that physical verification
of access devices with the subscribers / local cable operators is
impractical; however, the same can be tracked, in case of most of the
networks, through subscribers management system;
The Company is in the process of reconciling book records with outcome
of physical verification, wherever physical verification was carried
out and have accounted for the discrepancies observed on such
verification;
In our opinion, frequency and procedure for verification of
distribution equipments and certain Head-end Equipments under the
control of local cable operators and subsequent reconciliation with
book records need to be strengthened;
(c) The Company does not hold any immovable properties. Accordingly,
the paragraph 3(i)(c) of the Order regarding title deeds of immovable
properties is not applicable;
ii. (a) Inventories have been physically verified during the year by
the management. In our opinion the frequency of verification is
reasonable;
(b) The discrepancies noticed on physical verification as compared to
the book records were not material and have been properly dealt within
the books of account;
iii. The Company has granted unsecured loan to nine companies covered
in the register maintained under section 189 of the Act;
(a) In our opinion, the rate of interest and other terms and conditions
on which such loans had been granted were not, prima facie, prejudicial
to the interest of the Company;
(b) According to the information and explanation given to us, no
repayment schedule has been specified for the outstanding balance
amount of the loan given by the Company and accordingly, the question
of regularity in repayment of principal amount does not arise; and
(c) There are no overdue amounts in respect of such loans;
iv. Based on the audit procedures applied by us, during the year under
audit, the Company has not granted loans, guarantee and security or
made investments which require compliance in terms of the provisions
contained in the section 185 or section 186 of the Act. The Management
has, based on legal opinion, represented that overdue book debts are
not in the nature of loan and hence do not fall within the scope of
section 185 of the Act. In such circumstances, para 3(iv) of the Order
is not applicable;
v. In our opinion and according to the information and explanation
given to us, the Company has not accepted deposits from the public and
therefore, the provisions contained in sections 73 to 76 or any other
relevant provisions of the Act and Rules framed there under are not
applicable to the Company. We have been informed that no order has been
passed by Company Law Board or National Company Law Tribunal or Reserve
Bank of India or any Court or any other Tribunal;
vi. The Central Government has prescribed maintenance of cost records
under section 148(1) of the Act, for the products manufactured by the
Company. We have broadly reviewed the books of account maintained and
in our opinion; prima facie, the prescribed accounts and records have
been made and maintained by the Company. We have not, however, made a
detailed examination of the records with a view to determine whether
they are accurate or complete;
vii. (a) Based on the records produced before us, the Company has been
generally regular in depositing with appropriate authorities undisputed
statutory dues such as provident fund, employees state insurance,
income-tax, sales-tax, service tax, duty of customs, duty of excise,
value added tax, cess and other statutory dues applicable to it.
According to the information and explanations given to us, no
undisputed amount payable in respect of outstanding statutory dues were
in arrears as at March 31, 2016 for a period of more than six months
from the date they became payable;
(b) The details of disputed statutory dues, which have not been
deposited by the Company are as under:
(Rs. In Crore unless otherwise stated)
Sr. Name of the
Statute Nature of the Rupees Period to
which the
amount Forum where
dispute is
No. Dues relates pending
1 Bombay Entertainment
Tax 0.89 June 2006 to
May 2007 Entertainment
Tax
Entertain
ments Duty & penalty
thereon, Department,
Thane
Act , 1923
Thane
2 Bombay Entertainment
Tax 1.591 May 2009 to
October 2010 Court of
Divisional
Entertain
ments Duty Commissioner,
Aurangabad
Act , 1923 division
3 Hyderabad Entertainment
Tax 0.58 May 2005 to
June 2006 Andhra Pradesh
High Court
Entertain
ment Duty
Act, 1939
4 Uttar
Pradesh Entertainment
Tax 0.12 NA District
Magistrate, Agra
Entertain
ment Tax 1.05 April,2014
to Sept
2014
Rules 0.13 Oct 2014 to
November,
2014
0.67 December
2014 to
June 2015
5 Uttar
Pradesh Entertainment
Tax 1.41 April 2013
to January
2014 District
Magistrate,
Entertain
ment and Ghaziabad
Betting Act,
1979
6 The
Maharashtra Value Added
Tax 0.682 April 2008
to March 2009 Maharashtra
VAT Tribunal
Value Added
Tax, 2002
7 Finance Act,
1994 Service Tax 0.16 April 2003
to March
2004 Service Tax
Department
8 Madhya
Pradesh Commercial
Taxes 0.813 July 01,
2011 to
March 17, Settlement
Authority
Vilasita
Manoranjan, 2012
Amod Evam
Vigyapan
Kar
Adhiniyam,
2011
9 Andhra
Pradesh
Value Value Added
Tax 18.054 April 2008
to March 2009 Sales Tax
Appellate
Added Tax,
2005 Tribunal,
Andhra
Pradesh
10 Delhi
Entertainment
& Entertain
ment Tax 5.955 April 2013
to May 2013 Delhi High
Court
Betting Tax
Act 1996 23.36 June 2013 to
March 2014
27.78 April 2014 to
March 2015
11 Maharashtra Entertain
ment Tax 4.57 Up to
October,
2014 Writ Petition
to Bombay High
Entertain
ments Duty Court
Act, 1923
12 The Karnataka Value Added
Tax 10.28 2011-12,
2012-13,
2013-14 Writ Petition
to Karnataka
Entertain
ments Tax High Court
Act, 1958
13 Income Tax
Act,1961 Tax Deducted
at 3.996 April 2000
to
March 2004 Commissioner
of Income
Source &
interest Tax (Appeals)
thereon
14 Bombay
Sales Tax Sales Tax 0.007 1999-2000 Assistant
Comm. of Sales
Act, 1959 Tax, Appeals
15 Commercial
Tax Act Sales Tax/
VAT 0.887 Apil 2013-
March 14 Deputy
Commissioner
Commercial tax
16 Commercial
Tax Act Sales Tax 0.278 2012-13 Deputy
Commissioner
Commercial tax
(Rs. In Crore unless otherwise stated)
Sr. Name of the
Statute Nature of
the Rupees Period to
which the
amount Forum where
dispute is
No. Dues relates pending
17 Maharashtra Entertain
ment Tax 0.14 2013-14 Bombay High
Court
Entertainments
Duty
Act, 1923
18 Andhra
Pradesh Value Value Added
Tax 0.05 April 2005
to Nov 2008 Commercial Tax
Officer
Added Tax
Act, 2005
1 Amount paid is Rs. 1.15
2 Amount paid is Rs. 0.23
3 Amount demanded is fully paid
4 Rs. 9.03 is paid as pre-deposit
5 Amount paid Rs. 3.14
6 Part payment made to department Rs. 1.99
7 Part payment made to department Rs. 0.22
8 Part payment made to department Rs. 0.026
viii. Based on our audit procedure and according to the information
and explanations given to us, the Company has not defaulted in
repayment of dues to the financial institutions, bank, and government.
The Company has not issued any debentures;
ix. In our opinion and according to the information and explanations
given to us and based on overall examination of records, the term loans
have been applied for the purpose for which the loans were obtained;
The Company did not raise any money by way of initial public offer or
further public offer or debt instrument;
x. During the course of our examination of the books and records of
the Company carried out in accordance with generally accepted auditing
practices in India and according to the information and explanations
given to us, no material fraud by the Company or on the Company by its
officers or employees has been noticed or reported during the year;
xi. The managerial remuneration has been provided and paid in
accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Act except that, as stated in
the note no. 4.29 of the financial statements, approval from the
Central Government in respect of excess remuneration paid during the
year amounting to Rs. 0.47 to the Managing Director & C.E.O. on account
of inadequacy of profit is pending. To secure refund of such excess
amount, the Company has obtained an undertaking from the said
managerial personnel wherein he has undertaken to refund the excess
amount as may be determined on disposal of the application by the
Central Government;
xii. The Company is not Nidhi company. Accordingly, paragraph 3(xii) of
the Order is not applicable;
xiii. According to the information and explanations given to us the
Company, transactions with the related parties are in compliance with
sections 177 and 188 of the Act where applicable. The details of such
transactions have been disclosed in the financial statements as
required by the applicable accounting standards;
xiv. Based on the audit procedure performed and information and
explanations given by the management, the Company has not made any
preferential allotment or private placement of shares or fully or
partly convertible debentures during the year. Accordingly, the
provision of clause 3(xiv) of the Order are not applicable to the
Company;
xv. The Company has not entered into non-cash transaction with
directors. We have been informed that no such transactions have been
entered into with persons connected with directors. Accordingly, para
3(xv) of the Order is not applicable to the Company;
xvi. In our opinion, the Company is not required to be registered under
section 45 IA of the Reserve Bank of India Act, 1934 and accordingly,
the provision of clause 3(xvi) of the Order are not applicable to the
Company;
For G. M. Kapadia & Co.
Chartered Accountants
Firm Registration No.104767W
Viren Thakkar
Place : Mumbai Partner
Dated: May 26, 2016 Membership No. 49417
Mar 31, 2014
We have audited the accompanying financial statements of HATHWAY CABLE
& DATACOM LIMITED ("the Company") which comprise the Balance sheet as
at March 31, 2014 and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India including
Accounting Standards referred to in sub-section (3C) of section 211
ofthe Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs
in respect of Section 133 ofthe Companies Act, 2013. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment
ofthe risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness
ofthe Company''s internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness
of the accounting estimates made by management, as well as evaluating
the overall presentation ofthe financial statements. We believe that
the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
a) In the case ofthe Balance Sheet, ofthe state of affairs ofthe
Company as at March 31, 2014;
b) In the case of the Statement of Profit and Loss, of the Loss for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to Note no. 4.22 to the accounts relating to basis of
recognition of income. In view of the prevailing circumstances, as
explained in the said note, the Company has estimated its income from
its networks located in these cities.
Our opinion is not qualified in respect of above matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 ofthe Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 ofthe order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of 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 the Company so far as appears from our examination of those
books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Act read with the General
Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate
Affairs in respect of Section 133 of the Companies Act, 2013; and
(e) On the basis of written representations received from the directors
as on March 31, 2014 and taken on record by the Board of Directors,
none of the directors is disqualified from being appointed as a
director in terms of clause (g) of sub-section (1) of section 274 of
the Companies Act, 1956.
ANEXURE TO THE AUDITOR''S REPORT (Referred to in Paragraph 1 under
"other legal and regulatory requirements" of our report of even date)
(i) (a) The Company has maintained records of fixed assets showing
particulars of assets including quantitative details and location,
except the following:
Location-wise particulars of some of the Distribution Equipments like
cabling and other line equipments. As explained to us, nature of such
assets is such that maintaining location-wise particulars is
impractical; and location-wise particulars of Access Devices with the
subscribers.
(b) Fixed assets were physically verified during the year, except the
Access Devices with the subscribers / local cable operators.
Distribution Equipments like cabling and other line equipments of
selected networks were verified. We were informed that the management
plans to verify other networks also in a phased manner.
The Company has initiated the process of reconciliation of book records
with physical verification. However, in absence of updated
location-wise particulars of certain assets, actual discrepancies, if
any, are yet to be ascertained.
In our opinion, frequency and procedure for verification of
Distribution Equipments, Access Devices and certain Head-end Equipments
under control of local cable operators and subsequent reconciliation
with book records need to be strengthened.
(c) During the year, the Company has not disposed off any substantial
part of fixed assets.
(ii) (a) The inventories have been physically verified by the
management during the year.
(b) In our opinion and according to the information and explanation
given to us, the frequency of verification and procedures of physical
verification followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of such
inventory. We have been informed that no material discrepancies were
noticed on physical verification between the stocks and the book
records.
(iii) (a) The Company has not granted unsecured loans and
Inter-Corporate Deposits to companies covered in the Register
maintained under Section 301 of the Act. Hence provisions of clauses
(iii) (b), (c), (d) of paragraph 3 are not applicable to the Company.
(e) to (g) The Company has not taken any loans secured or unsecured
from companies, firms or other parties covered in the register
maintained under section 301 of the Act. In view of the same,
sub-clauses (f) to (g) of the clause (iii) of the Order are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system with regards to
purchases of the inventory and fixed assets and sale of goods and
services. The management is in process of further strengthening the
internal controls over documentation in certain areas so as to make it
commensurate with the size of the Company and the nature of its
business. During the course of our audit, we have not observed any
other area of continuing failure to correct major weakness in internal
controls except internal controls relating to revenue recognition to
the extent it relates to identification /registration of ultimate
subscribers.
(v) (a) On perusal of the information available with the Company and
based on explanations given to us, there have been no contracts or
arrangements referred to in section 301 of the Act for the year that
needs to be entered into the register maintained under that section.
(b) In our opinion and according to the information and explanation
given to us, during the year there have been no transactions made in
pursuance of contracts or arrangements entered in the register
maintained under section 301 of the Act and exceeding Rs. Five Lacs.
Hence the question of whether such transactions have been made at
prices which are reasonable having regard to prevailing market prices
at the relevant time does not arise.
(vi) In our opinion and according to the information and explanation
given to us, the Company has not accepted deposits from the public and
therefore, the provisions of Section 58A, 58AA or any other relevant
provisions of the Act and Rules framed there under are not applicable
to the Company. As informed to us, no order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
(viii) The Central Government has prescribed maintenance of cost
records under section 209(1 )(d) of the Act in respect of certain
service activities of the Company. We have broadly reviewed the
accounts and records of the Company in this connection and are of the
opinion, that prima facie, the prescribed accounts and records have
been made and maintained subject to our comments as stated above. We
have not, however, made a detailed examination of the same.
(ix) (a) Based on the records produced before us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues such as Provident Fund, Income Tax, Custom Duty and
other material statutory dues wherever applicable. According to the
information and explanations given to us, there are no arrears of
undisputed statutory dues outstanding for a period of more than six
months from the date on which they became payable except in case of
Entertainment tax amounting to Rs. 2.01 Crores outstanding for more than
six months.
(b) The details of disputed statutory dues, that have not been
deposited by the Company are as under:
Sr. Name of the statue Nature of dues Forum where dispute
No. is pending
1 Bombay Sales Tax
Act, 1959 Sales Tax Assistant Comm. of
Sales Tax, Appeals
2 Hyderabad
Entertainment Entertainment Tax Andhra Pradesh High
Duty Act, 1939 Court
3 Income Tax Act,
1961 Tax deducted at Commissioner of
source & interest Income Tax (Appeals)
thereon
4 Bombay Entert
-ainments Entertainment Tax & Collector Office,
Duty Act, 1923 penalty thereon Thane
5 Bombay Enterta
-inments Entertainment Tax Court of Divisional
Duty Act, 1923 Commissioner,
Aurangabad division
6 Andhra Pradesh
Value Value Added Tax Sales Tax Appellate
Added Tax Act, 2005 Tribunal, Andhra
Pradesh.
7 The Maharashtra
Value Value Added Tax Joint Commissioner of
Added Tax Act, 2002 Sales Tax
8 The Central
Sales Tax Central Sale Tax Joint Commissioner of
Act, 1958 Sales Tax
9 Delhi Enterta
-inment & Entertainment Tax Delhi High Court
Betting Tax
Act, 1966
Name of the Statue Period to which the Amount
amount relates (In Rs. Crores)
Bombay Sales Tax Act, 1959 1999-2000 0.007
Hyderabad Entertainment
Duty Act, 1939 May 2005 to June 0.58
2006
Income Tax Act, 1961 April 2000 to March 3.99*
2004
Bombay Entertainments
Duty Act, 1923 June 2006 to May 0.89
2007
Bombay Entertainments
Duty Act, 1923 May 2009 to October 1.59
2010
Andhra Pradesh Value
Added Tax Act, 2005 April 2011 to May 18.05#
2013
The Maharashtra Value
Added Tax Act, 2002 April 2008 to March 0.09
2009
The Central Sales Tax
Act, 1958 April 2008 to March 0.63
2009
Delhi Entertainment &
Betting Tax Act, 1966 April 2013 to May 5.95##
2013
* Part payment made to department Rs. 1.99 Crores.
# Rs. 9.03 Crores paid as pre-deposit
## Amount paid Rs. 3.14 Crores
(x) The accumulated losses at the end of the financial year are not
less than fifty percent of Net worth of the Company. The Company has
neither incurred cash losses during the financial year covered by our
audit nor in the immediately preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanation given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions or banks.
(xii) In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The Company is not a chit fund or a nidhi /mutual benefit fund /
society and hence clause 4(xiii) of the Order relating to such entities
is not applicable to the Company.
(xiv) The Company has maintained proper records of transactions and
contracts in respect of it''s dealing in securities, debentures and
other investments and timely entries have been made therein. All
shares, debentures and other investments have been held by the Company
in its own name except certain government securities, which are
deposited with revenue authorities as part of registration formalities.
Such securities are held in the name of the officials or ex-officials
of the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiaries from a
bank and others, the terms and conditions whereof, as explained to us,
are not prima facie prejudicial to the interest of the Company.
(xvi) Based on information and explanation given to us and based on
overall review of the funds utilisation, we are of the view that the
Company has generally utilised funds for which they were obtained.
However, pending such utilisation these funds have been temporarily
utilised to reduce the short-term borrowings.
(xvii) According to the information and explanations given to us and on
overall examination of the financial statements of the Company, we are
of the opinion that, the funds raised on short-term basis have
generally not been used for long term investment.
(xviii)According to the information and explanations given to us,
during the year, the Company has made preferential allotment of shares
to one of the promoter group company covered in the register maintained
under Section 301 of the Act. Since such shares are allotted in
accordance with Chapter VII of Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009, the
price at which shares are allotted are not prima facie prejudicial to
the interest of the Company.
(xix) The Company has not issued any secured debentures hence the
question of creation of securities does notarise.
(xx) We have verified the end use of money raised by public issue and
the same is as disclosed in note no. 4.21 to the accounts.
(xxi) Based upon the audit procedures performed and the information and
explanations given bythe management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
except cases of misappropriation of cash collection from the
subscribers and fraudulent withdrawals of funds by employees
aggregating to Rs. 0.03 Crores.
For G. M. Kapadia & Co.
Chartered Accountants
Firm Registration No. 104767W
Viren Thakkar
Place: Mumbai Partner
Dated: May 29 , 2014 Membership No. 49417
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of HATHWAY CABLE
& DATACOM LIMITED ("the Company"), which comprise the Balance Sheet
as at March 31, 2013 and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementation and maintenance of internal control
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the Profit for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of Matter
We draw attention to:
(a) Note no. 4.20 to the accounts in respect of the application to
Central Government for approval of managing director''s remuneration
provided in the books which is in excess of the limits specified under
the Schedule XIII to the Act for which application is pending before
the Central Government; and
(b) Note no. 4.22 to the accounts relating to basis of recognition of
income in view of introduction of Digital Addressable System (DAS) by
the Central Government in the metropolitan cities. In view of the
prevailing circumstances, as explained in the said note, the Company
has estimated its income from its networks located in these cities.
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of 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 the Company so far as appears from our examination of those
books;
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Act; and
(e) On the basis of written representations received from the directors
as on March 31, 2013 and taken on record by the Board of Directors,
none of the directors is disqualified from being appointed as a
director in terms of clause (g) of sub-section (1) of section 274 of
the Companies Act, 1956.
ANNEXURE TO THE AUDITORS'' REPORT
(i) (a) The Company has maintained records of fixed assets showing
particulars of assets including quantitative details and location,
except the following:
- location-wise particulars of some of the Distribution Equipments like
cabling and other line equipments. As explained to us, nature of such
assets is such that maintaining location-wise particulars is
impractical; and
- location-wise particulars of Access Devices with the subscribers.
(b) Fixed assets were physically verified during the year, except the
Access Devices with the subscribers / local cable operators.
Distribution Equipments like cabling and other line equipments of
selected net works were verified. We were informed that the management
plans to verify other networks also in a phased manner.
The Company has initiated the process of reconciliation of book records
with physical verification. However, in absence of updated
location-wise particulars of certain assets, actual discrepancies, if
any, are yet to be ascertained.
In our opinion, frequency and procedure for verification of
Distribution Equipments, Access Devices and certain Head-end Equipments
under control of local cable operators and subsequent reconciliation
with book records need to be strengthened.
(c) During the year, the Company has not disposed off any substantial
part of fixed assets.
(ii) (a) The inventories have been physically verified by the
management during the year.
(b) In our opinion and according to the information and explanation
given to us, the frequency of verification and procedures of physical
verification followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of such inventory. We
have been informed that no material discrepancies were noticed on
physical verification between the stocks and the book records.
(iii) (a) The Company has granted unsecured loans to two companies
covered in the register maintained under section 301 of the Act. These
loans are interest free except loan to the extent of Rs.60,000,000
granted to one company. The maximum amount involved in such
transactions during the year was Rs. 272,072,522 and the balance at the
end of the year was Rs. 223,768,928.
(b) In our opinion and according to the information and explanations
given to us, the terms and conditions of above loans are not prima
facie prejudicial to the interest of the Company.
(c) According to the information and explanations given to us, no
repayment schedule has been specified except that the said loans are
not repayable within a period of 12 months. The Company has not called
for refund of such loans.
Accordingly, the question of regularity in repayment of principal
amount and interest thereon, wherever applicable, does not arise.
(d) As stated above there are no overdue amounts in excess of Rs. One
lakh.
(e) The Company has not taken any loans secured or unsecured from
companies, firms or other parties covered in to the register maintained
under section 301 of the Act. In view of the same, sub-clauses (f) to
(g) of the clause (iii)
(g) of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system with regards to
purchases of the inventory and fixed assets and sale of goods and
services. The management is in process of further strengthening the
internal controls over documentation in certain areas so as to make it
commensurate with the size of the Company and the nature of its
business. During the course of our audit, we have not observed any
other area of continuing failure to correct major weakness in internal
controls except internal controls relating to revenue recognition to
the extent it relates to identification / registration of ultimate
subscribers.
(v) (a) On perusal of the information available with the Company and
based on explanations given to us, we are of the opinion that the
particulars of contracts or arrangements referred to in section 301 of
the Act for the year that needs to be entered into the register
maintained under that section have been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act and exceeding Rs. Five lakhs have been made at a prices which
are reasonable having regard to prevailing market prices at the
relevant time to the extent the same are available with the Company and
/ or in accordance with the approvals granted by the Central
Government, wherever applicable.
(vi) In our opinion and according to the information and explanation
given to us, the Company has not accepted deposits from the public and
therefore, the provisions of Section 58A, 58AA or any other relevant
provisions of the Act and Rules framed there under are not applicable
to the Company.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
(viii) The Central Government has prescribed maintenance of cost
records under section 209(1)(d) of the Act in respect of certain
service activities of the Company. We have broadly reviewed the
accounts and records of the Company in this connection and are of the
opinion, that prima facie, the prescribed accounts and records have
been made and maintained subject to our comments as stated above. We
have not, however, made a detailed examination of the same.
(ix) (a) Based on the records produced before us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues such as Provident Fund, Income Tax, Custom Duty and
other material statutory dues wherever applicable. According to the
information and explanations given to us, there are no arrears of
undisputed statutory dues outstanding for a period of more than six
months from the date on which they became payable.
(b) The details of disputed statutory dues, that have not been
deposited by the Company are as under:
Sr. Name of the statue Nature of dues Forum where dispute is
No. pending
1 Bombay Sales Tax Act, Sales Tax Assistant Comm. of
1959 Sales Tax, Appeals
2 Hyderabad Entertainment Entertainment Andhra Pradesh High
Duty Act, 1939 Tax Court
3 Andhra Pradesh Value Value Added Sales Tax Appellate
Added Tax Act, 2005 Tax & Tribunal, Andhra
Penalty thereon Pradesh.
4 Karnataka Sales Tax
Act, Sales Tax and Deputy Commissioner
1957 interest of Commercial Tax,
Bangalore
5 Karnataka Entertainment Entertainment Karnataka High Court
Tax Act, 1958 Tax
6 Income Tax Act, 1961 Tax deducted Commissioner of Income
at source & Tax (Appeals)
interest thereon
7 Bombay Entertainments Entertainment Collector Office, Thane
Duty Act, 1923 Tax & penalty
thereon
8 Bombay Entertainments Entertainment Court of Divsional
Duty Act, 1923 Tax Commissioner,
Aurangabad division
9 The Maharashtra Value Value Added Joint Commissioner of
Added Tax Act, 2002 Tax Sales Tax
10 The Central Sales
Tax Act, Central Sale Joint Commissioner of
1958 Tax Sales Tax
Name of the Statue Period to which the Amount
amount relates
Bombay Sales Tax Act 1959 1999-2000 70,979
Hyderabad Entertainment
Duty Act 1939 May 2005 to June 2006 5,813,760
Andhra Pradesh Value
Added Tax Act 2005 April 2005 to November 528,521
2008
52,852
Karnataka Sales Tax
Act 1957 April 2000 to November 54,406,240
2009
Karantaka Entertainment
Tax Act 1958 April 2006 to March 51,378,500*
2013
Income Tax Act 1961 April 2000 to March 39,896,066
2004
Bombay Entertainments
Duty Act 1923 June 2006 to May 2007 8,865,450
Bombay Entertainments
Duty Act 1923 May 2009 to October 79,192,049
2010
The Maharashtra Value
Added Tax Act 2002 April 2008 to March 946,104
2009
The Central Sales Tax
Act 1958 April 2008 to March 8,353,894
2009
*Amount paid under protest is Rs. 64,31,950.
(x) The accumulated losses at the end of the financial year are not in
excess of fifty percent of Net Worth of the Company. The Company has
neither incurred cash losses during the financial year covered by our
audit nor in the immediately preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanation given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions or banks.
(xii) In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The Company is not a chit fund or a nidhi /mutual benefit fund /
society and hence clause 4(xiii) of the Order relating to such entities
is not applicable to the Company.
(xiv) The Company has maintained proper records of transactions and
contracts in respect of it''s dealing in securities, debentures and
other investments and timely entries have been made therein. All
shares, debentures and other investments have been held by the Company
in its own name except certain government securities, which are
deposited with revenue authorities as part of registration formalities.
Such securities are held in the name of the officials or ex-officials
of the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiaries from a
bank and others, the terms and conditions whereof, as explained to us,
are not prima facie prejudicial to the interest of the Company.
(xvi) Based on information and explanation given to us and based on
overall review of the funds utilization, we are of the view that the
Company has generally utilized funds for which they were obtained.
However, pending such utilization these funds have been temporarily
utilized to reduce the short-term borrowings.
(xvii)According to the information and explanations given to us and on
overall examination of the financial statements of the Company, we are
of the opinion that, the funds raised on short-term basis have
generally not been used for long term investment.
(xviii)The Company has not made any preferential allotment of shares to
parties and Companies covered in the register maintained under Section
301 of the Act during the year, accordingly, the question of whether
the price at which shares have been issued is prejudicial to the
interest of the Company does not arise.
(xix) The Company has not issued any secured debentures hence the
question of creation of securities does not arise.
(xx) We have verified the end use of money raised by public issue and
the same is as disclosed in note no. 4.21 to the accounts.
(xxi) Based upon the audit procedures performed and the information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
except cases of misappropriation of cash collection from the
subscribers and fraudulent withdrawals of funds by employees
aggregating to Rs.13,64,081 of which Rs. 23,599 have been recovered by
the Company.
For G.M.Kapadia & Co.
Chartered Accountants
Firm''s Registration Number : 104767W
Atul Shah
Partner
Membership Number : 39569
Mumbai
Date : May 29, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of HATHWAY CABLE &
DATACOM LIMITED ('the Company') as at 31st March, 2012, the Statement
of Profit & Loss and the Cash Flow Statement for the year ended on that
date annexed thereto. These Financial Statements are the responsibility
of the management. Our responsibility is to express an opinion on these
Financial Statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 ('the
Order'), issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, ('the Act')
and on the basis of such checks of the books and records of the Company
as we considered appropriate and according to the information and
explanation given to us, we enclose in the Annexure a statement on the
matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of the
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
the said books;
(iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) Without qualifying our report, we draw attention to
a. Note no. 4.05 (c) to the accounts in respect of operations of the
Company in the State of Tamil Nadu.
b. Note no. 4.20 to the accounts in respect of the application to
Central Government for approval of managing director's remuneration
provided in the books which is in excess of the limits specified under
the Schedule XIII to the Companies Act, 1956 for which application is
pending before the Central Government.
(v) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Act to the extent applicable;
(vi) Based on representations made by the directors of the Company and
taken on records by the board, none of the directors of the Company
are, prima-facie, as at 31st March, 2012 disqualified from being
appointed as directors of the Company under clause (g) of sub-section
(1) of section 274 of the Act, on the said date;
(vii) In our opinion and to the best of our information and according
to the explanations given to us, the accounts read together with notes
thereon give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012,
b. In the case of the Statement of Profit & Loss, of the losses of the
Company for the year ended on that date, and
c. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT (Referred to in paragraph 3 of our
report of even date)
(i) (a) The Company has maintained records of fixed assets showing
particulars of assets including quantitative details and location,
except the following:
Location-wise particulars of some of the Distribution Equipments like
cabling and other line equipments. As explained to us, nature of such
assets is such that maintaining location-wise particulars is
impractical; and location-wise particulars of Access Devices with the
subscribers / local cable operators.
As confirmed by the management, such records have not been updated in
certain cases to record movement of assets from one location to another
and hence to that extent, location-wise particulars are to be updated.
(b) Fixed assets were physically verified during the year, except the
following:
Access Devices with the subscribers / local cable operators; andDistribution Equipments like cabling and other line equipments.
The Company has initiated the process of reconciliation of book records
with physical verification. However, in absence of updated location-wise
particulars of certain assets, actual discrepancies, if any, are yet to
be ascertained. In our opinion, frequency and procedure for
verification of Distribution Equipments, Access Devices and certain
Head- end Equipments under control of local cable operators and
subsequent reconciliation with book records need to be strengthened.
(c) During the year, Company has not disposed off any substantial part
of fixed assets.
(ii) (a) to (c) The inventories have been physically verified by the
management during the year. In our opinion and according to the
information and explanation given to us, the frequency of verification
and procedures of physical verification followed by the management are
reasonable and adequate in relation to the size of the Company and the
nature of its business. The Company is maintaining proper records of
such inventory. We have been informed that no material discrepancies
were noticed on physical verification between the stocks and the book
records. Access Devices held for installation are initially classified
under Capital Work - in - Progress and on installation, such devices
are capitalised or treated as sale as the case may be. Accordingly,
these items are not considered as inventory.
(iii) (a) The Company has granted unsecured loans to two companies
covered in the register maintained under section 301 of the Act. These
loans are interest free except loan to the extent of Rs. 60,000,000
granted to one company. The maximum amount involved in such
transactions during the year was Rs. 257,489,085 and the balance at the
end of the year was Rs. 234,995,459.
(b) In our opinion and according to the information and explanations
given to us, the terms and conditions of above loans are not prima
facie prejudicial to the interest of the Company.
(c) According to the information and explanations given to us, no
repayment schedule has been specified and the Company has not called for
refund of such loans. Accordingly, the question of regularity in
repayment of principal amount and interest thereon, wherever
applicable, does not arise.
(d) As stated above there are no overdue amounts in excess of Rs. One
lakh.
(e) to (g) The Company has not taken any loans secured or unsecured
from companies, firms or other parties covered in the register
maintained under section 301 of the Act. In view of the same,
sub-clauses (f) to (g) of the clause (iii) of the Order are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system with regards to
purchases of the inventory and fixed assets and sale of goods and
services. The management is in process of further strengthening the
internal controls over documentation in certain areas so as to make it
commensurate with the size of the Company and the nature of its
business. During the course of our audit, we have not observed any
other area of continuing failure to correct major weakness in internal
controls. (v) (a) On perusal of the information available with the
Company and based on explanations given to us, we are of the opinion
that the particulars of contracts or arrangements referred to in
section 301 of the Act for the year that needs to be entered into the
register maintained under that section have been so entered. (b) In
our opinion and according to the information and explanation given to
us, the transactions made in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the Act and
exceeding Rs. Five lakhs have been made at a prices which are
reasonable having regard to prevailing market prices at the relevant
time to the extent the same are available with the Company and / or in
accordance with the approvals granted by the Central Government,
wherever applicable. (vi) In our opinion and according to the
information and explanation given to us, the Company has not accepted
deposits from the public and therefore, the provisions of Section 58A,
58AA or any other relevant provisions of the Act and Rules framed there
under are not applicable to the Company. (vii) In our opinion, the
Company has an internal audit system commensurate with the size and the
nature of its business. (viii) The Central Government has prescribed
maintenance of cost records under section 209(1)(d) of the Act in
respect of certain service activities of the Company. We have broadly
reviewed the accounts and records of the Company in this connection and
are of the opinion, that prima facie, the prescribed accounts and
records have been made and maintained subject to our comments as stated
above. We have not, however, made a detailed examination of the same.
(ix) (a) Based on the records produced before us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues such as Provident Fund, Income Tax, Custom Duty and
other material statutory dues wherever applicable. According to the
information and explanations given to us, there are no arrears of
undisputed statutory dues outstanding for a period of more than six
months from the date on which they became payable.
(b) The details of disputed statutory dues, that have not been
deposited by the Company are as under:
Sr. Name of the
statue Nature of dues Forum where
dispute is Period to
which the Amount
No. pending amount
relates
1 Bombay Sales
Tax Sales Tax Assistant Comm.
of Sales Tax, 1999-2000 70,979
Act, 1959 Appeals
2 Hyderabad Entertainment
Tax Andhra Pradesh
High Court May 2005 to 5,813,760
Entertainment
Duty June 2006
Act, 1939
3 Andhra Pradesh Value Added
Tax & Commercial Tax
Officer, April 2005
to 528,521
Value Added
Tax Penalty
thereon Hyderguda Nov. 2008 52,852
Act, 2005
4 Karnataka
Sales Sales Tax
and Dy. Commissioner
of Commercial April 2000
to 54,406,240
Tax Act, 1957 interest Tax, Bangalore March 2009
5 Karnataka Entertainment
Tax Karnataka High
Court April 2006
to 2,876,586
Entertainment
Tax Dec 2006
Act, 1958
6 Income Tax Act, Tax deducted
at Commissioner of
Income Tax April 2000
to 39,896,065
1961 source &
interest (Appeals) March 2004
thereon
7 Bombay Entertainment
Tax & Collector Office,
Thane Jun. 2006 8,865,450
Entertainments
Duty penalty
thereon to
Act, 1923 May 2007
8 Bombay Entertainment
Tax Court of Divsional
Commissioner, May 2009 79,192,049
Entertainments
Duty Aurangabad Divsion to
Act, 1923 Oct. 2010
As stated in note no. 4.01 (f) to the accounts, the Company has
challenged the levy of Entertainment Tax pursuant to certain amendments
to Karnataka Entertainment Tax Act, 1958 and Hyderabad Entertainment
Duty Act, 1939. As informed to us, except as disclosed above, no demand
has been quantified in relation to same by the concerned authorities.
(x) The accumulated losses at the end of the financial year are not in
excess of fifty percent of Net Worth of the Company. The Company has
neither incurred cash losses during the financial year covered by our
audit nor in the immediately preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanation given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions or banks.
(xii) In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The Company is not a chit fund or a nidhi /mutual benefit fund /
society. Therefore, clause 4(xiii) of the Order is not applicable to
the Company.
(xiv) The Company has maintained proper records of transactions and
contracts in respect of it's dealing in securities, debentures and
other investments and timely entries have been made therein. All
shares, debentures and other investments have been held by the Company
in its own name except certain government securities which are held in
the name of the officials or ex- officials of the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiaries from a
bank and others, the terms and conditions whereof, as explained to us,
are not prima facie prejudicial to the interest of the Company.
(xvi) Based on information and explanation given to us and based on
overall review of the funds utilization, we are of the view that the
Company has generally utilized funds for which they were obtained.
However, pending such utilization these funds have been temporarily
utilized to reduce the short term borrowings.
(xvii) According to the information and explanations given to us and on
overall examination of the financial statements of the Company, we are
of the opinion that, the funds raised on short-term basis have
generally not been used for long term investment.
(xviii) The Company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Act during the year, accordingly, the question of
whether the price at which shares have been issued is prejudicial to
the interest of the Company does not arise.
(xix) The Company has not issued any secured debentures hence the
question of creation of securities does not arise.
(xx) We have verified the end use of money raised by public issue and
the same is as disclosed in note no. 4.22 to the accounts.
(xxi) Based upon the audit procedures performed and the information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
except cases of misappropriation of cash collection from the
subscribers and fraudulent withdrawals of funds by employees
aggregating to Rs. 2,464,471, of which Rs. 527,316 have been recovered
by the Company.
For G. M. Kapadia & Co.
Chartered Accountants
(Firm Registration No. 104767W)
(ATUL SHAH)
Mumbai Partner
Dated: August 10, 2012 (Membership No. 39569)
Mar 31, 2011
1. We have audited the attached Balance Sheet of HATHWAY CABLE &
DATACOM LIMITED ('the Company') as at 31st March, 2011, the Profit &
Loss Account and the Cash Flow Statement for the year ended on that
date annexed thereto. These Financial Statements are the
responsibility of the management. Our responsibility is to express an
opinion on these Financial Statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 ('the
Order'), issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, ('the Act')
and on the basis of such checks of the books and records of the Company
as we considered appropriate and according to the information and
explanation and information given to us, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of the
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
the said books;
(iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(iv) Wthout qualifying our report, we draw attention to Note no. B (10)
of Schedule N to the accounts in respect of operations of the Company
in the State of Tamil Nadu;
(v) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the Accounting
Standards referred to in sub-section (3C) of Section 211 of the Act to
the extent applicable;
(vi) Based on representations made by the directors of the Company and
taken on records by the board, none of the directors of the Company
are, prima-facie, as at 31st March, 2011 disqualified from being
appointed as directors of the Company under clause (g) of sub- section
(1) of section 274 of the Act, on the said date;
(vii) In our opinion and to the best of our information and according
to the explanations given to us, the accounts read together with notes
thereon give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011,
b. In the case of the Profit & Loss Account, of the losses of the
Company for the year ended on that date, and
c. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
(Referred to in paragraph 3 of our report of even date)
i. (a) The Company has maintained records of fixed assets. other than
distribution equipments, showing particulars, including quantitative
details and location. As explained to us, nature of some of the
distribution equipments (like cabling and other line equipments) and
Cable TV / Internet Access Devices with the subscribers in areas
serviced through local cable operators is such that maintaining
location-wise details is impractical. The management has maintained
maps to identify approximate quantity and location of such distribution
equipments. Updation / preparation of maps relating to addition /
replacement of assets is in progress.
(b) Fixed assets, other than distribution equipments and Cable TV/
Internet Access Devices with the subscribers. were physically verified
during the year as per the programme of verification. Major items of
distribution equipments only for one city were physically verified. In
our opinion, frequency and procedure for verification of distribution
equipments needs to be strengthened. Discrepancies arising on such
physical verification have been properly dealt within the books of
accounts. However, in absence of physical verification of balance
distribution equipments and Cable TV / Internet Access Devices with the
subscribers, discrepancies in such assets have not been ascertained and
not dealt within the books of accounts.
(c) During the year, Company has not disposed off any substantial part
of fixed assets.
ii. The inventories have been physically verified by the management
during the year. In our opinion and according to the information and
explanation given to us, the frequency of verification and procedures
of physical verification followed by the management are reasonable and
adequate in relation to the size of the Company and the nature of its
business. The Company is maintaining proper records of such inventory.
We have been informed that no material discrepancies were noticed on
physical verification between the stocks and the book records. Cable
Television and Internet Access Devices held for installation at the
subscribers' end are initially classified under Capital Work - in -
Progress and On installation, such devices are capitalised or treated
as sale as the case may be. Accordingly, these items are not considered
as inventory.
iii. (a) The Company has granted interest free unsecured loans to two
parties covered in the register maintained under section 301 of the
Act. The maximum amount involved in such transactions during the year
was Rs. 270,709, 861 and the balance at the end of the year was Rs.
174,995,459.
(b) In our opinion and according to the information and explanations
given to us, the terms and conditions of interest free loans given to
the parties covered in the register maintained under section 301 of the
Act are not prima facie prejudicial to the interest of the Company.
(c) According to the information and explanations given to us, no
repayment schedule has been specified and accordingly the question of
regularity in repayment of principal amount, wherever applicable, does
not arise.
(d) As stated above, no repayment schedule has been specified and there
are no overdue amounts in excess of Rs. One lakh.
(e) to (g) The Company has not taken any loans secured or unsecured
from companies, firms or other parties covered in the register
maintained under section 301 of the Act. In view of the same, sub -
clauses (f) to (g) of the clause (iii) of the order are not applicable.
iv. In our opinion and according to the information and explanations
given to us, there is adequate internal control system with regards to
purchases of the inventory and fixed assets and sale of goods and
services. The management is in process of further strengthening the
internal controls over documentation in certain areas so as to make it
commensurate with the size of the Company and the nature of its
business. During the course of our audit, we have not observed any
continuing failure to correct major weakness in internal controls.
v. (a) On perusal of the information available with the Company and
based on explanations given to us, we are of the opinion that the
particulars of contracts or arrangements referred to in section 301 of
the Act for the year that needs to be entered into the register
maintained under that section have been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act and exceeding Rs. Five lakhs have been made at a prices which
are reasonable having regard to prevailing market prices at the
relevant time to the extent the same are available with the Company and
/ or in accordance with the approvals granted by the Central
Government, wherever applicable.
vi. In our opinion and according to the information and explanation
given to us, the Company has not accepted deposits from the public and
therefore, the provisions of Section 58A, 58AA or any other relevant
provisions of the Act and Rules framed there under are not applicable
to the Company.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
viii. The Central Government has prescribed maintenance of Cost Records
under Section 209(1)(d) of the Act in respect of certain service
activities of the Company. We have broadly reviewed the accounts and
records of the Company in this connection and are of the opinion, that
prima facie, the prescribed accounts and records have been made and
maintained. We have not, however, made a detailed examination of the
same.
ix. (a) Based on the records produced before us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues such as Provident Fund, Income Tax, Service Tax, Custom
Duty and other material statutory dues wherever applicable. According
to the information and explanations given to us, there are no arrears
of undisputed statutory dues outstanding for a period of more than six
months from the date on which they became payable.
(b) The details of disputed statutory dues , that have not been
deposited by the Company are as under:
Sr. Name of the statue Nature of dues Forum where dispute
is Amount
No. pending
1 Bombay Sales Tax Act, Sales Tax Assistant Comm. of
Sales 70,987
1959 Tax, Appeals
2 Bombay Entertainments Entertainment
Tax & Commissioner,
Konkan 77,920
Duty Act, 1923 penalty thereon Division 157,800
3 Hyderabad
Entertainment Entertainment
Tax Andhra Pradesh
High 5,813,760
Duty Act, 1939 Court
4 Andhra Pradesh Value Value Added
Tax & Commercial Tax
Officer, 528,521
Added Tax Act, 2005 Penalty thereon Hyderguda 52,852
5 Karnataka Sales Tax Sales Tax and
interest Dy. Commissioner
of 54,406,240
Act, 1957 Commercial Tax,
Bangalore
6 Karnataka
Entertainment Entertainment
Tax Karnataka High
Court 2,876,586
Tax Act, 1958
7 Finance Act, 1994 Service Tax Commissioner of
Ser- 6,186,012
vice Tax
8 Income Tax Act, 1961 Tax deducted at
source Commissioner of
Income 39,896,065
& interest Tax (Appeals)
As stated in note no. B(2)(f) of Schedule N to the accounts, the
Company has challenged the levy of Entertainment Tax pursuant to
certain amendments to Karnataka Entertainment Tax Act, 1958 and
Hyderabad Entertainment Duty Act, 1939. As informed to us, except as
disclosed above, no demand has been quantified in relation to same by
the concerned authorities.
x. The accumulated losses at the end of the financial year are not in
excess of fifty percent of Net Worth of the Company. The Company has
neither incurred cash losses during the financial year covered by our
audit nor in the immediately preceding financial year.
xi. Based on our audit procedures and according to the information and
explanation given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions or banks.
xii. In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
xii. The Company is not a chit fund or a nidhi /mutual benefit fund /
society. Therefore, clause 4(xiii) of the Order is not applicable to
the Company.
The Company has maintained proper records of transactions and contracts
in respect of it's dealing in securities, debentures and other
investments and timely entries have been made therein. All shares,
debentures and other investments have been held by the Company in its
own name except certain government securities which are held in the
name of the officials or ex- officials of the Company.
xiv According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiaries from a
bank, the terms and conditions whereof in our opinion are not prima
facie prejudicial to the interest of the Company.
xvi. Based on information and explanation given to us and based on
overall review of the funds utilization, we are of the view that the
Company has generally utilized funds for which they were obtained.
However, pending such utilization these funds have been temporarily
utilized to reduce the short term credit limits.
xvii. According to the information and explanations given to us and
overall examination of the Financial Statements of the Company, we are
of the opinion that, the funds raised on short-term basis have
generally not been used for long term investment.
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act during the year hence the question of whether the price
at which shares have been issued is prejudicial to the interest of the
Company does not arise.
xix. The Company has not issued any non convertible debentures hence
the question of whether securities have been created does not arise.
xx. We have verified that the end use of money raised by public issue
and the same is as disclosed in note no. B(32) of Schedule N to the
accounts.
xxi. Based upon the audit procedures performed and the information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our audit
except as mentioned below :
a) Cases of misappropriation of cash collection from the subscribers
and fraudulent withdrawals of funds by employees aggregating to
Rs.1,694,748, of which Rs. 190,594 have been recovered by the Company,
no fraud on or by the Company has been noticed or reported during the
year and
b) A fraud has been reported in respect of one of the subsidiaries
involving the minority joint venture partner in respect of that
company. The fraud has been committed by falsification of accounts,
fraudulent destruction of valuable securities etc. involving aggregate
amount of Rs. 74,321,905. The Company has filed police complaint and
the matter is pending.
For G. M. KAPADIA & CO.
Chartered Accountants
(Firm Registration No. 104767W)
(ATUL SHAH)
Mumbai Partner
Dated: 12th August, 2011 (Membership No. 39569)
Mar 31, 2010
1. We have audited the attached Balance Sheet of HATHWAY CABLE &
DATACOM LIMITED (formerly known as HATHWAY CABLE & DATACOM PRIVATE
LIMITED) as at 31st March, 2010, the Profit & Loss Account and the Cash
Flow Statement for the year ended on that date annexed thereto. These
Financial Statements are the responsibility of the management. Our
responsibility is to express an opinion on these Financial Statements
based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003 (the
Order), issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Companies Act, 1956, (the Act)
we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of the
audit;
(ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
the said books;
(iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(iv) Without qualifying our report, we draw attention to :
a. Note no. B (9) of Schedule N to the accounts in respect of
operations of the Company in the city of Chennai; and
b. Note no. B (10) of Schedule N to the accounts in respect of
retrospective change in the policy of providing depreciation on Set Top
Boxes;
(v) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Act;
(vi) Based on representations made by the directors of the Company and
taken on records by the board, none of the directors of the Company
are, prima-facie, as at 31st March, 2010 disqualified from being
appointed as directors of the Company under clause (g) of sub- section
(1) of section 274 of the Act, on the said date;
(vii) In our opinion and to the best of our information and according
to the explanations given to us, the accounts read together with notes
thereon give the information required by the Act except details about
the two partnership firms in which the Company is a partner (refer note
No. B (23) of Schedule N to the Accounts) having investment of Rs.
127,731 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
a. In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010,
b. In the case of the Profit & Loss Account, of the losses of the
Company for the year ended on that date, and
c. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(Referred to in paragraph 3 of our report of even date)
(i) (a) The Company has maintained records of fixed assets, other than
distribution equipments, showing particulars, including quantitative
details and location. As explained to us, nature of some of the
distribution equipments (like cabling and other line equipments) is
such that maintaining location-wise details is impractical. The
management has maintained maps to identify approximate quantity and
location of such equipments. Updation / preparation of maps relating
to addition / replacement of assets is in progress.
(b) Fixed assets, other than distribution equipments and Cable TV /
Internet Access Devices with the subscribers, were physically verified
during the year as per the programme of verification which, in our
opinion, is reasonable. During the year, major items of distribution
equipments of certain cities were also physically verified.
Discrepancies arising on such physical verification have been properly
dealt within the books of accounts. However, in absence of physical
verification of balance distribution equipments and Cable TV / Internet
Access Devices with the subscribers, discrepancies in such assets have
not been ascertained and not dealt within the books of accounts.
(c) During the year, Company has not disposed off any substantial part
of fixed assets.
(ii) The inventories have been physically verified by the management
during the year. In our opinion and according to the information and
explanation given to us, the frequency of verification and procedures
of physical verification followed by the management are reasonable and
adequate in relation
to the size of the Company and the nature of its business. The Company
is maintaining proper records of such inventory. We have been informed
that no material discrepancies were noticed on physical verification
between the stocks and the book records. Cable Television and Internet
Access Devices held for installation at the subscribers end are
initially classified under Capital Work-in-Progress and are
subsequently capitalized or treated as sale depending on scheme opted
by the customers. Accordingly, these items are not considered as
inventory.
(iii) (a) The Company has granted interest free unsecured loans to two
parties covered in the register maintained under section 301 of the
Act. The maximum amount involved in such transactions during the year
was Rs. 260,098,080 and the balance at the end of the year was Rs.
205,709,861.
(b) In our opinion and according to the information and explanations
given to us, the terms and conditions of interest free loans given to
the parties covered in the register maintained under section 301 of the
Act are not prima facie prejudicial to the interest of the Company.
(c) According to the information and explanations given to us, no
repayment schedule has been specified and accordingly the question of
regularity in repayment of principal amount, wherever applicable, does
not arise.
(d) As stated above, no repayment schedule has been specified and there
are no overdue amounts in excess of Rs. One lakh.
(e) The Company has not taken any loans secured or to unsecured from
companies, firms or other parties (g) covered in the register
maintained under section 301 of
the Act. In view of the same, subÃclauses (f) to (g) of the clause
(iii) of the order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, there is adequate internal control system commensurate
with the size of the Company and the nature of its business with
regards to purchases of the inventory and fixed assets and sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weakness in internal
controls.
(v) (a) On perusal of the information available with the Company and
based on explanations given to us, we are of the opinion that the
particulars of contracts or arrangements referred to in section 301 of
the Act for the year that needs to be entered into the register
maintained under that section have been so entered.
(b) In our opinion and according to the information and explanation
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. five lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time to the extent the same are available with the Company and in
accordance with the approvals granted by the Central Government,
wherever applicable.
(vi) In our opinion and according to the information and explanation
given to us, the Company has not accepted deposits from the public and
therefore, the provisions of Section 58A, 58AA or any other relevant
provisions of the Act and Rules framed there under are not applicable
to the Company.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
(viii) The Central Government has prescribed maintenance of Cost
Records under Section 209(1)(d) of the Act in respect of certain
service activities of the Company. We have broadly reviewed the
accounts and records of the Company in this connection and are of the
opinion, that prima facie, the prescribed accounts and records have
been made and maintained. We have not, however, made a detailed
examination of the same.
(ix) (a) Based on the records produced before us, the Company is
generally regular in depositing with appropriate authorities undisputed
statutory dues such as Provident Fund, Income Tax, Service Tax, Custom
Duty and other material statutory dues, wherever applicable, except
payment of few instances of Value Added Tax and Central Sales Tax.
According to the information and explanations given to us, undisputed
dues in respect of Value Added Tax amounting to Rs. 213,544 and Central
Sales Tax amounting to Rs. 1,564,872 were outstanding, at the year end
for a period of more than six months from the date they became payable.
(b) The details of disputed statutory dues , that have not been
deposited by the Company are as under:
Sr. Name of the Nature of Forum where Amount
No. statue dues dispute is
pending
1 Bombay Sales Sales Tax Assistant Comm. 70,987
Tax Act, 1959 of Sales Tax,
Appeals
2 Bombay Entertainment Commissioner, 77,920
Entertainments Tax & penalty Konkan Division 157,800
Duty Act, 1923 thereon
3 Hyderabad Entertainment Andhra Pradesh 5,813,760
Entertainment Tax High Court
Duty Act, 1939
4 Andhra Pradesh Value Added Commercial 528,521
Value Added Tax Tax & Penalty Tax Officer, 52,852
Act, 2005 thereon Hyderguda
5 Karnataka Sales Sales Tax Dy. 54,406,240
Tax Act, 1957 Commissioner of
Commercial Tax,
Bangalore
6 Karnataka Entertainment Karnataka High 2,876,586
Entertainment Tax Court
Tax Act, 1958
7 Finance Act, Service Tax Commissioner of 6,186,012
1994 Service Tax
As stated in note no. B(4)(f) of Schedule N to the accounts, the
Company has challenged the levy of Entertainment Tax pursuant to
certain amendments to Karnataka Entertainment Tax Act, 1958 and Andhra
Pradesh Entertainment Tax Act, 1939. As informed to us, except as
disclosed above, no demand has been quantified in relation to same by
the concerned authorities.
(x) The accumulated losses at the end of the financial year are not in
excess of fifty percent of Net Worth of the Company. The Company has
not incurred cash losses during the financial year covered by our audit
and also in the immediately preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanation given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions or banks.
(xii) In our opinion and according to the information and explanation
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The Company is not a chit fund or a nidhi /mutual benefit fund /
society. Therefore, clause 4(xiii) of the Order is not applicable to
the Company.
(xiv) The Company has maintained proper records of transactions and
contracts in respect of itÃs dealing in securities, debentures and
other investments and timely entries have been made therein. All
shares, debentures and other investments have been held by the Company
in its own name except certain government securities which are held in
the name of the officials or ex- officials of the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by its subsidiaries from a
bank, the terms and conditions whereof in our opinion are not prima
facie prejudicial to the interest of the Company.
(xvi) Based on information and explanation given to us and based on
overall review of the funds utilization, we are of the view that the
Company has generally utilized funds for which they were obtained.
(xvii) According to the information and explanations given to us and
overall examination of the Financial Statements of the Company, we are
of the opinion that, the funds raised on short-term basis have
generally not been used for long term investment.
(xviii)The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act during the year hence the question of whether the price
at which shares have been issued is prejudicial to the interest of the
Company does not arise.
(xix) The Company has not issued any non convertible debentures hence
the question of whether securities have been created does not arise.
(xx) We have verified that the end use of money raised by public issue
during the year and the same is as disclosed in note no. B(34) of
Schedule N to the accounts.
(xxi) Based upon the audit procedures performed and the information and
explanations given by the management, we report that except for cases
of misappropriation of cash collection from the subscribers and
fraudulent withdrawals of funds by employees aggregating to Rs.
679,705, of which Rs. 365,187 have been recovered by the Company, no
fraud on or by the Company has been noticed or reported during the
year.
For G. M. KAPADIA & CO.
Chartered Accountants
(Firm Registration No. 104767W)
(ATUL SHAH)
Mumbai Partner
Dated: 12th August 2010 (Membership No. 39569)
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