Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of HUBTOWN LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 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.
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 state of affairs (financial position), profit or loss (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. 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 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 these standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorsâ judgement, 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 Companyâs 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 Companyâs 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 qualified audit opinion on the standalone financial statements.
Basis for Qualified Opinion
(a) As stated in Footnote (a) to Note 28 to the standalone financial statements of the Company for the year, with regards the Company not having provided for Interest amounting to Rs. 4,162.00 Lakhs on certain Inter-corporate deposits, including reversal of interest in current quarter amounting to Rs. 2,561.57 Lakhs provided in a previous quarterâs. Consequent to above, finance cost for the quarter and year ended 31st March, 2018 has been understated by Rs. 2,561.57 and Rs. 4,162.00 Lakhs respectively resulting in a consequential increase in the profit for the quarter and year ended 31st March, 2018.
(b) As stated in Footnote (c) Note 23 to the standalone financial statements of the Company for the year, with regards the company not having recognized finance Income from Deep Discount bond held in one of its Joint Venture entities. Consequently, Finance Income and profit for the year has been understated by Rs. 18,508.44 Lakhs.
Qualified Opinion
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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 31st March, 2018, and its profit/loss and its cash flows for the year ended on that date.
Emphasis of Matters
We draw attention to:
(a) Note 2 (II) (b) (i) to the standalone financial statements regarding recognition of expense and income for ongoing projects which is based upon estimated project costs, as per the judgement of the management, which have been relied upon by us, these being technical matters.
(b) Footnote to Note 17 of standalone financial results, regarding the company has not created investments to the extent of 15% of the value of the such debentures, which is required to be created and earmarked in the manner prescribed under Rule 18(7)(c) of the Companies (Share Capital and Debentures) Rules, 2014 notified by the Ministry of Corporate Affairs.
(c) Footnote (a) to Note 13 to the standalone financial statements regarding the status of the projects and the opinion framed by the Companyâs management regarding realizable value of the costs incurred on the projects, which, being a technical matter is relied upon by us.
(d) Note 36 (i) (B) to the standalone financial statements regarding Corporate guarantees issued and securities provided aggregating Rs. 98,457.50 lakhs by the Company to banks and financial institutions on behalf of various entities as at 31st March, 2018, which are significant in relation to the profits for the year and the net worth of the Company. In the opinion of the Management, these are not expected to result into any financial liability to the Company.
(e) Footnote (c) to Note 36 of the standalone financial statements regarding the above corporate guarantees issued and securities provided are disclosed at amounts outstanding as at 31st March, 2018. The financial liabilities on account of such financial guarantee contracts have not been measured at fair value as management is of the opinion that there is no material benefit which is expected to accrue to the borrowers on behalf of whom the company has provided the corporate guarantees.
(f) Footnote (b) to Note 36 of the standalone financial statements, regarding reliance placed by the auditors on certification received from the management with regard to the disclosure of contingent liabilities of the Company.
(g) Note 42 of the standalone financial statements regarding balances that are subject to confirmations, reconciliation and adjustments, if any.
(h) Footnote (a) to Note 19 of the standalone financial results, regarding the Companyâs default in redemption of non-convertible debentures along with interest amounting to Rs. 2,199 lakhs. We are however informed by the management that the company is in the process of negotiation for settlement / redemption of the said debentures.
(i) Footnote (c) to Note no. 9 of the standalone financial statements regarding the company not having charged interest on advances given by it to various group entities developing real estate projects, in which the Company has a commercial and business interest.
(j) Footnote (f) to Note 6 of the standalone financial statements regarding the Companyâs investments, in certain subsidiaries, joint ventures and associates as at 31st March, 2018 which have incurred losses and carry an eroded net worth as at 31st March, 2018.
Our opinion is not qualified in respect of the above matters.
Other Matters
Attention is further invited to:
1. The Statement of Profit and Loss of the Company which includes share of Profit from investments in partnership firms / joint ventures aggregating Rs. 325.47 lakhs that are based on the financial statements of the firms/joint ventures prepared by the management and presented to us on which we have relied.
2. The audited standalone financial statements for the year ended 31st March 2017, was carried out and reported by Dalal Doshi & Associates, vide their unmodified audit report dated 29th May 2017, whose report has been furnished to us by the management and which has been relied upon by us for the purpose of our audit of the standalone financial statements.
Our opinion is not qualified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
I. 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 Annexure âAâ, a statement on the matters specified in paragraphs 3 and 4 of the Order;
II. 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 accounts 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 relevant books of accounts.
(d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standard specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure âBâ; 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), in our opinion and to the best of our information and according to the explanation given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements.
ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
ANNEXURE âAâ REFERRED TO IN OUR REPORT TO THE MEMBERS OF HUBTOWN LIMITED ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2018;
On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that: -
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the Management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Pursuant to the program, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical fixed assets have been noticed.
(c) the title deeds of immovable properties are held in the name of the Company.
(ii) The physical verification of inventory has been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts;
(iii) The Company has granted unsecured loan to one company covered under the register maintained under Section 189 of the Act;
(a) The terms and condition of the loan are prima facie not prejudicial to the interest of the Company, and
(b) The schedule of repayment of principal and interest has been stipulated as per terms of the arrangement;
(c) As per the terms and conditions of the arrangement, the amount of the loan is not overdue;
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it;
(v) The Company has not accepted any deposits during the year from the public within the meaning of Sections 73 to 76 of the Act and the Rules framed thereunder to the extent notified;
(vi) Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act. We have broadly reviewed the cost records maintained by the Company in respect of projects 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 records with a view to determine whether they are accurate or complete;
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of Income Tax, Provident Fund, Profession Tax, Tax Deducted at Source, Value Added Tax, Goods and Service Tax and Service Tax, the Company is generally regular in depositing undisputed statutory dues, including, Employeesâ State Insurance, Wealth Tax, duty of customs, duty of excise and other material statutory dues, as applicable, with the appropriate authorities. The extent of arrears of statutory dues outstanding including Interest as at the Balance Sheet date, for a period exceeding six months from the date they became payable are Rs. 1316.75 lakhs relating to Income Tax Deducted at Source, Rs. 11.86 lakhs relating to Provident Fund, Rs. 111.99 lakhs relating to Value Added Tax, Rs. 173.82 relating to Works Contract Tax and Rs. 156.84 lakhs relating to Service Tax;
(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income Tax, Value Added Tax and Service Tax as at the Balance Sheet date which have not been deposited on account of a dispute, are as follows:
Statute and nature of dues |
Financial Year |
Amount (Rs. in lakhs) |
Forum where dispute is pending |
Income Tax Act, 1961 |
|||
Income Tax |
2003-04 |
17.48 |
Mumbai High Court |
Income Tax |
2004-05 |
21.31 |
Mumbai High Court |
Income Tax |
2005-06 |
20.92 |
Mumbai High Court |
Maharashtra Value Added Tax Act, 2002 |
|||
Maharashtra Value Added Tax |
2006-07 |
1.64 |
Joint Commissioner of Sales Tax (Appeals) |
Service Tax |
|||
(Finance Act,1994) |
|||
Service Tax |
2011-12 |
481.60 |
Commissioner of Service Tax |
Service Tax |
2012-13 |
451.00 |
Commissioner of Service Tax |
Service Tax |
2013-14 |
520.83 |
Commissioner of Service Tax |
Service Tax |
2014-15 |
727.52 |
Commissioner of Service Tax |
(viii) On the basis of the records examined by us and the information and explanations given to us, the Company has delayed in repayment of dues to banks, financial institution and debentures holders. Attention is invited to footnote âeâ to Note 18 - Non-Current Borrowings, with regards to banks, footnote âeâ to Note 18 - Current Borrowings, with regards to financial institution and footnote âbâ to Note 19 with regards to debentures, for the amounts and period of delays in payment of principle and interest thereon;
(ix) In our opinion, and according to the information and explanations given to us, the term loans have been applied on an overall basis for the purposes for which they were obtained;
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management. Attention is however invited to Note 36(ii)(c) to accounts in connection with a commercial transaction with an erstwhile associate company;
(xi) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013;
(xii) As the Company is not a Nidhi company, the provisions of clause 3(xii) of the Order are not applicable to the Company;
(xiii) The company has entered into transactions with related parties in compliance with the provisions of section 177 and 188 of the Act. The details of such related party transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards;
(xiv) 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) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, the provisions of clause 3(xv) of the Order are not applicable to the Company;
(xvi) The Company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3(xvi) of the Order are not applicable to the Company.
âANNEXURE Bâ TO THE INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF HUBTOWN LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (the âActâ)
We have audited the internal financial controls over financial reporting of Hubtown Limited (âthe Companyâ) 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.
Managementâs Responsibility for Internal Financial Controls
The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting 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 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 the Companyâs 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. 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 over financial reporting 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 over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risks. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting 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 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 companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, 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 over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting 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 over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal controls over financial reporting 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 issued by the Institute of Chartered Accountants of India.
For M H DALAL & ASSOCIATES
Firm Registration No.: 112449W
Chartered Accountants
DEVANG DALAL
Partner
Membership No.:109049
Place: Mumbai
Date: May 29, 2018
Mar 31, 2016
The Members of Hubtown Limited Report on the Financial Statements
We have audited the accompanying standalone financial statements of HUBTOWN LIMITED ("the Companyâ), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Actâ) with respect to 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 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 of 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 and the Rules made there under including the Accounting Standards and matters which are required to be included in the audit report. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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 the disclosures in the financial statements. The procedures selected depend on the auditors'' 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 controls 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 financial statements. opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 31st March, 2016, and its profit and its cash flows for the year ended on that date.
Emphasis of matter
Attention is invited to:
(a) Note 2 (III) (A) (ii) and (iii) in the financial statements with regard to recognition of expense and income for ongoing projects which is based upon estimated costs, as per the judgment of the management, which have been relied upon by us, these being technical matters.
(b) Note 4 (footnote b) in the financial statements with regard to non-creation of investments to the extent of 15% of the value of the redeemable debentures, which is required to be created and earmarked in the manner prescribed under Rule 18 (7) (c) of the Companies (Share Capital and Debentures) Rules, 2014 notified by the Ministry of Corporate Affairs.
(c) Note 17 (footnote b) of the financial statements regarding the status of the projects and the opinion framed by the Company''s management regarding realizable value of the costs incurred, being a technical matter, relied upon by us.
(d) Note 32 (i) (B), regarding guarantees issued and securities provided aggregating Rs. 90099.69 lakhs by the Company to banks and financial institutions on behalf of various entities, which are significant in relation to the profits for the year and the net worth of the Company. In the opinion of the Management, these are not expected to result into any financial liability to the Company.
(e) Note 32 (footnote b) of the financial statements with regard to reliance placed by the auditors on certification received from the management with regard to the disclosure of contingent liabilities given by the Company.
(f) Note 39 of the financial statements with regard to balances that are subject to confirmations, reconciliation and adjustments, if any.
(g) Note 14 of the financial statements with regard to amounts deposited with the Hon''ble Sessions Court, Mumbai as deposits on account of an ongoing case in connection with a commercial transaction with an erstwhile associate company. In connection with the above, a bank account of the Company has been attached by the Maharashtra State CID. Considering the facts of the matter and its pendency, we are unable to express any opinion on the same as the matter is sub-judice.
(h) Note 27 (footnote c) of the financial statements with regard to corporate social responsibility (CSR) expense, which is subject to cheque realization by the recipient.
(i) The Company has not charged interest on advances given to various group entities developing real estate projects, in which the Company has a business interest.
Our opinion is not qualified in respect of the above matters.
other Matters
Attention is invited to:
(a) The Statement of Profit and Loss of the Company which includes share of loss (net) from investments in partnership firms / joint ventures aggregating Rs. 4.75 lakhs are based on the financial statements of the joint ventures / firms as audited by other auditors whose reports have been furnished to us, which have been relied upon by us. Further, the Statement of Profit and Loss of the Company includes share of loss from investments in partnership firms / joint ventures aggregating Rs. 720.93 lakhs are based on the financial statements of the joint ventures / firms as prepared by the management and presented to us on which we have relied.
(b) Note12 (footnote e) regarding the Company''s investments in certain subsidiaries, jointly controlled entities and associates as at 31st March, 2016 which have incurred losses and have negative net worth as at March 31, 2016.
report on other legal and regulatory requirements
I. As required by the provisions of ''the Companies (Auditor''s Report) Order, 2016'', issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to as the "Orderâ), 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 explanations given to us, we give in Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order;
II. 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 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 31st March, 2016 taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 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.
(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 knowledge and belief and according to the information and explanations given to us :
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2016 on its financial position in its standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and protection fund by the company during the year ended march 31, 2016.
ANNEXURE âAâ REFERRED TO IN OUR REPORT TO THE MEMBERS OF HUBTOWN LIMITED ON THE STANDALONE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 ST MARCH, 2016;
On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that: -
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;
(b) The fixed assets have been physically verified by the Management in a phased manner, designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Pursuant to the program, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical fixed assets have been noticed;
(c) The title deeds of immovable properties are held in the name of the Company;
(ii) The physical verification of inventory has been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts;
(iii) The Company has granted unsecured loan to one company covered under the register maintained under Section 189 of the Act;
(a) In respect of the aforesaid loan, as per the terms and conditions the same is interest free and repayable on demand;
(b) The terms and conditions of the loan are prima facie, not prejudicial to the interest of the Company, and
(c) As the loan is repayable on demand, the question of overdue amount does not arise;
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it;
(v) The Company has not accepted any deposits during the year from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified;
(vi) Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148 (1) of the Act. We have broadly reviewed the cost records maintained by the Company in respect of projects 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 records with a view to determine whether they are accurate or complete;
(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except
for dues in respect of Income Tax, Provident Fund, Profession Tax, Tax Deducted at Source, Value Added Tax and Service Tax, the Company is generally regular in depositing undisputed statutory dues, including, Employees'' State Insurance, Wealth Tax, duty of customs, duty of excise and other material statutory dues, as applicable, with the appropriate authorities. The extent of arrears of statutory dues outstanding as at the Balance Sheet date, for a period exceeding six months from the date they became payable are Rs. 2382.12 lakhs relating to Income Tax Deducted at Source, Rs. 0.07 lakhs relating to Provident Fund, Rs. 0.06 lakhs relating to Profession Tax, Rs. 697.58 lakhs relating to Value Added Tax and Rs. 330.02 lakhs relating to Service Tax;
(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of Income Tax, Value Added Tax and Cess as at the Balance Sheet date which have not been deposited on account of a dispute, are as follows:
Statute and nature of dues |
Financial year |
Amount (Rs. in lakhs) |
Forum where dispute is pending |
Income Tax Act, 1961 |
|||
Income Tax |
2003-04 |
17.48 |
Mumbai High Court |
Income Tax |
2004-05 |
21.31 |
Mumbai High Court |
Income Tax |
2005-06 |
20.92 |
Mumbai High Court |
Income Tax |
2009-10 |
6.46 |
Income Tax Appellate Tribunal, Mumbai |
Income Tax |
2010-11 |
431.4 |
Income Tax Appellate Tribunal, Mumbai |
Income Tax |
2011-12 |
29.64 |
Commissioner of Income Tax (Appeals), Mumbai |
Income Tax |
2012-13 |
2235.04 |
Commissioner of Income Tax (Appeals), Mumbai |
Statute and nature of dues |
Financial year |
Amount (Rs. in lakhs) |
Forum where dispute is pending |
Maharashtra Value Added Tax Act, 2002 |
|||
MVAT |
2006-07 |
15.49 |
Joint Commissioner of Sales Tax (Appeals) - 3 |
MVAT |
2007-08 |
0.26 |
Joint Commissioner of Sales Tax (Appeals) - 3 |
MVAT |
2008-09 |
92.94 |
Deputy Commissioner of Sales Tax (Appeals) - 6 |
MVAT |
2009-10 |
8.64 |
Joint Commissioner of Sales Tax (Appeals) - 3 |
MVAT |
2010-11 |
5.31 |
Joint Commissioner of Sales Tax (Appeals) - 3 |
MVAT |
2011-12 |
4.53 |
Joint Commissioner of Sales Tax (Appeals) - 3 |
(viii) On the basis of the records examined by us and the information and explanations given to us, the Company has delayed in repayment of dues to banks, financial institution and debentures holders. Attention is invited to footnote "fâ to Note 5 with regards to banks, footnote "gâ to Note 8 with regards to financial institution and footnote "câ to Note 10 with regards to debentures, for the amounts and period of delays in payment of principle and interest thereon;
(ix) In our opinion, and according to the information and explanations given to us, the term loans have been applied on an overall basis for the purposes for which they were obtained;
(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practice in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management. Attention is however invited to Note 14 to accounts in connection with a commercial transaction with an erstwhile associate company;
(xi) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013;
(xii) As the Company is not a nidhi company, the provisions of clause 3 (xii) of the Order are not applicable to the Company;
(xiii) The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transaction have been disclosed in the financial statements as required under Accounting Standard AS 18 - Related Party Disclosures specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.
(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debenture during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company;
(xv) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company;
(xvi) The Company is not required to be registered under Section 45IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3(xvi) of the Order are not applicable to the Company.
For Dalal Doshi & Associates
Firm Registration Number: 121773W
Chartered Accountants
Dinesh Doshi
Partner
Membership No.: F-9464
Place : Mumbai
Date : 22nd June, 2016
Mar 31, 2015
Report on the Financial Statements
We have audited the accompanying standalone financial statements of
HUBTOWN LIMITED ("the Company"), which comprise the Balance Sheet as at
31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management's responsibility for the 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 financial statements to 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 of 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 there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. 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 the 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 financial statements that
give a true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial control system over financial reporting and the operating
effectiveness of such controls. 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 financial
statements.
opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 31st March, 2015, and its profit and its cash flows for the year ended
on that date.
emphasis of matter
Attention is invited to:
(a) Note 2 (III) (A) (ii) and (iii) in the financial statements with
regard to recognition of expense and income for ongoing projects which
is based upon estimated costs, as per the judgment of the management,
which have been relied upon by us, these being technical matters.
(b) Note 4 (footnote c) in the financial statements with regard to
non-creation of investments to the extent of 15% of the value of the
redeemable debentures, which is required to be created and earmarked in
the manner prescribed under Rule 18(7) (c) of the Companies (Share
Capital and Debentures) Rules, 2014 notified by the Ministry of
Corporate Affairs.
(c) Note 17 (footnote) of the financial statements regarding the status
of the projects and the opinion framed by the Company's management
regarding realizable value of the costs incurred, being a technical
matter, relied upon by us.
(d) Note 20 (footnote a) in the financial statements with regard
reversal of revenue from sale of properties / FSI in earlier years /
periods.
(e) Note 32(B), regarding guarantees issued and securities provided
aggregating Rs. 47,280.82 lacs by the Company to banks and financial
institutions on behalf of various entities, which are significant in
relation to the profts for the year and the net worth of the Company.
In the opinion of the Management, these are not expected to result into
any financial liability to the Company.
(f) Note 32 (footnote) of the financial statements with regard to
reliance placed by the auditors on certification received from the
management with regard to the disclosure of contingent liabilities
given by the Company.
(g) Note 39 of the financial statements with regards to balances that
are subject to confirmations, reconciliation and adjustments if any.
(h) The Company has not charged interest on advances given to various
group entities developing real estate projects, in which the Company
has a business interest.
Our opinion is not qualified in respect of the above matters.
other matters
Attention is invited to:
(a) The Statement of Profit and Loss of the Company which includes share
of loss (net) from investments in partnership firms / joint ventures
aggregating Rs. 20.02 lacs are based on the financial statements of the
joint ventures / firms as audited by other auditors whose reports have
been furnished to us, which have been relied upon by us. Further, the
Statement of Profit and Loss of the Company which includes share of loss
from investments in partnership firms / joint ventures aggregating Rs. 349
lacs are based on the financial statements of the joint ventures / firms
as prepared by management and presented to us on which we have relied
upon.
(b) Note 12 (footnote c) regarding the Company's investments in certain
subsidiaries, jointly controlled entities and associates as at 31st
March, 2015 which have incurred losses and have negative net worth as
at March 31, 2015.
report on other legal and regulatory requirements
I. As required by 'the Companies (Auditor's Report) Order, 2015',
issued by the Central Government of India in terms of sub-section (11)
of Section 143 of the Act (hereinafter referred to as the "Order"), 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
explanations given to us, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.
II. As required by Section143 (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 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 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
(f) 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 knowledge and belief
and according to the information and explanations given to us:
i. The Company has disclosed the impact of pending litigations as at
March 31, 2015 on its financial position in its financial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses; and
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended March 31, 2015.
ANNEXURE 1 REFERRED TO IN OUR REPORT TO THE MEMBERS OF HUBTOWN LIMITED
ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH,
2015 WE REPORT THAT;
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we state that: -
(i) a) The Company has maintained proper records showing full
particulars of the quantitative details and situation of its fixed
assets; and
b) The fixed assets are physically verified by the management according
to a phased programme designed to cover all the items over a period of
three years which, in our opinion, is reasonable having regard to the
size of the Company and nature of its assets. According to the
information and explanations given to us, no material discrepancies
were noticed on such verification;
(ii) a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of verification is
reasonable.
b) In our opinion, the procedures for physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business; and
c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material;
(iii) The Company has granted unsecured loan to one Company covered
under the register maintained under Section 189 of the Act;
(a) The above loan is interest free and repayable on demand; and
(b) As the loan is repayable on demand, the question of overdue amount
does not arise;
(iv) In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, for the purchase of inventories and fixed assets and for sale
of goods and services. Further, on basis of our examination of the
books and records of the Company, and according to the information and
explanations given to us, we have neither come across, nor have been
informed of, any continuing failure to correct major weaknesses in the
aforesaid internal control;
(v) In our opinion, and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
73, 74, 75 and 76 or any other relevant provisions of the Act and the
Rules framed there under to the extent notified, with regard to the
deposits accepted from the public. According to the information and
explanations given 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 on the Company in respect of the aforesaid
deposits;
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of projects where, pursuant to the rules made by the
Central Government of India, the maintenance of cost records has been
specified under sub-section (1) of Section 148 of the Act, 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 records with a view to determine whether they are
accurate or complete;
(vii) a. According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except for
dues in respect of Income Tax, Tax Deducted at Source, Value Added Tax
and Service Tax, the Company is generally regular in depositing
undisputed statutory dues, including Provident Fund, Employees' State
Insurance, Wealth Tax, Sales Tax, Customs Duty, Excise Duty and other
material statutory dues, as applicable, with the appropriate
authorities. The extent of arrears of statutory dues outstanding as at
Balance Sheet date, for a period exceeding six months from the date
they became payable are Rs. 153.01 lacs relating to Income Tax, Rs.
2,064.90 lacs relating to Income Tax Deducted at Source, Rs. 522.34
relating to Value Added Tax and Rs. 63.34 relating to Service Tax;
b. According to the information and explanations given to us and the
records of the Company examined by us, the particular of dues of Income
Tax, Value Added Tax and Cess as at Balance Sheet date which have not
been deposited on account of a dispute, are as follows:
Statute and nature
of dues Financial amount Forum where dispute is
pending
year (Rs. in
lacs)
income tax act,
1961:
Income Tax 2003-04 17.48 Hon'ble Bombay High Court
Income Tax 2004-05 21.31 Hon'ble Bombay High Court
Income Tax 2005-06 20.92 Hon'ble Bombay High Court
Income Tax 2009-10 6.46 Hon'ble Bombay Income Tax
Appellate Tribunal
Income Tax 2010-11 431.40 Hon'ble Bombay Income Tax
Appellate Tribunal
Income Tax 2011-12 29.64 Learned Commissioner of
Income Tax (Appeals)
Statute and nature
of dues Financial amount Forum where dispute is
pending
year (Rs. in
lacs)
maharashtra Value
added tax act, 2002:
Value Added Tax 2006-07 15.49 Joint Commissioner of
Sales Tax Appeal
Value Added Tax 2007-08 0.26 Joint Commissioner of
Sales Tax Appeal
Value Added Tax 2008-09 92.94 Joint Commissioner of
Sales Tax Appeal
Value Added Tax 2009-10 8.66 Joint Commissioner of
Sales Tax Appeal
Value Added Tax 2010-11 5.31 Joint Commissioner of
Sales Tax Appeal
Value Added Tax 2011-12 4.53 Joint Commissioner of
Sales Tax Appeal
Note: Appeals pending at admission stage with appellate bodies are not
considered in the above list.
c. The amount required to be transferred to Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act, 2013 and the Rules
made there under;
(viii) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year;
(ix) On the basis of the records examined by us and the information and
explanations given to us, the Company has delayed in repayment of dues
to banks and a financial institution. Attention is invited to Footnote
"f" to Note 5 with regards to banks and the financial institution for
the amounts and period of delay in payment of principal and interest in
case of banks and interest in case of the financial institution;
(x) In our opinion, and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company for loans taken by others in which Company has business
interest from Banks or financial institutions during the year, are not
prejudicial to the interest of the Company;
(xi) In our opinion and according to the information and explanations
given to us, the term loans have been applied, on an overall basis, for
the purposes for which they were obtained; and
(xii) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practice in India, and according to the information and
explanations given to us, we have neither come across any instance of
material fraud on or by the Company, noticed or reported during the
year, nor have been informed of any such case by the Management.
For dalal doshi & associates
Firm Registration Number: 121773W
Chartered Accountants
Dinesh Doshi
Partner
Membership No.: F-9464
Mumbai, May 30, 2015
Mar 31, 2014
We have audited the accompanying financial statements of Hubtown Limited
(''the Company''), which comprise the Balance Sheet as at March 31, 2014,
and the Statement of Profit and Loss and 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 Financial Statements
The Company''s 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 notifed under the Companies
Act, 1956 ("the Act") read with the General Circular No. 15/2013 dated
13th September, 2013 of the Ministry of Corporate Afairs in respect of
Section 133 of the 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.
auditors'' 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 auditors'' 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, but not for the
purpose of expressing an opinion on the efectiveness of the Company''s
internal control. An audit also includes evaluating the appropriateness
of the accounting policies used and the reasonableness of the
accounting estimates made by the management, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufcient 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 accompanying 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 afairs of the
Company as at March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the Profit of the
Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
emphasis of matter
Attention is invited to:
(a) Note 2 (III) (A) (ii) and (iii) in the financial statements with
regard to recognition of expense and income for ongoing projects which
is based upon estimated costs, as per the judgement of the management,
which have been relied upon by us, these being technical matters.
(b) Note 4 (footnote d) in the financial statements with regard to the
dividend recommended by the Board of Directors, wherein the concurrence
of the secured debenture holders is required to be obtained in
accordance with the SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2009 and the Debenture Trust Deeds.
(c) Note 4 (footnote e) in the financial statements with regard to
non-creation of investments to the extent of 15% of the value of the
redeemable debentures, which are required to be created and earmarked
in accordance with the requirements of the General Circular No. 4/2013
dated 11th February 2013 issued by the Ministry of Corporate Afairs.
(d) Note 5 (footnote k) of the financial statements with regards to
non-provision of interest and allied costs or accounting for
liabilities on funds received from the debentureholders. We are
informed that the management is in the process of negotiating with them
and the impact, if any, on the financial statements of the Company after
the conclusion of the negotiations is not expected to be material.
(e) Note 13 (footnote c) in the financial statements with regard to
investment in certain debentures.
(f) Note 18 (footnote) of the financial statements regarding the status
of the projects and the opinion framed by the Company''s management
regarding realizable value of the costs incurred, being a technical
matter, relied upon by us.
(g) Note 33(B) regarding guarantees issued and securities provided
aggregating Rs. 64,273.76 lacs by the Company to banks and financial
institutions on behalf of various entities, which are significant in
relation to the Profits for the year and the net worth of the Company.
In the opinion of the management, these are not expected to result into
any financial liability to the Company.
(h) Note. 33 (footnote) of the financial statements with regard to
reliance placed by the auditors on certification received from the
management with regard to the disclosure of contingent liabilities
given by the Company.
Our opinion is not qualified in respect of the above matters.
Other Matters
Attention is invited to:
(a) the Statement of Profit and Loss of the Company which includes share
of loss (net) from investments in partnership firms / joint ventures
aggregating Rs. 818.51 lacs and investments in these firms aggregating Rs.
31,589.54 lacs [Refer Note 13 (G), and ''Current account balance'' in
Note 17 and Note 11] are based on the financial statements of the firms
as audited by other auditors whose reports have been furnished to us,
which have been relied upon by us. Further, the Statement of Profit and
Loss of the Company includes share of loss (net) from investments in
joint ventures aggregating Rs. 29.03 lacs and investments in these firms
aggregating Rs. 802.39 lacs [Refer Note 13 (G), and ''Current account
balance'' in Note 17 and Note 11] are based on the financial statements
of the firms as prepared by the management and presented to us on which
we have relied.
(b) Note 13 (footnote d) regarding the Company''s investments
aggregating Rs. 860.20 lacs, loans and advances aggregating Rs. 104,981.29
lacs in certain subsidiaries, jointly controlled entities and
associates which have incurred losses and also have negative net worth
as at the year end. As explained in the said Note,the investments in
these entities are considered strategic and long term in nature, and
the underlying projects in these entities are at an early stage of real
estate development and in the opinion of the management, have current
market values of certain properties significantly in excess of carrying
values and are expected to achieve adequate Profitability on substantial
completion of their projects.
report on other legal and regulatory requirements
1. As required by ''the Companies (Auditor''s Report) Order, 2003'', as
amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004''
(hereinafter referred to as ''the Order''), issued by the Central
Government of India in terms of sub-section (4A) of Section 227 of 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 explanations given to us, 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 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 Balance Sheet, the Statement of Profit and Loss,
and the Cash Flow Statement dealt with by this Report comply with the
Accounting Standards notifed under the Companies Act, 1956 ("the Act")
read with the General Circular No. 15/2013 dated 13th September, 2013
of the Ministry of Corporate Afairs in respect of Section 133 of the
Companies Act, 2013; and
(e) on the basis of the 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 as on March 31, 2014,
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of the fixed
assets;
(b) The fixed assets are physically verifed by the management according
to a phased programme designed to cover all the items over a period of
three years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. According to the
information and explanations given to us, no material discrepancies
were noticed on such verifcation;
(c) In our opinion and according to the information and explanations
given to us, a substantial part of the fixed assets has not been
disposed of by the Company, during the year;
ii. (a) The inventory has been physically verifed by the management
during the year. In our opinion, the frequency of verifcation is
reasonable;
(b) In our opinion, the procedures of physical verifcation of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business;
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verifcation of inventory as compared
to book records were not material;
iii. The Company has not granted/taken any loans, secured or unsecured,
from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956;
iv. In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weaknesses in internal control system of the Company;
v. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 that need to be
entered in the register maintained under Section 301 have been so
entered;
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lacs in respect of
any party during the year are mainly for reimbursement of actual
expenses and hence the question of comparable market price does not
arise;
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA or any other applicable provisions of the Companies Act,
1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
to the deposits accepted from the public. According to the information
and explanations given 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 against the Company in respect of the
aforesaid deposits;
vii. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business;
viii. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and we are of the opinion that prima facie, the prescribed accounts
and records have been maintained;
ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except for
dues in respect of undisputed sales tax, income tax deducted at source,
works contract tax and service tax, the Company is generally regular in
depositing undisputed statutory dues including wealth tax, provident
fund, investor education and protection fund, employees'' state
insurance, customs duty, excise duty, cess and other material statutory
dues as applicable with the appropriate authorities. At the year end,
income tax deducted at source of Rs.12,06,07,661, Maharashtra VAT and
works contract tax of Rs.1,52,12743 and service tax of Rs.1,93,81,921
remained outstanding for a period exceeding six months;
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of wealth-tax,
service-tax, customs duty, excise duty and cess which have not been
deposited on account of any dispute, other than the following;
Statute and nature
of dues Financial Amount not Forum where dispute is
pending
Year Deposited
Rs. in lacs
Income Tax Act 1961:
Income Tax 2010-2011 431.40 Commissioner of Income
Tax (Appeals) (Preferred
by the Company)
Income Tax 2009-2010 6.46 Income Tax Appellate
Tribunal (Preferred by
income tax Authorities)
Income Tax 2003-2004 17.48 High Court (Preferred
by income tax Authorities)
Income Tax 2004-2005 21.30 High Court (Preferred
by income tax Authorities)
Income Tax 2005-2006 20.92 High Court (Preferred by
income tax Authorities)
Maharashtra
Value Added Tax 2008-2009 92.94 Deputy Commissioner of
Sales tax (Preferred by
the Company)
Note: Appeals pending at admission stage with appellate bodies are not
considered in the above list.
x. The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year;
xi. On the basis of the records examined by us and the information and
explanations given to us, the Company has delayed in repayment of dues
to banks, financial institutions and debenturesholders. Attention is
invited to footnote "j" to Note 5 with regards to banks and financial
institutions and footnote "c" to Note 11 with regards to debentures,
for the amounts and period of delays in payment of principal and
interest thereon;
xii. According to the information and explanations given to us and
based on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities;
xiii. In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Therefore, the provisions of clause
(xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003
(as amended) are not applicable to the Company;
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 (as amended) are not applicable to the Company;
xv. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year are, considering the circumstances, not prejudicial to
the interest of the Company;
xvi. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which the loans were raised;
xvii. According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment;
xviii. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies entered in the Register maintained under Section 301 of
the Companies Act, 1956;
xix. According to the information and explanations given to us, during
the period covered by our audit report, the Company has not issued any
debentures;
xx. The Company has not raised any money by public issue during the
year; and
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the management.
For doshi doshi and associates
Firm Registration Number: 121773W
Chartered Accountants
Dinesh Doshi
Partner
Membership No.: F-9464
Mumbai: May 29, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying fnancial statements of Hubtown Limited
(''the Company''), which comprise the Balance Sheet as at March 31, 2013,
and the Statement of Proft and Loss and Cash Flow Statement for the
year then ended and a summary of signifcant accounting policies and
other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
fnancial performance and cash fows 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 fnancial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these fnancial
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 fnancial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditors'' judgment, including the assessment of
the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our qualifed audit opinion.
Basis for Qualifed Opinion
1. Attention is invited to note no. 29 with regard to a major fre which
took place at the registered offce of the Company on December 23, 2011,
causing extensive damage and destruction of the records, documents and
assets of the Company, including the fnancial accounting records. The
Company has however substantially reconstructed the fnancial records
which have been relied upon for our opinion. The management is of the
opinion that no signifcant adjustment would be necessary, to the
position reported in the fnancial statements, upon reconstruction of
balance documents and records.
Qualifed Opinion
In our opinion and to the best of our information and according to the
explanations given to us, subject to the matters included in paragraph
1 above, the fnancial 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 Proft and Loss, of the proft for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash fows for the
year ended on that date.
Emphasis of Matter
Attention is invited to:
(a) Note no. 2 (III) (A) (ii) & (iii) in the fnancial statement with
regard to recognition of expense and income for ongoing projects which
is based upon estimated costs, as per the judgement of the management,
which have been relied upon by us, these being technical matters.
(b) Note no. 4 (footnote c) in the fnancial statement with regard to
the dividend recommended by the Board of Directors, wherein the
concurrence of the secured debenture holders are required to be
obtained in accordance with the ICDR guidelines and Debenture Trust
Deed.
(c) Note no. 4 (footnote d) in the fnancial statement with regard to
non creation of investments to the extent of 15% of the value of
redeemable debentures, which is required to be created and earmarked in
accordance with the requirement of the Companies Act, 1956.
(d) Note no. 13 (footnote c) in the fnancial statement with regard to
investment in certain debentures.
(e) Statement of Proft & Loss which includes share of proft (net) from
investment in partnership frms aggregating Rs. 3282.76 lacs and
investments in these frms aggregating Rs. 33,987.39 lacs (Refer Note 13
(F) & (G), Note 17 and ÂCurrent accont balance'' in Note 10); are based
on fnancial statements of the frms as audited by other auditors whose
reports have been furnished to us and which have been relied upon by
us.
(f) Note no. 13 (footnote e) regarding the Company''s investments
aggregating Rs. 257.60 lacs in and loans and advances aggregating Rs.
95,702.98 lacs to, certain subsidiaries, joint controlled entities and
associates which have incurred losses and also have negative net worth
as at the year end. As explained in the said Note, investments in these
entities are considered strategic and long term in nature, the entities
are in early stage of real estate development and in the opinion of the
Company, have current market values of certain property signifcantly in
excess of carrying values and are expected to achieve adequate
proftability on substantial completion of their projects.
(g) Note no. 18 (footnote b) of the fnancial statement regarding the
status of the projects and the opinion framed by the Company regarding
realizable value of the cost incurred, being a technical matter, relied
upon by us.
(h) Note no. 22 (footnote) of the fnancial statement, with regard to
the compensation received towards yield, which is arising on account of
restructuring of the originally contracted respective terms for
investments made through debentures.
(i) Note no. 34(B), regarding guarantees issued and securities provided
aggregating Rs. 31,018.45 lacs issued by the Company to banks and
fnancial institutions on behalf of various entities, which are
signifcant in relation to the proft for the year and net worth of the
Company. In the opinion of the Company, these are not expected to
result into any fnancial liability to the Company.
(j) Note no. 34 (footnote) of the fnancial statement, with regard to
reliance placed by the auditors on certifcation received from the
management, with regard to corporate guarantees given by the Company.
Our opinion is not qualifed in respect of the above matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'' 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 specifed 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 Proft 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 Proft and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of Section 211 of the Companies Act, 1956;
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 disqualifed as on March 31, 2013, 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 audItors'' report
i. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of the fxed
assets;
(b) The fxed assets are physically verifed by the Management according
to a phased programme designed to cover all the items over a period of
three years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. According to the
information and explanations given to us, no material discrepancies
were noticed on such verifcation;
(c) In our opinion and according to the information and explanations
given to us, substantial part of the fxed assets has not been disposed
of by the Company, during the year;
ii. (a) The inventory has been physically verifed by the Management
during the year. In our opinion, the frequency of verifcation is
reasonable;
(b) In our opinion, the procedures of physical verifcation of inventory
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business;
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verifcation of inventory as compared
to book records were not material;
iii. The Company has not granted / taken any loans, secured or
unsecured from companies, frms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956;
iv. In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fxed assets and with
regard to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weakness in internal control system of the Company;
v. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 that need to be
entered into the register maintained under Section 301 have been so
entered;
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lacs in respect of
any party during the year are mainly for reimbursement of actual
expences and hence the question of comparable market price does not
arise;
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Companies Act,
1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
to the deposits accepted from the public. According to the information
and explanations given 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 on the Company in respect of the
aforesaid deposits;
vii. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause (d) of sub-section (1) of Section 209 of the
Act and we are of the opinion that prima facie, the prescribed accounts
and records have been maintained;
ix. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except for
dues in respect of undisputed VAT, Income tax deducted at source and
Service tax, the Company is generally regular in depositing undisputed
statutory dues including Wealth Tax, provident fund, investor education
and protection fund, employees'' state insurance, customs duty, excise
duty, cess and other material statutory dues as applicable with the
appropriate authorities. At the year end, Income Tax Deducted at source
of Rs.9,62,85,906, Maharashtra VAT of Rs. 29,96,429 and Service Tax of Rs.
1,79,54,073 remained outstanding for a period exceeding six months;
x. The Company has no accumulated losses at the end of the fnancial
year and it has not incurred cash losses in the current and immediately
preceding fnancial year;
xi. According to the records of the Company examined by us and the
information, explanations and confrmation certifcations given to us, at
the balance sheet date, the Company is not a defaulter in the repayment
of dues to banks and fnancial institutions. The Company has defaulted
in repayment of dues to debenture holders amounting to Rs. 1,43,56,94,511
(balance outstanding on the last day of the year) that became due for
redemption on 1st March 2013, which includes an instance of delay in
payment of interest amounting to Rs. 5,00,00,000 for a period of 181
days, upto the date of maturity;
xii. According to the information and explanations given to us and
based on the documents and records produced to us, the company has not
granted loans & advances on the basis of security by way of pledge of
shares, debentures and other securities;
xiii. In our opinion, the Company is not a chit fund or a nidhi /
mutual beneft fund / society. Therefore, the provisions of clause
(xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003
(as amended) are not applicable to the Company;
xiv. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Companies (Auditor''s
Report) Order, 2003 (as amended) are not applicable to the Company;
xv. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
company, for loans taken by others from banks or fnancial institutions
during the year are, considering the circumstances, not prejudicial to
the interest of the Company;
xvi. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
the loans were raised;
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment;
xviii. According to the information and explanation given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956;
xix. According to the information and explanations given to us, during
the period covered by our audit report, the Company had issued 3,000
debentures of Rs.1,00,000 each. The Company has created charge in respect
of debentures issued;
xx. The Company has not raised any money by public issues during the
year;
xxi. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
For Doshi Doshi & Associates For Haribhakti & Co.
Firm Registration Number: 121773W Firm Registration
Number: 103523W
Chartered Accountants Chartered Accountants
Dinesh Doshi Chetan Desai
Partner Partner
Membership No.: F-9464 Membership Number: F-17000
Mumbai: May 29, 2013 Mumbai: May 29, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of Hubtown Limited ('the
Company') as at March 31, 2012 and also the Statement of Profit and
Loss and the Cash Flow Statement for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Company's 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 Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonaPle basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003, (as
amended), issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of 'The Companies Act, 1956' of India
(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 explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order,
4. Further to our comments in paragraph 3 above, we report that:
i. We have optained 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 appears from our examination of
those books of the Company;
iii. 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 of the Company;
iv. 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 Companies Act, 1956;
v. On the basis of the written representations received from the
directors, as on March 31, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
March 31, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
5. Without qualifying our opinion, attention is invited to :
(a) Note no, 2 (iii) in the financial statements with regard to
recognition of expense and income for ongoing projects which is based
upon estimated costs, as per the judgement of the Management, which
have been relied upon by us, these being technical matters.
(b) Note no. 2 (vii) in the financial statements with regard to manner
in which expenses incurred by the Company on Joint Venture projects has
been accounted for.
(c) Note no. 13 (footnote b) in the financial statements with regard to
investment in certain debentures.
(d) Note no. 19(a) in the financial statements with regard to an amount
of Rs. 1864.53 lacs which remained outstanding over two years. We have
relied upon the Management's expectation that such amount would be
fully recoveraPle
6. Attention is invited to Note no. 29 with regard to a major fire
which took place at the registered office of the Company on DecemPer
23, 2011, causing extensive damage and destruction of the records,
documents and assets of the Company, including the financial accounting
records. The Company has, however, substantially reconstructed the
financial records which have been relied upon for our opinion. The
Management is of the opinion that no significant adjustment would Pe
necessary, to the position reported in the financial statements, upon
reconstruction of Palance documents and records.
7. Balances of trade payables and advances to suppliers are supject to
confirmation & consequential adjustment, if any.
8, In our opinion, and to the best of our information and according to
the explanations given to us, subject to the matter included in
paragraphs 6 & 7 above, the said financial statements and the notes
thereon, give the information required by the Companies Act, 1956, in
the manner so required and present 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, 2012;
b. in the case of the statement of profit and loss, of the profit for
the year ended on that date; ana
c. in the case of cash flow statement, of the cash flows for the year
ended on that date.
Annexure To Auditors' Report
1. (a) During the year, due to a major fire at the registered office
of the Company, substantial fixed assets were destroyed, which were
however insured. The Company has written off these assets from its
financial recoras, The Company is maintaining proper records showing
full particulars, including quantitative details and situation, of
fixed assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
(c) In our opinion and according to the information and explanations
given to us, apart from the destruction due to the fire at the
registered office of the Company, substantial part of fixed assets has
not been disposed of by the Company during the year.
2. (a) The inventory has been physically verified by the Management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable ana adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory recoras, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. The Company has not granted / taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there exists an adequate internal control system
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regara to the sale of goods and services. During the course of our
audit, we have not observed any continuing failure to correct major
weakness in internal control system of the Company.
5. (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 that need to be
entered into the register maintained under Section 301 have been so
entered.
(b) In our opinion and according to the information ana explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lacs in respect of
any party during the year are only for reimbursement of actual expenses
and hence the question of comparable market price does not arise.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Companies Act,
1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
to the deposits accepted from the puPlic. According to the information
and explanations given to us, no Order has Peen passed Py the Company
Law Board or National Company Law Tribunal or Reserve Bank of India or
any Court or any other Tribunal on the Company in respect of the
aforesaid deposits.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescriPed under clause (d) of sub-section (1) of Section 209 of the
Act and we are of the opinion that prima facie, the prescribed accounts
and records have been maintained.
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except for
dues in respect of undisputed VAT, Income Tax Deducted at Source,
Wealth Tax and Service Tax, the Company is generally regular in
depositing undisputed statutory dues including provident fund, investor
Education and Protection Fund, employees' state insurance, customs
duty, excise duty, cess and other material statutory dues as applicable
with the appropriate authorities. At the year end, Income Tax Deducted
at source of Rs. 19,266,932/-, Wealth Tax of Rs. 260,000 and Maharashtra
VAT of Rs. 862,637/- remained outstanding for a period exceeding six
months.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of sales-tax,
weaith-tax, service-tax, customs duty, excise duty and cess which have
not been deposited on account of any dispute, other than the
following:
Statute and Financial Year Amount Forum where dispute
is pending
nature of dues (Rs.)
Income Tax
Act, 1961:
Penalty 2000-2001 3,031,840
Penalty 2001-2002 5,827,603
Penalty 2002-2003 6,183,986
Penalty 2003-2004 13,490,265 Commissioner of
Income Tax (Appeals)
Penalty 2004-2005 20,049,665
Penalty 2005-2006 16,065,086
Penalty 2006-2007 26,375,205
Income Tax 2008-2009 26,967,390
Service Tax
Rules, 1994:
Service Tax Upto March 31, 69,864,666 Supreme Court (through
Maharashtra
2012 Chamber of Housing
Industry)
10. The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
11. According to the information, explanations and confirmations
provided by the Company, it has not defaulted in repayment of dues to
any financial institution or bank or debenture holder.
12. According to the information and explanations given to us and
Pased on the documents and records produced to us, the Company has not
granted loans and advances on the basis of security by way of pledge of
shares, dePentures and other securities,
13. In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society Therefore, the provisions of clause (xiii) of
paragraph 4 of the Companies (Auditor's Report) Order, 2003 (as
amended) are not applicable to the Company.
14. In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Companies (Auditor's
Report) Order, 2003 (as amended) are not applicable to the Company.
15. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given Py the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
16. In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
the loans were raised.
17. According to the information and explanations given to us and on
an overall examination of the Palance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
18. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
19. According to the information and explanations given to us, during
the period covered by our audit report, the Company had issued 7,500
debentures of Rs.100,000 each. The Company has created charge in respect
of debentures issued,
20. The Company has not raised any money Py public issues during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
For Doshi Doshi & Associates For Haribhakti & Co.
Firm Registration Number: 121773W Firm Registration Number: 103523W
Chartered Accountants Chartered Accountants
Dinesh Doshi Chetan Desai
Partner Partner
Membership No.: F - 9464 Membership Number: F - 17000
Mumbai: May 30, 2012 Mumbai: May 30, 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of Ackruti City Limited
("the Company"), as at 31st March, 2011, the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the Companys
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 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 (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the "Order"), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of The Companies Act, 1956
of India (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 explanations given to us, we give in the Annexure a
statement on the mattersspecified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
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 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 appears from our examination of the
books of the Company;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account of the Company;
(iv) 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 Companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March, 2011 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2011
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, 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 and Loss Account, 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.
Annexure to the Auditors Report REFERRED TO IN PARAGRAPH 3 OF THE
AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF ACKRUTI CITY LIMITED ON
THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31" MARCH, 2011._
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we state that:-
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of fixed
assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of 3 years which, in our opinion, is reasonable having regard to
the size of the Company and the nature of its assets. However, no
physical verification was conducted during the year.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2. (a) The inventory has been physically verified by the Management
during the year. In our opinion, the frequency of verification is
reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. The Company has not granted / taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are generally adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory and fixed assets and for
sale of properties / rights and services. Further, on the basis of our
examination of the books and records of the Company, and according to
the information and explanations given to us, we have neither come
across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or arrangements
referred to in Section 301 of the Act have been entered in the register
required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements 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 the prevailing market prices at the relevant time,
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Act and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. According to the information and
explanations given 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 on the Company in respect of the aforesaid
deposits.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except for
dues in respect of undisputed Work Contract Tax, Income tax deducted at
source and Service tax, the Company is regular in depositing the
undisputed statutory dues including provident fund, investor education
and protection fund, employees state insurance, sales-tax, wealth tax,
customs duty, excise duty, cess and other material statutory dues as
applicable with the appropriate authorities;
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of sales-tax,
wealth-tax, service-tax, customs duty, excise duty and cess which have
not been deposited on account of any dispute, other than the following;
Statute and nature
of dues Financial Amount not Forum where dispute is
pending
Year deposited
(Rs.)
Income Tax Act, 1961:
Penalty 2000-01 3,031,840
Penalty 2001-02 5,827,603
Penalty 2002-03 6,183,986
Penalty 2003-04 13,490,265
Penalty 2004-05 20,049,665 Commissioner of Income
Tax (appeals)
Penalty 2005-06 16,065,086
Penalty 2006-07 26,375,205
Income Tax 2007-08 489,846,345
Income Tax 2008-09 26,967,390
Service Tax Rules,
1994:
Service Tax 2010-11 29,268,756 High Court (through
Maharashtra Chamber of
Housing Industry)
9. The Company has no accumulated losses as at 31st March, 2011 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
10. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holder.
11. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
12. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund/ societies are not applicable to the
Company.
13. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
14. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
15. In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
16. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
17. 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,
18. The Company has created security in respect of debentures issued
and outstanding at the year-end.
19. The Company has not raised any money by public issues during the
year,
20. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
The other clauses, (iii) (b), (iii) (c), (ii!) (d), (iii) (e), (iii)
(f), (iii) (g) and (viii) of paragraph 4 of the Order, are not
applicable in the case of the Company for the year, since in our
opinion there is no matter which arises to be reported in the aforesaid
Order.
For Doshi Doshi & Associates For Sudit K. Parekh & Co.
Firm Registration Number: 121773W Firm Registration Number: 110512W
Chartered Accountants Chartered Accountants
Viral D. Doshi Raman Jokhakar
Partner Partner
Membership No.: F - 105330 Membership Number: F - 103241
Mumbai: 30th May, 2011 Mumbai: 30th May, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of Ackruti City Limited
("the Company"), as at 31st March, 2010, the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the Companys
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 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 (Auditors Report) Order, 2003, as
amended by the Companies (Auditors Report) (Amendment) Order, 2004
(together the ÃOrderÃ), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of ÃThe Companies Act, 1956
of India (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 explanations given to us, we give 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 in paragraph 3
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 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 appears from our examination of the
books of the Company;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account of the Company;
(iv) 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 Companies Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March, 2010 and taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2010
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
(vii) In our opinion and to the best of our information and according
to the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, 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 and Loss Account, 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.
Annexure to the Auditors Report
REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT OF EVEN DATE TO THE
MEMBERS OF ACKRUTI CITY LIMITED ON THE FINANCIAL STATEMENTS FOR THE
YEAR ENDED 31st MARCH, 2010
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we state that:- 1.
(a) The Company is maintaining proper records showing full particulars,
including quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of 3 years which, in our opinion, is reasonable having regard to
the size of the Company and the nature of its assets. However, no
physical verification was conducted during the year.
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2. (a) The inventory has been physically verified by the Management
during the year. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion, the procedures of physical verification of
inventory followed by the Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3. The Company has not granted / taken any loans, secured or
unsecured, to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, there are generally adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory and fixed assets and for
sale of properties and services. Further, on the basis of our
examination of the books and records of the Company, and according to
the information and explanations given to us, we have neither come
across nor have been informed of any continuing failure to correct
major weaknesses in the aforesaid internal control system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or
arrangements referred to in Section 301 of the Act have been entered in
the register required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rupees Five Lakhs in respect of
any party during the year have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Act and the
Companies (Acceptance of Deposits) Rules, 1975 with regard to the
deposits accepted from the public. According to the information and
explanations given 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 on the Company in respect of the aforesaid
deposits.
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our
opinion, except for dues in respect of undisputed Income Tax, Work
contract Tax, Income tax deducted at source and Service tax, the
Company is regular in depositing the undisputed statutory dues
including provident fund, investor education and protection fund,
employees state insurance, sales-tax, wealth tax, customs duty, excise
duty, cess and other material statutory dues as applicable with the
appropriate authorities. Rs.183,696,417 towards advance income tax are
outstanding for a period exceeding six months from the date the
instalments became payable.
(b) According to the information and explanations given to us and the
records of the Company examined by us, there are no dues of income-tax,
sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess
which have not been deposited on account of any dispute.
9. The Company has no accumulated losses as at 31st March, 2010 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
10. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holder.
11. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
12. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund/ societies are not applicable to the
Company.
13. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
14. In our opinion and according to the information and explanations
given to us, the terms and conditions of the guarantees given by the
Company, for loans taken by others from banks or financial institutions
during the year, are not prejudicial to the interest of the Company.
15. In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
16. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long-term investment.
17. 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.
18. The Company has created security in respect of debentures issued
and outstanding at the year-end.
19. The Company has not raised any money by public issues during the
year.
20. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year, nor
have we been informed of such case by the Management.
The other clauses, (iii) (b), (iii) (c), (iii) (d), (iii) (e), (iii)
(f), (iii) (g) and (viii) of paragraph 4 of the Order, are not
applicable in the case of the Company for the year, since in our
opinion there is no matter which arises to be reported in the aforesaid
Order.
For and on behalf of For and on behalf of
DALAL & SHAH DOSHI DOSHI & ASSOCIATES
Firm Registration No. 102021W Firm Registration No. 121773W
Chartered Accountants Chartered Accountants
SHISHIR DALAL VIRAL DOSHI
Partner Partner
Membership No.: F-37310 Membership No.: F-105330
Mumbai: 7th August, 2010 Mumbai: 7th August, 2010