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AUDITOR'S REPORT

Ansal Housing Ltd.

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Market Cap. (₹) 29.40 Cr. P/BV 0.10 Book Value (₹) 48.56
52 Week High/Low (₹) 18/5 FV/ML 10/1 P/E(X) 0.00
Bookclosure 28/09/2018 EPS (₹) 0.00 Div Yield (%) 0.00
Year End :2018-03 

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Ansal Housing and Construction Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information (herein after referred as “Standalone Ind AS Financial Statements”).

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS 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 (Ind AS) prescribed 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 Ind AS 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 Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS 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 Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the state of affairs (financial position) of the Company as at 31st March, 2018, and its loss (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

a. Attention is invited to Note 42 to the standalone Ind AS financial statements regarding company’s investment of Rs. 491.67 lakh in a wholly owned subsidiary company in Sri Lanka by way of equity shares. The subsidiary company had filed an arbitration claim against the Board of Investment of Sri Lanka (BOI) which has been withdrawn during the year and company gone for settlement. The BOI has terminated the agreements for development of integrated township in Sri Lanka between the subsidiary and the BOI. During the year, the management of the subsidiary company has written off all assets. Now the subsidiary company does not have enough assets to redeem the said investment but management of the company is of the opinion that they will be able to redeem the said investment through the settlement and write down of Investment is not required at this stage.

b. We draw attention to Note 1.19 & 33 to the standalone Ind AS financial statements which describe the uncertainty relating to the outcome of certain matters pending in litigation with Courts/Appellate Authorities, pending the final outcome of the aforesaid matters, which is presently unascertainable, no adjustments have been made in these standalone Ind AS financial statements.

Our opinion is not modified in respect of these matters.

Other Matter

a. Incoming auditor to audit comparative information for adjustments to transition to Ind AS

The comparative financial information of the Company for the year ended 31st March 2017 and the transition date opening balance sheet as at 1st April 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31st March 2017 and 31st March 2016 dated 29th May 2017 and 30th May 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.

b. Refer Note 1.19 of standalone Ind AS Financial Statements, the status of various ongoing projects, recognition of expense and income and the realizable value of the costs incurred are as per the judgment of Management of the Company and certified by their technical personnel and being of technical nature, have been relied upon by us.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of subsection 11 of section 143 of the Act, we give in the “Annexure A’; a statement on the matters specified in the paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the 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 it appears from our examination of those books.

(c) The Balance Sheet, the Statement of Profit and Loss, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, read with Rules issued thereunder.

(e) On the basis of written representations received from the directors as on 31st March, 2018 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 B”; and

(g) with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 33 to the standalone Ind AS 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.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone Ind AS financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit and to the best of our knowledge and belief, we report that:-

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by the management in accordance with a regular programme of verification 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 physical verification.

(c) The title deeds of immovable properties included in fixed assets of the Company are held in the name of the Company.

(ii) The inventory of building materials, stores and spares, restaurant’s provisions, beverages etc., land and flats/shops/houses etc. At major locations has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. According to the information and explanations given to us, keeping in view the nature of the operations of the company, inventory of work-in-progress cannot be physically verified. As explained to us, there was no material discrepancies noticed on physical verification of inventory.

(iii) The company has not granted loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore the provisions of Clause 3(iii)(a),(b) and (c) of the said Order are not applicable to the company.

(iv) In our opinion, in respect of loans, investments, guarantees, and security provisions of section 185 and 186 of the Companies Act, 2013 have been complied with.

(v) During the previous year, the company approached the National Company Law Tribunal (NCLT), New Delhi, under section 74(2) of the companies act, 2013 seeking approval for extension of time to repay the deposits which was received vide NCLT’s order dated 3rd October, 2016. The total outstanding deposits at the time of Company’s application to the NCLT amounting to Rs. 8457.47 Lacs are generally being repaid by the company as per the terms of NCLT Orders though there are some overdue amounts. However, the NCLT vide its order dated 1st December,2017 has permitted to pay Rs. 125.00 Lakh per month including hardship cases and same scheme has been extended by NCLT till July 2018 vide its latest order dated 10.05.2018. The Company is in the process of complying with the above NCLT orders (Refer Note No 16.7 of the standalone Ind AS financial statements). Further in our opinion and according to the information and explanations given to us, the provision of sections 73 to 76 or any other relevant provisions of Companies Act, 2013 and the rules framed thereunder, wherever applicable, have been complied with by the Company.

(vi) We have broadly reviewed the books of account maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not, nor we are required, carried out detailed examination of such accounts and records.

(vii) (a) On the basis of our examination of the records of the company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, value added tax, cess and any other statutory dues have not been regularly deposited during the year by the company with the appropriate authorities and there have been delays in a large number of cases. We are informed that the Company’s operations during the year did not give rise to any liability for customs duty and excise duty.

In our opinion, no undisputed dues were in arrears as at 31st March, 2018 for a period of more than six months from the date they became payable except following dues:-

Name of the Statute

Nature of dues

Amount (Rs. In Lacs)

Period to which the amount relates

Due Dates

Date of Payments

Remarks

Haryana VAT Act

Value Added Tax (including interest)

1126.36

Apr 14 - June 17

Monthly

Unpaid

-

Building and Other Construction Workers Act

Labour Cess

516.33

Upto March, 17

Yearly

Unpaid

-

Income Tax

Tax deducted at source

66.34

July 17 - August 17

Monthly

April 18 to May 18

-

(b) On the basis of our examination of the books of accounts and records, the details of the dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute, are as under:-

Name of the Statute

Nature of dues

Amount (Rs. In Lakh)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act

Income tax

847.99

AY 1989-90 to 1997-98 & 2002-03 to 2006-07

Supreme Court

Income Tax Act

Income tax

96.71

Assessment Year2011-12 and 2012-13

Commissioner ofIncome Tax (Appeals), New Delhi

UP Sales Tax Act

Sales Tax

76.13

Assessment Years 2004-05 to 2006-07

Tribunal, Commercial Tax, Ghaziabad

UP Value Added Tax Act

Sales Tax

304.76

Assessment Years 2007-08 to 2013-14

Tribunal, Commercial Tax, Ghaziabad

MP Value Added Tax Act

Sales Tax

5.00

Assessment Year 2008-09

Tribunal, Commercial Tax, Bhopal

Employees Provident Fund Act

Provident Fund

33.39

June 1994 to March 2006

Delhi High Court

(viii) On the basis of our examination of the books of accounts and records and explanations given to us, we are of the opinion that the Company has defaulted in the repayment of dues including interest to banks and financial institutions covered by the Order during the year. While there were delays in repayment on different occasions during the year, the relevant amounts have been paid to the respective banks and financial institutions during the year or loans have been restructured during the year. The delays which have remained outstanding at the year end are given below:

Particulars

Amount of default as on Balance Sheet Date (Rs. In Lakh)

Period of Default

Principal

Interest

Principal

Interest

Due to Banks:

- Punjab National Bank

2.43

1 to 30 days

Due to Financial Institutions:

- HDFC Ltd.

258.61

15 to 59 days

- IFCI Ltd.

6.00

173.73

15 to 44 days

15 to 31 days

Further the company does not have any debentures and loan from government.

(ix) In our opinion, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year and term loans obtained for financing real estate projects, in our opinion, were used for the real estate projects on an overall basis.

(x) In our opinion, no material fraud by the company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) In our opinion, the company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) Based on our examination of the records of the Company and in our opinion, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable Indian Accounting Standards.

(xiv) Based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year and hence not commented upon.

(xv) Based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him.

(xvi) Based on our examination of the records of the Company, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

To the Members of Ansal Housing and Construction Limited

We have audited the internal financial controls over financial reporting of Ansal Housing and Construction Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control 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. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s 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 “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 risk. The procedures selected depend on the auditor’s judgement, 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 Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s 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 company’s 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over 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 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.

For Dewan P.N. Chopra & Co.

Chartered Accountants

Firm Regn. No. 000472N

(Sandeep Dahiya)

Place : New Delhi Partner

Date :29th May, 2018 Membership No. 505371

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