Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of HOV
Services 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 Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 (the Act) with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error,
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
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls 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 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
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India,
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2015;
(b) in the case of the Statement of Profit and Loss, of the loss 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
We draw attention to note on 20.7 of the Standalone Financial
statements regarding pending approval of shareholders and Central
Government in respect of managerial remuneration aggregating to Rs.
9,600,000 payable to the three whole time directors.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 201S (the
Order) issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the aforesaid standalone financial statements comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the
directors as on 31st March, 201S taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 201S
from being appointed as a director in terms of Section 164 (2) of the
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 information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in the aforesaid financial statements - Refer Note
20.1(a)(i) to the financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
iii. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING REPORT ON OTHER
LEGAL AND REGULATORY REQUIREMENTS OF OUR REPORT OF EVEN DATE TO THE
MEMBERS OF HOV SERVICES LIMITED ON THE STANDALONE FINANCIAL
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us during the course of
our audit, we state that:
1. a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
b) The Company has carried out physical verification of all its fixed
assets during the year. In our opinion, the frequency of verification
is reasonable considering the size of the Company and the nature of its
assets. No material discrepancies were noticed on such verification.
2. The Company does not hold any inventory. Therefore, the provisions
of the clause 3 (ii) of the Order are not applicable to the Company.
3. During the year, the Company has not granted any loans, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 189 of the Act.
4. In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
purchased and sold are of the special nature in respect of which
suitable alternative sources do not exist for obtaining comparable
quotations, there are adequate internal control systems commensurate
with the size of the Company and nature of its business for purchase of
inventory, fixed assets and with regard to the sale of services. During
the course of our audit, no major weakness has been noticed in the
aforesaid internal control systems.
5. In our Opinion and according to the information and explanations
given to us, the Company has not accepted any public deposits within
the meaning of Section 73 to 76 or any other relevant provisions of the
Act and rules framed thereunder.
6. According to the information and explanations given to us, the
maintenance of cost records has not been prescribed by the Central
Government under Section 148(1) of the Act for any of the activities of
7. a) The Company isregular in depositing undisputed statutory dues
including Provident Fund, Employees'' State Insurance, Income Tax, Sales
Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value
Added Tax, Cess and any other material statutory dues applicable to the
Company with the appropriate authorities. No undisputed amounts payable
in respect of the aforesaid statutory dues were outstanding as at the
last day of the financial year for a period of more than six months
from the date they became payable.
b) According to the records of the Company, there are no dues of Income
Tax, Sales Tax, Service tax, Customs Duty, Wealth Tax, Excise Duty,
Value Added Tax, Cess which have not been deposited on account of any
dispute except the following :
Name of the Nature of Period to which Amount Forum where
Statute Dues it relates in Rs. dispute is
Assessment 2,905,432 Income Tax
Year 2009-10 Appellate
Income Tax Income Tribural
Act, 1961 Tax Assessment 4,907,220 Commissioner
Year 2007-08 of Income
c) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
8. The Company has no accumulated losses as at the end of the year.
However, it has incurred cash losses in the current financial year but
it did not incur cash losses in the immediately preceding financial
9. In our opinion and according to the information and explanations
given to us and based on the documents and records produced before us
there has been no default in repayment of dues to banks .There are no
dues to financial institutions or debenture holders.
10. According to the information and explanations given to us, the
terms and conditions on which the Company has given guarantee for loans
taken by others from banks and financial institutions, are not prima
facie prejudicial to the interest of the Company.
11. Based on the information and explanations given to us by the
management, the Company has not obtained any term loans during the
year. Therefore, the provisions of the clause 3 (xi) of the Order are
not applicable to the Company.
12. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing standards 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 Lodha& Company
Firm Registration No. 3010S1E
Membership No. 38323
Date : 22nd May, 201S