The Members Of
Prozone Intu Properties Limited
(Formerly Known as Prozone Capital Shopping Centers Limited)
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Prozone IntuProperties Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014.This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 and its profit and its cash flows for the year ended onthat date.
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 sub-section (11) of section 143 ofthe Act we give in the Annexure "A " statement on the matters specified in theparagraphs 3 and 4 of the Order.
2. 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 bestof 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act.
(f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer ourseparate report in Annexure "B";
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements -Refer Note no 12 (a) and 26 (A)(iii) to thefinancial statements;
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For S G C O & Co.
Firm's Registration No. 112081W
Mem. No. 49006
Date: 19th May 2016
Annexure "A" to the Independent Auditors Report
The Annexure A referred to in Paragraph 1 under the heading "Report on Other Legaland Regulatory Requirements "in our Independent Auditor's Report to the members ofProzone Intu Properties Limited for the year ended 31st March 2016.
As required by the Companies (Auditors Report) Order 2016 and according to theinformation and explanations given to us during the course of the audit and on the basisof such checks of the books and records as were considered appropriate we report that:
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
b) The Fixed Assets have been physically verified by the management during the year atreasonable intervals. In our opinion the frequency of verification is reasonable havingregard to the size of the Company and the nature of its assets. No discrepancies have beennoticed on such physical verification.
c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the title deeds of immovable properties which wasvested to the Company as per the Composite Scheme of Arrangement and Amalgamation duringthe year ended March 31 2012 are not held in the name of the Company. Details of the sameis as below :-
|Particulars ||Buildings ||Remarks |
|Gross Block ||141.73 Lakhs ||Held in the name of erstwhile demerged Company. |
|Net Block ||95.22 Lakhs || |
(ii) Since the Company does not have any inventory the paragraph 3 (ii) of the saidOrder is not applicable to the Company.
(iii) The company has granted unsecured loans to companies covered in the registermaintained under section 189 of the Companies Act 2013.
a) In our opinion the rate of interest and the other terms and conditions of the grantof such loans were not prima facie prejudicial to the company's interest;
b) The borrowers have been regular in the payment of the interest as stipulated. Theterms of arrangements do not stipulate any repayment schedule and the loans are repayableon demand. Accordingly paragraph 3(iii) (b) of the Order is not applicable to the Companyin respect of repayment of the principal amount;
c) There are no overdue amounts in respect of such loans.
(iv) In our opinion and according to the information and explanation given to ussection 185 of the Act is not applicable since the Company has not granted any loan andhas not provided any guarantees or security to the parties covered under section 185 ofthe Act. With regards to investments in securities guarantees and loans provided to otherbody corporates after enforcement of section 186 of the Act the Company has complied withthe provisions of section 186 of the Act.
(v) The Company has not accepted any deposits from the public.
(vi) The Central Government has not prescribed the maintenance of cost records underSection 148 (1) of the Act for the Company.
(vii) a) Accordingly to the records of the Company the undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxDuty of Custom Duty of Excise Value Added Tax Cess and other statutory dues to theextent applicable have been regularly deposited with the appropriate authorities exceptdelays in some cases of Tax Deducted at Source (TDS) Professional Tax and Service Tax.There are no undisputed amount payable in respect of such statutory dues which haveremained outstanding as at 31st March 2016 for a period more than six months from thedate they became payable.
b) According to the records of the Company Income Tax Sales Tax Service Tax Duty ofCustom Duty of Excise Value Added Tax which have not been deposited on account of anydispute with the relevant authorities are given below:
|Name of Statute ||Amount (Rs. In lakhs) ||Period to which amount relates ||Forum where dispute is pending |
|Income Tax ||14.87 ||A.Y 201011 ||ITAT (Appeals) |
(viii) The Company has not defaulted in repayment of its dues to banks and financialinstitutions and has not issued debentures.
(ix) The company did not raise money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3 (ix) of the order is not applicable.
(x) According to the information & explanations given to us no fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandate by the provision ofsection 197 read with schedule V of the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3 (xii) of the Order is notapplicable.
(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with of section 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the financial statements as requiredunder Accounting Standard (AS) 18 Related Party Disclosures specified under section 133of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into any noncashtransactions with the directors or persons connected with him. Accordingly paragraph 3(xv) of the Order is not applicable.
(xvi) In our opinion and according to the information and explanation given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
For S G C O & Co.
Firm's Registration No. 112081W
Mem. No. 49006
Date: 19th May 2016
Annexure "B" to the Independent Auditor's Report of even date on theStandalone financial statements of Prozone Intu Properties Limited for the year ended 31stMarch 2016.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ProzoneIntu Properties Limited ("the Company") as of March 312016 in conjunction withour audit of the Standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that We comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For S G C O & Co.
Firm's Registration No. 112081W
Mem. No. 49006
Date: 19th May 2016