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Sunteck Realty Ltd.

BSE: 512179 Sector: Infrastructure
NSE: SUNTECK ISIN Code: INE805D01034
BSE 14:01 | 20 Feb 399.65 -0.25
(-0.06%)
OPEN

396.00

HIGH

405.20

LOW

393.45

NSE 13:44 | 20 Feb 400.30 -0.05
(-0.01%)
OPEN

400.60

HIGH

404.20

LOW

393.00

OPEN 396.00
PREVIOUS CLOSE 399.90
VOLUME 63268
52-Week high 449.90
52-Week low 120.00
P/E 63.34
Mkt Cap.(Rs cr) 5,847
Buy Price 399.65
Buy Qty 100.00
Sell Price 399.80
Sell Qty 1.00
OPEN 396.00
CLOSE 399.90
VOLUME 63268
52-Week high 449.90
52-Week low 120.00
P/E 63.34
Mkt Cap.(Rs cr) 5,847
Buy Price 399.65
Buy Qty 100.00
Sell Price 399.80
Sell Qty 1.00

Sunteck Realty Ltd. (SUNTECK) - Auditors Report

Company auditors report

To the Members of Sunteck Realty Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of SUNTECKREALTY LIMITED("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity the Statement of Cash flows for the year then ended anda summary of the significant accounting policies and other explanatory information(hereinafter referred to 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of the stateof affairs (financial position)profit or loss (financial performance including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS ) prescribed under Section 133 of the Act and relevant rules thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based 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 thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs (financial position) of the Company as at 31st March 2017 and its profit(financial performance including other comprehensive income) the changes in equity andcash flows for the year ended on that date.

Emphasis of Matters

Without qualifying our opinion we draw your attention to following matters:

a) The Company has overdue trade receivable amounting to Rs. 1203.50 Lakhs from acustomer against sale of a commercial unit. The management has taken necessary steps forrecovery of this receivable including filing of legal case and are hopeful of recoveringthe same in due course of time. In their opinion therefore no provision is considerednecessary at this stage (Refer Note No. 51 of the standalone Ind AS financial statements).

b) The Company is a partner in a partnership firm Kanaka & Associates in whichthe Company has total exposure comprising of capital invested loans given and otherreceivables aggregating to Rs. 902.05 Lacs. Since there is some dispute with the otherpartner the financial statements of the firm are not available and therefore the Companyhas not accounted for its share of profit or loss for the year from the said firm whichas explained by the management would be immaterial. The management is hopeful ofrecovering/ realising the aforesaid exposure in due course of time as concerted effortsare being made to resolve the dispute including filing of an arbitration petition in theHigh Court. In their opinion therefore no provision is considered necessary at thisstage (Refer Note No. 45 of the standalone Ind AS financial statements).

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified in paragraph 3 and 4 ofthe Order.

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 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 (Including Other ComprehensiveIncome) the Statement the Statement of Changes in Equity and of Cash flow and dealt withby this Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 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 to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g) With respect to other matter to be included in the Auditor's Report in accordancewith the Rule 11 of the Companies (Audit and Auditors ) Rules 2014 in our opinion andto 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 standalone Ind AS financial statements- Refer Note No. 31 to thestandalone Ind AS financial statements.

ii. The Company did not have material foreseeable losses on long term contractsincluding derivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

iv The Company did not have any holdings or dealings in Specified Bank Notes during theperiod from 8th November 2016 to 30th December 2016. (Refer Note No. 40 to thestandalone Ind AS financial statements)

For Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
A. M. Hariharan
Place: Mumbai Partner
Date: 26th May 2017 Membership No: 38323

Annexure "A"

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF THE SUNTECKREALTY LIMITED ON STANDALONE IND AS FINANCIAL STATEMENTS

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we state that:

i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) According to the information and explanations given to us the fixed assets havebeen physically verified by the management at the year end which in our opinion isreasonable considering the size of the Company and nature of its fixed assets. Asexplained no material discrepancies were noticed on such verification.

c) As explained title deed of the immovable property classified as fixed assetswhich was constructed as per the Joint Development Agreement with the land owners will betransferred in the name of the Company after formation of condominium.

ii) According to the information and explanations given to us the inventories havebeen physically verified during the year by the management at reasonable intervals and nomaterial discrepancies were noticed on such verification.

iii) During the year the Company has granted unsecured loans amounting to Rs.21816.68 Lakhs (including interest free loan of Rs. 12938.30 Lakhs) to eleven subsidiarycompanies covered in the register maintained under Section 189 of the Act. The maximumamount involved during the year of such loans was Rs. 25092.07 Lakhs (including interestfree loans of Rs. 13101.18 Lakhs) and the year-end balance of loans granted to suchparties was Rs. 24910.89 Lakhs (including interest free loans of Rs. 13094.18 Lakhs).

a) Considering what is stated in para (iv) below in respect of non-applicability ofSection 186 of the Act relating to loans granted by the Company and as explained by themanagement said loans are granted to subsidiary companies for their principal businessactivities the terms and conditions of the aforesaid loans are not prima facieprejudicial to the interest of the Company.

b) As explained by the management the schedule of repayment of principal and paymentof interest wherever applicable of such loans are not stipulated since the same isrepayable on demand. As informed the Company has received the loan amount during the yearas and when it was demanded.

c) Considering what is stated in para (b) above there are no amounts overdue from suchparties.

iv) As informed on the basis of legal opinion obtained by the Company the provisionsof Section 186 of the Act with respect to the loans made guarantees given and securityprovided are not applicable to the Company as the Company is engaged in the business ofproviding infrastructural facilities. In our opinion and according to the information andexplanations given to us and based on the aforesaid legal opinion the Company hascomplied with the provisions of Section 185 and 186 of the Act to the extent applicablewith respect to the loans investments guarantees and security made.

v) No deposits within the meaning of directives issued by RBI (Reserve Bank of India)and Sections 73 to 76 or any other relevant provisions of the Act and rules framedthereunder have been accepted by the Company.

vi) We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government of India regarding the maintenance of costrecords under sub-section (1) of Section 148 of the Act and are of the opinion that primafacie the prescribed accounts and records have been maintained. We have however notmade a detailed examination of the records with a view to determine whether they areaccurate or complete.

vii) a) According to the information and explanation given to us and on the basis ofour examination of the records the Company is generally regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax SalesTax Service Tax Duty of Customs Duty of Excise Value Added Tax Cess and othermaterial statutory dues applicable to the Company with the appropriate authorities. Noundisputed amounts in respect of the aforesaid statutory dues were outstanding as at thelast day of the financial year for a period of more than six months from the date theybecame payable except Income Tax of Rs. 0.02 lakhs.

b) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company there are no dues of Income Tax Sales TaxService tax Duty of Customs Duty of Excise and Value Add Tax which have not beendeposited on account of any dispute except the following:

Statute Nature of Dues Forum where the dispute is pending Amount (Rs. in Lakhs) Financial year to which it relates
6.29 2006-07
2.81 2007-08
Income Tax Appellate Tribunal 14.99 2008-09
0.21 2010-11
Income Tax Act 1961 Income Tax Matter 5.10 2011-12
20.78 2008-09
Commissioner of Income Tax(Appeals) 155.19 2012-13
0.14 2013-14

viii) In our opinion and according to the information and explanations given to usduring the year the Company has not defaulted in repayment of loans or borrowings tofinancial institutions banks and dues to debenture holders.

ix) According to the information and explanations given to us the Company has notraised any money by way of initial public offer or further public offer (including debtinstruments) during the year and in recent past and based on the information andexplanations given to us by the management term loans have been applied for the purposefor which they were obtained. However certain funds have been temporarily used for othercorporate purposes.

x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or on the Company by its officers or employees noticedor reported during the year nor have we been informed of such case by the management.

xi) According to the information and explanations given to us and based on theexamination of the records the Company has paid / provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

xii) The provisions of Nidhi Company are not applicable to the Company. Therefore Para3 (xii) of the Order is not applicable to the Company.

xiii) According to the information and explanations given to us the provision ofSection 177 and 188 of Act to the extent applicable in respect of transactions with therelated parties have been complied by the Company and the details have been disclosed inthe Ind AS Financial Statements as required by the applicable accounting standards in noteno. 32 to the Ind AS Financial Statements.

xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Therefore the provision ofPara 3 (xiv) of the order are not applicable to the company.

xv) According to the information and explanations given to us during the year theCompany has not entered into any non-cash transactions with directors or persons connectedwith him under Section 192 of the Act.

xvi) The Company is not required to be registered under Section 45 IA of the ReserveBank of India Act 1934.

For Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
A. M. Hariharan
Place: Mumbai Partner
Date: 26th May 2017 Membership No: 38323

"ANNEXURE B"

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 SUNTECKREALTY LIMITED ("the Company") as of 31st March 2017 in conjunction with ouraudit of the Standalone Ind AS Financial Statements of the Company for the year ended onthat date.

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 ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

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 deemed tobe prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 Auditors' judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor 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 standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASfinancial 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.

Opinion

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 31st March 2017 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 Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
A. M. Hariharan
Place: Mumbai Partner
Date: 26th May 2017 Membership No: 38323