You are here » Home » Companies » Company Overview » Sunteck Realty Ltd

Sunteck Realty Ltd.

BSE: 512179 Sector: Infrastructure
NSE: SUNTECK ISIN Code: INE805D01034
BSE LIVE 15:40 | 21 Aug 258.35 6.55
(2.60%)
OPEN

249.85

HIGH

259.85

LOW

248.10

NSE 15:55 | 21 Aug 257.05 6.95
(2.78%)
OPEN

250.00

HIGH

259.00

LOW

249.00

OPEN 249.85
PREVIOUS CLOSE 251.80
VOLUME 105280
52-Week high 266.50
52-Week low 86.98
P/E 25.35
Mkt Cap.(Rs cr) 3,255
Buy Price 258.35
Buy Qty 150.00
Sell Price 0.00
Sell Qty 0.00
OPEN 249.85
CLOSE 251.80
VOLUME 105280
52-Week high 266.50
52-Week low 86.98
P/E 25.35
Mkt Cap.(Rs cr) 3,255
Buy Price 258.35
Buy Qty 150.00
Sell Price 0.00
Sell Qty 0.00

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 financial statements of SUNTECK REALTYLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss and 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 Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding 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 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 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 thereunder.

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 theauditors’ judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of 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.

Opinion

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 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. 120350000 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. 48 of the 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. 86130854. 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. 47 of the financial statements).

c) The Company continues to apply ‘project completion method’ on transactionsand activities of real estate development which it had applied over the yearsconsistently. The Institute of Chartered Accountants of India has issued "Guidancenote on Accounting for Real Estate Transactions (Revised 2012)" which is applicableto projects which have commenced on or after 1st April 2012 and also to projects whichhave already commenced but where revenue is being recognized for the first time on orafter 1st April 2012 to follow ‘percentage completion method’. The impact ofGuidance note on the standalone financial statements for the year has not been quantifiedby the Company.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified 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 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 and 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) As required by Section 143 (3) of the Act with respect to the adequacy of theinternal financial controls over financial reporting of the Company and the operatingeffectiveness of such controls we give in "Annexure B" a separate report on thesame.

g) With respect to the other matters to be included in the Auditors’ 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 the aforesaid financial statements – Refer note no. 28(c) to thefinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich 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 Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
A. M. Hariharan
Place: Mumbai Partner
Date: 30th May 2016 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 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 andexplanations given to us the fixed assets have been physically verified by the managementat the year end which in our opinion is reasonable considering the size of the Companyand nature of its fixed assets. As explained no material discrepancies were noticed onsuch verification. c) As explained title deed of the immovable property classified asfixed assets which was constructed as per the Joint Development Agreement with the landowners will be transferred 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.1291361858 (including interest free loan of Rs. 978865000) to nine subsidiarycompanies covered in the register maintained under Section 189 of the Act. The maximumamount involved during the year of such loans was Rs. 1293861858 (including interestfree loans of Rs. 981365000) and the year-end balance of loans granted to such partieswas Rs. 340382349 (including interest free loans of Rs. 27885491). a) Considering whatis stated in para (iv) below in respect of non-applicability of Section 186 of the Actrelating to loans granted by the Company and as explained by the management said loansare granted to subsidiary companies for their principal business activities the terms andconditions of the aforesaid loans are not prima facie prejudicial to the interest of theCompany. b) As explained by the management the schedule of repayment of principal andpayment of interest wherever applicable of such loans are not stipulated since the sameis repayable on demand. As informed the Company has received the loan amount during theyear as and when it was demanded. c) Considering what is stated in para (b) above thereare no amounts overdue from such parties.

(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 pursuantto the 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) The Company is generally regular in depositing undisputed statutory duesincluding Provident Fund Employees’ State Insurance Income Tax Sales Tax ServiceTax Duty of Customs Duty of Excise Cess and other material statutory dues applicable tothe Company with the appropriate authorities. No undisputed amounts in respect of theaforesaid statutory dues were outstanding as at the last day of the financial year for aperiod 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 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.

Financial year to which it relates

2616 2005-06
628635 2006-07
281212 2007-08
1498828 2008-09
Income Tax Act 1961 Income Tax Matter Commissioner of Income Tax(Appeals) 2008870 2009-10
21051 2010-11
510460 2011-12
15518860 2012-13

(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 the Company has paid /provided for managerial remuneration in accordance with the requisite approvals mandatedby the provisions of Section 197 read with Schedule V to the Act.

(xii) The provisions of Nidhi Company are not applicable to the Company. ThereforePara 3 (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 Financial Statements as required by the applicable accounting standards in note no. 32to the Financial Statements.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures.

(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: 30th May 2016 Membership No: 38323

Annexure "B"

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF SUNTECK REALTY LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

In conjunction with our audit of the financial statements of the Company for the yearended 31st March 2016 we have audited the internal financial controls over financialreporting of SUNTECK REALTY LIMITED ("the Company") as of that 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company’s policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 deemedto be 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 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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.

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 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 Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
A. M. Hariharan
Place: Mumbai Partner
Date: 30th May 2016 Membership No: 38323