To the Members of M/s. Bhagyanagar Properties Limited Report on the Ind AS FinancialStatements
We have audited the accompanying Ind AS financial statements of M/s. BhagyanagarProperties Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2018 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the statement of change in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information
Management's Responsibility for the 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 thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 andthe companies (Indian Accounting Standards) Rule 2015 as amended. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.
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 theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing issued by the Institute of Chartered Accountants of India as 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 anddisclosures in the financial statements.
The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement or error. In making those risk assessments the auditorofthe standaloneIndAS financial considers internal financial control relevant to theCompany's preparation of the standalone Ind AS financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements. Webelieve that the audit evidence we have obtained is sufficientand appropriate to provide abasis for our audit opinion on the standalone Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the standalone Ind AS financial statements give the information required bythe 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 March 31 2018 its profit including other comprehensive income its cash flows .andthe changesin equityforthe 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 Specifiedinparagraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act we further report that: a. we have soughtand obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit. b. in our opinion proper books ofaccount as required by law have been kept by the Company so far as appears from ourexamination of those books; c. The Balance Sheet Statement of Profit and Loss includingthe Statement of Other Comprehensive Income the
Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are inagreement with the books of account; d. In our opinion the aforesaid standalone Ind ASfinancial statements comply with the Accounting Standards specified under section 133 ofthe Act read with Rule 7 of the Companies (Accounts) Rules 2014 Companies (IndianAccounting Standards) Rules 2015 as amended; e. on the basis of written representationsreceived from the directors as on March 31 2018 and taken on record by the Board ofDirectors none of the directors is disqualified as on March 31 2018 from beingappointed as a director in terms of Section 164(2) of the Act; f. with respect to theadequacy of the internal financialreporting of the Company and the controls overoperating effectiveness of such controls refer to our separate report in "AnnexureB"; and g. With respect to 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) TheCompany does not have any pending litigations which would impact its financial position
(ii) The Company did not have any long-term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise (iii) There has not been an occasion in case of the Company during the year underreport to transfer any sums to the Investor Education and Protection Fund. The question ofdelay in transferring such sums does not arise
3. the financial information of the Company for the year ended March 31 2017 and thetransition date opening balance sheet as at April 1 2016 included financialstatementsare based on the previously issued thesestandaloneIndAS statutory financial statementsfor the years ended March 31 2017 and March 31 2016 prepared in accordance with theCompanies (Accounting Standards) Rules 2006 (as amended) which were audited by us onwhich we expressed an unmodified opinion dated May 26 2017 and May 12 2016 respectively.The adjustments to those financial statements for the differences in accounting principlesadopted by the Company on transition to the Ind AS have been audited by us.
Our opinion is not qualified in respect of these matters.
Annexure A referred to in Independent Auditors' Report to the members of the Company onthe standalone financial statements for the year ended 31st March 2018 we report that
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets ;
(b) As explained to us some fixed assets have been physically verified by themanagement at reasonable intervals. According to the information and explanation given usno material discrepancies were noticed on such verification;
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) The company does not hold any physical inventory. Thus paragraph 3(ii) of theOrder is not applicable to the Company.
(iii) The company had granted loans to four parties as covered in the registermaintained under section 189 of the Companies Act 2013.
(a) In our opinion and according to the information and explanations given to us theterms and conditions of the grant for such Loan are not prejudicial to the Company'sinterest.
(b) In respect of the aforesaid loan the schedule of repayment of principle andinterest has been stipulated repayment of principal and interest has been regular as perthe stipulation.
(c) There are no overdue amounts in respect of the loan granted to a body corporatelisted in the register maintained under section 189 of the Act.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) The Company has not accepted any deposits from the public.
(vi) As informed to us the Central Government has not prescribed maintenance of costrecords under sub-section (1) of Section 148 of the Act.
(vii) (a) According to the information and explanations given to us and based on therecords of the company examined by us the company is generally regular in depositing theundisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Sales-tax Wealth Tax Service Tax Custom Duty Excise Duty and otherstatutory dues as applicable with the appropriate authorities in India;
(b) According to the information and explanations given to us and based on the recordsof the company examined by us there are no dues of Income Tax Wealth Tax Service TaxSales Tax Customs Duty and Excise Duty which have not been deposited on account of anydisputes;
(viii) According to the records of the company examined by us and as per theinformation and explanations given to us the company has not defaulted in repayment ofloans from any financial institution or banks and has not issued debentures.
(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
(x) According to the information and explanations given to us no material 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 explanations give to us and based on ourexamination of the records of the Company the Company has not paid/provided formanagerial remuneration in accordance with the provisions of section 197 read withSchedule V to the Act. Accordingly paragraph 3(xi) of the Order is not applicable.
(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 explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(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 explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure - B to the Auditors' Report
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 BhagyanagarProperties Limited ("the Company") as of 31 March 2018 in conjunction with ouraudit 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 (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 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 and maintained and ifsuch 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 reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement 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 with generally accepted accounting principles. Acompany's internal financial control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton 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 31 March 2018 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 Luharuka & Associates |
| ||Chartered Accountants |
| ||Firm Reg No:- 01882S |
|Place: Secunderabad ||Rameshchand Jain |
|Date: 26th May 2018 ||(Partner) |
| ||Membership No.023019 |