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Eldeco Housing & Industries Ltd.

BSE: 523329 Sector: Infrastructure
NSE: N.A. ISIN Code: INE668G01013
BSE 15:03 | 28 Sep 3174.00 24.65
(0.78%)
OPEN

3290.00

HIGH

3290.00

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3140.00

NSE 05:30 | 01 Jan Eldeco Housing & Industries Ltd
OPEN 3290.00
PREVIOUS CLOSE 3149.35
VOLUME 499
52-Week high 3340.00
52-Week low 905.20
P/E 12.85
Mkt Cap.(Rs cr) 625
Buy Price 3171.00
Buy Qty 2.00
Sell Price 3174.00
Sell Qty 2.00
OPEN 3290.00
CLOSE 3149.35
VOLUME 499
52-Week high 3340.00
52-Week low 905.20
P/E 12.85
Mkt Cap.(Rs cr) 625
Buy Price 3171.00
Buy Qty 2.00
Sell Price 3174.00
Sell Qty 2.00

Eldeco Housing & Industries Ltd. (ELDECOHOUSING) - Auditors Report

Company auditors report

To the Members of Eldeco Housing and Industries Limited Report on the Audit of theStandalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of Eldeco Housingand Industries Limited ("the Company") which comprise the Balance Sheet asat March 31 2020 the Statement of Profit and Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearended on that date and a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as "the Standalone FinancialStatements"). issufficient

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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("IND AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2020 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the independence requirements thatare relevant to our audit of the financial statements under the provisions of the Act andthe Rules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained and appropriate to provide a basis for our audit opinionon the Standalone Financial Statements.

Key Audit Matters

Key Audit Matters ("KAM") are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined that there are no keyaudit natters to be communicated in our report.

Description of Key Audit Matters

Revenue Recognition (Refer Note 24 to the standalone financial statements)

Key Audit Matters How the key audit matter was addressed in our audit report
The Company's most significant revenue streams involve sale of residential and commercial units representing 94.24% of the total revenue from operations of the Company. Revenue is recognised post transfer of control of residential and commercial units to customers for the amount/consideration which the Company expects to receive in exchange for those units. The trigger for revenue recognition is normally completion of the project or receipt of approvals on completion from relevant authorities or intimation to the customer of completion post which the contract becomes non-cancellable. The Company records revenue over time till the actual possession to the customers or on actual possession to the customers as determined by the terms of contract with customers. Our audit procedures included following:
Evaluating the design and implementation and tested operating effectiveness of key internal controls over revenue recognition.
Evaluating the accounting policies adopted by the Company for revenue recognition to check those are in line with the applicable accounting standards and their consistent application to the significant sales contracts.
Scrutinising the revenue journal entries raised throughout the reporting period and comparing details of a sample of these journals which met certain risk- based criteria with relevant underlying documentation.
Testing timeliness of revenue recognition by comparing individual sample sales transactions to underlying contracts.
The risk for revenue being recognised in an incorrect period presents a key audit matter due to the financial and geographical spread of the Company's projects across different regions in India. Conducting site visits during the year for selected projects to understand the scope nature and progress of the projects.
Considering the adequacy of the disclosures in the standalone financial statements in respect of the judgments taken in recognising revenue for residential and commercial property units in accordance with IND AS 115.

Information other than the Standalone Financial Statements and Auditor's Report thereon

The Company's Management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's

Report Business Responsibility Report Corporate Governance and shareholder'sinformation but does not include the standalone financial statements and our auditor'sreport thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statement or our knowledge obtainedduring the course of our audit or other wise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard as for the year ended March 31 2020 the otherinformation has not yet been prepared and not yet approved by Board of Directors.

Management's Responsibility for the Standalone Financial Statements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the IND AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safe guarding the assets of the Company and forpreventing 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 of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for over seeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and a reconsidered material if individually or in the aggregatethey could reasonably be expected to influence the economic decisions of users taken onthe basis of these standalone financial statements. As part of an audit in accordance withSAs we exercise professional judgment and maintain professional skepticism through outthe audit. We also:

- Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the over ride of internal control.

- Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls. - Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertainty existsrelated to events or conditions that may cast significant doubt on the Company's abilityto continue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport.

However future events or conditions may cause the Company to cease to continue as agoing concern.

- Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions so farreasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding in dependence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit. b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books. c) The Balance Sheet the Statement of Profitand Loss

(including Other Comprehensive Income) Statement of

Changes in Equity and the Statement of Cash Flow dealt with by this Report are inagreement with the relevant books of account. d) In our opinion the aforesaid financialstatements comply with the IND AS specified under Section 133 of the Act read with Rule 7of the Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on March31 2020 take on record by the Board of Directors none of the director disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct. 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 unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting. g) With respect to the other matters to be included inthe

Auditor's Report in accordance with the requirements of section 197(16) of the Act asamended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act. h) With respect to the othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules 2014 as amended in our opinion and to the best of ourinformation and according to the explanations given to us:

I. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements Refer Note 35 to the standalone financialstatements.

II. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

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

2. As required by the Companies (Auditor's Report) Order 2016

("the Order") issued by the Central Government in terms of

Section 143(11) of the Act we give in "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the order the extent applicable.

For B S D & Co.
Chartered Accountants
Firm's Registration Number: 000312S
CA Surendra Khinvasra
Partner
Membership number: 070804
UDIN:20070804AAAABQ1841
Place: New Delhi
Date: June 26 2020

ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under "Report on other Legal and RegulatoryRequirements" section of our report to the members of Eldeco Housing and IndustriesLimited of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of two years. Inaccordance with this programme certain fixed assets verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and natureof its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deed of immovable properties are heldin the name of the Company. In respect of immovable properties taken on lease anddisclosed as right-of-use-assets in the standalone financial statements the leaseagreements are in the name of the Company.

(ii) The inventory includes land completed real estate projects project in progressand construction material. Physical verification of inventory has been conducted atreasonable intervals by the management and discrepancies noticed which were not materialin nature have been properly dealt with in the books of accounts.

(iii) The Company has granted unsecured loan to one company covered in the registermaintained under section 189 of the Companies Act 2013:

(a) The terms and conditions on which loans have been granted to the companies coveredin the register maintained under section 189 of the Act are not prima facie prejudicialto the interest of the Company.

(b) The companies covered in the register maintained under

Section 189 of the Act are regular in payment of principle and interest on demand.

(c) There are no overdue amounts in respect of loan granted to the companies covered inthe 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 in respect ofloans investments guarantees and security.

(v) The Company has not accepted any deposits from the public.

Accordingly paragraph 3 (v) of the order is not applicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by the company pursuantto the Rules made by the Central Government for the maintenance of Cost Records undersection 148 of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained however we have not made a detailedexamination of such cost records.

(vii) (a) According to the information & explanations given to us and on the basisof our examination of the records of the

Company the Company is generally regular in depositing with the appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income tax duty of customs excise goods & service tax

(GST) and any other material statutory dues applicable to it and there are noundisputed statutory dues outstanding as at 31st March 2020 for a period exceeding sixmonths from the date they became payable.

(b) According to the information & explanations given to us there are no dues ofincome tax duty of customs duty of excise goods & service tax (GST) or otherapplicable material statutory dues which have not been deposited on account of anydispute except the following along with the forum where dispute is pending:

Name of the Statute Nature of the dues/Period to which it relates Amount (in Rs.) Forum where dispute is pending
VAT Act VAT/ F.Y. 2015-16 1938238 Joint/ Additional Commissioner Lucknow
VAT Act VAT/ F.Y. 2016-17 955577 Joint/ Additional Commissioner Lucknow

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to banks and financial institutions.During the year the

Company has not issued any debentures. Further the Company has old outstanding of Rs.46.07 lakhs (shown in Note 18 of balance sheet) from City Co-operative Bank Lucknow inoverdraft account against FDR's of Rs. 106.29 lakhs. The said bank has discontinued itsoperations; however the Company has applied for repayment of fixed deposits afteradjustment of the balance outstanding in the overdraft account. A writ petition is alsopending in respect of the same in Hon'ble Allahabad High

Court.

(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 given to us and based on ourexamination of the records of the Company the

Company has paid/provided for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act. (xii)In our opinion and according to the information and explanations given to us the Companyis not a nidhi company. Accordingly paragraph 3 (xii) of the order is not applicable.

(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 standalone financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the

Company has not made any preferential allotment or private placement of shares or fullyor partly convertible debentures during the year. Accordingly paragraph 3(xv) of theorder are not applicable.

(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 in to non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe order is not applicable.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For B S D & Co.
Chartered Accountants
Firm's Registration Number: 000312S
CA Surendra Khinvasra
Partner
Membership number: 070804
UDIN:20070804AAAABQ1841
Place: New Delhi
Date: June 26 2020

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to the paragraph 1(f) under "Report on other Legal and RegulatoryRequirements" section of our report to the Members of Eldeco Housing and IndustriesLimited of even date) Report on the Internal Financial Controls under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of EldecoHousing and Industries Limited ("the Company") as of 31st March 2020in conjunction with our audit of the standalone financial statements of the Company forthe year ended on 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'). 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 the Company's policies the safeguardingof its 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.

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 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 ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 judgment 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.

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 2020based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For B S D & Co.
Chartered Accountants
Firm's Registration Number: 000312S
CA Surendra Khinvasra
Partner
Membership number: 070804
UDIN:20070804AAAABQ1841
Place: New Delhi
Date: June 26 2020

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