To the Members
Elegant Marbles And Grani Industries Limited
We have audited the standalone financial statements of ELEGANT MARBLES AND GRANIINDUSTRIES LTD. ("the Company") which comprise the balance sheet as at 31stMarch 2021 the statement of Profit and Loss statement of changes in equity andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India including Indian Accounting Standards (Ind AS)specified in Section 133 of the Act of the state of affairs of the Company as at March31 2021 its profit cash flows and the changes in equity for the year ended on thatdate.
2. Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
3. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
Non-receipt of audited statement of account in case of investment through PMS/FundManagers
a. The Company has invested in shares securities debentures units of mutual fundsetc. through Fund Managers & Portfolio Management Service (PMS) providers. These FundManagers/PMS entities provide statement showing investments made by them on behalf of thecompany gains/losses earned/incurred on sale of such investments expenses incurred bythem including their fees for managing the portfolio and the balance of investmentsremaining with them at the end of the year. The Company accounts for these transactions inits books of accounts on receipt of such statements. However in all these cases ofinvestment through PMS/fund managers the audited statements for the financial year isusually not received before finalisation of our audit and all the income expendituregains/losses investments are accounted for on the basis of unaudited statements providedby these PMS/fund managers to the Company. On the basis of its past experience themanagement of the Company is of the opinion that generally no material difference in theincome expenditure gains/losses investment etc. is detected after the auditedstatements are provided by these PMS/fund managers.
Investment in debentures
b. The Company has invested in debentures of various private/public limited companiesdirectly or through various funds managers/PMS and accounts for interest accrued and/orreceived on such investment in debentures from these companies/funds from time to time.However in the case of investment in 20.50% debentures of Green Farm Tech Pvt. Ltd.amounting to Rs 7500000/- 20% debentures of Samruddhi Realty Ltd. amounting to Rs10000000/- 18% debentures of Fortuna Buildcon (India) Pvt. Ltd. amounting to Rs4900000/- 20% debentures of Diyug Construction Pvt. Ltd. amounting to Rs 7789867/-17.25% debentures of Kasata Hometech (India) Pvt. Ltd. amounting to Rs 8717500/- and 18%debentures of BCIL Red Earth Developers India Pvt. Ltd. amounting to Rs 7500000/- theinterest and principal sums wherever due are not being received on due dates. Thesecompanies/funds managers/PMS managers have earlier informed the Company about thefinancial and/or liquidity crunch faced by these companies status of their constructionprojects the legal cases filed in various forums against these companies with currentstatus of these cases and accordingly advised the company not to account for suchinterest in its books of accounts on accrual basis. Accordingly the interest on suchdebentures is not being accounted for on accrual basis. Further having regard to thecommunications received/talks with these companies/fund managers/PMS managers andevaluation of the underlying assets made by the Board of Directors in the management'sperception the amounts recoverable against these investments including interest thereonare fully secured by the underlying security of immoveable properties with their estimatedmarket values adequately covering the principal amounts as well as interest accrued &already accounted for. In the circumstances the management has taken a conscious decisionto not to make a provision for any loss on recoverability of these debenture investments& interest already accounted in its books of accounts and defer the same tillrealisation of these debentures. In absence of any working for evaluation of underlyingasset being produced before us we are not in a position to comment on it.
Impact of Covid19 pandemic
c. The attention is drawn to Note No. 26.08 to the Notes to accounts which specificallydescribes the uncertainties and the impact of the Covid19 pandemic on the operationsgoing concern status and recoverability of the assets of the company. The management hasassessed the impact of the lockdown and related restrictions imposed by the governmentalauthorities to control pandemic and came to the conclusion that there is no materialimpact on the company's financial and operational health.
Our procedures included but were not limited to the following:
(i) Non-receipt of audited statement of account in case of investment through PMS/FundManagers
(a) Obtained an understanding of management's process of recording of investmentsprofit/loss on sale of such investments expenses etc. and evaluated it on the basis ofearlier year's audited & unaudited statements furnished by the PMS entities to checkabout the difference in the results that occur.
(b) Assessed the appropriateness of the methodology and corrective actions taken insubsequent years.
(c) Assessed the reasonableness & correct recording of the transactions by the PMSentities based on historical data available with the Company.
(ii) Investment in debentures
(a) Obtained an understanding of management's process & methodology of investing indebentures evaluated the methodology adopted for assessing the realisability of thedebentures & interest thereon and security available against such investment indebentures. We also tested effectiveness of such evaluation process adopted by themanagement to determine recoverable value of the security available.
(b) Assessed the appropriateness of the methodology and valuation model used by themanagement to estimate the recoverable value of securities underlying these investments.
(c) Assessed the reasonableness of the assumptions made by the management regarding thevalue of underlying security and realisability of the same to cover the investment made bythe Company.
(iii) Impact of Covid19 pandemic
(a) Assessed the impact of lockdown and resultant closure of operations on thefinancials of the company;
(b) Assessed the recoverability of the debtors inventory investments and other assetsand the ability of the company to repay its liabilities;
(c) Assessed the reasonableness of the assumptions made by the management regardingassessing the situation post-Covid19 pandemic.
4. 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 (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe 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 financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
5. Auditors' Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors' report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
(a). Identify and assess the risks of material misstatement of the 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 override of internal control.
(b). Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(I)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
(c). Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the management.
(d). Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions 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 asa going concern.
(e). Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
6. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
7. We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
8. From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matters orwhen 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 of such communication.
9. Other Matters
Our attendance at the time of physical inventory taken by the management was notpracticable under the lockdown conditions and accordingly we have relied upon the reportof the internal auditors and have performed alternative procedures to audit on theexistence and condition of inventory at year end as per the guidance provided in"SA-501 - Audit Evidence - Specific considerations for selected items" and haveobtained sufficient audit evidence to issue our unmodified opinion on these financialresults.
10. Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
11. Further to our comments in Annexure A as required by Section 143(3) of the Act wereport 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 Standalone Balance Sheet the Statement of Profit and Loss and the Cash FlowStatement dealt 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 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 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".
(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:
(h) i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company .
| ||For SDBA & Co. |
| ||Chartered Accountants |
| ||(FRN: 142004W) |
|Place: Mumbai ||(Sanjeev A. Mehta) |
|Date : 24th June 2021 ||Partner |
|UDIN : 21041287AAAADK4775 ||M. No. 41287 |
Annexure 'A' to the Independent Auditors' Report
Referred to in paragraph 10 of the Independent Auditors Report of even date to theMembers of Elegant Marbles And Grani Industries Ltd. on the standalone financialstatements of the Company for the year ended March 31 2021
I. a)The company has maintained proper records of fixed assets showing full particularsincluding quantitative details and situation of fixed assets.
b)As explained to us the fixed assets have been physically verified by the managementduring the year in accordance with a regular programme for verification which in ouropinion is reasonable having regard to the size of the company and nature of its assets.No material discrepancies were noticed on such physical verification.
c)The title deeds of immovable properties are held in the name of the company.
ii. a)The inventories have been physically verified by the management during the yearon a monthly basis. In our opinion the frequency of such verification is reasonable.
b)The inventories have been physically verified by the management during the year on amonthly basis. As explained to us the internal auditors have also participated in theinventory physical verification process and have reported a slight variation which wasinsignificant having regard to the size of the company. We have relied on the same and inour opinion the frequency of such verification is reasonable.
c)In our opinion and according to the information and explanation given to us thecompany is maintaining proper records of inventory. The discrepancies noticed onverification between physical stocks and book records were not material and have beenproperly dealt with in the books of accounts.
iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of clause 3 (iii) (a) to (c) of theOrder are not applicable to the Company and hence not commented upon.
iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and I86 of the Companies Act 2013in respect of loans investments guarantees and security.
v. In our opinion and according to the information and explanations given to us thecompany has not accepted any deposit in contravention of section 73 to section 76 or anyother relevant provision of the Companies Act 2013 and Companies (Acceptance of Deposits)Rules 2014. As informed to us no order has been passed by the Company Law Board orNational Company Law Tribunal or Reserve Bank of India or any other Court or tribunal.
vi. Having regard to the turnover of the Company and as per the information andexplanation given to us in our opinion the rules regarding maintenance of cost recordsunder section 148(1) of the Companies Act 2013 are not applicable to the Company.
vii. a.The company is generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance
income tax sales tax service tax goods and service tax customs duty excise dutyvalue added tax cess and other material statutory dues with appropriate authoritieswherever applicable to it. However the company has not deposited demand raised by theIncome Tax authorities for A.Yr.2011-2012 amounting to Rs 258760/- and for A.Yr. 2016-17amounting to Rs 77530/- on account of its application for its adjustment against refundfor the A.Yr. 2008-2009 and A. Yr. 2009-10 due to the company.
b.In our opinion and in accordance with the information and explanation given to usthe following demands were not deposited on account of dispute:
|Name of the Statute ||Nature of Dues ||Period to which the amount relates ||Forum where dispute is pending ||Amount (Rs.) |
|Income Tax Act 1961 ||Income Tax ||A.Yr. 2014-2015 ||CIT (Appeals) ||Rs 799670/- |
|Income Tax Act 1961 ||Income Tax ||A.Yr. 2013-2014 ||CIT (Appeals) ||Rs 4173670/- |
|Income Tax Act 1961 ||Income Tax ||A.Yr. 2017-2018 ||CIT (Appeals) ||Rs 515400/- |
viii. In our opinion and according to the information and explanations given to us thecompany has not borrowed any funds from financial institutions banks or debentureholders.
ix. In our opinion the company has not raised any funds from public offer (includingdebt instruments) or by term loan.
x. In our opinion on the basis of audit conducted by us and in accordance with theinformation and explanations given to us no fraud on or by the company has been noticedor reported during the course of our audit.
xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
xii. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
xiii. In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
xiv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
xv. The company has not entered into any non-cash transactions with directors orpersons connected with them covered under Section 192 of the Act. Accordingly theprovisions of clause 3 (xv) of the Order are not applicable to the Company and hence notcommented upon.
xvi. In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.
| ||For SDBA & Co. |
| ||Chartered Accountants |
| ||(FRN: 142004W) |
| ||(Sanjeev A. Mehta) |
| ||Partner |
| ||M. No. 41287 |
|Place: Mumbai || |
|Date : 24th June 2021 || |
|UDIN : 21041287AAAADK4775 || |
Annexure 'B' to the Independent Auditor's Report
Referred to in paragraph 11(f) of the Independent Auditors' Report of even date to theMembers of Elegant Marbles And Grani Industries Ltd on the Standalone financial statementsfor the year ended March 31 2021.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
1.We have audited the internal financial controls over financial reporting of ELEGANTMARBLES & GRANI INDUSTRIES LTD. ("the Company") as of March 31 2021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
2.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 Reporting issued by theInstitute of Chartered Accountants of India". These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating 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.
3.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.
4.Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.
5.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
6.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.
Limitations of Internal Financial Controls Over Financial Reporting
7.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.
8.In our opinion to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2021 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For SDBA & Co. |
| ||Chartered Accountants |
| ||(FRN: 142004W) |
| ||(Sanjeev A. Mehta) |
| ||Partner |
| ||M. No. 41287 |
|Place: Mumbai || |
|Date : 24th June 2021 || |
|UDIN : 21041287AAAADK4775 || |