Garnet Construction Ltd.
|BSE: 526727||Sector: Infrastructure|
|NSE: N.A.||ISIN Code: INE797D01017|
|BSE 00:00 | 03 Feb||15.95||
|NSE 05:30 | 01 Jan||Garnet Construction Ltd|
Garnet Construction Ltd. (GARNETCONSTRUCT) - Auditors Report
Company auditors report
The Members of
GARNET CONSTRUCTION LIMITED MUMBAI
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of GARNETCONSTRUCTION LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2022 the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information(herein referred to as "the financial statements")
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 2022 and profit (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.
Basis of Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
Information Other than the Financial Statements and Auditor's ReportThereon
The Company's management and Board of Directors are responsible for theother information. The other information comprises of the information included in theCompany's annual report but does not include the financial statements and our auditor'sreport thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or appears to be material misstatement.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Responsibility of Management for the Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows 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. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate implementation and maintenance of 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 and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing thecompany's financial reporting process
Auditor's Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether thefinancial 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 are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.
As part of an audit in accordance with SAS we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances butnot for the purpose of expressing an opinion on whether the Company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theability of the Company to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As As required by the Companies (Auditor's Report) Order 2022("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Companies Act 2013 we give in the Annexure "A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
A. As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books
c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Cash Flow Statement and Statement of changes in Equity dealtwith by this Report are in agreement with the books of account
d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.
e) On the basis of the written representations received from thedirectors as on 31st March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2022 from being appointed as a director interms of Section 164 (2) of the Act.
f) With respect With respect to the adequacy of the internal financialcontrols over financial reporting and the operating effectiveness of such controls referto our separate report in Annexure "B";
g) In our opinion and according to the information and explanationsgiven to us the remuneration paid by the Company to its directors during the current yearis in accordance with the provisions of Section 197 of the Act. The remuneration paid toany director is not in excess of the limit laid down under section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us; and
h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i) The Company does not have any pending litigations which would impactits financial position and its financial statements as of March 31 2022.
ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; and
iii) There were no amount which were required to be transferred to theInvest or Education and Protection Fund by the Company.
iv) (a) Management has represented to us that to the best of itsknowledge and belief no funds
(which are material either individually or in the aggregate) have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other person or entity includingforeign entity ('Intermediaries') with the understanding whether recorded in writing orotherwise hat the Intermediary shall
whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Company ('UltimateBeneficiaries') or provide any guarantee security or the like on behalf of the UltimateBeneficiaries;
(b) Management has represented that to the best of its knowledge andbelief no funds (which are material either individually or in the aggregate) have beenreceived by the Company from any person or entity including foreign entities ('FundingParties') with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalf of the Funding Party ('UltimateBeneficiaries') or provide any guarantee security or the like on behalf of the UltimateBeneficiaries;
(c) Based on the audit procedures that have been considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clauses (i) and (ii) of rule 11(e) as providedunder (a) and (b) above contain any material misstatement
Annexure - A to the Independent Auditors' Report
In terms of the information and explanations sought by us and given bythe Company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we report that:
(i) (a) The company has maintained proper records showing fullparticulars including quantitative
details and situation of its property plant and equipment.
b) The Company has a regular program of physically verification of itsproperty plant and equipment under which the assets are physically verified in a phasedmanner over a period of three years which in our opinion is reasonable having regardsto the size of the company and the nature of its assets. In accordance with the programcertain property plant and equipment were verified during the year and no materialdiscrepancies were noticed on such verification.
c) According to the information and explanation given to us and on thebasis of our examination of the records of the company the title deed of immovable ofproperty are held in the name of the company.
d) The Company has not revalued its property plant and equipmentduring the year.
e) No proceedings have been initiated or are pending against theCompany for holding any benami property under the Benami Transactions (Prohibition) Act1988 (45 of 1988) and rules made thereunder. Accordingly reporting under clause 3(i)(e)of the Order is not applicable to the Company.
(ii) (a) The management has conducted physical verification ofinventory at reasonable intervals
during the year. In our opinion the coverage and procedure of suchverification by the management is appropriate and no discrepancies of 10% or more in theaggregate for each class of inventory were noticed.
(b) As the Company has not availed any working capital limit during theyear reporting requirements under this clause is not applicable.
(iii) (a) A. Based on the audit procedures carried on by us and as perthe information and
explanations given to us the Company has not granted any loans tosubsidiary.
B. Based on the audit procedures carried on by us and as per theinformation and explanations given to us the Company has granted loans to associatesentities other than subsidiaries as below:
The Company did not provide any guarantee or security during the year.
(b) The Company had given interest free loan to its associate concernson a short term basis. Based on information and explanations provided to us we are of theopinion that the terms and conditions of the loans given are prima facie not prejudicialto the interest of the Company.
(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company in the case of loans giventhe repayment has been stipulated and the repayments or receipts have been regular.
(d) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no overdue amount formore than ninety days in respect of loans given.
(e) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is no loan given fallingdue during the year which has been renewed or extended or fresh loans given to settle theoverdue of existing loans given to the same party.
(f) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not given anyloans either repayable on demand or without specifying any terms or period of repayment.
(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of Sections 185 and 186 of theCompanies Act 2013 in respect of loans investments guarantees and security asapplicable.
(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits or there is no amount which hasbeen considered as deemed deposit within the meaning of Sections 73 to 76 of the CompaniesAct 2013 and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly reporting under clause 3(v) of the Order is not applicable to the Company.
(vi) According to the information and explanations given to us theCentral Government has not prescribed the maintenance of cost records under Section 148(1)of the Companies Act 2013 for the products manufactured by it (and/ or services providedby it). Accordingly clause 3(vi) of the Order is not applicable.
(vii) (a) In our opinion and according to the information andexplanations given to us undisputed statutory dues including goods and services taxprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax cess and other material statutory dues asapplicable have generally been regularly deposited with the appropriate authorities bythe Company. Further no undisputed amounts payable in respect thereof were outstanding atthe year-end for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us thereare no statutory dues referred in sub-clause (a) which have not been deposited with theappropriate authorities on account of any dispute.
(viii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has notsurrendered or disclosed any transactions previously unrecorded as income in the books ofaccount in the tax assessments under the Income-tax Act 1961 as income during the year.
(ix) (a) According to the information and explanations given to us theCompany has not defaulted in repayment of its loans or borrowings or in the payment ofinterest thereon to any lender.
(b) According to the information and explanations given to us includingrepresentations received from the management of the Company and on the basis of our auditprocedures we report that the Company has not been declared a willful defaulter by anybank or financials institution or other lender.
(c) According to the information and explanations given to us and basedon the audit procedures performed by us the Company has not availed any term loans duringthe year. Accordingly the reporting under Clause 3(ix)(c) of the Order is not applicableto the Company.
(d) In our opinion and according to the information and explanationsgiven to us and on an overall examination of the financial statements of the Companyfunds raised by the Company on short term basis have not been utilised for long termpurposes.
(e) According to the information and explanations given to us and on anoverall examination of the financial statements of the Company the Company has not takenany funds from any entity or person on account of or to meet the obligations of itssubsidiaries associates or joint ventures.
(f) According to the information and explanations given to us theCompany has not raised any loans during the year on the pledge of securities held in itssubsidiaries associates or joint ventures.
(x) (a) The Company has not raised any money by way of initial publicoffer or further public offer
(including debt instruments) during the year. Accordingly reportingunder clause 3(x)(a) of the Order is not applicable to the Company.
(b) According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fullypartially or optionally convertible debentures during the year. Accordingly reportingunder clause 3(x)(b) of the Order is not applicable to the Company.
(xi) (a) To the best of our knowledge and according to the informationand explanations given to us
no fraud by the Company or on the Company has been noticed or reportedduring the period covered by our audit.
(b) No report under Section 143(12) of the Companies Act 2013 has beenfiled with the Central Government for the period covered by our audit.
(c) According to the information and explanations given to us includingthe representation made to us by the management of the Company there are no whistleblowercomplaints received by the Company during the year.
(xii) The Company is not a Nidhi Company and the Nidhi Rules 2014 arenot applicable to it. Accordingly reporting under clause 3(xii) of the Order is notapplicable to the Company.
(xiii) In our opinion and according to the information and explanationsgiven to us all transactions entered into by the Company with the related parties are incompliance with Sections 177 and 188 of the Companies Act 2013 where applicable.Further the details of such related party transactions have been disclosed in thestandalone financial statements as required by the applicable Accounting Standards.
(xiv) a) In our opinion and based on our observation the Company hasan internal audit system commensurate with the size and nature of the business. b) We haveconsidered the internal audit reports of the Company issued till date for the year underaudit in determining the nature timing and extent of our audit procedures.
(xv) According to the information and explanation given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected with them and accordingly provisions of Section 192 of the Companies Act 2013are not applicable to the Company.
(xvi) (a) The Company is not required to be registered under Section45-IA of the Reserve Bank of
India Act 1934. Accordingly reporting under clause 3(xvi)(a) of theOrder is not applicable to the Company.
(b) The Company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934. Accordingly clause 3(xvi)(b) of the Order is notapplicable.
(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by the Reserve Bank of India. Accordingly clause 3(xvi)(c) of theOrder is not applicable.
(d) According to the information and explanations provided to us duringthe course of audit the Group does not have any CIC. Accordingly the requirements ofclause 3(xvi)(d) are not applicable.
(xvii) The Company has not incurred cash losses in the current and inthe immediately preceding financial year
(xviii) There has been no resignation of the statutory auditors duringthe year. Accordingly clause 3(xviii) of the Order is not applicable.
(xiv) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realization of financialassets and payment of financial liabilities other information accompanying the financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that the Company is not capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from the
balance sheet date. We however state that this is not an assurance asto the future viability of the Company. We further state that our reporting is based onthe facts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.
(xx) According to the information and explanations given to us as theCompany does not fulfill the criteria as specified under Section 135(1) of the CompaniesAct 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014 inthe absence of average net profits in the immediately three preceding years hence thereis no requirement for the Company to spend any amount under sub-section (5) of section 135of the Act. Accordingly reporting under clause 3(xx) of the Order is not applicable tothe Company.
(xxi) The reporting under clause (xxi) is not applicable in respect ofaudit of standalone financial statements of the Company. Accordingly no comment has beenincluded in respect of said clause under this report.
Annexure - B to the Independent Auditors' Report
(Referred to in paragraph 1(A)(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Garnet Construction Limited ("the Company") as of 31st March 2022in conjunction with our audit of the financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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 FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2022 based onthe 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.