You are here » Home » Companies » Company Overview » Mahindra Lifespace Developers Ltd

Mahindra Lifespace Developers Ltd.

BSE: 532313 Sector: Infrastructure
NSE: MAHLIFE ISIN Code: INE813A01018
BSE 13:47 | 20 Jan 412.00 -0.10
(-0.02%)
OPEN

415.00

HIGH

415.00

LOW

405.50

NSE 13:39 | 20 Jan 411.50 -1.50
(-0.36%)
OPEN

418.00

HIGH

418.00

LOW

410.30

OPEN 415.00
PREVIOUS CLOSE 412.10
VOLUME 369
52-Week high 454.15
52-Week low 351.90
P/E 34.83
Mkt Cap.(Rs cr) 2,116
Buy Price 409.70
Buy Qty 31.00
Sell Price 411.70
Sell Qty 31.00
OPEN 415.00
CLOSE 412.10
VOLUME 369
52-Week high 454.15
52-Week low 351.90
P/E 34.83
Mkt Cap.(Rs cr) 2,116
Buy Price 409.70
Buy Qty 31.00
Sell Price 411.70
Sell Qty 31.00

Mahindra Lifespace Developers Ltd. (MAHLIFE) - Auditors Report

Company auditors report

To The Members of Mahindra Lifespace Developers Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Mahindra LifespaceDevelopers Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2019 and the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Cash Flows and the Statement of Changes in Equity for the year thenended and 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 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 31 March 2019 and its profit totalcomprehensive income its cash flows and the changes in equity 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’sResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI’s Code of Ethics.We believe that the audit evidence obtained by us is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matter Auditor’s Response
1 Revenue Recognition of Construction Contracts Principal audit procedures
We assessed the Company’s process to identify the impact of adoption of the new Revenue Accounting Standard.
The Company has applied the modified retrospective approach in accordance with Ind AS 115 only to contracts that are not completed contracts as on April 1 2018. This transitional adjustment of Rs. 7958 lakhs has been adjusted against opening Retained Earnings as per the requirements of Ind AS 115. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
There is a risk that all the incomplete contracts as on April 01 2018 were not considered in applying the transitional provisions of Ind AS 115 due to which the adjustment to the opening Retained Earnings is misstated. • Evaluated the design of the internal controls relating to implementation of the new revenue accounting standard.
The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised at a point in time or over a period of time. • Obtained listing of all the contracts as on March 31 2018. Identified the contracts that are not completed contracts for which handover of units not done and/or occupancy certificate not received as on March 31 2018. For such identified contracts verified on a test check basis the consideration received cost incurred and revenue recognized to verify the adjustment to the opening Retained Earnings as on April 01 2018.
• Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price.
• Selected a sample of continuing and new contracts and performed the following procedures:
• Read analysed and identified the distinct performance obligations in these contracts.
• Compared these performance obligations with that identified and recorded by the Company.
Refer Notes 2.4.1 and 22 to the Standalone Financial Statements • Verified the progress towards satisfaction of performance obligations used to compute recorded revenue with contractual obligations necessary approvals pertaining to the completion of the project third- party certifications and the collectability of an amount of consideration.
• Performed project wise analytical procedures for reasonableness of revenues.
2 Carrying values of Inventories (Construction work in Progress and Stock in Trade) Principal audit procedures
We assessed the Company’s process for the valuation of inventories.
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
There is a risk that the valuation of inventory may be misstated as it involves the determination of net realizable value (NRV) and estimated total construction cost of completion of each of the projects which is an area of judgement. • Evaluated the design of the internal controls relating to the valuation of inventories.
Refer Notes 2.18 and 10 to the Standalone Financial Statements • Tested the operating effectiveness of controls for the review of estimates involved for the expected cost of completion of projects including construction cost incurred construction budgets and net realizable value. We carried out a combination of procedures involving enquiry and observation and inspection of evidence in respect of operation of these controls. Selected a sample of project specific inventories and performed the procedures around:
• Construction costs incurred for the project specific inventories by tracing to the supporting documents estimated total construction cost to be incurred for completing the construction of the project and corroborated the same with the reports from external supervising engineers where applicable. Obtained the company’s assessment of NRV for the project specific inventories.
• The expected net amounts to be realized from the sale of inventory in the ordinary course of business.
3 Fair Valuation of Non-current Investments Principal audit procedures
The investments which are carried at Fair Value Through Profit/Loss (FVTPL) as per level 2 and level 3 fair valuation hierarchy involves assumptions and estimates in evaluation of inputs used for the purpose of fair valuation. We assessed the Company’s process for the valuation of non-current investments carried at FVTPL.
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
There is a risk that these investments are misstated as assumptions and estimates involved in the evaluation of the inputs may not be appropriate. • Evaluated the design of the internal controls relating to the valuation of non-current investments at FVTPL.
Refer Notes 2.21 and 7 to the Standalone Financial Statements • Tested the operating effectiveness of controls for the review of assumptions and estimates used in evaluation of inputs for the purpose of fair valuation. We carried out a combination of procedures involving enquiry and observation and inspection of evidence in respect of operation of these controls.
For a sample of non-current investments at FVTPL we performed the following procedures:
• Reviewed the valuation reports obtained by the Company from third party valuation experts for investments recorded at fair value for level 2 and level 3 fair valuation hierarchy.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Board’s ReportManagement Discussion and Analysis Report Corporate Governance Report and BusinessResponsibility Report but does not include the standalone financial statements and ourauditor’s report 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 informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise 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.

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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue 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 asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’sfinancial reporting process.

Auditor’s Responsibility for the Audit of the Standalone 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the 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 override of internal control.

Obtain an understanding of internal financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the 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 uncertaintyexists related to events or conditions that may cast significant doubt on theCompany’s ability 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 standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor’s report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably 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 independence 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 aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be 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) 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 and the reports.

c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.

g) With respect to the other matters to be included in the Auditor’s Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone 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.

2. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For Deloitte Haskins and Sells LLP
Chartered Accountants
(Firm’s Registration No.117366W/W-100018)
Ketan Vora
Place: Mumbai Partner
Date: 22nd April 2019 (Membership No. 100459)

ANNEXURE "A" TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements’ section of our report to the members of Mahindra Lifespace DevelopersLimited of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MahindraLifespace Developers Limited ("the Company") as of 31st March 2019 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.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 performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor’s judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2019 based on the criteria forinternal financial control over financial reporting 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 Deloitte Haskins and Sells LLP
Chartered Accountants
(Firm’s Registration No.117366W/W-100018)
Ketan Vora
Place: Mumbai Partner
Date: 22nd April 2019 (Membership No. 100459)

ANNEXURE "B" TO THE INDEPENDENT AUDITOR’S REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report to the members of Mahindra Lifespace DevelopersLimited of even date)

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

(b) The fixed assets (Property Plant and Equipment) were physically verified duringthe year by the Managementinaccordancewitharegularprogramme of verification which in ouropinion provides for physical verification of all the fixed assets (Property Plant andEquipment) at reasonable intervals. According to the information and explanation given tous no material discrepancies were noticed on such verification.

(c) With respect to immovable properties of land that are freehold according to theinformation and explanations given to us and the records examined by us and based on theexamination of the conveyance deed provided to us we report that the title deeds of suchimmovable properties are held in the name of the Company as at the balance sheet date.According to the information and explanation given to us the Company does not have anyleasehold land and leased/freehold Building other than administrative block and projectfacilities temporarily constructed at the project sites and capitalised as Building. .

(ii) In our opinion and according to the information and explanations given to ushaving regard to the nature of inventory the physical verification by way of verificationof title deeds site visits by the Management and certification of extent of workcompletion by competent persons are at reasonable intervals and no material discrepancieswere noticed on physical verification.

(iii) According to the information and explanations given to us the Company hasgranted unsecured loans to companies covered in the register maintained under section 189of the Companies Act 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company’s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.

(c) There is no overdue amount remaining outstanding as at the year-end.

(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 Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits during the year and the provisions of sections 73 to 76 of the Actare not applicable and hence reporting under clause 3 (v) of the Order is also notapplicable.

(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. We have however not made a detailed examinationof the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Income-tax Goods and Service Tax Sales Tax Service TaxCustoms Duty Value Added Tax cess and other material statutory dues applicable to it tothe appropriate authorities. The provisions of Employees’ State Insurance and ExciseDuty are not applicable to the operations of the Company.

(b) There were no undisputed amounts payable in respect of Provident Fund Income-taxGoods and Service Tax Sales Tax Service Tax Customs Duty Value Added Tax cess andother material statutory dues in arrears as at 31st March 2019 for a period of more thansix months from the date they became payable.

(c) There are no dues of Income-tax Sales Tax Service Tax Customs Duty Excise DutyValue Added Tax and Goods & Service Tax which have not been deposited as on 31stMarch 2019 on account of disputes except as given below:

(viii) In our opinion and according to the information and explanations given tous the Company has not defaulted in the repayment of loans or borrowings to banks anddebenture holders. The Company has not taken any loans or borrowings from financialinstitutions and government.

(ix) In our opinion and according to the information and explanations given to us theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments). The money raised by way of term loans have been applied bythe Company during the year for the purposes for which they were raised.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theCARO 2016 Order is not applicable. .

(xiii) In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Standalone Ind AS financial statements etc. asrequired by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding subsidiary or persons connected with them and henceprovisions of section 192 of the Companies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins and Sells LLP
Chartered Accountants
(Firm’s Registration No.117366W/W-100018)
Ketan Vora
Place: Mumbai Partner
Date: 22nd April 2019 (Membership No. 100459)