The Members of Manjeera Constructions Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of ManjeeraConstructions Limited ("the Company") which comprise the Balance Sheet asat March 31 2021 the Statement of Profit and Loss (including other ComprehensiveIncome) the Statement of Change in Equity and the Statement of Cash Flow for the yearthen ended and notes to the standalone financial statements including a summary of thesignificant accounting policies and other explanatory information ("here afterreferred to as "the standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2021 the Loss and totalcomprehensive loss changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the AuditorsResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI s Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.
Emphasis of Matter:
We draw attention to Note: 41 of the standalone financial statements which describesthe uncertainties and the managements assessment of the financial impact due to lockdown and other restrictions and conditions related to CoVID-19 pandemic situation forwhich a definitive assessment of the impact in the subsequent period is highly dependenton future economic developments and circumstances as they evolve. Our opinion is notmodified in this matter.
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
|S.No Key Audit Matters ||Auditors Response |
|1 Carrying values of Inventories (Construction work in Progress and Stock in Trade) ||Principal audit procedures |
| ||We assessed the Companys process for the valuation of inventories. |
|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. ||Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
| ||Evaluated the design of the internal controls relating to the valuation of inventories. |
|Refer Notes 2.2.2 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 companys 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 Amortised cost involves assumptions and estimates in evaluation of inputs used for the purpose of fair valuation. There is a risk that these investments are subject to diminution in value of investments as at March 31 2021 ||We assessed the Companys valuation methodology of non-current investments carried at amortised cost. |
| ||Evaluated the design of the internal controls relating to the valuation of non-current investments at amortised cost. |
| ||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. |
|Refer Notes 2.2.15a and 4 to the Standalone Financial Statements ||For a sample of non-current investments at amortised cost we performed the following procedures: |
| ||Reviewed the latest financial statements of the investee company and evaluated the realisable value of the assets net of liabilities and tested the impairment requirements. |
Information Other than the Standalone Financial Statements and Auditors ReportThereon
The Companys Board of Directors is responsible for the preparation of otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Financial and Operational Review Directors ReportCorporate Governance Report Annual Report on CSR activities but does not include thestandalone financial statements and our auditors 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 ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Managements Responsibility for the Standalone Financial Statements
The Companys 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 and cashflows of the Company in accordance with The Accounting Standards specified under section133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Companys 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 arealso responsible for overseeing the Companys financial reporting process.
Auditors Responsibility for the Audit of 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 auditors 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 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 standalonefinancial 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 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 reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors 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 upto the dateof our auditors 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 the standalonefinancial statements including the disclosures and whether the 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 our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements We communicate with those charged with governance regarding among othermatters 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 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 auditors 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 the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of subsection (11) ofsection 143 of the Act we give in the Annexure A a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the applicable.
2. As required by Section 143(3) of the Companies Act 2013 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 purpose 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 Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of the 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 written representations received from the directors as on March 312021 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct.
f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure B. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the internal financial control over financialreporting of those companies for reasons stated therein.
g) with respect to the other matters to be included in the Auditors 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 Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements Refer Note No. 34 to the standalonefinancial statements.
ii. The company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses and
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company for the year ended March 312021.
For M Bhaskara Rao & Co
Firm Registration No: 000 459 S
V K Muralidhar
Membership No. 201570
Place : Hyderabad
Date : June 30 2021
Annexure A to the Independent Auditors Report
(Referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements section of our report to the members of ManjeeraConstructions Limited of even date)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. Discrepancies notedon such verification were not matierla and have been properly dealt with in the books ofaccount.
(c) Based on our audit procedures performed for the purpose of reporting the true andfiar view of the financial statements and according to the information and explanationsgiven the management the title deeds of all the immovable properties included in thefixed assets are held in the name of the Company.
(ii) The management has conducted the physical verification of inventories atreasonable intervals during the year. Discrepancies noted on the physical verification ofinventories were not material and have been properly dealt with in the books of account.
(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to company firm limitedliability partnership or other parties covered in the register maintained under Section189 of the Companies Act 2013. Accordingly the provisions of the Clause (iii) (a) (b)and (c) of the Order 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 inrespect of loans investments guarantees and securities offered by the Company theprovision of sections 185 and 186 of the Companies Act 2013 are not applicable to theCompany being the company is engaged in providing the infrastructural facilities. ReferNote 42 of the standalone financial statements.
(v) According to the information and explanations given to us the Company has notaccepted any deposits to which the directions issued by the Reserve Bank of India and theprovisions of Section 73 to Section 76 or any other relevant provisions of the CompaniesAct 2013 and the Rules framed there under where applicable during the year.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by theCentral Government under sub-section (1) of Section 148 of the Companies Act 2013 andare of the opinion that prima facie the prescribed cost records have been made andmaintained. We have however not made a detailed examination of the cost records with aview 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 Employees State Insurance Income-tax Goods and ServiceTax Customs Duty Excise Duty Cess and any other statutory dues applicable to itto theappropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident FundEmployees State Insurance Income-tax Goods and Service Tax Customs Duty ExciseDuty Cess and any other statutory dues in arrears as at March 31 2021 for a period ofmore than six months from the date they became payable.
(c) According to the records of the Company there were no disputed amounts payable inrespect of Income-tax Sales Tax Service Tax Customs Duty Excise Duty Value Added TaxCess Service tax Goods and Service Tax in arrears as at March 31 2021.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions and banks. The Company did not have any dues to Government nor has it issuedany debentures as at the balance sheet date.
(ix) According to the information and explanations given by the management and anoverall examination of the balance sheet we report that monies raised by the Company byway of the term loans were applied for the purposes for which those were raised.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no fraud by theofficers and employees of the Company 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 is not applicable.
(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with Section 177 and 188 of theCompanies Act 2013 where applicable the details have been disclosed in the standalonefinancial statements as required 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) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withthem as referred to in provisions of section 192 of the Companies Act 2013 are notapplicable. The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.
| ||For M Bhaskara Rao & Co |
| ||Chartered Accountants |
| ||Firm Registration No: 000 459 S |
| ||V K Muralidhar |
| ||Partner |
|Place: Hyderabad ||Membership No. 201570 |
|Date: June 30 2021 ||UDIN: 21201570AAAAEA6181 |
Annexure B to the Independent Auditors report
(Referred to in paragraph 2.f under Report on Other Legal andRegulatory Requirements section of our report to the members of ManjeeraConstructions Limited of even date)
We have audited the internal financial controls over financial reporting of ManjeeraConstructions Limited ("the Company") as of March 31 2021 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Managements Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting 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 companys 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 Companys 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") issued by ICAI and the Standards on Auditing prescribedunder section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy 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 auditors 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 and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys 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 companys internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the companys assets that could havea material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects maintained adequate internalfinancial controls over financial reporting as of 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 and except for the possible effects of the material weaknessdescribed above on the achievement of the objectives of the control criteria theCompanys internal financial controls over financial reporting were operatingeffectively as of March 31 2021.