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Marathon Nextgen Realty Ltd.

BSE: 503101 Sector: Infrastructure
NSE: MARATHON ISIN Code: INE182D01020
BSE 00:00 | 01 Jul 203.05 1.80
(0.89%)
OPEN

197.70

HIGH

209.00

LOW

197.70

NSE 00:00 | 01 Jul 204.10 2.70
(1.34%)
OPEN

201.40

HIGH

209.00

LOW

198.40

OPEN 197.70
PREVIOUS CLOSE 201.25
VOLUME 22000
52-Week high 218.00
52-Week low 64.00
P/E 43.29
Mkt Cap.(Rs cr) 938
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 197.70
CLOSE 201.25
VOLUME 22000
52-Week high 218.00
52-Week low 64.00
P/E 43.29
Mkt Cap.(Rs cr) 938
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Marathon Nextgen Realty Ltd. (MARATHON) - Auditors Report

Company auditors report

To

The Members of Marathon Nextgen Realty Limited Report on the Audit ofthe Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements ofMarathon Nextgen Realty Limited("the Company") which comprise the Balance Sheetas at 31st March 2021 the Statement of profit and loss(Including Other ComprehensiveIncome) Statement of changes in equity and Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"Standalone Financial Statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 312021and its Profit including Other Comprehensive Income changes in equity and its cash flowsfor the year ended on that date.

Basis for Opinion

We conducted our audit of Standalone Financial Statements in accordancewith the Standards on Auditing specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities 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 ethicalrequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and theICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the Standalone Financial Statementsfor the financial year ended March 31 2021. These matters were addressed in the contextof our audit of the Standalone Financial Statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context. We havedetermined the matters described below to be the key audit matters to be communicated inour report. We have fulfilled the responsibilities described in the Auditor'sresponsibilities for the audit of the Standalone Financial Statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Standalone Financial Statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Standalone Financial Statements.

1. Investment in subsidiaries and joint ventures and loans/financialinstruments to group entities

(Refer note no 5A 5B 6 and 15 of standalone financial statements)

Recoverability of investment in subsidiaries and joint ventures:

The Company's investments in subsidiaries and joint ventures arecarried at cost less any diminution in value if any. The investments are assessed forimpairment at each reporting date. The impairment assessment involves the use of estimatesand judgements. The identification of impairment event and the determination of animpairment charge also require the application of significant judgement by the Company.The judgement in particular is with respect to the timing quantity and estimation ofprojected cash flows of the real estate projects in these underlying entities. In view ofthe significance of these investments and above we consider valuation / impairment ofinvestments in subsidiaries and joint ventures to be a key audit matter.

How the matter was addressed in our audit

Our audit procedures included:

• Evaluating design and implementation and testing operatingeffectiveness of controls over the Company's process of impairment assessment and approvalof forecasts.

• Assessing the financial position of the subsidiaries and jointventures assessing profit history and project details of those subsidiaries and jointventures.

• Verifying the inputs used in the projected profitability.

• Testing the assumptions and understanding the forecasted cashflows of subsidiaries and joint ventures based on our knowledge of the Company and themarkets in which they operate.

• Assessing the comparability of the forecasts with historicalinformation.

• Analysing the possible indications of impairment andunderstanding Company's assessment of those indications.

• Considering the adequacy of disclosures in respect of theinvestment in subsidiaries and joint ventures.

Recoverability of loans in the nature of project advances to andinvestment in financial instruments of group entities:

The Company has extended loans to and invested in financial instrumentsof group entities. These are assessed for recoverability at each period end. Due to thenature of the business in the real estate industry the Company is exposed to heightenedrisk in respect ofthe recoverability of the loans/financial instruments granted to theaforementioned parties. In addition to nature of business there is also significantjudgment involved as to the recoverability of the project specific loans/financialinstruments. This depends on property developments projects being completed over the timeperiod specified in agreements. We have identified measurement of loans/financialinstruments to group entities as key audit matter because recoverability assessmentinvolves Company's significant judgement and estimate.

How the matter was addressed in our audit

Our procedures included:

• Evaluating the design and implementation and testing operatingeffectiveness of key internal controls placed around the impairment assessment process ofthe recoverability of the loans/financial instruments.

• Assessing the net worth of subsidiaries and joint ventures onthe basis of latest available financial statements.

• Assessing the controls for grant of new loans/financialinstruments and sighting the Board approvals obtained.

• Tracing loans/financial instruments advanced / repaid during theyear to bank statement.

• Obtaining confirmations to assess completeness and existence ofloans/financial instruments and advances given to subsidiaries and joint ventures as on 31March 2021.

Other Information

The Company's Board of Directors is responsible for the Preparation ofother information. The other information comprises of the information included in theAnnual Report but does not include the Financial Statements and our auditor's reportthereon. Our opinion on the Standalone Financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the Standalone Financial Statements our responsibility is to read theother information and in doing so consider whether the other information is materiallyinconsistent with the Standalone Financial Statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Financial Statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements the Board ofDirectors is 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 the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so. The Board ofDirectors are also responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of theseStandalone Financial Statements.

As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain professional scepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of theStandalone Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 as amended we are also responsible forexpressing our opinion on whether the Company has adequate internal financial controlssystem in place and the operating effectiveness 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 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 conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the FinancialStatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the Financial Statements may beinfluenced. We consider quantitative materiality and qualitative factors in

(i) Planning the scope of our audit work and in evaluating the resultsof our work; and (ii) to evaluate the effect of any identified misstatements in thefinancial statements.

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 required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure A" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 197(16) of the Act we report that thecompany has paid remuneration to its directors during the year in accordance with theprovisions of the limits laid down under Section 197 read with Schedule V of the Act.

3. 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 havebeen kept 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 Statement of Changes in Equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid Standalone Financial Statementscomply with the Indian Accounting Standards specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2015 as amended.

(e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controlswith reference to standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B''.

(g) 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 :

1. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Financial Statements - Refer Note no 39 to theStandalone Financial Statements

2. The Company has made provision as required under the applicable lawor accounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts.

3. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

"ANNEXURE A" TO THE INDEPENDENT AUDITORS' REPORT ON THESTANDALONE FINANCIAL STATEMENTS OF MARATHON NEXTGEN REALTY LIMITED

(Referred to in Paragraph 1 under the heading of "Report on otherlegal and regulatory requirements" of our report of even date)

i. In respect of its fixed assets :

a. The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets on the basis of availableinformation.

b. As explained to us all the fixed assets have been physicallyverified by the management in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and nature of its assets. No materialdiscrepancies were noticed on such physical verification.

c. The title deeds of immovable properties recorded as fixed assets inthe books of account of the company are in the name of the company except for the detailsgiven below:

Land/Building Total number of cases Leasehold/ Freehold Gross block as on March 31 2021 (Rs. In lakhs) Net Block as on March 31 2021 (Rs. In Lakhs) Remarks
Land 1 Freehold 1.49 1.49 Unused FSI of self-developed project

ii. Inventories comprise of car parking units unsold inventoryexpenditure incurred on acquisition of land development rights and other expenditure onconstruction and development of the project of the company. As explained to us physicalverification of the inventories have been conducted at reasonable intervals by themanagement which in our opinion is reasonable having regard to the size of the Companyand nature of its inventories. No material discrepancies were noticed on such physicalverification.

iii. The company has granted unsecured loans to Companies and aLimited Liability Partnerships covered in the register maintained under Section 189 of theAct.

(a) According to the information and explanations given to us and basedon the audit procedures conducted by us we are of the opinion that the terms andconditions of the aforesaid loans granted by the Company are not prejudicial to theinterest of the Company.

(b) According to the information and explanations given to us and basedon the audit procedures conducted by us the unsecured loans granted to companies andlimited liability partnership and interest thereon are repayable on demand and schedule ofrepayment of principal and payment of interest in respect of such loans has not beenstipulated and hence we are unable to comment whether the repayments or receipts areregular and report on amounts overdue for more than ninety days if any as required underParagraph 3(iii) of the Order.

iv. According to the information and explanations given to us inrespect of loans granted investments made guarantees provided and securities providedthe Company has complied with the provisions of Section 185 of the Act. Further theprovisions of section 186 of the Act except Sub section 1 are not applicable to theCompany as it is engaged in the business of providing infrastructural facilities.

v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits within the meaning of provisions ofsections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Therefore the clause (v) of paragraph 3 of the Order is not applicable to theCompany.

vi. The Central Government has prescribed the maintenance of costrecords under sub section (1) of Section 148 of the Act and rules framed there under.However at present the Company does not fall under the criteria for which such recordsare required to be maintained. Hence the said rules are not applicable to the Company.

vii. In respect of Statutory dues :

a. According to the records of the Company undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxCustom Duty Excise Duty Value Added Tax Cess Goods and Service tax and any otherstatutory dues have been generally regularly deposited with appropriate authorities.According to the information and explanations given to us no undisputed amounts payablein respect of the aforesaid dues were outstanding as at 31st March 2021 for a period ofmore than six months from the date becoming payable except for advance tax dues of Rs.250.05 Lakhs for the financial year 2020-21

b. According to the information and explanations given to us the duesoutstanding with respect to Income tax Excise duty Sales tax Value added tax onaccount of any dispute are as follows:

Name of the statute Nature of dues Amount (Rs.in Lakhs)# Period to which the amount relates Forum where dispute is pending
Central Excise Act 1944 Excise duty including penalty 24.58 1994- 95 1995- 96 Central Excise & Service tax Appellate Tribunal (CENSTAT)
Central Excise Act 1944 Penalty 0.15 1998-99 Commissioner of Central Excise (Appeal)
Central Excise Act 1944 Excise duty 14.63 1977-78 1983-84 Deputy Commissioner of Central Excise (Appeal)
The Maharashtra Value Added Tax Act 2002 Value Added Tax 164.43* 2008-09 Deputy Commissioner Sales Tax (Appeal)
The Maharashtra Value Added Tax Act 2002 Value Added Tax 4131.10* 2006-07 2007-08 2009-10 Deputy Commissioner Sales Tax (Appeal)

^Excluding applicable interest and penalties #Net of Amount paid underprotest.

viii. In our opinion and according to the information given to usthe Company has not defaulted in repayment of loans or borrowings to financial institutionor bank and did not have any outstanding dues payable to Government or to debentureholders.

ix. In our opinion and according to the information andexplanations given to us the money raised by way of term loan has been applied by theCompany for the purpose for which they were raised. The Company has not raised money byway of initial public offer or further public offer (including debt instruments)

x. In our opinion based on the audit procedures performed for thepurpose of reporting the true and fair view of the Standalone Financial Statements and asper information and explanations given to us no fraud by the Company or on the Company byits officers or employees has been noticed or reported during the year.

xi. According to the information and explanations given to usmanagerial remuneration has been paid/ provided in accordance with the requisite approvalsmandated by the provisions by the provisions of Section 197 read with Schedule V to theAct.

xii. In our opinion Company is not a Nidhi Company and hencereporting under the provisions of clause (xii) of paragraph 3 of the Order is notapplicable to the Company.

xiii. In our opinion and according to the information andexplanations given to us all transactions with related parties are in compliance withsections 177 and 188 of the Act and details of related party transactions have beendisclosed in the Standalone Financial Statements etc. as required by the applicableaccounting standards.

xiv. In our opinion and according to the information andexplanations given to us the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year and hencereporting under clause (xiv) of paragraph 3 of the Order is not applicable to the Company.

xv. In our opinion and according to the information andexplanations given to us during the year the Company has not entered into any non-cashtransaction with the directors or persons connected with him and covered under section 192of the Act and hence reporting under clause (xv) of the paragraph 3 of the Order is notapplicable to the Company.

xvi. In our opinion and according to the information andexplanations given to us the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT ON THESTANDALONE FINANCIAL STATEMENTS OF MARATHON NEXTGEN REALTY LIMITED

(Referred to in paragraph 3 (f) under 'Report on Other Legal andRegulatory Requirements' of our report of even date)

Report on the Internal Financial Controls with reference to StandaloneFinancial Statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 ("the Act")

We have audited the Internal Financial Control with reference tostandalone financial statements of MARATHON NEXTGEN REALTY LIMITED ("thecompany") as of 31st March 2021 in conjunction with our audit of the StandaloneFinancial Statements of the Company for the year ended on that date.

In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at March 312021 based on theinternal financial controls with reference to financial statements criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls With reference to standalonefinancial statements issued by the Institute of Chartered Accountants of India (the"Guidance Note").

Management Responsibility for the Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tostandalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls With reference to standalone financial statements (the "GuidanceNote") 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 Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to standalone financial statements based on our audit.We conducted our audit in accordance with the Guidance Note issued by ICAI and theStandards on auditing prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls withreference to standalone financial statements was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statements included obtaining anunderstanding of internal financial controls with reference to standalone financialstatements 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 Standalone Financial Statements whether due tofraud 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 with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to StandaloneFinancial Statements

A company's internal financial control with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of Standalone Financial Statementsfor external purposes in accordance with generally accepted accounting principles. Acompany's internal financial control with reference to standalone financial statementsincludes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of Standalone Financial Statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls with reference toStandalone Financial Statements

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For Rajendra & Co
Chartered Accountants
Firm's Registration No. 108355W
Akshay R. Shah
Partner
Membership No. 103316
UDIN21103316AAAAHS2881
Place: Mumbai
Date: 28th June 2021

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