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Mazda Properties Ltd.

BSE: 523197 Sector: Infrastructure
NSE: N.A. ISIN Code: INE245R01017
BSE 05:30 | 01 Jan Mazda Properties Ltd
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Mazda Properties Ltd. (MAZDAPROPERTIES) - Auditors Report

Company auditors report

TO THE MEMBERS OF

MAZDA PROPERTIES LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of MAZDA PROPERTIES LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2018 the Statement of Profit and Loss (including Other Comprehensive Income) the cashflow statement and the Statement of changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance including other comprehensive incomecash flows and changes in the equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards(Ind AS)prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the company andfor preventing and detecting frauds and other irregularities; selection and applicationsof appropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the 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.

Auditors' Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit. In conducting our audit we have taken into account the provisions of theAct the accounting and auditing standards and matters which are required to be includedin the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatements.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company's Directors aswell as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Basis for Qualified Opinion

Attention is invited to Note No. 16A which was also the subject matter of our reportsimilarly qualified in the previous year regarding non provision of interest payable to aparty Rs. 1522142/- for the reasons stated therein which constitutes a departure fromthe Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act. If thesame is considered the project expenses (under Note 5) as at the year end would have beenRs.9007841/- as against the reported figure of Rs.7485699/- (Previous yearRs.8963724/- as against the reported figure of Rs.7485699/-) and Other CurrentLiabilities (under Note 12) would have been Rs.3266426/- as against the reported figureof Rs.1744284/- (Previous year Rs.3098979/- as against the reported figure ofRs.1620954/-).

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the basis for the qualifiedopinion paragraph above the aforesaid financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2018 and its loss and its cash flows for the year ended onthat date.

Emphasis of Matters

We draw attention to the following matter in the Note to the financial statements:

(a) Note No. 20 in the financial statement which indicates that the Company hasaccumulated losses and its net worth has been fully eroded the Company has incurred a netloss during the current and previous year(s) and the Company's current liabilitiesexceeded its current assets as at the balance sheet date. These conditions indicate theexistence of a material uncertainty that may cast significant doubt about the Company'sability to continue as a going concern. However the financial statements of the Companyhave been prepared on a going concern basis for the reason stated in the said Note No. 20.Our opinion is not qualified in respect of these matters.

(b) Note No. 21 in the financial statement which indicates that subsequent to the yearended 31.03.2018 shares of the company have been delisted by SEBI w.e.f. 09.05.2018. Ourreport is not qualified in respect of this matter. Our opinion is not qualified in respectof these matters.

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 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the Order.

2. As required by section 143 (3) of the Act we further 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) except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books;

(c) the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

(d) except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion the aforesaid financial statements comply with theapplicable Accounting Standards specified under Section 133 of the Act read with Rule 7of the Companies (Accounts) Rules 2014;

(e) the going concern matter described in sub - paragraph (a) under the Emphasis ofMatters paragraph above in our opinion may have an adverse effect on the functioning ofthe company;

(f) on the basis of written representations received from the Directors as on 31stMarch 2018 and taken on record by the Board of Directors we report that none of theDirectors is disqualified as on 31st March 2018 from being appointed as a director interms of Section 164(2) of the Act;

(g) 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;

(h) subject to the qualification relating to non provision of interest payable to aparty as stated in the Basis for Qualified Opinion paragraph above (i) with respect toother matters to be included in the Auditor's Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us;

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note No. 5(A) to the financialstatements;

ii. The Company did not have any long - term contracts including derivative contracts;

iii. There were no amounts which were required to be transferred to the Investor

Education and Protection Fund by the Company;

For V. J. SHAH & CO.
(Chartered Accountants)
Firm Regn. No.109823W
Place : Mumbai (CHINTAN V. SHAH)
Date : 4th September 2018 Partner
Membership No.164370

ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

i) The Company does not own any fixed assets. Therefore requirements of clauses 3 (i)(a) to 3 (i) (c) of the Order are not applicable.

ii) The Company is engaged in the business of real estate. It does not hold anyphysical inventories. Therefore requirements of clause 3 (ii) of the Order are notapplicable.

iii) The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under Section 189 of the Companies Act2013 (18 of 2013). Therefore requirements of clauses 3 (iii) (a) to 3 (iii) (c) of theOrder are not applicable.

iv) The compliance of provisions of Section 185 and 186 of the Act is not required inrespect of loans investments guarantees and securities as no such transactions havebeen entered into by the Company during the year.

v) The Company has not accepted any deposits from the public within the meaning ofsections 73 to 76 or any other relevant provisions of the Companies Act where applicableand the Rules framed there under. We are informed that no Order has been passed by theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any Courtor any other Tribunal.

vi) As informed to us the maintenance of cost records has not been prescribed by theCentral Government under section 148(1) of the Companies Act 2013 in respect ofactivities carried on by the Company.

vii) a) In our opinion and according to the information and explanations given to usand on the basis of our examination of the records of the Company the Company has beenregular in depositing undisputed statutory dues including provident fund employees'state insurance income tax sales tax service tax customs duty excise duty valueadded tax cess and any other material statutory dues with the appropriate authoritieswhere applicable.

b) According to the records of the Company and information and explanations given tous no disputed amount is outstanding in respected of dues of income tax sales taxservice tax customs duty excise duty value added tax cess and any other materialstatutory dues.

viii) The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable.

ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable. x) According to the information andexplanations given to us no material fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the course of our audit.

xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company is not liable to pay/provide formanagerial remuneration in accordance with the provisions of section 197 read withSchedule V to the Act. Accordingly paragraph 3(xi) of the Order is not applicable.

xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

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

For V. J. SHAH & CO.
(Chartered Accountants)
Firm Regn. No.109823W
Place : Mumbai (CHINTAN V. SHAH)
Date : 4th September 2018 Partner
Membership No.164370

ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2(g) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of MazdaProperties Limited ("the Company") as of 31st March 2018 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the ‘Guidance Note') and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial 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 Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations ofManagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For V. J. SHAH & CO.
(Chartered Accountants)
Firm Regn. No.109823W
Place : Mumbai (CHINTAN V. SHAH)
Date : 4th September 2018 Partner
Membership No.164370