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Pansari Developers Ltd.

BSE: 538381 Sector: Infrastructure
NSE: PANSARI ISIN Code: INE697V01011
BSE 05:30 | 01 Jan Pansari Developers Ltd
NSE 05:30 | 01 Jan Pansari Developers Ltd

Pansari Developers Ltd. (PANSARI) - Auditors Report

Company auditors report

To

The Members of

M/s Pansari Developers Limited

Report on the Financial Statements

We have audited the accompanying Standalone financial statements of PANSARIDEVELOPERS LIMITED ("the Company") which comprises the Balance Sheet as at 31stMarch 2020 and the Statement of Profit and Loss the Cash Flow Statement and thesignificant accounting policies and other explanatory information.

Opinion

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 Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the financialposition of the Company as at 31st March 2020 and its profit and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit of financial statement in accordance with thestandards of auditing (S A) specified under section 143 (10) of the Companies Act 2013.We are independent of the Company in accordance with the Code of Ethics issued hythe Institute of Chartered Accountants of India and we have fulfilled our other ethicalresponsibilities in accordance with the provisions of the Companies Act 2013. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Emphasis of Matters:

We draw your attention to note 28.2 to the Standalone Financial Resultsfor the year ended March 31 2020 which describes the impact of outbreaks of Coronavirus(COVED-19) on the business operations of the company. In view of the uncertain economicenvironment a definitive assessment of the impact on the subsequent periods is dependentupon circumstances as they evolve. Our conclusion is not modified in respect of thismatter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere most of significance in our audit of the Standalone Financial Statements of thecurrent financial year. These matters were addressed in the context of our audit of thefinancial statements as a wholeand informing our opinion thereon and we do not provide aseparate opinion on these matters.

Key Audit Matters Response to Key Audit Matters
1.Assessing the carrying value of Inventory and advances paid. Our audit procedures/testing included among others:
The Company's inventory comprises of ongoing and completed real estate projects unlaunched projects As at March 31 2020 the carrying values of inventories amounts to Rs. 10324.63 lakhs • Read and evaluated the accounting policies and disclosures made in the financial statements with respect to inventories;
• Understood and reviewed the management's process and methodology of using key assumptions for determination of NRV of the inventories including considerations given to impact of Covid-19;
The inventories are carried at the lower of the cost and net realizable value ('NRV'). The determination of the NRV involves estimates based on prevailing market conditions current prices and expected date of commencement and completion of the project the estimated future selling price cost to complete projects and selling costs.
• Tested the NRV of the inventories to its carrying value in books on sample basis.
• Where the Company involved specialists to perform valuations we also performed the following procedures:
Considering significance of the amount of carrying value of inventories in the financial statements and the involvement of significant estimation and judgement in such assessment of NRV the same has been considered as key audit matter.
• Obtained and read the valuation report used by the management for determining the NRV;
Further the Company has made various advances and deposits to the seller/ intermediary towards purchase during the course of obtaining clear and marketable title free from all encumbrances and transfer of legal title to the Company whereupon it is transferred to land stock under inventories. • Considered the independence competence and objectivity of the specialist involved in determination of valuation.
• Involved experts to review the assumptions used by the management specialists. For advance our audit procedures included the following:
With respect to advance given the net recoverable value is based on the management's estimates and internal documentation which include among other things the likelihood when the land acquisition would be completed the expected date of plan approvals for commencement of project estimation of sale prices and construction costs and Company's business plans in respect of such planned developments.
• Obtained status update from the management and verified the underlying documents for related developments.
• Compared the acquisition cost of the underlying land with current market price in similar locations.
In view of the Covid-19 pandemic the Company has reassessed its future business plans and key assumptions as at March 312020 while assessing the adequacy of carrying value of inventories and advances. (for Inventories Refer Note no: 16 and for Advances & deposit for lands referNote no: 19) • Evaluated the management assessment w.r.t. recoverability of those advances and changes if any in the business plans relating to such advances including considerations given to the impact of Covid-19.
2.Related party transactions: Our procedures / testing included the following:
The Company has undertaken transactions with its related parties in the ordinary course of business at arm's length. These include making new or additional investments in Joint Venture and Partnership Firm lending loans to and from related parties etc. as disclosed in note 29 to the standalone financial statements. Obtained and read the Company's policies processes and procedures in respect of identifying related parties obtaining approval recording and disclosure of related party transactions;
• Read minutes of shareholder meetings board meetings and minutes of meetings of those charged with governance in connection with Company's assessment of related party transactions being in the ordinary course of business at arm's length;
We identified the accuracy and completeness of the related party transactions and its disclosure as set out in respective notes to the financial statements as a key audit matter due to the significance of transactions with related parties and regulatory compliances thereon during the year ended March 312020.
Based on our Audit observation we conclude there are no material misstatement to be reported.
• Tested related party transactions with the underlying contracts confirmation letters and other supporting documents;
•Agreed the related party information disclosed in the financial statements with the underlying supporting documents on a sample basis.

Information Other than the Financial Statements and Auditor's ReportThereon;

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report andCorporate Governance hut does not include financial statements and our auditors reportthereon. Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon. In connection with our auditof the financial statements our responsibility is to read the other information and indoing so consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of the Management and Those Charged with Governancefor the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a the and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of Companies (Accounts) Rule2014.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and dent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative hut to do so. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.

Auditor's Responsibility

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 SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of 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 controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances butnot for the minise of expressive an opinion on whether the Company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls.

•• Evaluate the appropriateness of accounting policies usedand the reasonableness of accounting estimates and related disclosues made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theability of the company to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the Stand alone 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) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial 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 to comunicatewith them all relationships and other matters that may reasonably be thought to hear onour 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 Standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit wereport to the extent applicable 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 accounts 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 and the CashFlow Statement dealt with by this Report are in agreement with the relevant books ofaccounts.

d) In our opinion the aforesaid financial statements comply with theAccounting Standards prescribed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of the written representations received from theDirectors as on 31 st March 2020 taken on record by the Board of Directors none of theDirectors are disqualified as on 31 st March 2020 from being appointed as a director interms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.

g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of Section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to theexplanation given to us the remuneration paid by the company to its directors during theyear is as per the special resolution passed in the general meeting of the company in thisregard.

h) With respect to the other matters to be included in the Auditor'sReport in accordance with the Rule 11 of the Companies (Audit and Auditors) rules 2014in our opinion and to the best of our information and according to the explanations givento us:

1. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements.

ii. The Company is not required to make any provision as requiredunder the applicable law or accounting standards for material foreseeable losses on longterm contracts including derivative contracts.

iii. The Company was not required to transfer any amount to theInvestor education and Protection Fund.

2. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in "Annexure B" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

Annexure - A to the Independent Auditors' Report on the Financial ofPansari Developers Limited as on 31 March 2020

(Referred to in paragraph 1 (f) under 'Report on Other Legal andRegulatory Requirements' section our report of even date addressed to the members ofPansari Developers Limited on the financial statements as on 31 March 2020)

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

We have audited the internal financial controls over financialreporting of Pansari Developers Limited("the Company") as of 31 March 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under Section 143 (10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors' judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purpose in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes 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 financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; 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 financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31" March 2020based 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.

Annexure - B to the Auditors' Report

(Referred to in paragraph under 'Report on Other Legal and RegulatoryRequirements' section our report of even date addressed to the members of PansariDevelopers Limited on the financial statements as on 31 March 2020)

I. In respect of Fixed Assets:-

a) The company is maintaining proper records showing full particularsincluding quantitative details and situations of fixed asset.

b) Fixed Assets were physically verified by the management during theyear in accordance with planned programme of verifying all of them once in three yearswhich in our opinion is reasonable having regards to the size to the company and thenature of its assets. No material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and therecords examined hy us including registered title deeds we report that the title deedscomprising all the immovable properties of land and buildings which are freehold are heldin the name of the Company as at the Balance Sheet date.

II. According to the information and explanations given to us theinventory has been physically verified during the year by the management. In our opinionthe frequency of such verification is reasonable. The discrepancies noticed onverification between the physical stocks and the book records were not material and havebeen dealt with in books of accounts.

III. a. The Company has granted unsecured loans to companies firms orother parties covered in the register maintained under Section 189 of the Companies Act2013. In our opinion and according to the information and explanations given to us theterms and conditions of the grant of such loans are not prejudicial to the Company'sinterest.

b. The Company has granted loans that are re-payable on demand tocompanies firms or other parties covered in the register maintained under Section 189 ofthe Companies Act 2013. We are informed that the company has not demanded repayment ofany such loan during the year and thus there has been no default on the part of theparties to whom the money has been lent. The payment of interest has been regular.

c. There are no amounts of loans granted to companies firms or otherparties listed in the register maintained under Section 189 of the Companies Act 2013which are overdue for more than ninety days.

IV. In our opinion and according to the information and explanationsgiven to us provisions of Section 185 and 186 of the Companies Act 2013 in respect ofloans to directors including entities in which they are interested and in respect of loansand advances given investments made and guarantees and securities given have beencomplied with by the Company

V. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of sections 185 and 186 of theCompanies Act 2013 in respect of grant of loans making investments and providingguarantees and securities as applicable.

VI. The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly Paragraph 3 (v) of the order is not applicable.

Vii. The company is not required to maintain cost records under asper section 148 (1) of Companies Act 2013.

Viii. In respect of Statutory dues:

(a) The company is regular in depositing undisputed statutory dues withthe appropriate authorities including income tax service tax and duty of custom valueadded tax. Good and Service Tax (GST) or any other statutory dues. The provisions relatingto duty of excise are not applicable to the Company.

(b) There were no in disputed amounts payable in respect of ProvidentFund Employees' State Insurance Income Tax Service Tax Goods and Service Tax(GST)Value Added Tax Customs Duty Cess and other statutory dues in arrears as at March 312020 for a period of more than six months from the date they became payable. Theprovisions relating to duty of excise are not applicable to the Company.

According to the information and explanations given to us disputedamounts payable in respect statutory dues in arrears as at 31st March 2020 are as follows-

(h) The Company has a regular programme of physical verification of itsfixed assets by which all fixed assets are verified in a phased manner. In accordance withthis programme a portion of the fixed assets has been physically verified by themanagement during the year and no material discrepancies have been noticed on suchverification. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us thetitle deed of the immovable property are held in the name of the company.

SL Nature of Dues Period to which it pertain Demand Forum where the dispute pending
1. Tax Deducted at Source 2017-182016-17 2014-15Prior Years 169156.77 Assessing Officer

IX. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted during the year in repayment of loans orborrowings to financial institutions bankers and the government. The Company did not haveany outstanding debentures during the year.

X. The company has not raised any money by the way of initial publicoffer or further public offer and term loans. Accordingly paragraph 3(ix) of the order isnot applicable.

XI. No fraud by /on the Company by its officers or employees has beennoticed or reported during the year nor have we been informed about any of such case bythe management;

Xii. According to the information and explanations given to us theremuneration paid by the company to its directors during the year is as per the specialresolution passed in the general meeting of the company in this regard.

Xiii. The company is not a Nidhi Company. Hence paragraph 3(xii)of the order is not applicable to company.

XIV. All the transactions with the related parties are in compliancewith the sections 177 and 188 of the Companies Act 2013 wherever applicable and thedetails have been disclosed in the financial statements as required by the applicableAccounting Standard.

XV. The company has not made any preferential allotment or privateplacement of shares or Fully or Partly convertible debentures during the year. Henceparagraph 3(xiv) of the order is not applicable on the company.

XVI. The Company has not entered into any non-cash transactions withthe directors or persons connected with him/her as referred to in section 192 of CompaniesAct 2013

XVii. The Company is not required to registered under section 45-IAof the Reserve Bank of India Act 1934.

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