TO THE MEMBERS OF POPULAR ESTATE MANAGEMENT LIMITED
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of PopularEstate Management Limited ("the Company") which comprise the Balance Sheet asat March 31 2020 the Statement of Profit and Loss including the statement of otherComprehensive income the Statement of Cash Flows and the statement of Changes in Equityfor the year ended on that date and notes to the financial statements including asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the Standalone Ind AS financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 its loss includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as 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 Ind AS Financial Statements section ofour report. We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India (ICAl) together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAl's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 312020. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.
> Claims Litigations and contingencies: (Refer note 11 to the financial Statements)
|The company is having various ongoing litigations court and other legal proceedings before tax and regularity and courts which could have significant financial impact if the potential exposure were to materialize. ||Our audit procedures included: |
|Considering the determination by the management of whether and how much to provide and / or disclose for such contingencies involves significant judgement and estimation the same has been considered as key audit matter. ||We understood management's process relating to the identification and impact analysis of claims litigations and contingencies; |
| ||We analyzed responses obtained from the legal advisors |
| ||We have assessed management's assumptions and estimates related to disclosures of contingent liabilities in the financial statements. |
> Related Party transactions: (Refer note 9 to the financial Statements)
|The Company has undertaken transactions with its related parties in the ordinary course of business at arm's length. These include transactions in the nature of investments loans etc. as disclosed in note 9 to the standalone Ind AS financial statements. ||Our procedures/ testing included the following: |
|Considering the significance of transactions with related parties and regulatory compliances thereon related party transactions and its disclosure as set out in respective notes to the financial statements has been identified as key audit matter. ||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; |
| ||Agreed the related party information disclosed in the financial statements with the underlying supporting documents. |
Emphasis of Matter
We draw attention to Note 2.1 (g) of the financial statements which states that thecompany has not made any provision towards defined benefit plan or defined contributionplan as per requirements of Ind AS - 19.
The World Health Organization (WHO) declared the novel Corona virus COVID-19 outbreak aglobal pandemic on March 11 2020 Consequent to this Government of India had declarednationwide lockdown w.e.f. March 25 2020. COVID-19 has significantly impacted thebusiness operations of the Company resulted in to interruption in production Supply chaindisruption closure of production facilities etc. during the lock-down period. Howeverbusiness operations resumed from 1st June 2020 after obtaining necessary permissions fromthe appropriate government authorities. The Company has made detailed assessment of itsliquidity position and the recoverability and carrying value of its assets comparing ofproperty plant and equipment intangible assets inventory and trade receivables. Basedon current indicators of future economic conditions the Company expects to recover thecarrying amount of these assets. The situations is changing rapidly giving rise toinherent uncertainty around the extent and timing of the potential future impact of theCOVID-19 which may be different from that estimated as at the date of approval of thesestandalone financial results. The Company will continue to closely monitor any materialchanges arising of future economic conditions and impact on its business.
Our opinion is not modified in respect of this matter.
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the management discussion and analysisand chairman statement but does not include the standalone Ind AS financial statementsand our auditor's report thereon.
Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.
We have been provided the aforesaid reports and based on the work we have performed wedid not observe any material misstatement of this other information and accordingly wehave nothing to report in this regard.
Responsibilities of Management 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 preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards [Ind AS) specifiedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of 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-prudent; 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 Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.
In preparing the standalone Ind AS 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 but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Ind AS financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
> Identify and assess the risks of material misstatement of the standalone Ind ASfinancial 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 controls relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system with reference tofinancial statements in place and the operating effectiveness of such controls.
> Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
> Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Financial Statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
> Evaluate the overall presentation structure and content of the standalone Ind ASfinancial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone Ind AS 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 in terms of Section 143(11) of the Companies Act 2013we give in "Annexure A" a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act based on our audit we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss including the statement ofother Comprehensive Income the Cash Flow Statement and statement of changes in Equitydealt with by this Report are in agreement with the relevant books of account.
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended.
(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 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 with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure B". Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting.
(g) In our opinion the managerial remuneration for the year ended March 312020 hasbeen paid / provided by the company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
(I) The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind As financial statements; - Refer Note 11 to the standaloneInd AS financial Statements;
(II) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;
(III) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the company.
For Patel & Jesalpura
Firm Registration No. 120802W
CA Hiren Patel Partner
Membership No. 132726
Date: 30h June 2020
ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT
Referred to in Paragraph 1 of our report on Other Legal and Regularity Requirements ofeven date on the accounts of Popular Estate Management Limited for the year ended on March31 2020.
1) In respect of its Property Plant & Equipments:
(a) The company has generally maintained proper records showing full particularsincluding quantitative details and situation of Property Plant & Equipments (PPE).
(b) As explained to us the PPE have been physically verified by the management atreasonable intervals during the year which in our opinion is reasonable having regard tothe size of the Company and nature of its PPE. No material discrepancies were noticed onsuch physical verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the Company.
2) In respect of its inventories:
(a) As explained to us the physical verification of the inventory has been conductedby the management at reasonable intervals during the year.
(b) In our opinion and according to the information and explanations given to us theprocedures of the physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
(c) The company has maintained proper records of inventory. As explained to us therewas no material discrepancies noticed on physical verification of inventory as compared tothe book records.
3) The Company has not granted any loans secured or unsecured to companies firmsLLPs or other parties covered in the register maintained under section 189 of theCompanies Act. Therefore reporting requirements as per the provisions of clause 3[iii)[(a) to (c)] of the order are not applicable to the company.
4) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the act with respectto the loans and investments made. The Company has not given any guarantee or provided anysecurity in connection with a loan to any person or other body corporate and accordinglythe question of commenting on compliance with the provisions in respect thereof does notarise.
5) In our opinion and according to the information and explanations given to us TheCompany has not accepted any deposits from the public in accordance with the provisions ofsection 73 to 76 of the Act and the rules framed there under.
6) As informed to us the Central Government has not prescribed the maintenance of costrecords under section 148 (1) of the Companies Act 2013.
7) In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of ourexaminations of the books of account the Company has been regular in depositingundisputed amounts with the appropriate authorities in respect of Statutory dues includingProvident Fund Investor Education and Protection Fund Employees' State Insurance Incometax Sales tax Wealth Tax Service tax Custom Duty Excise Duty GST Cess and any otherstatutory dues wherever applicable to it.
(b) Further as informed to us there are no undisputed dues payable for a period ofmore than six months as at 31st March 2020 from the date they became payable.
(c) According to the information and explanation given to us and on the basis of thebooks of accounts examined by us given below are the details of dues of income tax whichhave not been deposited on account of disputes and the forum where the dispute is pending:
|Nature of Statutes ||Nature of dues ||Disputed Amount (Rs. In lacs) ||Amt. deposited under dispute (Rs. In lacs) ||Period to which the amount relates (Financial year) ||Forum where dispute is pending |
|Income Tax Act ||Income Tax ||227.84 ||NIL ||2007-08 ||Gujarat High Court by Department. |
|Income Tax Act ||Income Tax ||387.28 ||NIL ||2008-09 ||Gujarat High Court by Department. |
|Income Tax Act ||Income Tax ||215.45 ||NIL ||2010-11 ||CIT( APPEAL)-9 Ahmedabad by Co. |
|Income Tax Act ||Income Tax ||100.00 ||NIL ||2013-14 ||CIT(APPEAL)-9 Ahmedabad by Co. |
|Income Tax Act ||Income Tax ||590.94 ||NIL ||2014-15 ||CIT(APPEAL)-9 Ahmedabad by Co. |
|Wealth Tax Act ||Wealth Tax ORDER U/S 18(1)(C) ||13.04 ||NIL ||2011-12 ||Commissioner of Wealth Tax (Appeal) |
8) According to the information and explanations given to us the company has notdefaulted in repayment of loans or borrowings to a financial institution banks ordebenture holders during the year. The Company did not have any outstanding loans orborrowings due to government.
9) 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 fix) of the Order is not applicable.
10) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
11) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
12) 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.
13) 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 standalone Ind AS financial statements as requiredby the applicable accounting standards.
14) According to the information and explanations given 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.
15) According to the information and explanations given to us and based on ourexaminations 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.
16) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3[xvi) of the order is not applicable.
|Date: 30-06-2020 ||For Patel & Jesalpura |
|Place: Ahmedabad ||Chartered Accountants |
| ||FRNo: 120802W |
| ||CA. Hiren U. Patel |
| ||Partner |
| ||M. No. 132726 |
| ||UDIN: 20132726AAAABQ2417 |
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls under Section 143(3)(i) of the Companies Act2013 ("the Act")
We have audited the internal financial controls over financial reporting of PopularEstate Management Limited ("the Company'') as of March 312020 in conjunction withour audit of the standalone Ind AS 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 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 ('ICAl'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
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 ICAl and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInfernal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 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 procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the Standalone Ind AS financial statements whetherdue 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 standalone Ind AS financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 312020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal
Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|Date : 30-06-2020 ||For Patel & Jesalpura |
|Place: Ahmedabad ||Chartered Accountants |
| ||FRNo: 120802W |
| ||CA. Hiren U. Patel |
| ||Partner |
| ||M. No. 132726 |
| ||UDIN: 20132726AAAABQ2417 |