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Prestige Estates Projects Ltd.

BSE: 533274 Sector: Infrastructure
NSE: PRESTIGE ISIN Code: INE811K01011
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VOLUME 30712
52-Week high 553.40
52-Week low 315.80
P/E 35.71
Mkt Cap.(Rs cr) 18,636
Buy Price 0.00
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Sell Price 0.00
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OPEN 452.35
CLOSE 457.00
VOLUME 30712
52-Week high 553.40
52-Week low 315.80
P/E 35.71
Mkt Cap.(Rs cr) 18,636
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Prestige Estates Projects Ltd. (PRESTIGE) - Auditors Report

Company auditors report

To the Members of Prestige Estates Projects Limited

REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

OPINION

We have audited the accompanying standalone Ind AS financial statements of PrestigeEstates Projects Limited ("the Company") which comprise the Balance sheet as atMarch 31 2021 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 then ended and notes to the Standalone Ind AS financial statementsincluding a summary of significant accounting policies and other explanatory information.

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 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021its profit including other comprehensive income its cash flows and the changes in equityfor the year ended on that 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’ sectionof our report. We are independent of the Company in accordance with the ‘Code ofEthics’ issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence obtained by us and other auditors in terms of their reportsreferred to in "Other Matter" paragraph below is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS financial statements.

EMPHASIS OF MATTER

We draw attention to Note 54 to the Standalone Ind AS financial statements for the yearended March 31 2021 which describes the management’s evaluation of COVID-19 impacton the future business operations and future cash flows of the Company and itsconsequential effects on the carrying value of its assets as at March 31 2021. In view ofthe uncertain economic conditions the management’s evaluation of the impact on thesubsequent periods is highly dependent upon conditions as they evolve. Our opinion is notmodified in respect of this matter.

We draw attention to Note 53 to the Standalone Ind AS financial statements where in itis stated that the Company has gross receivables of ` 923 million from a land owneragainst whom winding up petitions has been ordered by the Hon’ble High Court ofJudicature. Pending resolution of litigation against the land owner these receivables areclassified as recoverable by the Company based on rights under a Joint DevelopmentAgreement. Our opinion is not modified in respect of this matter.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS financial statements for the financialyear ended March 31 2021. 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. For each matter below ourdescription of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor’s responsibilities for the audit of the Standalone Ind AS financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the Standalone Ind AS financial statements. The resultsof our audit procedures including the procedures performed to address the matters belowprovide the basis for our audit opinion on the accompanying Standalone Ind AS financialstatements.

Key audit matters How our audit addressed the key audit matter
Revenue recognition from Contract with Customers (as described in note 2.6 31 and 52 of the standalone Ind AS financial statements)
In accordance with the requirements of Ind AS 115 Company’s revenue from sale of real estate inventory property (other than projects executed through joint development arrangements described below) is recognised at a point in time which is upon the Company satisfying its performance obligation and the customer obtaining control of the promised asset. Our audit procedures included among others the following:
For revenue contract forming part of joint development arrangements (‘JDA’) that are not jointly controlled operations the revenue from the development and transfer of constructed area/ revenue sharing arrangement and the corresponding land/ development rights received under JDA is measured at the fair value of the estimated construction service rendered to the land owner. Such revenue is recognised over a period of time in accordance with the requirements of Ind AS 115. • We read the accounting policy for revenue recognition of the Company and assessed compliance of the policy in terms of principles enunciated under Ind AS 115.
For contracts involving sale of real estate inventory property the Company receives the consideration in accordance with the terms of the contract in proportion of the percentage of completion of such real estate project and represents payments made by customers to secure performance obligation of the Company under the contract enforceable by customers. The assessment of such consideration received from customers involves significant judgment in determining if the contracts with customers involves any financing element. • We on a sample basis inspected the underlying customer contracts and assessed the management evaluation of determining revenue recognition from sale of real estate inventory property at a point in time in accordance with the requirements under Ind AS 115.
Ind AS 115 requires significant judgment in determining when ‘control’ of the property underlying the performance obligation is transferred to the customer. Further for projects executed through JDA significant estimate is undertaken by management for determining the fair value of the estimated construction service. • We understood and tested management process and controls around transfer of control in case of sale of real estate inventory property and further controls related to determination of fair value of estimated construction service rendered to the landowner in relation to projects executed through JDA.
As the revenue recognition involves significant estimates and judgement we regard this as a key audit matter. • We on a sample basis inspected the sale deed and handover documents evidencing the transfer of control of the property to the customer based on which revenue is recognised at a point in time.
• We on a sample basis inspected the underlying customer contracts to determine whether the contracts with customers involved any financing element.
• We assessed the disclosures made in accordance with the requirements of Ind AS 115.
For projects executed during the year through JDA on a sample basis:
• We obtained and examined the computation of the fair value of the construction service under JDA
• We obtained the joint development agreements entered into by the Company and compared the ratio of constructed area/ revenue sharing arrangement between the Company and the landowner as mentioned in the agreement to the computation statement prepared by the management.
• We compared the fair value of the estimated construction service to the project cost estimates and mark up considered by the management.
• We assessed the disclosures made in accordance with the requirements of Ind AS 115.
Assessing the recoverability of carrying value of Investment property and investment properties under construction (as described in note 2.14 2.15 2.17 5 and 54 of the standalone Ind AS financial statements)
As at March 31 2021 the carrying value of the Investment property is ` 17644 million (including properties under construction - ` 6242 million). The carrying value of the investment property is calculated using land costs construction costs interest costs and other related costs. The Company reviews on a periodical basis whether there are any indicators of impairment of such investment properties i.e. ensuring that its investment properties are carried at no more than their recoverable amount. Our audit procedures included among others the following:
We considered the assessment of carrying value of Investment property as a key audit matter due to significance of the balance and significant estimates and judgement involved in impairment assessment. • We assessed the Company’s valuation methodology and assumptions based on current economic and market conditions including effects of COVID-19 pandemic applied in determining the recoverable amount.
• We obtained and read the valuation report used by the Company’s management for determining the fair value (‘recoverable amount’) of the investment property.
• We considered the independence competence and objectivity of the external specialist involved by the management in determination of valuation.
• We assessed the Company’s valuation methodology applied and compared key property related data used as input with historical actual data.
• We assessed the key assumptions used in Group’s valuation including but not limited to discount rates cashflows etc.
• We compared the recoverable amount of the investment property to the carrying value in books.
• We assessed the disclosures made in the financial statements in this regard.
Assessing the recoverability of carrying value of Inventory (including advances paid towards land procurement) and Refundable deposit paid under JDA (as described in note 2.18 12 and 54 of the standalone Ind AS financial statements)
As at March 31 2021 the carrying value of inventory comprising of Work in progress and Stock of units in completed projects is ` 68798 million. Our audit procedures included among others the following:
The inventory is valued at the lower of the cost and net realisable value ("NRV"). The determination of the NRV involves estimates based on prevailing market conditions and taking into account the estimated future selling price cost to complete projects and selling costs. • We evaluated the design and operation of internal controls related to testing recoverable amounts with carrying amount of inventory and advances including evaluating management processes for estimating future costs to complete projects.
As at March 31 2021 the carrying value of land advance is ` 529_million and refundable deposit is ` 5221 million. Advances paid by the Company to the landowner/ intermediary towards outright purchase of land is recognised as land advance under other assets during the course of transferring the legal title to the Company whereupon it is transferred to land stock under inventories. For land acquired under joint development agreement the Company has paid Refundable deposits for acquiring the development rights. • We assessed the Company’s methodology based on current economic and market conditions including effects of COVID-19 pandemic applied in assessing the carrying value.
The aforesaid deposits and advances are carried at the lower of the amount paid/ payable and net recoverable value which is based on the management’s assessment including the expected date of commencement and completion of the project and the estimate of sale prices and construction costs of the project. • We obtained and tested the computation involved in assessment of carrying value including the NRV/ net recoverable value.
We identified the assessment of the carrying value of inventory and land advances/ deposits as a key audit matter due to the significance of the balance to the financial statements as a whole and the involvement of estimates and judgement in the assessment. • We made inquiries with management to understand key assumptions used in determination of the NRV/ net recoverable value.
For inventory balance:
• We compared the total projected budgeted cost to the total budgeted sale value from the project.
• We compared the NRV to recent sales in the project or to the estimated selling price including effects of COVID-19 pandemic applied in assessing the NRV
• We compared the NRV to the carrying value in books.
For land advance/ refundable deposits:
• We obtained and assessed the management assumptions based on current economic and market conditions including effects of COVID-19 pandemic relating to launch of the project development plan and future sales.
• We obtained status update from the management and verified the underlying documents for related developments in respect of the land acquisition and expected realization of deposit amount.
• We carried out external confirmation procedures on sample basis to obtain evidence supporting the carrying value of land advance and refundable deposits on sample basis.
Assessing impairment of Investments and loans and advances made by the Company in subsidiaries joint ventures and associated Companies (as described in note 2.20 7 and 54 of the standalone Ind AS financial statements)
As at March 31 2021 the carrying values of Company’s investment in subsidiaries joint ventures and associated Companies amounted to ` 15596 million. Further the Company has granted loans and advances to its subsidiaries joint ventures and associates amounting to ` 23779 million as at March 31 2021. Management reviews regularly whether there are any indicators of impairment of the investments and loans and advances by reference to the requirements under Ind AS. Our procedures in assessing the management’s judgement for the impairment assessment included among others the following:
• We examined the management assessment in determining whether any impairment indicators exist.
As regards investments made:
For cases where impairment indicators exist management estimated the recoverable amounts of the investments being higher of fair value less costs of disposal and value in use. Significant judgements are required to determine the key assumptions used in determination of fair value/ value in use. • We assessed the Company’s valuation methodology and assumptions based on current economic and market conditions including effects of COVID-19 pandemic applied in determining the recoverable amount.
We focused our effort on those cases with impairment indicators. As the impairment assessment involves significant assumptions and judgement we regard this as a key audit matter. • We obtained and read valuation report of underlying property of the investee entity if any basis which the management had determined the recoverable amount.
• We considered the independence competence and objectivity of the external specialist involved by the management if any in determination of valuation.
• We involved experts to review the assumptions used by the external specialists involved by the management where applicable.
• We compared the recoverable amount of the investment to the carrying value in books as at March 31 2021.
• We assessed the disclosures made in the financial statements regarding such investments.
As regards loans and advances granted:
• We obtained and considered management evaluation based on current economic and market conditions including effects of COVID-19 pandemic applied in determining the recoverability of loans and advances granted to its subsidiaries joint ventures and associate entities.
• We assessed the financial condition of entities to whom loans and advances were granted by obtaining the most recent audited financial statements of such entities.
• We performed inquiries with management on the project status and future business plan of entities to whom loans and advances were granted to evaluate their recoverability.
• We assessed the disclosures made in the financial statements regarding such loans and advances.
Accuracy and completeness of related party transactions (as described in note 51 of the standalone Ind AS financial statements)
The Company has undertaken transactions with its related parties in the normal course of business at arm’s length. These include making new or additional investments in its subsidiaries associates joint ventures and other related parties and lending and borrowing of Inter- corporate deposits (‘ICD’) to or from the related parties. Our audit procedures included among others the following:
We identified the accuracy and completeness of the said related party transactions as set out in respective notes to the financial statements as a key audit matter due to the significance of transactions with related parties during the year ended March 31 2021 and regulatory compliance thereon. • We obtained and read the Company’s policies processes and procedures in respect of identifying related parties evaluation of arm’s length obtaining approval recording and disclosure of related party transactions.
• We tested on a sample basis related party transactions with the underlying contracts and other supporting documents and for appropriate authorization and approval for such transactions.
• We 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 agreed the related party information disclosed in the financial statements with the underlying supporting documents on a sample basis.
Accuracy and completeness of the accounting classification and presentation of assets and liabilities (‘disposal group’) held for sale (as described in note 2.26 and 50 of the standalone Ind AS financial statements)
On November 9 2020 management of the Company had entered into a term sheet with certain acquirers for sale of Company’s direct/ indirect interest in certain commercial offices retail and hotel properties mall management and identified maintenance business (‘Transaction’). Our audit procedures included among others the following:
Pursuant to above the Company on or before March 31 2021 has signed definitive documents with the acquirers and transferred control for a portion of the assets/interests as contemplated in the Transaction resulting in net profit/(loss) before tax of ` (813) million. • We obtained and tested Company’s computation of profit/(loss) after tax including their evaluation applied in determining the accounting treatment and agreed with underlying supporting documents.
The Company has evaluated recognition measurement and disclosure requirements under the Indian Accounting Standard (Ind AS) 105 - Non-current Assets Held for Sale and Discontinued Operations as at March 31 2021. • We read minutes of board meetings (including applicable committee’s) shareholder meetings and minutes of meetings of those charged with governance in connection with the Transaction.
Given the magnitude of the transaction the complexity of the accounting and significant judgement involved in the assessment of requirements under Ind AS 105 we considered the accuracy and completeness of the accounting classification and presentation of disposal group held for sale to be a key audit matter. • We assessed the Company’s evaluation and judgement applied in recognition measurement and disclosure requirements under Ind AS 105 including evaluation of Discontinued Operations.
• We read the term sheet and relevant agreements in connection with the said Transaction.
• We evaluated the tax impacts provided by the management by engaging experts where applicable.
• We examined management’s assessment in determining whether any impairment indicators exist in connection with the disposal group classified as held for sale.
• We made inquiries with management to understand key assumptions used in determination of the fair value less costs to sell in relation to disposal group classified as held for sale.
• We compared the recoverable amount of the disposal group classified as held for sale to the carrying value in books.
• We assessed the disclosures made in the financial statements.

We have determined that there are no other key audit matters to communicate in ourreport.

OTHER INFORMATION

The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual report but does notinclude the Standalone Ind AS financial statements and our auditor’s report thereon.The annual report is expected to be made available to us after the date of thisauditor’s report.

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 identified above when it becomes availableand in doing so consider whether such other information is materially inconsistent withthe Standalone Ind AS financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE INDAS FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those charged with governance are also responsible for overseeing the Company’sfinancial reporting process.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE IND AS FINANCIALSTATEMENTS

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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However future events or conditions may cause theCompany to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the Standalone IndAS financial 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 for the financial year ended March 31 2021 and are therefore the key auditmatters. We describe these matters in our auditor’s report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

OTHER MATTER

We did not audit the financial statements and other financial information as regardsCompany’s share in profits of partnership firm/ limited liability partnershipinvestments (post tax) amounting to ` 469 million for the year ended March 31 2021. TheseInd AS financial statements and other financial information of the said partnership firm/limited liability partnership investments have been audited by other auditors whosefinancial statements other financial information and auditor’s reports have beenfurnished to us by the management. Our opinion on the Standalone Ind AS financialstatements in so far as it relates to the amounts and disclosures included in respect ofthese partnership firm/ limited liability partnership investments and our report in termsof sub-sections (3) of Section 143 of the Act in so far as it relates to the aforesaidCompany’s share of profits of partnership firm/ limited liability partnershipinvestments is based solely on the reports of such other auditors. Our opinion is notmodified in respect of this_matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure 1" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act 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 Statement of Cash Flows and Statement of Changes in Equitydealt with by this Report are in agreement with the 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) The first matter described in Emphasis of Matter paragraph above in our opinionmay have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;

(g) With respect to the adequacy of the internal financial controls with reference tothese Standalone Ind AS financial statements and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure 2" to this report;

(h) In our opinion the managerial remuneration for the year ended March 31 2021 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(i) 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 40 to theStandalone Ind AS financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts – Refer Note 30 to the Standalone Ind AS financial statements;

iii. Following are the instances of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company

Details of delay Date of payment Amount involved (`)

No of days

Delay in transfer of unpaid dividend to the fund Unpaid as on date of this report 31874 211 days as on date of this report

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Adarsh Ranka

Partner

Membership Number: 209567

UDIN: 21209567AAAADB5837

Place of Signature: Bengaluru India

Date: June 08 2021

ANNEXURE _ REFERRED TO IN PARAGRAPH _ UNDER THE HEADING "REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE

Re: Prestige Estates Projects Limited ("the Company")

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets comprising of investment propertyand property plant and equipment except for particulars of quantitative details incertain cases which the Company is in the process of updating.

(b) All property plant and equipment and investment property have not been physicallyverified by the management during the year but there is a regular program of verificationwhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management and based onthe examination of the registered sale deed/ transfer deed/ registered joint developmentagreements provided to us we report that the title deeds of immovable propertiesincluded in property plant and equipment and investment property are held in the name ofthe Company. Immovable properties of land and buildings whose title deeds have beenpledged as security for term loans and guarantees are held in the name of the Companybased on confirmations received by us from lenders.

(ii) The inventories held by the Company comprise stock of units in completed projectsand work in progress of projects under development. Having regard to the nature ofinventory the management has conducted physical verification of inventory by way ofverification of title deeds site visits conducted and certification of extent of workcompletion by competent persons at reasonable intervals during the year and no materialdiscrepancies were noticed on such physical verification.

(iii) (a) The Company has granted loans to fourteen parties covered in the registermaintained under section 189 of the Companies Act 2013. In our opinion and according tothe information and explanations given to us the terms and conditions of the grant ofsuch loans are not prejudicial to the Company's interest considering the interest chargedand/or furtherance of the business objectives of the Company. The Company has also madeinterest free loans to certain subsidiaries/ jointly controlled entity. According to theinformation and explanations given to us and having regard to management’srepresentation that the interest free loans are given to subsidiaries/ jointly controlledentity of the Company in the interest of the Company’s business the terms andconditions for such loans are not prima facie prejudicial to the interest of the Company.

(b) In respect of loans granted to parties covered in the register maintained underSection 189 of the Companies Act 2013 the principal and interest are repayable ondemand. The repayments of principal amounts and interest have been regular as perstipulations.

(c) There are no amounts of loans granted to companies firms or other parties listedin the register maintained under section 189 of the Companies Act 2013 which are overduefor more than ninety days.

(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the Company as applicable.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the construction of buildings/structures and other related activities and are of the opinion that prima facie thespecified accounts and records have been made and maintained. We have not however made adetailed examination of the same.

(vii) (a) Undisputed statutory dues including employees’ state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added taxgoods and service tax cess and other statutory dues have generally been regularlydeposited with the appropriate authorities however tax deducted at source and providentfund dues have not generally been regularly deposited with the appropriate authoritiesthough the delays in deposit have not been serious.

(b) According to the information and explanations given to us no undisputed dues inrespect of provident fund employees’ state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and service tax cessand other statutory dues which were outstanding at the year end for a period of morethan six months from the date they became payable.

(c) According to the records of the Company the dues of income- tax sales-taxservice tax duty of custom duty of excise value added tax and cess which have not beendeposited on account of any dispute are as follows:

Name of the statue Nature of dues Amount # (` In millions) Period to which the amount relates Forum where the dispute is pending
Customs Act 1962 Customs duty 7 2014-15 Commissioner (Appeals) – Customs Duty
Finance Act 1994 Service tax 30 Various High Court of Karnataka
Finance Act 1994 Service tax including penalties 259 July 2010-July 2012 Customs Excise and Service Tax Appellate Tribunal
Karnataka Value Added Tax Act Value added tax and interest 55 2007-2010 Deputy Commissioner of Commercial Taxes (Intelligence & Co-ordination) Bangalore
Karnataka Value Added Tax Act Value added tax and interest Nil April 2006-August 2007 Karnataka Appellate Tribunal
Kerala Value Added Tax Act Value added tax and interest 260 Various High Court of Kerala
Kerala Value Added Tax Act Value added tax 50 April 2009-March 2011 Assistant Commissioner (Works Contract) Ernakulam
Income Tax Act 1961 Income tax interest and_penalty 9 Various Commissioner of Income tax (Appeals)

# Net of ` 606 million paid under protest

(viii) In our opinion and according to the information and explanations given by themanagement and based on confirmations given by banks and financial institutions theCompany has not defaulted in repayment of loans or borrowing to a financial institutionbank or government or dues to debenture holders.

(ix) In our opinion and according to the information and explanations given by themanagement the Company has utilized the monies raised by way of term loans (representingloans with a repayment period beyond 36 months) and debt instruments for the purposes forwhich those were raised other than temporary deployment pending application of proceeds.The Company has not raised any monies by way of initial public offer or further publicoffer.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no material fraud by the Company or no materialfraud on the Company by the officers and employees of the Company has been noticed orreported during the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid/ provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards except fortransactions as mentioned in Note 51 (D) to the standalone Ind AS financial statements.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act_2013.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Adarsh Ranka

Partner

Membership Number: 209567

UDIN: 21209567AAAADB5837

Place of Signature: Bengaluru India

Date: June 08 2021

ANNEXURE Y TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE INDAS FINANCIAL STATEMENTS OF PRESTIGE ESTATES PROJECTS LIMITED

REPORT ON THE INTERNAL FINANCIAL

CONTROLS UNDER CLAUSE _I_ OF SUB_SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013_"THE ACT"_

We have audited the internal financial controls with reference to standalone Ind ASfinancial statements of Prestige Estates Projects Limited ("the Company") as ofMarch 31 2021 in conjunction with our audit of the standalone Ind AS financial statementsof the Company for the year 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 the 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 Companies Act 2013.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to these standalone Ind AS financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") and theStandards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both issued by ICAI. 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 with reference to these standalone Ind AS financial statements wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to these standalone Ind AS financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone Ind AS financial statements included obtaining anunderstanding of internal financial controls with reference to these standalone Ind ASfinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor’s judgement includingthe assessment of the risks of material misstatement of the 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 controlswith reference to these standalone Ind AS financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THESE STANDALONE IND ASFINANCIAL STATEMENTS

A company's internal financial controls with reference to standalone Ind AS financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to standalone Ind AS financial statements includes thosepolicies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONE IND ASFINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls with reference tostandalone Ind AS financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone Ind AS financial statements to future periods aresubject to the risk that the internal financial control with reference to standalone IndAS financial statements 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 adequate internal financialcontrols with reference to standalone Ind AS financial statements and such internalfinancial controls with reference to standalone Ind AS financial statements were operatingeffectively as at March 31 2021 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For S.R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm Registration Number: 101049W/E300004

per Adarsh Ranka

Partner

Membership Number: 209567

UDIN: 21209567AAAADB5837

Place of Signature: Bengaluru India

Date: June 08 2021

.