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Pushpanjali Realms & Infratech Ltd.

BSE: 538437 Sector: Infrastructure
NSE: PUSHPREALM ISIN Code: INE728W01012
BSE 05:30 | 01 Jan Pushpanjali Realms & Infratech Ltd
NSE 05:30 | 01 Jan Pushpanjali Realms & Infratech Ltd

Pushpanjali Realms & Infratech Ltd. (PUSHPREALM) - Auditors Report

Company auditors report

To the Members of PUSHPANJALI REALMS AND INFRATECH LIMITED

Report on the audit of the Standalone Financial Statements

1. Opinion

(a) We have audited the financial statements of PUSHPANJALI REALMS AND INFRATECHLIMITED ("the Company") which comprise the balance sheet as at March 31st 2019and the statement of Profit and Loss and statement of cash flows for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information. (hereinafter referred to as "theFinancial Statements").

(b) In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March312019 and profit/loss and its cash flows for the year ended on that date.

2. Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

3. Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

S. No. Key Audit Matter Auditor's Response
1. Revenues recognition of ‘Real Estate Projects' Our revenue testing included both testing of the Company's controls as well as substantive audit procedures targeted at ‘Real estate Projects'.
Revenues recognition for ‘Real estate Projects' is a key audit matter in the audit due to high level of estimation. Our Substantive testing focused on estimates applied by the management in the Accounting.
Revenue recognition of ‘Real estate Projects' includes management judgment in the form of estimates which are subject to management experience and expectations of future events. The most important judgment relates to the estimated total cost of the projects. Our Procedures included among other things the following:
- Ensured that the revenue recognition method applied was appropriate based on the terms of the arrangement.
- Total project revenue estimates to sale agreements including amendments as appropriate.
- We obtained and understanding of the processes and tested relevant controls which impact the revenue recognition.
- We assessed the reliability of management's estimates by comparing the actual results of ongoing projects with projected cost estimated by the management and project Architect.

4. Information other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read the other information and if we conclude that there is a materialmisstatement therein we will communicate the matter to those charged with governance andtake necessary action as per applicable laws and regulations.

5. Management's Responsibility for the Standalone 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 financial statements that give a true and fair view of the financial positionfinancial performance including cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. That Board of Directors' are also responsible for overseeing theCompany's financial reporting process.

6. Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate financial controls system in place and the operating effectiveness ofsuch 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 concern basisof accounting 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonable knowledgeable under of the financial statements may be influences. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would bereasonably be expected to outweigh the public interest benefits of such communication.

7. Basis for Qualification

7.1 The company has not produced the physical cash in hand of Rs. 18568910/- duringour audit period for our verification. In the absence of Physical verification actualcash in hand at the end of year could not be ascertained.

8. Qualified Opinion

In our opinion and to the best of our information and accordingly to the explanationgiven to us except for the possible effect of the matter described in the Basis forQualified opinion at paragraph 7.1 which highlight uncertainty impact of which iscurrently not ascertainable the financial statement give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principal generally accepted in India of the state of affairs of the company asat 31st March 2019 its loss and other financial information for the year ended as ondate.

9. Report on Other Legal and Regulatory Requirements

9.1 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 Companies Act 2013 we give in "Annexure A" a statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

9.2 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 and the statement of Cash Flowdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor's Report inaccordance 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 the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of 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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

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.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For ARUN NARESH & Co.

Chartered Accountants

FRN: 007127N

Sd/-

(Arun Kumar Jain)Partner

M. No. : 084598

Place: Dehradun

Date: 29/05/2019

The Annexure ‘A' referred to in Our Report of even date to the members ofPushpanjali Realms And Infratech Limited on the accounts of the company for the year ended31st March 2019.

On the basis of such checks as we considered appropriate and in terms of theinformation and explanations given to us we state that:

(i) (a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) Fixed assets have been physically verified by the management during the year atreasonable interval and as informed to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanation given to us and the records examinedby us title deed of immovable properties (land) of Rs. 1167370/- as shown in balancesheet is not registered in the name of to the company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable and adequate in relation tothe size of the Company and the nature of its business. No material discrepancies werenoticed on physical verification of inventory as compared to book records.

(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships or any other party covered in register maintained undersection 189 of the Companies Act 2013. Therefore requirement of clause iii(a) to iii(c) ofParagraph 3 of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany.

(iv) In our opinion and according to the information and explanation given to us thecompany has not advanced any loan to directors/to a company in which the Director isinterested to which provisions of section 185 of the Companies Act 2013 apply and hencenot commented upon.

In our opinion and explanation given to us the company has not granted any loan andadvance nor made any investment and not given guarantee or provided security to whichprovisions of section 186 of the Act apply and hence not commented upon.

(v) The Company has not accepted any deposits from the public.

(vi) As explained to us maintenance of cost records has not been prescribed by theCentral Government under Section 148(1) of the Act.

(vii) (a) According to the records of the company and information and explanationsgiven to us the Company has generally been regular in depositing undisputed statutorydues including Provident Fund employees state insurance (ESI) Income-Tax Sales TaxValue Added Tax (VAT) Wealth Tax Service Tax Custom duty Goods and Service Tax ExciseDuty Cess and other statutory dues applicable to it to the appropriate authoritiesexcept Income Tax Rs. 35504469/-(refer Note-8) and other statutory dues i.e. TDS Rs.13545114/- ESI 140602/- EPF Rs. 592131/- VAT Rs. 207011/- etc. (referNote-7).

(b) There was no undisputed amounts payable in respect of Provident Fund Employeesstate Insurance (ESI) Income-Tax Sales Tax Service Tax Custom Excise Duty ValueAdded Tax Goods and Service Tax cess and other statutory dues in arrears as at March31 2019 for a period of more than six months from the date they became payable except thefollowing:-

NAME OF STATUTE NATURE OF DUES PERIOD TO WHICH THE AMOUNT RELATES AMOUNT
INCOME TAX ACT 1961 Self-Assessment Income Tax Liability and Interest thereon 2016-17 12297820
2017-18 22334039
INCOME TAX ACT 1961 TDS u/s 192B 2017-18 4504217
TDS u/s 194J 2017-18 7500
TDS u/s 192B 2018-19( due upto 30/09/2018) 2396425
TDS u/s 194A 2018-19( due upto 30/09/2018) 78647
TDS u/s 194C 2018-19( due upto 30/09/2018) 1703707
TDS u/s 194H 2018-19( due upto 30/09/2018) 9000
TDS u/s 194J 2018-19( due upto 30/09/2018) 194475
LATE FEES U/S 234E 2018-19 40600
Interest on TDS 2017-18 600934
2018-19 54518
THE ESI & EPF ACT ESIC PAYABLE 2017-18 37431
2018-19 53085
PF PAYABLE 2017-18 100483
2018-19 236251
DVAT ACT 2004 VAT 2017-18 207011
CESS 2017-18 68582

(c) In our opinion and according to the information and explanations given to us therewere no dues in respect of income tax sales tax wealth tax or custom duty or excise dutyand cess that have not been deposited with the appropriate authorities on account ofdispute.

(viii) In our opinion and according to the information and explanations given to usthe company has not defaulted in repayment of dues to a financial institution banksgovernments or dues to debenture holders. Repayment of loan from bank (PNB) has beenregularized as per the reschedule terms of the revised sanctioned letter.

(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised any money by way of initial publicoffer further public offer (including debt instruments). The company has obtained termloan from bank (SBI) during the year which is applied for the purpose it was raised.

(x) To the best of our knowledge and belief and according to the information andexplanations given to us no material fraud by the company or on the company by itsofficers or employees was noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid /provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with schedule V to the Act.

(xii) The company is not a nidhi company. Therefore requirement of clause (xii) ofParagraph 3 of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany.

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

(xiv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year under reviewunder section 42 of the Companies Act 2013. Accordingly the provisions of clause 3 (xiv)of the Order are not applicable to the Company and hence not commented upon.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with director during the year.

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

For ARUN NARESH & Co.

Chartered Accountants FRN: 007127N Sd/-

(Arun Kumar Jain)Partner

M. No. : 084598

Place: Dehradun Date: 29/05/2019

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

i) (Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Pushpanjali Realms and InfratechLimited of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PUSHPANJALIREALMS AND INFRATECH LIMITED ("the Company") as of March 31 2019 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

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

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that:

(1) Pertain to the maintenance 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 authorizations of management and directors of the company; and

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

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 in adequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

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 31 2019 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 FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For ARUN NARESH & Co.

Chartered Accountants FRN: 007127N

Sd /-

(Arun Kumar JainjPartner

M. No. : 084598

Place: Dehradun

Date: 29/05/2019

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