The Members of
Satra Properties (India) Limited
Report on Indian Accounting Standards ("Ind AS") Financial Statements
We have audited the accompanying standalone Ind AS financial statements of SatraProperties (India) Limited ("the Company") which comprise the standaloneBalance Sheet as at 31st March 2019 the standalone Statement of Profit andLoss (including other comprehensive income) standalone Statement of Cash Flows and thestandalone Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas 'Ind AS standalone Financial Statements').
In our opinion and to the best of our information and according to the explanationsgiven to us Except for the effects of the matter described in the Basis for QualifiedOpinion paragraph the aforesaid standalone Ind AS standalone Financial Statements givethe information required by the Act in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thefinancial position of the Company as at 31st March 2019 and its Lossincluding other comprehensive income the changes in equity and its cash flows for theyear ended on that date.
Basis for Qualified Conclusion
1. We draw your attention to Note 39 to the Financial statement which states that thecompany has not provided interest for Rs.33.55 crores for the year ended 31stMarch 2019 and further company has reversed the interest provision of Rs.4.77 crores forthe period 1st February 2018 to 31st March 2018 on the basis of theduly authenticated Minutes of Meeting held with said lender's as described in aforesaidnote. As per said Minutes of Meeting bulks of the Loans were to be adjusted against aProject in one of the subsidiary. However said matter is under litigation and the Loansare carried in books without any Interest provisions. Consequently the loss for the yearis understated by Rs.38.32 crores and current liabilities is understated by Rs.38.32Crores.
2. We draw attention to Note 40 regarding amount of Rs.5 crores being received againstdisputed sale of shares of one of the subsidiary and the matter is currently sub-judiceand the same is shown as other current liability. We are unable to comment on the same.
3. Management has not considered any provision for impairment in respect of investmentsaggregating Rs.58.56 Crores in Satra Property Developers Private Limited wholly ownedsubsidiary whose accumulated losses substantially exceed its paid up capital. Consequentlythe loss for the Quarter and year is understated by Rs.58.56 crores and Investment isoverstated by Rs.58.56 Crores.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of 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 the ethicalrequirements that are relevant to our audit of the Ind AS 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 ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the 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 Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report and Corporate Governance but does not include the Ind ASfinancial statements and our auditor's report thereon. The above stated reports areexpected to be made available to us after the date of this auditor's report.
Our opinion on the Ind AS financial statements does not cover the other information andwe will not express any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements our responsibility isto read the other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the Ind ASfinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
When we read the above stated reports if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.
Management's Responsibility for the IndAS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act ("the Act") with respect to the preparation of thesestandalone Ind AS Financial Statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Standalone 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. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process
Auditor's Responsibilities for the Audit of the Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS 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 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 Ind AS 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 control 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 on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness 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 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 Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the Ind AS financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Ind AS financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Ind AS 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 Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
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 Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder;
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 purpose of our audit;
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
(c) The standalone Balance Sheet standalone Statement of Profit and Loss (includingother comprehensive income) the standalone Cash Flow Statement and standalone statementof changes in Equity dealt with by this Report are in agreement with the books of account;
(d) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph In our opinion the aforesaid Ind AS Financial Statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act read with the relevant rulesissued thereunder;
(e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act;
(f) With respect to adequacy of internal financial controls over financial reporting ofthe Company and the operating effectiveness of such controls refer to our separate reportin "Annexure B";
(g) As per information and explanation give to us the managerial remuneration for theyear ended 31st March 2019 has not been paid/provided by the Company to itsdirectors;
(h) With respect to the matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rule 2014 as amended 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 standalone Ind AS Financial Statements. Refer Note No. 30 to the Ind ASFinancial Statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at 31st March 2019;
iii. There has been no delay in transferring amounts which were required to betransferred to the Investor Education and Protection Fund by the Company during the yearended March 31st 2019.
For GMJ & Co.
Firm Registration Number: 103429W
Date : 30th May 2019
The Annexure referred to in paragraph 1 of the Independent Auditors' under "Reporton Other Legal and Regulatory Requirements" section of our report of even date to themembers of Satra Properties (India) Limited on the Ind AS financial statements as of andfor the year ended 31 March2019
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
b) According to the information and explanations given to us the Fixed Assets havebeen physically verified by the management during the year no material discrepancies werenoticed on such verification with book records. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and nature ofits assets;
c) According to the information and explanations given to us and on the basis of ourexamination of the records the company does not have any immovable property and hencethis paragraph is not applicable to the company.
(ii) The management has conducted physical verification of inventory at reasonableintervals during the year. In our opinion and according to the information andexplanations given to us the Company is maintaining proper records of inventory. Nomaterial discrepancies have been noticed on physical verification between physical stockand book records;
(iii) In respect of loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered under register maintained under section 189 of theCompanies Act;
a. In our opinion the terms and conditions on which the loans have been granted arenot prima facie prejudicial to the interest of the company;
b. The terms of arrangements do not stipulate any repayment schedule and the loans arerepayable on demand. Accordingly this paragraph is not applicable to the Company inrespect of repayment of the principal and interest amount.
c. There are no overdue amounts in respect of loans granted to the parties coveredunder register maintained under section 189 of the Companies Act.
(iv) In our opinion and according to the information and explanations given to us andbased on our examination of the records the Company has complied with the provisions ofsection 185 and 186 of the Companies Act In respect of loans investments guaranteesand security given if any.
(v) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 of the Act andother relevant provisions with regard to the deposits accepted from the public are notapplicable.
(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 Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained;
(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records the Company is generally regular in depositing withappropriate authorities the amounts deducted/accrued in the books of accounts in respectof undisputed statutory dues including Provident Fund employees' state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added tax cessand other statutory dues as applicable except for dues in respect of Service Tax Valueadded tax Dividend Distribution Tax Income Tax Works Contract Tax and TDS which havegenerally been regularly deposited during the year by the Company with the appropriateauthorities and there have been significant delays in few cases.
According to the information and explanations given to us except for Rs. 4028034/-on account of Goods and Service Tax Rs. 34772389/- on account of Dividend distributiontax Rs. 16497541/- on account of Income-tax (Including TDS) Rs. 26191910/- onaccount of Value added tax Rs. 10165816/- on account of service tax (including cess)no undisputed amounts payable in respect of Profession tax Customs duty Provident fundand other material statutory dues were in arrears as at 31st March 2019 for aperiod of more than six months from the date they became payable.
b. According to the information and explanations given to us following dues have notbeen deposited with the concerned authorities on account of dispute as at 31 March 2019:
|Name of statute ||Nature of the Dues ||Amount (Rs.) ||Period to which the amount related ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income tax ||6038750 ||A.Y. 2011-12 ||Income Tax Appellate Tribunal |
|Income Tax Act 1961 ||TDS ||4903749 ||A.Y. 2009-10 to A.Y. 2014-15 ||Assessing Officer/As per Traces |
(viii) In According to the information and explanations given to us except forRs.14840220/- on account of interest and principal payable to a financial institutionthe company has not defaulted in repayment of dues to banks and financial institution. TheCompany has extended the date of redemption of balance Non-Convertible Debentures by twoyear which/is now due for redemption 3rd April 2019 onwards. The Company doesnot have any loan or borrowings from the government or dues to debenture holders duringthe year.
(ix) In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or term loan or furtherpublic offer (including debt instruments) during the year.
(x) According to the information and explanations given to us no material fraud by thecompany or on the Company by its officer or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanation given to us and based on ourexamination of the records the Company has not paid/provided for managerial remuneration.Therefore paragraph 3 (xi) of the Order is not applicable
(xii) According to the information and explanations given to us the Company is not aNidhi Company. Therefore the provisions of clause 3(xii) of the Order are not applicableto the Company;
(xiii) According to information and explanations given us and based on our examinationof the records of the Company all transactions with the related parties are in compliancewith sections 177 and 188 of Companies Act wherever applicable and the details have beendisclosed in the IndAS Financial Statements etc. as required by the applicable accountingstandards;
(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 underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe company;
(xv) According to information and explanations given to us and based on our examinationof records of the Company the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3 (xv) of the Order is notapplicable;
(xvi) 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;
For GMJ & Co.
Firm Registration Number: 103429W
M. No. 039070
Date : 30th May 2019
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act
We have audited the internal financial controls over financial reporting of SatraProperties (India) Limited ("the Company") as of 31 March 2019 in conjunctionwith our audit of the Ind AS Financial Statements of the Company for the year ended onthat 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). 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 Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols overfinancial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the IndAS 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 Ind AS Financial Statements for external purposes in accordance withgenerally 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 Ind ASFinancial Statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASFinancial 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 31st March 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For GMJ & Co.
Firm Registration Number: 103429W
Date : 30th May 2019