To The Members of Shristi Infrastructure Development Corporation Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of ShristiInfrastructure Development Corporation Limited ("the Company") whichcomprise the Balance Sheet as at 31st March 2019 the Statement of Profit and Loss(including Other Comprehensive Income) the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and a summary of the significantaccounting policies and other explanatory information (herein after referred to as"standalone financial statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (Rs. the Act') in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards specified under Section 133of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended(Rs. the Ind AS') and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2019 and its profit totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
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 standalone financialstatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (Rs. ICAI')together with the ethical requirements that are relevant to our audit of the standalonefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Note 31.15 of the Statement which describe the uncertaintyrelating to outcome of an arbitration dispute between Rishima SA Investments LLC Mauritius ("Claimant") and the Company in respect of which the Arbitrati on Tribunalhas issued a Parti al Award ("Award") in favour of the Claimant for payment ofan amount of Rs. 76100 Lakh calculated till 31st March 2019. The Company is in processof filing an appeal to set aside the Award and challenge its enforceability in the IndianCourts.
Our opinion is not modified in respect of above matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter ||How our audit addressed the key audit matter |
|Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) ||Our procedures in relation to revenue recognition for those contracts included: |
|The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. || Understanding and evaluating the design and testing the operating effectiveness of controls in respect of revenue recognition |
|Refer Notes 2.9 and 31(8) to the Standalone Financial Statements || Reading the underlying contracts with customers and advances received |
| || Assessing the appropriateness of information such as allotment letter and stage of completion of the project including expected completion date completion certificate and possession letter used by the Management to determine the duration of the project |
| || Evaluating the assumptions used by the Management in ascertaining performance obligation is satisfied over time or at a point in time in accordance with Ind AS 115. |
| || Selected a sample of agreements and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price satisfaction of performance obligation at a point of time and in recording and disclosing revenue in accordance with the new revenue accounting standard. |
| ||Based on the above procedures performed we did not find any significant exceptions in revenue recognized on transitioning to Ind AS 115 Revenue from contracts with customers. |
Information Other than the Standalone 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 andShareholder's Information but does not include the standalone financial statements andour auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Ind AS. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue 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.
That Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibility for the audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial 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 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 standalone 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 standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
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 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 of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inthe 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 Other ComprehensiveIncome the Statement of Changes in Equity and the Statement of Cash Flow dealt with bythis Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with the IndAS 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
(g) With respect to other matters to be included in the Auditor's Report in accordancewith 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 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 legations on its financial positionin its standalone financial statements - Refer Note No. 31.1 to the standalone financialstatements.
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
| ||For G.P. Agrawal & Co. |
| ||Chartered Accountants |
| ||Firm's Registra on No. 302082E |
| ||(CA. Ajay Agrawal) |
|Place of Signature: Kolkata ||Partner |
|Date: 26th May 2019 ||Membership No. 17643 |
"Annexure A" to the Independent Auditor's Report
Statement referred to in paragraph 'Report on Other Legal & RegulatoryRequirements' of our report of even date to the members of Shristi InfrastructureDevelopment Corporati on Limited on the standalone financial statements for the year ended31st March 2019:
(i) a) The Company has maintained proper records showing full parti culars includingquantitative details and
situation of its fixed assets.
b) The fixed assets have been physically verified by the management during the year. Tothe best of our knowledge no material discrepancy was noticed on such verificafion and inour opinion the periodicity of such physical verification is reasonable having regard tothe size of the Company and nature of its assets.
c) According to the informafion and explanations given to us and on the basis of ourexaminafion of the records of the Company the fitle deeds of immovable properfies areheld in the name of the Company.
(ii) The inventories have been physically verified during the year by the management atreasonable intervals and no material discrepancies were noticed on such physicalverificafion.
(iii) The Company has granted loans to 10 subsidiaries covered in the registermaintained under section 189 of the Act.
a) In our opinion and as per informati on and explanati ons given to us except forloans granted to those subsidiaries (except one subsidiary) are interest free other termsand conditions on which the loans had been granted were not prima facie prejudicial tothe interest of the Company.
b) In the case of the loans granted to the subsidiaries listed in the registermaintained under section 189 of the Act the loans are repayable on demand and have beenrepaid as and when demanded.
c) There are no overdue amounts in respect of the loan granted to a subsidiaries listedin the register maintained under section 189 of the Act.
(iv) In our opinion and according to the information and explanations given to usthere are no loans guarantees and securities granted in respect of which provisions ofSection 185 and 186 of the Act are applicable. Based on our audit procedures performed andaccording to information and explanations given by the management the Company hascomplied with provisions of section 186 of the Act in respect of investments made.
(v) The Company has not accepted any deposits within the meaning of section 73 to 76 orany other relevant provisions of the Act and the rules framed there under. The directivesissued by the Reserve Bank of India are not applicable to the Company.
(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where pursuant to the rules made by the Central Government the maintenance ofcost records has been prescribed under section 148(1) of the Act and are of the opinionthat prime facie the prescribed accounts and records have been made and maintained. Wehowever as not required have not made a detailed examination of such records.
(vii) a) According to the information and explanations given to us and based on ourexamination of the records of
the Company as provided to us the Company is regular in depositing undisputedstatutory dues including provident fund employees' state insurance income-tax goods andservice tax custom duty cess and any other statutory dues to the extent applicablewith appropriate authoriti es and no undisputed amounts payable in respect of theaforesaid dues were outstanding as at 31st March 2019 for a period of more than sixmonths from the date of becoming payable.
b) The disputed statutory dues aggregating to Rs. 999.01 lakh that have not beendeposited on account of matters pending before appropriate authorities are as under:
|Name of the Statute ||Nature of dues ||Period to which pertain ||Amount (Rs. in lakh) ||Forum where the dispute is pending |
|1 ||Income Tax Act 1961 ||Income tax ||F.Y. 2014-15 ||187.70* ||Commissioner of Income Tax (Appeals) |
|2 ||West Bengal Sales Tax Act ||Work Contract Tax ||F.Y. 2009-10 & 2011-12 ||253.44 ||West Bengal Appellate & Revisional Board |
|3 ||West Bengal Sales Tax Act ||Work Contract Tax ||F.Y. 2012-13 to 2015-16 ||557.87 ||Joint Commissioner of Commercial Taxes |
* Payment of Rs. 37.54 lakh has been made under protest against this demand.
(viii) The Company has not defaulted in repayment of dues to banks financialinstitutions and debenture holders. The Company has not taken any loan from Government.
(ix) The Company has not raised any money by way of initi al public offer or furtherpublic offer (including debt instruments) during the year. On the basis of our examinationof records and according to the information and explanations given to us money raised byway of term loans have been applied for the purpose for which the loans were obtained.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.
(xi) According to the information and explanations given 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) In our opinion the Company is not a Nidhi Company. Therefore clause (xii) ofparagraph 3 of the said Order is not applicable to the Company.
(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 section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(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 any non-cashtransactions with directors or persons connected with them. Accordingly clause (xv) ofparagraph 3 of the said order is not applicable to the Company.
(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 G.P. Agrawal & Co. || |
| ||Chartered Accountants || |
| ||Firm's Registra on No. 302082E || |
| ||(CA. Ajay Agrawal) || |
|Place of Signature: Kolkata ||Partner || |
|Date: 26th May 2019 ||Membership No. 17643 || |
"Annexure B" to the Independent Auditor's Report
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ShristiInfrastructure Development Corporation Limited ("the Company") as of 31st March2019 in conjunction with our audit of the standalone financial statements of the Companyfor 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding 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 Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting were established and maintained and if such controls operatedeffectively 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 judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
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 a re 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 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting 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 issued by theICAI.
| ||For G.P. Agrawal & Co. |
| ||Chartered Accountants |
| ||Firm's Registration No. 302082E |
| ||(CA. Ajay Agrawal) |
|Place of Signature: Kolkata ||Partner |
|Date: 26th May 2019 ||Membership No. 17643 |