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Shristi Infrastructure Development Corporation Ltd.

BSE: 511411 Sector: Infrastructure
NSE: PEERABASAN ISIN Code: INE472C01027
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NSE 05:30 | 01 Jan Shristi Infrastructure Development Corporation Ltd
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VOLUME 935
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OPEN 49.00
CLOSE 49.00
VOLUME 935
52-Week high 83.00
52-Week low 33.45
P/E
Mkt Cap.(Rs cr) 105
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shristi Infrastructure Development Corporation Ltd. (PEERABASAN) - Auditors Report

Company auditors report

To The Members of Shristi Infrastructure Development Corporation Limited

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying Standalone Financial Statements of ShristiInfrastructure Development Corporation Limited ("the Company") which comprisethe Balance Sheet as at 31st March 2020 the Statement of Profit and Loss (includingOther Comprehensive Income) the Statement of Changes in Equity and the Statement of CashFlows for the year then ended and notes to the standalone financial statements includinga summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effect of the matters described in the 'Basis ofQualified opinion' section of our report the aforesaid standalone financial statementsgive the information required by the Companies Act 2013 ('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 31st March2020 its profit including other comprehensive income changes in equity and its cashflows for the year ended on that date.

Basis for Qualified Opinion

Refer Note 31(16) of the Standalone Financial Statements regarding investments of Rs25631.90 lakh made by the Company in 4 subsidiaries and one joint venture company as at31st March 2020 in the absence of valuation report of an Independent Valuer we areunable to comment whether any provision for impairment in the value of these investmentsis required.

We conducted our audit of the Standalone Financial Statements in accordance with theStandards 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 financial statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ('ICAI') together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Standalone Financial Statements.

Emphasis of Matter

We draw attention to

a) Note 31(15) of the Standalone Financial Statements regarding regarding anarbitration dispute between Rishima SA Investments LLC Mauritius ("Claimant")and the Company in respect of which the Arbitration Tribunal has issued a Partial Award("Partial Award") and Final Award ("Final Award") in favour of theClaimant for payment of an amount of Rs 76100 Lakh with interest calculated till30.04.2019 amounting to Rs 1390 Lakh and in case the same cannot be enforced in any Courtor Tribunal a sum of Rs 16020 Lakh with interest calculated till 30th April 2019amounting to Rs 2621 Lakh towards the value of their investment in Sarga Hotel Pvt. Ltda subsidiary of the Company together with aggregate costs damages etc. of Rs 1808 Lakh.Pending outcome of the enforcement proceedings before Hon'ble High Court of Delhi andbased on the legal opinion obtained by the Company the management does not considernecessary any provision in this respect. Our opinion is not modified in respect of thismatter.

b) Note 31(17) of the Standalone Financial Statements which explains the management'sassessment that there is no significant impact of COVID-19 pandemic on the Statement forthe year ended 31st March 2020. 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 financial statements of the current year.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
A Measurement of revenue recorded from sale of residential units Our audit procedures on revenue recognition included the following:
Revenues from sale of residential units represent the largest porti on of the total revenues of the Company. Revenue is recognised upon transfer of control of residential units to customers for an amount which reflects the consideration the Company expects to receive in exchange for those units. The point of revenue recognition is normally on handover of the unit to the customer on completi on of the project. The Company records revenue at a point in time upon transfer of control of residential units to the customers. • Evaluation of the Company's accounting policies for revenue recognition on sale of residential units are in line with the applicable accounting standards and their application to customer contracts including consistent application;
Considering the volume of the Company's projects and the competitive business environment there is a risk of revenue being overstated (for example through premature revenue recogniti on i.e. recording revenue prior to handover of unit to the customers) or understated (for example through improperly shifting revenues to a later period) in order to present consistent financial results. Since revenue recognition has direct impact on the Company's profitability there is a possibility of the Company being biased hence this is considered as a key audit matter. Refer Notes 2.9 and 31(8) to the Standalone Financial Statements • Evaluati on of the design and implementation and testing the operating effectiveness of key controls around approvals of contracts milestone billing handover letters and controls over collection from customers;
• For samples selected verifying the underlying documents - handover letter sale agreement signed by the customer and the collections;
• Cut-off procedures for recording of revenue in the relevant reporting period; and
• Considered the adequacy of the disclosures in notes to the standalone financial statements in respect of recognising revenue for residential units.

Information Other than the Standalone financial statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe Standalone Financial Statements and our auditors' report thereon. The annual report isexpected to be made available to us after the date of this auditor's report.

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.

When we read the annual report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

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 includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting 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 judgements 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 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 Responsibilities 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 judgment 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 accounti ng 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. (A) 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) Except for the possible effect of the matters described in the 'Basis of Qualifiedopinion' section of our report in our opinion the aforesaid Standalone FinancialStatements comply with the Accounting Standards specified under Section 133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended.

(e) The matter described in the Basis for Qualified Opinion paragraph and Emphasis ofMatter paragraph to this report in our opinion may have an adverse effect on thefunctioning of the Company;

(f) On the basis of the written representations received from the Directors as on31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31stMarch 2020 from being appointed as a director in terms of Section164(2) of the Act.

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Financial Statements and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB" to this report;

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note No. 31.1 to the standalonefinancial statements.

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 to theInvestor Education and Protection Fund by the Company.

(B) 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 read with Schedule V to the Act.

For G.P. Agrawal & Co.
Chartered Accountants
Firm's Registration No. 302082E
CA. Rakesh Kumar Singh
Partner
Place of Signature: Kolkata Membership No. 066421
Date: 27th July 2020 UDIN: 20066421AAAAFU1942

"Annexure A" to the Independent Auditor's Report

Statement referred to in paragraph 1 under 'Report on Other Legal & RegulatoryRequirements' of our report of even date to the members of Shristi InfrastructureDevelopment Corporation Limited on the standalone financial statements for the year ended31st March 2020:

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

b) The fixed assets have been physically verified by the management during the year.Based on our review no material discrepancy was noticed on such verification and theperiodicity of such physical verification is reasonable having regard to the size of theCompany and nature of its assets.

c) The title deeds of immovable properties are held in the name of the Company.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year. No discrepancies have been noticed on physical verification ofthe inventory as compared to book records.

(iii) The Company has granted loans to 8 companies (including 6 subsidiaries and oneassociate) covered in the register maintained under section 189 of the Act.

a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records except for loans granted to fivecompanies are interest free other terms and conditions on which the loans had beengranted were not prima facie prejudicial to the interest of the Company.

b) According to the information and explanations given to us and based on the auditprocedures conducted by us the unsecured loans granted to the companies and the interestthereon are repayable on demand. The borrowers have been regular in payment of principaland interest as demanded.

c) There are no overdue amounts in respect of unsecured loan granted to companies(including subsidiaries).

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act with respectto investments made and guarantees given. Further there are no loans and security givenin respect of which provisions of Sections 185 and 186 of the Act are applicable.

(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 indepositing undisputed statutory dues including provident fund employees' state insuranceincome-tax goods and service tax custom duty cess and any other statutory dues to theextent applicable with appropriate authoriti es and no undisputed amounts payable inrespect of the aforesaid dues were outstanding as at 31st March 2020 for a period of morethan six months from the date of becoming payable.

b) The disputed statutory dues aggregating to Rs 1835.33 lakh that have not beendeposited on account of matters pending before appropriate authorities are as under:

Sl. No. 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
4 Finance Act 1994 Service Tax F.Y. 2011-12 to 2014-15 712.77# Commissioner Central Tax CGST & CX Kolkata North Commissionerate
5 Employees' State Insurance Act 1948 Employee State Insurance F.Y. 2005-06 -2009-10 123.55@ Recovery Officer

* Payment of Rs 37.54 lakh has been made under protest against this demand.

# Payment of Rs 51.73 lakh has been made under protest against this demand.

@ Payment of Rs 15.00 lakh has been made under protest against this demand.

(viii) According to the information and explanations given to us and as per recordsexamined by us 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 initial 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) The provisions of clause 3 (xii) of the Order regarding Nidhi Company are notapplicable to the Company and hence not commented upon.

(xiii) Based upon the audit procedures performed and the information and explanationsgiven by the management transactions with the related parties are in compliance withsection 177 and 188 of the Act where applicable and details of such transactions have beendisclosed in the financial statements as required by the applicable accounting 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.

(xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the Company has not entered into any non-cash transactions withdirectors or persons connected with them. Accordingly clause (xv) of paragraph 3 of thesaid order is not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 and accordingly the provisions of clause 3 (xvi) of the Order arenot applicable to the Company and hence not commented upon.

For G.P. Agrawal & Co.
Chartered Accountants
Firm's Registrahon No. 302082E
CA. Rakesh Kumar Singh
Partner
Place of Signature: Kolkata Membership No. 066421
Date: 27th July 2020 UDIN: 20066421AAAAFU1942

"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 31stMarch2020 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.

Auditors' Responsibility

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 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 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.

Opinion

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 31stMarch 2020 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 G.P. Agrawal & Co.
Chartered Accountants
Firm's Registrafion No. 302082E
CA. Rakesh Kumar Singh
Partner
Place of Signature: Kolkata Membership No. 066421
Date: 27th July 2020 UDIN: 20066421AAAAFU1942

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