To the Members of Supreme Holdings & Hospitality (India) Limited
Report on the Audit of Standalone Ind-AS Financial Statements
We have audited the Standalone Ind-AS financial statements of Supreme Holdings &Hospitality (India) Limited('the Company') which comprise the balance sheet as at March31 2019 and the statement of profit and loss statement of changes in equity andstatement of cash flows for the year then ended and notes to the Standalone Ind ASfinancial statements including a summary of the significant accounting policies and otherexplanatory information (hereinafter referred to as 'the Standalone Ind AS financialstatements').
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019and profit changes in equity and its cash flows for the year ended on that date.
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 theStandalone Ind AS Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the Standalone Ind AS financial statements under the provisions of the Companies Act2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS financial statements for the financialyear ended March 31 2019. These matters were addressed in the context of our audit of theStandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.
|Key audit matters ||How our audit addressed the key audit matter |
|Revenue recognition for real estate projects (as described in note 2 (i) to the standalone Ind AS financial statements) |
|The Company has adopted Ind AS 115 - Revenue from ||Our audit procedures included: |
|Contracts with Customers mandatory for reporting periods beginning on or after April 1 2018. || We have read the Company's revenue recognition accounting policies and assessed compliance of the policies with Ind AS 115; |
|The application of Ind AS 115 has impacted the Company's accounting for recognition of revenue from real estate projects which is now being recognised at over the time upon the Company satisfying its performance obligation and the customer obtaining control of the underlying asset. || We tested the computation of the adjustment to retained earnings balance as at April 1 2018 in view of adoption of Ind AS 115; |
| || |
|Considering application of Ind AS 115 involves significant judgment in identifying performance obligations and determining when 'control' of the asset underlying the performance obligation is transferred to the customer and the transition method to be applied the same has been considered as key audit matter. || We obtained and understood revenue recognition process including identification of performance obligations and determination of transfer of control of the asset underlying the performance obligation to the customer; |
| || We tested revenue related transactions with the underlying customer contracts sale deed and handover documents evidencing the transfer of control of the asset to the customer based on which revenue is recognized; |
| ||We assessed the revenue-related disclosures included in Note 2 (i) to the financial statements. |
|Related party transactions (as described in note 30 to the standalone Ind AS financial statements) |
|The Company has undertaken transactions with its related parties in the ordinary course of business at arm's length. These include transactions in the nature of Joint Development Agreement as disclosed in note 30 to the standalone Ind AS financial statements. ||Our procedures/ testing included the following: |
|Considering the significance of transactions with related parties and regulatory compliances thereon related party transactions and its disclosure as set out in respective notes to the financial statements has been identified as key audit matter. || Obtained and read the Company's policies processes and procedures in respect of identifying related parties obtaining approval recording and disclosure of related party transactions; |
| || Read minutes of shareholder meetings board meetings and minutes of meetings of those charged with governance in connection with Company's assessment of related party transactions being in the ordinary course of business at arm's length; |
| || Tested related party transactions with the underlying contracts confirmation letters and other supporting documents; |
| ||Agreed the related party information disclosed in the financial statements with the underlying supporting documents. |
Responsibilities of Management for the Ind AS 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 Standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theaccounting standards specified under section 133 of the Act.
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 accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Ind-AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.
In preparing the Standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing 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 for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. 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 Ind AS financial statements.
As part of an audit in accordance with SA's we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going 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 exists we are required to drawattention in our auditor's report to the related disclosures in the Standalone Ind ASfinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions 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 Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone Ind AS financialstatements for the year ended March 31 2019 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 Companies Act 2013 we give in the "Annexure A'' a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
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 Cash Flow Statementdealt with by this Report are in agreement with the books of account;
d) In our opinion the aforesaid Standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;
e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct;
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure B";
g) 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 does not have any pending litigations which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at March 31 2019.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the year ended March 31 2019.
| ||For K C P L And Associates LLP |
| ||Chartered Accountants |
| ||Firm Reg. No.: 119223W / W100021 |
| ||Rakesh Agarwal |
|Place: Mumbai ||Partner |
|Date: May 30 2019 ||Mem. No.: 170685 |
Annexure A' to Auditors Report
Annexure referred to in Independent Auditors' Report to the members of SupremeHoldings & Hospitality (India) Limited ("the Company") on the financialstatements for the year ended 31st March 2019 we report that:
(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The Company has a phased programme of physical verification of fixed assets whichin our opinion is reasonable having regard to the size of the Company and the nature ofits assets. In accordance with this programme the fixed assets of the Company werephysically verified by the Management during the year and no material discrepancies werenoticed on such verification.
c) As per information and explanation provided to us and on the basis of ourexamination of records produced to us for verification by the Company the title deeds ofimmovable properties are held in the name of the Company.
(ii) The inventories have been physically verified by the management at reasonableinterval and discrepancies noticed on verification between physical stock & book stockwere not material and have been properly dealt with in the books of account.
(iii) As informed and explanation provided to us the Company has not granted anyloans secured or unsecured to the companies firms limited liabilities partnerships orother parties covered in the register maintained under section 189 of the Companies Act2013 hence clause (iii) (a) (iii) (b) and (iii) (c) of the Order are not applicable tothe Company.
(iv) According to the information and explanations provided to us the Company has notgiven any loan or guarantee or security to/ for any person or entity covered underprovisions of section 185 of the Companies Act 2013 after the enactment thereof.
According to information and explanation provided to us loans given security providedand investments done by the Company are in compliance with the provisions of section 186of the Companies Act 2013 wherever applicable.
(v) As per the information and explanation given to us the Company has not acceptedany deposits from the public and consequently the directives issued by the Reserve Bankof India the provision of sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 and rules made there under are not applicable.
(vi) The maintenance of cost records has been specified by the Central Government undersection 148(1) of the Companies Act 2013. We have broadly reviewed the cost recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014as amended prescribed by the Central Government under sub-section (1) of Section 148 ofthe Companies Act 2013 and are of the opinion that prima facie the prescribed costrecords have been made and maintained. We have however not made a detailed examinationof the cost records with a view to determine whether they are accurate or complete.
(vii) a) According to the information and explanation given to us and on the basis ofour examination of records of the Company amounts deducted/ accrued in the books ofaccounts in respect of undisputed statutory dues including provident fund employees stateinsurance income-tax sales tax service tax duty of custom duty of excise value addedtax Goods and Service Tax cess and any other statutory dues have been regularlydeposited during the year by the Company with the appropriate authorities.
According to the information and explanation given to us no undisputed amounts payablein respect of provident fund employees state insurance income-tax sales tax servicetax Goods and Service Tax duty of custom duty of excise value added tax cess and anyother statutory dues were in arrear as at 31st March 2019 for a period of morethan six months from the date they became payable.
b) According to the information and explanation given to us and on the basis of ourexamination of books of accounts there are no dues of income tax sales tax service taxGoods and Service Tax duty of custom and duty of excise and value added tax as at the endof financial year which have not been deposited on account of any dispute.
(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowing to financial institutions bank governmentand dues to debentures holders wherever availed.
(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 further public offer orTerm loan during the year hence clause (ix) of the Order are not applicable to theCompany.
(x) According to information and explanation given to us no fraud by the Company or onthe Company by its officers or employee has been noticed or reported during the course ofour audit.
(xi) In our opinion and according to the information and explanations given to us theCompany has provided or paid managerial remuneration in terms of provisions of section 197read with Schedule V of the Companies Act 2013.
(xii) The company is not a Nidhi Company hence clause (xii) of the Order is notapplicable.
(xiii) In our opinion and according to the information and explanations provided to usall the transactions with related parties are in compliance with section 177 and 188 ofthe Companies Act 2013 wherever applicable and the details has been disclosed in thefinancial statements etc. as required by the applicable accounting standards.
(xiv) In our opinion and according to the information and explanations provided to usthe Company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures under section 42 of the Companies Act 2013 henceclause (xiv) of the Order is not applicable.
(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith him thus provision under section 192 of the Companies Act 2013 are not applicableat Company hence clause (xv) of the Order is not applicable.
(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of Reserve Bank of India Act1934.
| ||For K C P L And Associates LLP |
| ||Chartered Accountants |
| ||Firm Reg. No.: 119223W / W100021 |
| ||Rakesh Agarwal |
|Place: Mumbai ||Partner |
|Date: May 30 2019 ||Mem. No.: 170685 |