Vijay Shanthi Builders Ltd.
|BSE: 523724||Sector: Infrastructure|
|NSE: VIJSHAN||ISIN Code: INE806F01011|
|BSE 00:00 | 22 Oct||Vijay Shanthi Builders Ltd|
|NSE 05:30 | 01 Jan||Vijay Shanthi Builders Ltd|
|BSE: 523724||Sector: Infrastructure|
|NSE: VIJSHAN||ISIN Code: INE806F01011|
|BSE 00:00 | 22 Oct||Vijay Shanthi Builders Ltd|
|NSE 05:30 | 01 Jan||Vijay Shanthi Builders Ltd|
The Members of
Vijay Shanthi Builders Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying Standalone financial statements of Vijay ShanthiBuilders Limited (the Company) which comprise the balance sheet as at 31 March 2019 thestatement of profit and loss (including other comprehensive income) the statement ofchanges in equity and the cash flow statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information (herein after referredto 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the financialposition of the Company as at 31st March 2019and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear 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 theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
EMPHASIS OF MATTERS
We draw attention to:
I. The Company has adopted selective accounting policy by deviating from themeasurement principles laid down in Indian Accounting Standards (Ind AS) in respect ofrevenue recognition in the matter of its projects- Boulevard and The Art . In this regardthe contract is identified transaction price is determined & performance obligationhas been satisfied. However the Company follows the policy of recognising the revenueupon handing over the possession of flat to the customers.
II. Refer No.18 (a) (ii) to the standalone Ind AS financial Statements: In absence ofconfirmation from the concerned banks we are unable to comment about the correctness ofbalances grouped under Bank Accounts which amounts to Rs.3.04/- lakhs.
Our opinion is not modified in respect of the matters mentioned above.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined that there are no key audit matters to communicate in our report.
The Company s management and Board of directors are responsible for the otherinformation. The other information comprises the information included in the Company sannual report but does not include the financial statements and our auditor s reportthereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in this regard
RESPONSIBILITIES OF MANAGEMENT FOR THE FINANCIAL STATEMENTS
The Company s management and Board of Directors are responsible for the matters statedin section 134(5) of the Companies Act 2013 (the Act) with respect to the preparation ofthese financial statements that give a true and fair view of the state of affairs changesin equityand cash flows of the Company in accordance withthe accounting principlesgenerally accepted in India including the Indian accounting Standards (Ind AS) specifiedunder section 133 of the Act. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud orerror.
In preparing the financial statements management and Board of directors areresponsible for assessing the Company s ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to doso.
Board of Directors is also responsible for overseeing the Company s financial reportingprocess
AUDITOR S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor s report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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.
Report on Other Legal and Regulatory Requirements
1. As required by Section 197(16) of the Act we report that the Company has providedremuneration to its directors during the year which in accordance with the provisions ofand limits laid down under Section 197 read with Schedule V to the Act.
2. As required by the Companies (Auditor s Report) Order 2016 (the Order) issued bythe Central Government of India in terms of sub-section (11) of section 143 of the Act wegive in the Annexure A a statement on the matters specified in the paragraph 3 and 4 ofthe order.
3. 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 financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015as amended except Indian Accounting standard 19 -Employee Benefits where the company has not accounted for the provision for Gratuity onthe basis of Actuarial valuation certificate but the Company recognisedRs.25 lakhs towardsGratuity in the statement of profit & loss as per the management decision.
(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 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 ; and
(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 and as amendedin the Companies (Audit and Auditors) Amendment Rules2017 in our opinion and to the bestof 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 27.1 to the standaloneInd AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. The below mentioned amounts which were required to be transferred to the InvestorEducation and Protection Fund have not been transferred by the Company.
ANNEXURE - A TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in Independent Auditors Report to the members of the Companyon the standalone Ind AS financial statements for the year ended 31 March 2019 we reportthat:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant & equipment.
(b) As explained to us all the property plant & equipment have not beenphysically verified by the management during the year but there is a regular programme ofverification which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. No material discrepancies were noticed on such verification
(c) According to their information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in property plant & equipment are not held in the name of the Company asmentioned below:
(ii) As explained to us the inventory has been physically verified at reasonableintervals during the year by the management. In our opinion the frequency of verificationis reasonable. The procedures of physical verification of inventories followed by themanagement are reasonable and adequate in relation to the size of the company and thenature of its business. No material discrepancy noticed on verification between thephysical stocks and the book records.
(iii) In respect of loans in the nature of project advances/trade credits granted bythe Company to two companies and one proprietorship firm covered in the registermaintained under section 189 of the Companies Act2013 according to the information andexplanations given to us:
(a) The loan granted is repayable on demand. The loan is given interest free which isnot prima facie prejudicial to the interest of the Company considering Company s economicinterest in such entity.
(b) We are informed that the Company has demanded repayment of such loans during theyear and the same have been repaid as per the instruction. Hence there has been no defaulton the part of the parties to whom the money has been lent.
(c) There is no overdue amount in respect of the loans granted to such Companies firmsor other parties.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(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 section 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of deposits) Rules2015 withregard to the deposits accepted from the public are not applicable.
(vi) We have broadly reviewed the books of accounts and records maintained by thecompany pursuant to the rules prescribed under section 148(1) of the Act for maintenanceof cost records in respect of materials labour and other items and are of the opinionthat prima facie the prescribed accounts and records have been made and maintained.However we have not made a detailed examination of records.
(vii)(a) According to the information and explanations given to us and on the basis ofour examination of the records of the company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees StateInsurance Income-tax Goods and Service tax duty of customs cess and other materialstatutory dues have not been regularly deposited during the year by the Company with theappropriate authorities.
The undisputed amounts payable in respect of Income tax TDS Dividend Distribution TaxService tax and EPF that were in arrears as 31st March 2019 for a period of more thansix months from the date they became payable are given below:
# The said amount includes interest U/s.234A 234B & 234C.
(b) According to the information and explanations given to us there are no dues ofSales Tax Income Tax Custom Duty Wealth Tax Service Tax Excise Duty and Cess thathave not been deposited with appropriate authorities on account of any dispute except thefollowing:
(viii) In our opinion and according to the information and explanations given to usthe details of defaults in the repayment of borrowings to banks as at 31stMarch 2019 are given below:
(ix) The company has not raised money by way of initial public offer or further publicoffer (including debt instrument). However the moneys were raised by way of term loanswhich were applied for the purposes for which those were raised.
(x) Based upon the audit procedures performed and according to the information andexplanations given to us no fraud by the company or any fraud on the company by itsofficers or employees has been noticed or reported during the course of our audit thatcauses the standalone Ind AS financial statements to be materially misstated.
(xi) The Managerial remuneration has been provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct.
(xii) The company is not a Nidhi Company hence this clause is not applicable.Accordingly paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with related parties are incompliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the standalone Ind AS financial statements etc. as requiredby the applicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE - B TO THE AUDITORS 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 VijayShanthi Builders Limited (the Company) as of 31 March 2019 in conjunction with our auditof the standalone financial statements of the Company for 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 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 Companies Act 2013.
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 on Audit of Internal Financial Controls over Financial Reporting(the Guidance Note) and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company s internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company s internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company s internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations 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 financialstatements.
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 internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting needs to be improved upon as at 31 March 2019 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.