To The Members of Omaxe Limited
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Omaxe Limited("the Company") which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofchanges in Equity and the Statement of Cash Flows for the year then ended and Notes toStandalone Financial Statement including a summary of the significant information(hereinafter referred to as "the 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 theCompanies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with Indian Accounting Standards prescribed under section 133of the Act read with Companies (Indian Accounting Standards) Rules2015as amended andaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2019 and profit (including other comprehensive income) changes inequity and its cash flows for the year then ended.
Basis for Opinion
We conducted our audit of standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those SAs 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 issuedby the 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 accounting policies and other explanatory withthese requirements and the ICAI's Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.
Key Audit Matters
Key audit matters ("KAM") are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.
|Key Audit Matters ||How that matter was addressed in our audit report || |
|1 Revenue recognition ||Our audit procedure on revenue recognition from real estate projects included: |
|The application of the new revenue accounting standard involves certain key judgements relating to identification of contracts with customer 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. || Selecting sample to identify contracts with customers identifying separate performance obligation in the contracts determination of transaction price and allocating the transaction price to separate performance obligation. |
| || On selected samples we tested that the revenue recognition is in accordance with accounting standards by |
| ||i) reading analysing and identifying the distinct performance obligations in real estate projects. |
| ||ii)comparing distinct performance obligations with that identified and recorded. |
|Refer Notes 27 and 39 to the Standalone Financial Statements ||iii) reading terms of agreement to determine transaction price including variable consideration to verify transaction price used to recognise revenue. |
| ||iv) performing analytical procedures to verify reasonableness of revenue accounted by the Company. |
|2. Pending Income Tax cases || |
|The Company has pending income tax cases involving tax demands which involves significant judgement to determine possible outcome of these cases. Refer Notes 36 and 38 to the Standalone Financial Statements ||We obtained details of all pending income tax matters involving tax demands on the Company and discussed with the Company's in house tax team regarding sustainability of Company's claim before various income tax/ appellate authorities on matters under litigation. The inhouse tax team of the company relied upon past legal and other rulings submissions made by them during various hearings held; which was taken in consideration by us to evaluate management position on these tax demands. |
|3. Liability for non-performance of real estate agreements/ civil law suits against the Company || |
|The Company may be liable to pay damages/ interest for specificnon- performance of certain real estate agreements civil cases preferred against the Company for specific performance of the land agreement the liability on account of these if any have not been estimated and disclosed as contingent liability. ||We obtained details/ list of pending civil cases and also reviewed on sample basis real estate agreements to ascertain damages on account of non-performance of those agreement and discussed with the legal team of the Company to evaluate management position. |
|Refer Notes 36 to the Standalone Financial Statements || |
The Company's Management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone financial statements and our 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.
Management's Responsibility for the Standalone Financial Statements
The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performance(including other comprehensive income) changes in equity and cash flows of the Company inaccordance 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 implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statement that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are responsible for overseeing the company's financial reportingprocess.
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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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 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.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced.materiality and qualitative factors in (i) planning the scope of our audit work and inevaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant any significant 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 financialstatementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit 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 Cash Flow and the Statement of Changes in Equity dealt with bythis report are in agreement with the relevant books of account.
d. In our opinion the aforesaid standalone financial statements comply with the IndianAccounting 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 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-ii". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act:
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 litigations on its financialposition in its standalone financial statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
2. 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 I" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
ANNEXURE I TO INDEPENDENT AUDITORS' REPORT (Referred to in paragraph 2 under"Report on other Legal and Regulatory Requirements section of our report to themembers of Omaxe Limited of even date)
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.
(b) The fixed assets have been physically verified by the management at the reasonableintervals which in our opinion is considered reasonable having regard to the size of thecompany and the nature of its assets. No material discrepancies were noticed on suchverification.
(c) In our opinion and according to information and explanations given to us and on thebasis of an examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
ii. The inventory includes land completed real estate projects projects in progressconstruction material development and other rights in identified land. Physicalverification of inventory has been conducted at reasonable intervals by the management anddiscrepancies noticed which were not material in nature have been properly dealt with inthe books of accounts.
iii. The Company has granted loans (secured or unsecured) to companies covered in theregister maintained under Section 189 of the Act.
(a) The terms and conditions on which loan has been granted to the companies covered inthe register maintained under Section 189 of the Act are not prima facie prejudicial tothe interest of the Company.
(b) The companies covered in the register maintained under Section 189 of the Act areregular in payment of principal and interest amount as stipulated.
(c) There are no overdue amounts in respect of loan granted to the companies covered inthe register maintained under Section 189 of the Act.
iv. In our opinion and according to information and explanations given to us theCompany has complied with provisions of Section 185 and 186 of the Act in respect ofloans investments guarantees and security.
v. In our opinion and according to the information and explanations given to us theCompany has accepted deposits in respect of which directives issued by the Reserve Bankof India and the provisions of Section 73 to 76 or any other relevant provisions of theAct and rules framed there under to the extent applicable have been complied with.
vi. We have broadly reviewed the books of accounts maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of Cost
Records under section 148 of the Act and are of opinion that prima facie theprescribed accounts and records have been made and maintained however we have not madethe detailed examination of such cost records.
vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company provident fund employees' state insuranceincome tax duty of customs goods and services tax (GST) and other applicable materialundisputed statutory dues have generally been deposited regularly during the year with theappropriate authorities with delays in certain cases and there are no arrears ofoutstanding statutory dues as at the last day of the financial year concerned for aperiod of more than six months from the date they became payable.
(b) According to the information and explanations given to us there are no dues ofincome tax duty of customs value added tax GST or other applicable material statutorydues which have not been deposited as on 31st March 2019 on account of any dispute exceptthe followings:-
|Name of Statutes ||Nature of Dues ||Financial Year to which the matter pertains ||Forum where dispute is pending ||Amount Outstanding |
| || || || ||(Rs. in crore) |
|Income Tax Act 1961 ||Income Tax ||2006-07 ||High Court ||0.97 |
|Income Tax Act 1961 ||Income Tax ||2009-10 2010-11 ||Income Tax Appellate Tribunal New Delhi ||7.72 |
|Income Tax Act 1961 ||Income Tax ||2011-12 to 2015-16 ||Commissioner of Income Tax(A) New Delhi ||14.07 |
|Income Tax Act 1961 ||Income Tax penalty ||2008-09 2009-10 ||Commissioner of Income Tax(A) New Delhi ||1.88 |
|Income Tax Act 1961 ||TDS ||2013-14 to 2016-17 ||Commissioner of Income Tax(A) New Delhi ||1.20 |
|Delhi VAT ACT 2005 ||Sales Tax ||2005-06 & 2006-07 ||Joint/ Deputy Commissioner of Trade & Taxes Delhi ||11.14 |
|Delhi VAT ACT 2005 ||Sales Tax ||2014-15 ||DVAT Appellate Authority ||0.11 |
|Haryana VAT 2003 ||Sales Tax ||2014-15 ||Chandigarh High Court ||21.81 |
|Haryana VAT 2003 ||Sales Tax ||2015-16 ||Joint Commissioner Appeal Commercial Tax Office Faridabad Haryana ||1.02 |
|Haryana VAT 2003 ||Sales Tax ||- ||Joint Commissioner Appeal Commercial Tax Office Faridabad Haryana ||3.83 |
|Rajasthan VAT Act 2003 ||Sales Tax ||2007-08 2008-09 2010-11 & 2013-14 ||Assistant Commissioner Tax Officer Bhiwadi ||0.06 |
|Finance Act 1994 ||Service Tax ||2010-11 to 2012-13 ||Commissioner (Appeals) ||1.81 |
|Finance Act 1994 ||Service Tax ||July 2012 to March 2016 ||Commissioner (Appeals) ||6.76 |
viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of dues to banks financial institutions anddebenture holders as at the balance sheet date.
ix. According to the information and explanations given to us the term loans weregenerally applied for the purpose for which those are raised. The Company has not raisedmoney by way of initial public offer or further public offer (including debt instruments)during the year.
x. According to the information and explanations given to us no material fraud by theCompany or on the
Company by its officers or employees has been noticed or reported during the course ofour audit.
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. According to the information and explanations given to us the Company is not aNidhi Company as prescribed under Section 406 of the Act. Accordingly paragraph 3(xii) ofthe Order is not applicable to the Company.
xiii. According to the information and explanations given to us all transactions withthe related parties are in compliance with Section 177 and 188 of Act where applicableand the details of related party transactions have been disclosed in the standalonefinancial statements as required by the applicable accounting 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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi. According to information and explanations given to us the Company is not requiredto be registered under Section 45 IA of the Reserve Bank of India Act 1934.
ANNEXURE II TO INDEPENDENT AUDITORS' REPORT (Referred to in paragraph 1(f) underReport on Other Legal and Regulatory Requirements' section of our report to theMembers of Omaxe Limited of even date)
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 OmaxeLimited ("the Company") as at 31st 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 Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding 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 on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to audit of Internal Financial Controls andboth issued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was 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 of the Company.
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 standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that:
(a) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(b) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorizations of management and directors of the company; and
(c) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.
Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
for b s D & co.
Firm's Registration No: 000312S
Prakash Chand Surana
Membership No: 010276
Place of Signature: New Delhi
Date: 27th May 2019