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Sunteck Realty Ltd.

BSE: 512179 Sector: Infrastructure
NSE: SUNTECK ISIN Code: INE805D01034
BSE 00:00 | 24 Apr 2020 Sunteck Realty Ltd
NSE 05:30 | 01 Jan 1970 Sunteck Realty Ltd

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OPEN 190.00
PREVIOUS CLOSE 190.70
VOLUME 22138
52-Week high 532.00
52-Week low 164.05
P/E 21.30
Mkt Cap.(Rs cr) 2,722
Buy Price 183.05
Buy Qty 126.00
Sell Price 190.00
Sell Qty 1.00
OPEN 190.00
CLOSE 190.70
VOLUME 22138
52-Week high 532.00
52-Week low 164.05
P/E 21.30
Mkt Cap.(Rs cr) 2,722
Buy Price 183.05
Buy Qty 126.00
Sell Price 190.00
Sell Qty 1.00

Sunteck Realty Ltd. (SUNTECK) - Auditors Report


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Company auditors report

TO THE MEMBERS OF SUNTECK REALTY LIMITED Report on the Standalone Financial StatementsOpinion

We have audited the accompanying standalone financial statements of SUNTECK REALTYLIMITED (“the Company”) which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and Statement of Cash Flows for the year then ended and asummary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (“the Act”) in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under Section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended and other accounting principles generally accepted in India of the state ofaffairs of the Company as at 31stMarch 2019 its profit (including othercomprehensive income) its changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI)together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the standalone financial statements.

Emphasis of Matters

Without qualifying our opinion we draw your attention to following matters:

a) The Company has overdue trade receivables amounting र 1203.50 lakhs (PreviousYearto र 1203.50 lakhs) from a customer against sale of a commercial unit. Themanagement has taken necessary steps for recovery of this receivable including filing oflegal case and is hopeful of recovering the same in due course of time. In their opiniontherefore no provision is considered necessary at this stage.

b) The Company is a partner in a partnership firm Kanaka & Associates in whichthe Company has total exposure comprising of capital invested loans given and otherreceivables aggregating to र 1179.55 lakhs (Previous Year र 949.23 lakhs).Since there is some dispute with the other partner the financial statements of the firmare not available and therefore the Company has not accounted for its share of profit orloss for the year from the said firm which as explained by the management would beimmaterial. The management is hopeful of recovering/ realising the aforesaid exposure indue course of time as the Company has received the favourable arbitration award and areceiver has been appointed by virtue of the said order and hence in their opinion noprovision is considered necessary at this stage.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matters How the matter was addressed in our audit
Revenue recognition for real estate development contracts
Effective 1st April 2018 the Company has adopted Ind AS 115 - ‘Revenue from contracts with customers' using the cumulative catch-up transition method applied to contracts that were not completed as on the transition date i.e. 1st April 2018. Our audit procedures on revenue recognised from real estate development contracts included:
Revenue from real-estate contracts is recognised over a period of time (using percentage of completion method) if the necessary conditions as mentioned in the standard are satisfied otherwise recognised at the point in time. Testing the controls over the completeness and accuracy of cost and revenue reports generated from the system.
Obtaining an understanding of the systems processes and controls implemented by management for recording and calculating revenue.
Significant level of judgement is required to identifying contract obligations and whether these obligations are satisfied over a period of time or at the point in time. Further for determining revenue using percentage of completion method budgeted project cost is a critical estimate. This estimate has inherent uncertainty as it requires ascertainment of progress of the project cost incurred till date and balance cost to be incurred to complete the project. Selected samples of old and new contracts and tested that the revenue has been recognised in accordance with the accounting standard by evaluating the identification of performance obligation
Refer note no. 1(d) and 47 to the standalone financial statements. Reviewed the management's budgeting system and process of calculating the cost to be incurred for completing the remaining performance obligations which has been reviewed periodically and approved by appropriate levels of management.
Compared the aggregate project cost (including costs incurred) with costs of similar projects. Performing a retrospective review of costs incurred with budgeted costs to identify significant variations and verify whether those variations have been considered in estimating the remaining costs to complete the project.
Assessing the adequacy of disclosures included in financial statements as specified in Ind AS 115.

 

Carrying values of Inventories
Inventory is valued at cost and net realisable value (NRV) whichever is less. The cost includes direct and indirect expenditure relating or incidental to construction activity. We assessed the Company's process for the valuation of inventories by:
Various estimates such as prevailing market conditions stage of completion of the projects future selling price selling costs and cost to complete projects are necessary to derive NRV. Evaluating the design and operative effectiveness of internal controls relating to valuation of inventories.
Testing the operating effectiveness of controls for the review of estimates involved for the expected cost of completion of projects including construction cost incurred construction budgets and net realisable value.
Refer notes 1 (k) and 10 to the standalone financial statements. We carried out a combination of procedures involving enquiry and observation and inspection of evidence in respect of operation of these controls.
Comparing the aggregate project cost (including costs incurred) with costs of similar projects.
Comparing NRV with recent sales or estimated selling price and also checked the general selling costs.

 

Key Audit Matters How the matter was addressed in our audit
Recoverability of carrying value of investment in/loan to subsidiaries and joint ventures:
The Company accounts for investments in equity instruments of subsidiaries and joint ventures at cost less accumulated impairment losses if any. Our procedures / testing included the following:
The assessment of recoverable amount of the Company's investment and loans receivable from subsidiaries and joint ventures involves significant judgement in respect of assumptions such as current projects expected sales future business plan upcoming projects and the recoverability of certain receivables/investments. Tested management's assessment of the provision required for impairment of investments / loans Checked the net worth of the subsidiaries/joint ventures and its history of financial performance.
We focused on this area as a key audit matter due to judgement involved in forecasting future cash flows and the selection of assumptions. Evaluated appropriateness of key assumptions including current market rates used in the cash flow forecasts used in computing recoverable amount of investment and/or loan (including interest accrued).
Refer notes 6 7 and 15 to the standalone financial statements.
Fair valuation of certain investments:
Investments other than investment in subsidiaries and joint ventures are carried at either Fair Value through Profit / Loss (FVTPL) or Fair Value through Other Comprehensive Income (FVTOCI) as per fair value hierarchy. Our procedures / testing included the following:
Tested the operating effectiveness of controls for the review of assumptions and estimates used in evaluation of inputs for the purpose of fair valuation.
In case of investments whose fair valuation falls under the Level 3 hierarchy the Company engages third party valuers to perform the valuation. Input/ assumptions used for valuation are not based on observable market data and therefore significant level of judgement is involved. Hence we have considered this area as key audit matter. Reviewed the valuation reports obtained by the Company from independent third party valuers for investments recorded at fair value for level 3 fair valuation hierarchy and assessed the assumptions methods and competency of the valuer.
Refer notes 1 (m) and 6 to the standalone financial statements.

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 Board's Report ManagementDiscussion and Analysis Report Corporate Governance Report and Business ResponsibilityReport but does not include the standalone financial statements and our auditor's reportthereon.

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 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) changes in equity and cash flows of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateimplementation and maintenance of accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statement that give a true and fair view and are free frommaterial 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 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 standalone 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 to designaudit procedures that are appropriate in the circumstances. Under Section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls in place and the operating effectiveness of suchcontrols.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 ourauditors' 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 standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent 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. Weconsider quantitative materiality and qualitative factors in (i) Planning the scope of ouraudit work and in evaluating the results of our work and (ii) To evaluate the effect ofany identified misstatements in the standalone financial statements.

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 financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' 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 r equired by the Companies (Auditor's Report) Order 2016 (“theOrder”) issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act 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 r equired by Section 143(3) of the Act we report that:

a) W e 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 Flows dealt with by thisReport are in agreement with the books ofaccount .

d) In our opinion the aforesaid standalone financial statements comply with Ind ASprescribed under Section 133 ofthe Act readwith Companies (Indian Accounting Standards)Rule 2015 as amended.

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 ofSection164 (2) ofthe Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in “Annexure B”. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended in our opinionand to the best of our information and according the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions ofthe Section 197 ofthe Act. h) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements – Refer Note No. 38 to the standalonefinancial statements.

ii. The Company did not have material foreseeable losses on long term contractsincluding derivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
R.P. Baradiya
Place : Mumbai Partner
Date : 2nd May 2019 Membership No: 44101

“ANNEXURE A”

ANNEXURE REFERRED TO IN INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF THE COMPANY ONTHE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2019

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we state that:

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

b) Accor ding to the information and explanations given to us the property plant andequipment (fixed assets) have been physically verified by the management at the year endwhich in our opinion is reasonable considering the size of the Company and nature of itsproperty plant and equipment (fixed assets). As explained no material discrepancies werenoticed on such verification. c) As e xplained title deed of the immovable propertyclassified as property plant and equipment (fixed assets) which was constructed as perthe Joint Development Agreement with the land owners will be transferred in the name ofthe Company after formation of condominium.

ii) Accor ding to the information and explanations given to us the inventories havebeen physically verified by the management at the year end and no material discrepancieswere noticed on such verification.

iii) During the year the Company has granted unsecured loans amounting to र27505.78 lakhs (including interest free loan of र 26383.37 lakhs) to eightsubsidiary companies and one joint venture Company covered in the register maintainedunder Section 189 of the Act. The maximum amount involved during the year of such loansincluding loans granted in the previous years was र 46054.31 lakhs (includinginterest free loans of र 25617.09 lakhs) and the year-end balances of loan grantedto such parties including loans granted in previous years was र 27851.90 lakhs(including interest free loans of र 14688.93 lakhs).

a) C onsidering what is stated in para (iv) below in respect of non-applicability ofSection 186 of the Act relating to loans granted by the Company and as explained by themanagement said loans are granted to subsidiary companies for their principal businessactivities the terms and conditions of the aforesaid loans are not prima facieprejudicial to the interest of the Company.

b) As e xplained by the management the schedule of repayment of principal and paymentof interest of such loans are stipulated except for certain loan which are repayable ondemand. As informed wherever repayment schedule is defined repayments or receipt ofprincipal amounts have been regular as per stipulation. In case of demand loans theCompany has received the loan amount during the year as and when it was demanded.

c) C onsidering what is stated in para (b) above there are no amounts overdue fromsuch parties.

iv) As informed and on the basis of legal opinion obtained by the Company theprovisions of Section 186 of the Act with respect to the loans made guarantees given andsecurity provided are not applicable to the Company as the Company is engaged in thebusiness of providing infrastructural facilities. In our opinion and according to theinformation and explanations given to us and based on the aforesaid legal opinion theCompany has complied with the provisions of Section 185 and 186 of the Act to the extentapplicable with respect to the loans investments made.

v) No deposits within the meaning of directives issued by RBI (Reserve Bank of India)and Sections 73 to 76 or any other relevant provisions of the Act and rules framedthereunder have been accepted by the Company.

vi) W e have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government of India regarding the maintenance of costrecords under sub-section (1) of Section 148 of the Act and are of the opinion that primafacie the prescribed accounts and records have been maintained. We have however notmade a detailed examination of the records with a view to determine whether they areaccurate or complete.

vii) a) According to the information and explanations given to us and on the basis ofour examination of the records the Company is generally regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax SalesTax Service Tax Goods and Service Tax (GST) Duty of Customs Duty of Excise ValueAdded Tax Cess and other material statutory dues applicable to the Company with theappropriate authorities. No undisputed amounts in respect of the aforesaid statutory dueswere outstanding as at the last day of the financial year for a period of more than sixmonths from the date they became payable.

b) Accor ding to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no dues of Income Tax Sales TaxService tax GST Duty of Customs Duty of Excise and Value Added Tax which have not beendeposited on account of any dispute except the following:

Statute Nature of Dues Forum where the dispute is pending Amount (र in Lakhs)

Financial year to which it relates

6.29 2006-07
Income Tax Act 1961 Income Tax Before Assessing Officer for reassessment 16.59 2008-09
0.21 2010-11
5.10 2011-12
Commissioner of Income Tax (Appeals) 177.82 2012-13
15.00 2014-15

viii) In our opinion and according to the information and explanations given to usduring the year the Company has not defaulted in repayment of loans or borrowings tofinancial institutions banks and dues to debenture holders. The Company did not have anyloans or borrowings from the Government.

ix) Accor ding to the information and explanations given to us the Company has notraised any money by way of initial public offer or further public offer (including debtinstruments) during the year and in recent past and based on the information andexplanations given to us by the management term loans have been applied for the purposefor which they were obtained. However certain funds have been temporarily used for othercorporate purpose which have been completely repaid during the year.

x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by the Company or on the Company by its officers or employees noticedor reported during the year nor have we been informed of such case by the management.

xi) Accor ding to the information and explanations given to us and based on theexamination of the records the Company has paid / provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

xii) The provisions of Nidhi Company are not applicable to the Company. Therefore Para3 (xii) of the Order is not applicable to the Company.

xiii) Accor ding to the information and explanations given to us the provisions ofSection 177 and 188 of Act to the extent applicable in respect of transactions with therelated parties have been complied with by the Company and the details have been disclosedin the Standalone Financial Statements as required by the applicable accounting standardsin Note No. 43 to the Standalone Financial Statements.

xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Therefore Para 3 (xiv) ofthe Order is not applicable to the Company.

xv) Accor ding to the information and explanations given to us during the year theCompany has not entered into any non-cash transactions with directors or persons connectedwith him under Section 192 of the Act.

xvi) The Company is not required to be registered under Section 45 IA of the ReserveBank of India Act 1934.

For Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
R.P. Baradiya
Place : Mumbai Partner
Date : 2nd May 2019 Membership No: 44101

“ANNEXURE B”

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 SUNTECKREALTY LIMITED (“the Company”) as of 31st March 2019 in conjunction with ouraudit of the Standalone Financial Statements of the Company for the year ended on thatdate.

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”). 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 Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation ofreliable financialinformation 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 on Audit of Internal Financial Controls Over Financial Reporting(the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemed tobe prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and ifsuch controls operated effectively in all materialrespects.

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 Auditors' judgment 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 ofInternal 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 (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial 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 standalonefinancial statements.

Inherent Limitations ofInternal 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 opin o i n considering nature of business size of operation and organisationalstructure of the entity the Company has broadly in all material respects an adequateinternal financial controls system over financial reporting and such in ternal financialcontrols over financial reporting were operating effectively as at 31st March 2019 basedon the n i e t rnal control over financial reporting criteria established by the Companyconsidering the essential components of in ternal control stated in the Guid ance Note onAudit of In e t rnal Financial Controls Over Financial Reporting issued by the InstituteofChartered Accountants ofIndia .

For Lodha & Co.
Chartered Accountants
Firm Registration No: 301051E
R.P. Baradiya
Place : Mumbai Partner
Date : 2nd May 2019 Membership No: 44101


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