To the Members of,
M/s. KMF Builders and Developers Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of M/s. KMF Builders
and Developers Limited., which comprise the Balance Sheet as at March 31, 2021 and the
Statement of Profit and Loss, statement of changes in Equity, statement of Cash Flow for
the year then ended, and Notes to financial statements including a summary of significant
accounting policies and other explanatory information (hereinafter referred to as
"the standalone financial statements"].
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone financial statements give the information required
by the Companies Act,2013 ("the Act"] in the manner so required and give a true
and fair view in conformity with the Accounting Standards prescribed under section 133 of
the Act and other accounting principles generally accepted in India, of the state of
affairs of the Company as at 31 March 2021, and its profit, changes in equity, its cash
flows for the year ended on that date.
Basis for Opinion
We conducted our auditing accordance with the Standards on Auditing (SAs) specified
under section 143(10] of the Companies Act 2013. Our responsibilities under those
Standards are further described in the Auditors Responsibility for the Audit of the
Standalone Financial Statements section of our report. We are independent of the Company
in accordance with the 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
standalone financial statements under the provisions of the Companies Act 2013 and the
Rules made there under, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the ICAIs Code of Ethics. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance 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 financial
statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
We have described below to be the Key audit matters to be communicated in our report.
| s. Key Audit Matter No. |
Auditors Response |
| 1. Revenue Recognition of Construction Contracts |
Principal Audit Response |
| The Company follows/recognises revenue based on IND AS - 115. |
Our Audit approach consisted testing of the design and operating effectiveness of the
internal controls and substantive testing as follows. |
|
- Evaluated the design of the internal controls relating to implementation of the new
revenue accounting standard. |
|
- Obtained listing of all the contracts as on |
|
31.03.2021. Identified the contracts that are not completed contracts for which
handover of units not done and Partial occupancy certificate received as on 28.03.2018. |
| 2. Carrying Values of Inventories (Construction work in progress and Stock in trade) |
Principal Audit procedures |
| There is a Risk that the valuation of inventory may be misstated as it involves the
determination at cost and estimated total construction cost of completion of the projects
which is an area of Judgement. |
We assessed the Companys Process for the valuation of inventories. |
| Refer Notes to the Standalone Financial statements. |
Our audit approach consisted testing of the design and operating effectiveness of the
internal controls and substantive testing as follows: |
|
? Evaluated the design of the internal controls relating to the valuation of
inventories. |
|
? Tested 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 realizable value. We carried out a combination of procedures
involving enquiry and observation, and inspection of evidence in respect of operation of
these- controls. Selected a sample of project specific inventories and performed the
procedures around: |
|
? Construction costs incurred for the project specific inventories by tracing to the
supporting documents, estimated total construction cost to be incurred for completing the
construction of the project and corroborated the same with the reports from external
supervising engineers, where applicable. Obtained the companys assessment of NRV for the
project specific inventories. |
|
? 9The expected net amounts to be realized from the sale of inventory in the-ordinary
course of business. |
| 3. Investment in Shares |
The Investment in Shares reflecting in the Company Balance sheet is held in the name
of the Director Kavita Chadha as on 31.03.2021 vide Board Resolution dated 29.05.2019 to
hold in the name of the Director. |
| Refer Notes to Accounts 1(j) to the standalone financial statement |
|
Information Other than the Financial Statements and Auditors Report Thereon
• The Companys Board of Directors is responsible for the other information. The
other information comprises the information included in the Boards Report, Management
Discussion and Analysis Report and Business Responsibility Report, but does not include
the standalone financial statements and our auditors report thereon.
• Our opinion on the standalone financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
• In connection with our audit of the standalone financial statements, our
responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the standalone financial statements, or
our knowledge obtained during the course of our audit or otherwise appears to be
materially misstated any form of assurance conclusion thereon.
• If, based on the work we have performed, we conclude that there is no material
misstatement of this other information; we are required to report that fact. We have
nothing to regard in this regard.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors are responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these standalone financial statements that give a true and fair view of the financial
position, financial performance and cash flows and changes in equity of the Company in
accordance with the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether
due to fraud or error.
In preparing the standalone financial statements, management is responsible for
assessing the Companys ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companys financial
reporting process. Auditors Responsibility for the Audit of the Standalone Financial
Statements
Our objectives are to obtain reasonable assurance about whether the standalone
financial statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditors report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these stand alone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone
financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal financial control relevant to the audit in
order 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
the Company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the standalone 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
auditors report. However, future events or conditions may cause the Company to cease to
continue as a going concern.
• Evaluate the overall presentation, structure, and content of the standalone
financial statements, including the disclosures, and whether the standalone financial
statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Materiality is the magnitude of misstatements in the stand alone financial statements
that, individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the standalone financial statements may be influenced. We
consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the standalone financial
statements.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters. We describe these matters
in our auditors report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be 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, we report that:
(a) We have sought and obtained all the information and explanations which to the best
of 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 the
Company so far as it appears from our examination of those books;
(c) The Balance Sheet and the Statement of Profit and Loss, the statement of cash flow
and statement of changes in equity dealt with by this Report are in agreement with the
books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014;
(e) On the basis of the written representations received from the directors as on 31
March 2021 taken on record by the Board of Directors, none of the directors is
disqualified as on 31 March 2021 from being appointed as a director in terms of Section
164 (2) of the Act; and
(f) With respect to the adequacy of the "internal financial controls over
financial reporting of the company with reference to financial statements" reporting
of the Company and the operating effectiveness of such controls, refer to our separate
Report in "Annexure-A". Our report expresses an unmodified opinion of the
adequacy and Operating effectiveness of the companys Internal financial controls over
financial reporting.
(g) With respect to the other matters to be included in the Auditors Report in
accordance with the requirements of section 197(16) of the Act, as amended, in our opinion
and to the best of our information and according to the explanations given to us, the
remuneration paid by the Company to its directors during the year is in accordance with
the provisions of section 197 of the Act.
(h) with respect to the other matters to be included in the Auditors Report in
accordance with Rule
11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of
our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial
position in its financial statements.
ii. The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any.
iii. The Company did not have any long-term contracts including derivative contracts
for which there were any material foreseeable losses;
iv. There has been no amount in transferring amount required to be transferred, to the
Investor Education and Protection fund by the Company.
2. As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
as amended, issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, we give in the "Annexure B" a statement on the matters
specified in paragraphs 3 and 4 of the Order.
Annexure "A" to the Independent Auditors Report.
(Referred to in paragraph 1(f) under Report on Other Legal and Regulatory
Requirements section of our report to the members of KMF Builders and Developers Limited
of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of
Sub-section 3 of Section 143 of the Companies Act, 2013 (the "Act")
We have audited the internal financial controls over financial reporting of M/s.KMF
Builders and Developers Limited, (the "Company"] as of March 31, 2021in
conjunction with our audit of the standalone Ind AS financial statements of the Company
for the year ended on that date.
Managements Responsibility for Internal Financial Controls
he Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India. These responsibilities include
the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of its business,
including adherence to companys policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under
the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the"Guidance Note"] issued by the Institute of Chartered Accountants of India
and the Standards on Auditing prescribed under Section 143(10] of the Companies Act, 2013,
to the extent applicable to an audit of internal financial controls. Those Standards and
the Guidance Note require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether adequate internal financial
controls over financial reporting was established and maintained and if such controls
operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that
(1] pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(2] provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and payments of the company are being made only in
accordance with authorizations of management and directors of the company; and
(3] provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
According to the information and explanations given to us, the company has not
introduced Internal Audit system for the year.
In our opinion, to the best of our information and according to the explanations given
to us, except for the effect of the matter described in the above paragraph, the Company
has in all material respects, an adequate internal financial controls system over
financial reporting and such internal financial controls over financial reporting were
operating effectively as at March 31, 2021, based on the internal control over financial
reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls Over
Financial Reporting issued by the Institute of Chartered Accountants of India.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2 under Report on Other Legal and Regulatory Requirements
section of our report to the Members of KMF Builders and Developers Limited of even date)
i) In respect of Companys Fixed Assets:
a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets(Property, Plant and Equipment).
b) The fixed assets (Property, Plant and Equipment) were physically verified during the
year by the Management in accordance with a regular programmed of verification which, in
our opinion, provides for physical verification of all the fixed assets (Property, Plant
and Equipment) at reasonable intervals. According to the information and explanation given
to us, no material discrepancies were noticed on such verification.
c) With Respect to Immovable properties of Land that are freehold, according to the
information and explanations given to us, the records examined by us and based on the
examination of the conveyance deed/Registered sale deed provided to us, we report that the
title deeds, compromising all the immovable properties of land & buildings which are
free hold, are held in the name of Company as at the balance sheet date. According to the
information and explanation given to us, the company does not have any leasehold land and
leased/freehold
Building other than administrative block and Project facilities, temporary constructed
at the project sites and capitalized as Building.
ii) In our opinion and according to the information and Explanations given to us,
having regard to the nature of Inventory, the physical verification by way of verification
of title deeds, site visits by the management and certification of extent of work
completion by competent persons, are at reasonable intervals and no material discrepancies
were noticed on physical verification.
iii) According to the information and explanations given to us, the Company has not
granted any loans, secured or unsecured to companies, firms, Limited Liability
partnerships or other parties covered in the Register maintained under section 189 of the
Act. Accordingly, the provisions of clause 3 (iii) (a) to (C) of the Order are not
applicable to the Company and hence not commented upon.
iv) In our opinion and according to the information and explanations given to us, the
company has complied with the provisions of section 185 and 186 of the Companies Act, 2013
in respect of loans, investments, guarantees, and securities.
v) According to the information and explanations given to us, the Company has not
accepted any deposits from the public during the year and hence the directives issued by
the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant
provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to
the deposits accepted from the public are not applicable.
vi) The maintenance of the cost records has not been specified by the Central
Government under Section 148(1) of the Companies Act,2013 for the business activates
carried out by the company. Thus, reporting under Clause 3(vi) of the order is not
applicable to the Company.
vii) According to the information and explanations given to us, in respect of statutory
dues;
a) The Company has been generally regular in depositing undisputed statutory dues
including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax,
Duty of Customs, Duty of Excise, Goods & Service tax, Cess and any other statutory
dues with the appropriate authorities. The provisions of Employees state insurance and
Excise duty are not applicable to the operations of the company.
b) There were no undisputed amounts payable in respect of provident fund, Employees
State Insurance, Income tax, sales tax, Goods & Service tax, duty of customs, service
tax, cess and other material statutory dues were in arrears as at 31 March 2021 for a
period of more than six months from the date they became payable.
c) There are no dues of Income- Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty,
Value Added Tax and Goods & Service Tax which have not been deposited as on 31stMarch,
2021 on account of disputes except as given below:
iv) In Our opinion and according to the information and explanations given to us, the
Company has not defaulted any loans or borrowings to any financial institutions, banks,
Government, or debenture holders during the year. The Company has not taken any loans or
borrowings from financial institutions and government.
v) The company has not raised moneys by way of initial public offer or further public
offer including debt instruments and term Loans. Accordingly, the provisions of clause 3
(ix) of the Order
are not applicable to the Company.
vi) To the best of our knowledge and according to the Information and explanations
given to us, no fraud by the company or no material fraud on the company by its officers
or employees has been noticed or reported during the year.
vii) In our opinion and according to the information and explanations given to us, the
company has paid/provided managerial remuneration in accordance with the requisite
approvals mandated by the provisions of section 197 read with Schedule V to the Companies
Act;
viii) The Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii)
of the Order are not applicable to the Company.
ix) In our opinion and according to the information and explanations given to us, the
company is in compliance with section 177 and 188 of Companies Act, 2013 where applicable,
for all transactions with the related parties and the details of related party
transactions have been disclosed in the standalone Financial Statements as required by the
applicable accounting standards.
x) During the year, the company has not made any preferential allotment or private
placement of shares or fully or partly paid convertible debentures and hence reporting
under clause 3 (xiv) of the Order is not applicable to the Company.
xi) In our opinion and according to the information and explanations given to us,
during the year the company has not entered into any non-cash transactions with directors
or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order
and section 192 of the companies Act,2013 are not applicable to the Company.
xii) In our opinion, the company is not required to be registered under section 45 IA
of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi)
of the Order are not applicable to the Company.
For C S Nagendra &Co.,
Chartered Accountants,
Firm Reg No.9486S
CA C S Nagendra
Proprietor
ICAI Reg. No. 27390
UDIN: 21027390AAAAAM5037
PLACE : Bangalore
DATE :13.08.2021
+91-9892691696
