To
The Members of
Vijay Shanthi Builders Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Opinion
We have audited the accompanying Standalone financial statements of Vijay Shanthi
Builders Limited (the Company), which comprise the balance sheet as at 31 March 2019, the
statement of profit and loss (including other comprehensive income), the statement of
changes in equity and the cash flow statement for the year then ended, and a summary of
significant accounting policies and other explanatory information (herein after referred
to as 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 Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India including the Ind AS, of the financial
position of the Company as at 31st March 2019,and its financial performance
including other comprehensive income, its cash flows and the changes in equity for the
year ended on that date.
Basis for Opinion
We conducted our audit in 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 Auditor s Responsibilities for the Audit of the
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 together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Companies Act, 2013 and the Rules
thereunder, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
EMPHASIS OF MATTERS
We draw attention to:
I. The Company has adopted selective accounting policy by deviating from the
measurement principles laid down in Indian Accounting Standards (Ind AS) in respect of
revenue recognition in the matter of its projects- Boulevard and The Art . In this regard,
the contract is identified, transaction price is determined & performance obligation
has been satisfied. However, the Company follows the policy of recognising the revenue
upon handing over the possession of flat to the customers.
II. Refer No.18 (a) (ii) to the standalone Ind AS financial Statements: In absence of
confirmation from the concerned banks, we are unable to comment about the correctness of
balances grouped under Bank Accounts which amounts to Rs.3.04/- lakhs.
Our opinion is not modified in respect of the matters mentioned above.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. These matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We
have determined that there are no key audit matters to communicate in our report.
OTHER INFORMATION
The Company s management and Board of directors are responsible for the other
information. The other information comprises the information included in the Company s
annual report, but does not include the financial statements and our auditor s report
thereon.
Our opinion on the 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 financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained 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 material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard
RESPONSIBILITIES OF MANAGEMENT FOR THE FINANCIAL STATEMENTS
The Company s management and Board of Directors are responsible for the matters stated
in section 134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of
these financial statements that give a true and fair view of the state of affairs, changes
in equityand cash flows of the Company in accordance withthe accounting principles
generally accepted in India, including the Indian accounting Standards (Ind AS) specified
under section 133 of the Act. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding of 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 orerror.
In preparing the financial statements, management and Board of directors are
responsible for assessing the Company s 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 doso.
Board of Directors is also responsible for overseeing the Company s financial reporting
process
AUDITOR S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor s 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 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 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 control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Companies Act, 2013, we are also responsible for expressing our opinion on 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 management.
• Conclude on the appropriateness of management s 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 Company s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor s report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor s
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 financial
statements, including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
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.
Report on Other Legal and Regulatory Requirements
1. As required by Section 197(16) of the Act, we report that the Company has provided
remuneration to its directors during the year which in accordance with the provisions of
and limits laid down under Section 197 read with Schedule V to the Act.
2. As required by the Companies (Auditor s Report) Order, 2016 (the Order) issued by
the Central Government of India in terms of sub-section (11) of section 143 of the Act, we
give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of
the order.
3. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the 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, the statement of profit and loss and the cash flow statement
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 Companies (Indian
Accounting Standards) Rules, 2015,as amended except Indian Accounting standard 19 -
Employee Benefits, where the company has not accounted for the provision for Gratuity on
the basis of Actuarial valuation certificate but the Company recognisedRs.25 lakhs towards
Gratuity in the statement of profit & loss as per the management decision.
(e) On the basis of the written representations received from the directors as on 31
March 2019 taken on record by the Board of Directors, none of the directors is
disqualified as on 31 March 2019 from being appointed as a director in terms of Section
164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in Annexure B ; and
(g) With respect to the other matters to be included in the Auditor s Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 and as amended
in the Companies (Audit and Auditors) Amendment Rules,2017 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 standalone Ind AS financial statements Refer Note 27.1 to the standalone
Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. The below mentioned amounts which were required to be transferred to the Investor
Education and Protection Fund have not been transferred by the Company.
| Financial Year |
Date of declaration of dividend |
Unclaimed amount as on March 31,2019 (Rs.in Lakhs) |
Due Date for transfer to Investor Education and protection Fund |
Amount of Transfer to Investor Education and Protection Fund (Rs.in
Lakhs) |
| 2010-11 |
28.09.2011 |
8.18 |
27.10.2018 |
NIL |
|
For Sanjiv Shah & Associates |
|
Chartered Accountants |
|
Firm s registration number : 003572S |
|
CA.G. Ramakrishnan |
| Place : Chennai |
Partner |
| Date : 14 June 2019 |
Membership number : 209035 |
ANNEXURE - A TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in Independent Auditors Report to the members of the Company
on the standalone Ind AS financial statements for the year ended 31 March 2019, we report
that:
(i) (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of property, plant & equipment.
(b) As explained to us, all the property, plant & equipment have not been
physically verified by the management during the year but there is a regular programme of
verification which, in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. No material discrepancies were noticed on such verification
(c) According to their information and explanations given to us and on the basis of our
examination of the records of the Company, the title deeds of immovable properties
included in property, plant & equipment are not held in the name of the Company as
mentioned below:
| Sl. No |
Asset Category |
Gross Block |
Remarks |
|
|
(Rs.in thousands) |
|
| 1 |
Land |
1800 |
Title deeds are not provided |
(ii) As explained to us, the inventory has been physically verified at reasonable
intervals during the year by the management. In our opinion, the frequency of verification
is reasonable. The procedures of physical verification of inventories followed by the
management are reasonable and adequate in relation to the size of the company and the
nature of its business. No material discrepancy noticed on verification between the
physical stocks and the book records.
(iii) In respect of loans in the nature of project advances/trade credits granted by
the Company to two companies and one proprietorship firm, covered in the register
maintained under section 189 of the Companies Act,2013, according to the information and
explanations given to us:
(a) The loan granted is repayable on demand. The loan is given interest free which is
not prima facie prejudicial to the interest of the Company considering Company s economic
interest in such entity.
(b) We are informed that the Company has demanded repayment of such loans during the
year and the same have been repaid as per the instruction. Hence there has been no default
on the part of the parties to whom the money has been lent.
(c) There is no overdue amount in respect of the loans granted to such Companies, firms
or other parties.
(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 Act, with respect
to the loans and investments made.
(v) The Company has not accepted any deposits from the public and hence the directives
issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other
relevant provisions of the Act and the Companies (Acceptance of deposits) Rules,2015 with
regard to the deposits accepted from the public are not applicable.
(vi) We have broadly reviewed the books of accounts and records maintained by the
company pursuant to the rules prescribed under section 148(1) of the Act for maintenance
of cost records in respect of materials, labour and other items and are of the opinion
that, prima facie, the prescribed accounts and records have been made and maintained.
However, we have not made a detailed examination of records.
(vii)(a) According to the information and explanations given to us and on the basis of
our examination of the records of the company, amounts deducted/ accrued in the books of
account in respect of undisputed statutory dues including Provident fund, Employees State
Insurance, Income-tax, Goods and Service tax, duty of customs, cess and other material
statutory dues have not been regularly deposited during the year by the Company with the
appropriate authorities.
The undisputed amounts payable in respect of Income tax, TDS, Dividend Distribution Tax
Service tax and EPF that were in arrears, as 31st March, 2019 for a period of more than
six months from the date they became payable are given below:
| Name of the Statute |
Nature of Dues |
Amount of Default |
Period of Default |
|
|
(Rs.in Lakhs) |
|
| Income tax Act,1961 |
Income Tax and interest |
95.67# |
AY 2015-16 |
| Income tax Act,1961 |
Income Tax |
48.40# |
AY 2016-17 |
| Income tax Act,1961 |
Income Tax |
362.71# |
AY 2017-18 |
| Income tax Act,1961 |
TDS |
88.54 |
FY 2017-18 |
| Income tax Act,1961 |
TDS |
46.42 |
April 2018 September 2018 |
| Income tax Act,1961 |
Dividend Distribution Tax |
33.99 |
FY 2012-13 |
| Service tax |
Service Tax |
58.71 |
Oct 2016- June 2017 |
| Employees Provident Funds & Miscellaneous Provisions Act,1952 |
EPF |
0.96 |
FY 2015-16 |
| Employees Provident Funds & Miscellaneous Provisions Act,1952 |
EPF |
9.81 |
FY 2016-17 |
| Employees Provident Funds & Miscellaneous Provisions Act,1952 |
EPF |
3.49 |
FY 2017-18 |
| Employees Provident Funds & Miscellaneous Provisions Act,1952 |
EPF |
5.54 |
April 2018 September 2018 |
# The said amount includes interest U/s.234A, 234B & 234C.
(b) According to the information and explanations given to us, there are no dues of
Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess that
have not been deposited with appropriate authorities on account of any dispute except the
following:
| Name of the Statue |
Nature of Dues |
Amount |
Period to which the amount relates |
Forum where dispute is pending |
|
|
(Rs. in Lakhs) |
|
|
| Service Tax |
Service tax and Penalty |
Rs.150.00 |
April 2009 to June 2010 |
CESTAT, Chennai |
| Employees State Insurance Act,1948 |
ESI contribution |
Rs.2.96 |
January 2012 to December 2012 |
Hon ble Prinicpal Labour Court, Chennai |
| Consumer Forums |
Consumer Claims |
Rs.35.50 |
Not Available |
Not Available |
(viii) In our opinion and according to the information and explanations given to us,
the details of defaults in the repayment of borrowings to banks as at 31st
March, 2019 are given below:
| Particulars of Dues to Banks (also refer Note. \11.3 of the Standalone Financial
Statements) |
Amount of default of repayment (Rs. In Lakhs) |
Period of Default |
|
Principal |
Interest (including penal interest) |
|
| South Indian Bank |
765.50 |
41.80 |
July 2018-March 2019 |
| ICICI |
3.68 |
0.17 |
Feb 2019 & March 2019 |
(ix) The company has not raised money by way of initial public offer or further public
offer (including debt instrument). However, the moneys were raised by way of term loans
which were applied for the purposes for which those were raised.
(x) Based upon the audit procedures performed and according to the information and
explanations given to us, no fraud by the company or any fraud on the company by its
officers or employees has been noticed or reported during the course of our audit, that
causes the standalone Ind AS financial statements to be materially misstated.
(xi) The Managerial remuneration has been provided in accordance with the requisite
approvals mandated by the provisions of section 197 read with Schedule V to the Companies
Act.
(xii) The company is not a Nidhi Company hence this clause is not applicable.
Accordingly, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our
examination of the records of the Company, all transactions with related parties are in
compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the
details have been disclosed in the standalone Ind AS financial statements etc. as required
by the applicable accounting standards.
(xiv) The company has not made any preferential allotment or private placement of
shares or fully or partly convertible debentures during the year under review.
(xv) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into non-cash
transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of
the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act 1934.
| Place : Chennai |
M/s Sanjay Shah & Associates, |
| Date : 14.06.2019 |
Chartered Accountants, Chennai |
|
(Firm Registration No: 003572S) |
|
CA G Ramakrishnan |
|
Partner |
|
M. No. 209035 |
ANNEXURE - B TO THE AUDITORS REPORT
Report on the Internal Financial Controls 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 Vijay
Shanthi Builders Limited (the Company) as of 31 March 2019 in conjunction with our audit
of the standalone financial statements of the Company for the year ended on that date.
Management s Responsibility for Internal Financial Controls
The Company s management is responsible for establishing and maintaining 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 (ICAI). 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 company s 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 Company s 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) and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to
an audit of internal financial controls, both applicable to an audit of Internal Financial
Controls and, both issued by the Institute of Chartered Accountants of India. 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 auditor s judgment, 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 Company s internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company s 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 company s 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 expenditures of the company are being made only in accordance with
authorisations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the company s 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
In our opinion, the Company has, in all material respects, an internal financial
controls system over financial reporting and such internal financial controls over
financial reporting needs to be improved upon as at 31 March 2019, 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.
| Place : Chennai |
M/s Sanjay Shah & Associates, |
| Date : 14.06.2019 |
Chartered Accountants, Chennai |
|
(Firm Registration No: 003572S) |
|
CA G Ramakrishnan |
|
Partner |
|
M. No. 209035 |
+91-9892691696
