To,
The Resolution Professional
Satra Properties (India) Limited (A Company under corporate insolvency resolution
process) Report on the audit of the financial statements Disclaimer of Opinion
We were engaged to audit the accompanying financial statements of Satra Properties
(India) Limited ("the Company"), which comprises the Balance Sheet as at
March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income),
the Statement of Changes in Equity, the Statement of Cash Flows for the year then ended,
and notes to the financial statements, including a summary of significant accounting
policies and other explanatory information.
We do not express an opinion on the accompanying financial statements of the Company.
Because of the significance of the matters described in the Basis for Disclaimer of
Opinion paragraph of our report, we have not been able to obtain sufficient appropriate
audit evidence to provide a basis for an audit opinion on these financial statements.
However all the transactions during the CIRP process are properly supported.
Basis for Disclaimer of Opinion
1. Except few bank statements and tally data, the management could not provide us with
any other records to conduct audit for the year. In absence of these records, we cannot
ascertain whether financial statements are prepared in compliance with the applicable Ind
AS and whether they present true and fair view of the financial position and performance
of the company.
2. The management has not provided us with the detailed working of construction work in
progress, Cost to Completion and consequent profitability and/or losses on projects. In
absence of these details, it is not possible for us to ascertain, whether the Construction
WIP of Rs. 20,387.78 lakh and have been valued and stated correctly or not. The
consequential impact, if any, on the financial statements is therefore not ascertainable.
3. Balance confirmations for Borrowings, Trade Receivables, Loans and Advances,
deposits and trade payables are not received from respective parties, including the
debtors of Rs. 1393.10 lakhs (net of ECL provisions) which are outstanding for a period
exceeding three years. These balances are subject to confirmations and consequent
adjustments, if required. In absence of balance confirmations, financial impact on
financial statements is not ascertainable
4. In accordance with the Insolvency and Bankruptcy Code (Code), the Resolution
Professional ("RP") has to receive, collate and admit the claims submitted by
the creditors as a part of Corporate Insolvency Process ("CIRP"). Such claims
can be submitted to the RP till the approval of the resolution plan by the CoC. The amount
of claim admitted by the RP may be different than the amount reflecting in the financial
results of the Company as on 31st March 2021. Pending final outcome of the CIRP, no
adjustments have been made in these financial results for the differential amount, if any.
Hence, consequential impact, if any, is currently not ascertainable and we are unable to
comment on possible financial impacts of the same.
5. There are many statutory dues amounting to Rs. 1178.46 lakhs, which are pending to
be deposited with appropriate government authorities. The company has not made provision
for interest on these dues on account of delay m depositing them. The management is of the
opinion that since the matter in under CIRP, there will not be any possibility of payment
of such interest. Since the management has not estimated overall liability on account of
interest, financial impact on statement of financial results is not ascertainable. Further
in the absence of the documents we are not in a position to verify the liability of
statutory liability on account of non-deduction of tax at source, non-filling of statutory
returns and Interest and other penal liabilities.
6. We draw your attention to the fact that updating of personnel records was carried
out based on the availability of the documents, data, etc. In addition, employee dues
including retirement/ termination benefits were calculated based on the available data.
The company has not obtained valuation report from an actuary as required by Ind AS 19
"Employee Benefits" and consequently not provided for any gratuity and leave
encashment liability as on 31st March 2021. In the absence of any documentary evidence and
limited information provided to us, we are unable to obtain sufficient appropriate audit
evidence and are unable to ascertain the impact of the same.
7. The Company has not assessed impairment of carrying value of tangible assets in
accordance with requirements of Indian Accounting Standard 36 on "Impairment of
Assets". We are unable to obtain sufficient appropriate audit evidence about the
recoverable amount of the Companys tangible assets. Consequently, we are unable to
determine whether any adjustments to carrying value are necessary and consequential
impacts on the statement.
8. As depicted in Note 23, Note 24 and 27 of the Ind 45 financial statements, the
company has incurred Cost of Construction, Employee Benefit Expense and Other expenses
amounting to INR
0.31, INR 5.77 lakhs and INR 131.46 lakhs respectively for which complete documentary
evidence including invoice or information was not provided to us for verification to
satisfy ourselves about the validity, accuracy and other assertions. In the absence
sufficient documentary evidence and limited information provided to us, we are unable to
obtain sufficient appropriate audit evidence and are unable to corroborate the
managements assertion for occurrence, completeness and measurement of all the expenses
carried in these Ind AS financial statements.
9. During the year, the company has reversed allowance of Rs. 185.30 lakhs for doubtful
advances. In the absence of any documentary evidence and limited information provided to
us, we are unable to obtain sufficient appropriate audit evidence and are unable to
ascertain the impact of the same.
Following are the matters in the Notes to the Ind AS financial statements which are not
fully complied with IND AS/Schedule III:
a. Note 11 regarding Income tax, disclosures with respect to unrecognized deductible
temporary differences and reconciliation of tax expense with accounting profit multiplied
by effective income tax rate as required by Ind AS 12 on Income taxes has not been fully
disclosed for the reporting period.
b. Note 14 regarding borrowings, disclosures as required by Schedule III related to the
period and amount of default of all the borrowings have not been ascertained for the
reporting period.
c. Note 28 regarding employee benefit obligations, disclosures with respect to benefits
to employees as required by Ind AS 19 have not been disclosed in the standalone Ind A5
financial statements in view of non-availability of information with the Company.
d. To the extent of information available to us regarding related party list,
transactions and disclosures have been identified and disclosed by the
management/Resolution Professional for the reporting period in Note 30 on Related Party
Disclosures as required by Ind /AS 24.
e. The company has not collected information from the vendors about their status under
Micro, Small and Medium Enterprises Development Act 2006 as required in Note 36 of
Financial statements.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors and the Resolution Professional (for the period
commencing from 03.08.20) is responsible for the preparation of the other information. The
other information comprises the information included in the Management Discussion and
Analysis, Boards Report including Annexures to Boards Report, Business Responsibility
Report, Corporate Governance and Shareholders Information, but does not include the
financial statements and our auditors 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.
Managements / Resolution Professionals Responsibility for the Financial Statements
The Statement, which is the responsibility of the Companys Management and taken on
record by the Resolution Professional, has been prepared on the basis of the financial
statements. The Resolution Professional is responsible for the preparation of these
financial statements (for the period commencing from 03.08.20) that give a true and fair
view of the net loss and other comprehensive income and other financial information in
accordance with the accounting principles generally accepted in India and in compliance
with Regulation 33 of the Listing Regulations. 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 results that give a true and fair view and
are free from material misstatement, whether due to fraud or error.
In preparing the financial results, the Resolution Professional are 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
the Companys Management either intends to liquidate the Company or to cease operations,
or has no realistic alternative but to do so. Under Section 20 of the Code the Resolution
Professional should endeavour to manage the operations of the Company as a going concern
upon initiation of CIRP and the financial results which have been prepared on going
concern basis have been considered by the Resolution Professional accordingly.
The Management/RP is also responsible for overseeing the Companys financial reporting
process. Auditors Responsibilities for the Audit of the Ind AS Financial Statements
Our responsibility is to conduct an audit of the entitys financial statements in
accordance with Standards on Auditing and to issue an auditors report. However, because
of the matters described in the Basis for Disclaimer of Opinion section of our report, we
were not able to obtain sufficient appropriate audit evidence to provide a basis for an
audit opinion on these Ind AS financial statements.
We are independent of the company in accordance with the ethical requirements that are
relevant to our audit of the financial statements and we have fulfilled our ethical
responsibilities in accordance with these requirements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Companies Act, 2013, we give in the Annexure "A" a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a. We have sought but not provided information and explanations which to the best of
our knowledge and belief were necessary for the purpose of our audit;
b. The standalone Balance Sheet, standalone Statement of Profit and Loss (including
other comprehensive income), the standalone Cash Flow Statement and standalone statement
of changes in Equity dealt with by this Report are in agreement with the books of account,
subject to the possible facts of the matter described in the Basis for Disclaimer of
Opinion paragraph.
c. Subject to the possible effects of the matter described in the Basis for Disclaimer
of Opinion paragraph, the aforesaid financial statements comply with the Indian Accounting
Standards under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules,
2014;
d. Due to the possible effects of the matters described in the Basis for Disclaimer of
Opinion paragraph ,we are unable to state whether they have an adverse effect on the
functioning of the Company;
e. Since the Board of the Company is suspended as per the provisions of the Code, no
declaration under section 164(2) of the Act has been received from directors;
f. With respect to the adequacy of the internal financial controls with reference to
financial statements of the Company and the operating effectiveness of such controls, we
give our separate Report in "Annexure B".
g. With respect to the other matters included in the Auditors Report in accordance
with Rule 11 of the Companies (Audit & Auditors ) Rules, 2014, in our opinion and to
our best of our information and according to the explanations given to us;
h. As detailed in Note No. 29 to the Financial Statements, the Company has disclosed
the impact of pending litigations on its financial position;
i. Subject to the possible effects of the matter described in the Basis for Disclaimer
of Opinion paragraph, the Company has made provision, as required under the applicable law
or accounting standards, for material foreseeable losses, if any, on long-term contracts
including derivative contracts;
j. Amount of Rs.3.08 lakhs are due and outstanding which are to be credited to the
Investor Education and Protection Fund for the year ended 31st March, 2021.
k. In respect of identified non-compliance with provisions of the Companies Act, 2013:
a) The Company has not appointed Internal Auditors as required by Section 138 of the
Companies Act 2013.
Accordingly, we are unable to comment on the possible impact, if any, of non-compliance
with the provisions of the Act.
| For GMJ & Co. |
| Chartered Accountants |
| ICAI Firm Registration Number: 103429W |
| Haridas Bhat |
| Partner |
| Membership No.: 039070 |
| UDIN |
22039070AEEJTX3959 |
| Date: |
March 05, 2022 |
Annexure "A" to the Independent Auditors Report
The Annexure referred under "Report on Other Legal and Regulatory
requirements" in the Independent Auditors Report of even date to the Resolution
Professional of Satra Properties (India) Limited (The Company) on the financial
statements for the year ended March 31, 2021.
We report that:
i. In respect of its fixed assets:
a. The Company has maintained records showing full particulars including quantitative
details and situation of fixed assets.
b. As informed to us, no physical verification of assets was conducted during the year.
In absence of the physical verification, we cannot comment on existence of material
discrepancy between physical verification and book records.
c. According to the information and explanations given to us, the company does not have
any immovable property. Hence this paragraph is not applicable to the company.
ii. In respect of inventories, according to the information and explanation given to
us, the physical verification of inventory has not been conducted during the year by the
management. In absence of the physical verification, we cannot comment on existence of
material discrepancy between physical verification and book records.
iii. In respect of loans, secured or unsecured to companies, firms, Limited Liability
Partnerships or other parties covered under register maintained under section 189 of the
Companies Act;
a. In our opinion, the terms and conditions on which the loans have been granted are
not prejudicial to the interest of the company when granted, however due to CIRP process
the same are now prejudicial to the interests of company;
b. The terms of arrangements do not stipulate any repayment schedule and the loans are
repayable on demand. However the same will now be payable as per the CIRP process.
Accordingly, this paragraph is not applicable to the Company in respect of repayment of
the principal and interest amount.
c. There are no overdue amounts in respect of loans granted to the parties covered
under register maintained under section 189 of the Companies Act.
iv. According to the information and explanations given to us, the Company has complied
with the provisions of Sections 185 and 186 of the Act in respect of grant of loans and
making investments and providing guarantees and securities, as applicable, except for the
possible effects of the matter described in the Basis for Disclaimer of Opinion section on
which we are unable to comment.
v. The Company has not accepted any deposits from the public and hence the directives
issued by the Reserve Bank of India and provisions of section 73 to 76 of the Act and
other relevant provisions with regard to deposits accepted from Public are not applicable.
vi. We are informed that the books of accounts are maintained by the Company pursuant
to the rules prescribed by the Central Government under Section 148(1) of the Companies
Act, 2013. We have, however, not made an examination of the cost records with a view to
determine whether they are accurate or complete.
vii. In respect of statutory dues:
a. According to information and explanations given to us and on the basis of our
examination, undisputed statutory dues including Provident Fund, Employees State
insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of Customs, Duty of
Excise, Value Added Tax, Goods & Service Tax, Cess and other material statutory dues
have not been regularly deposited with the appropriate authorities and there have been
significant delays in payment of statutory dues.
According to the information and explanations given to us, undisputed amounts payable
in respect thereof, which were outstanding as at March 31, 2021 for a period of more than
six months from the date of becoming payable are as follows:
| Name of the Statue |
Nature |
Amount(in INR) |
Period to which it pertains |
Due Date |
| Goods and Service Tax Act,2017 |
GST |
2,29,32,925 |
2017-18 to 2020-21 |
|
| Income Tax Act 1961 |
Dividend distribution tax |
3,93,36,286 |
2011-12 to 2020-21 |
|
| Rajasthan VAT Act 2003 |
VAT |
5,67,015 |
2016-17 to 2020-21 |
|
| Maharashtra VAT Act 2003 |
VAT |
2,89,68,514 |
2019- 20 to 2020- 21 |
|
| The Finance Act, 1994 |
Service Tax |
32,10,078 |
2016-17 to 2020-21 |
|
| The Employees Provident Fund Scheme, 1952 |
Provident Fund |
4,35,967 |
2018-19 to 2020-21 |
|
| The Employees State Insurance Act, 1948 |
ESIC |
87,860 |
2016-17 to 2020-21 |
|
| Profession Tax Act,1975 |
Profession Tax |
25,475 |
2019- 20 to 2020- 21 |
|
| Income Tax Act 1961 |
TDS and Income Tax |
1,38,34,268 |
Income Tax 14-15 to 2020- 21 TDS:2019-20 to 2020-21 |
|
| The Finance Act, 1994 |
work contract tax |
1,30,004 |
2017-18 to 2020-21 |
|
b. According to the information and explanations given to us, dues that have not been
deposited by the Company on account of disputes are as follows:
| Name of Statute |
Nature of due |
Amount (Rs.) |
Period |
Forum where the dispute is pending |
| Income tax Act 1961 |
Income tax |
60,38,750 |
A.V 2011-12 |
Income Tax Appeallate Tribunal |
| Income tax Act 1961 |
TDS |
97,15,899 |
A.Y 2017-10 to A.Y. 2014-15 |
Assessing Officer / As per Traces |
viii. In our opinion and according to the information and explanations given to us, the
Company has defaulted in repayment of following dues to the financial institutions and
banks during the year:.
| Name of Lender |
Amount of Default |
Period of Default |
| Punjab National Bank-O/D No-5223009300000046 |
* |
* |
| Punjab National Bank-O/D No-5223009300000046 |
* |
* |
| HDFC Bank Ac CE Loan No. 81617922 |
* |
* |
| HDFC Bank Ac CE Loan No. 81635907 |
* |
* |
| Jumbo Finvest (India) LTD |
* |
* |
| Mayank Shah 12% secured Redeemable NCD |
* |
* |
* The period and Amount of default has not been ascertained by the management.
ix. In our opinion and according to the information and explanation given to us, during
the year, the company has not raised money by way of initial public offer or further
public offer (including debt instrument) or Term Loan.
x. During the course of our limited examination of the books and records of the company
as explained in this report, carried out in accordance with the generally accepted
auditing principles in India, and according to the information and explanations given to
us, we are neither come across any instance of fraud by the company or any fraud on the
company by its officers or employees, noticed or reported during the year nor have we been
informed of any such instance by the Resolution Professional.
xi. According to the information and explanation given to us and on the basis of an
overall examination of books of accounts of the Company, no managerial remuneration has
been paid or provided during the year.
xii According to the information and explanation given to us, the company is not a
Nidhi Company. Therefore, provisions of clause 3(xii) of the order are not applicable to
the company.
xiii. In the absence of any documentary evidence and limited information, we are unable
t< comment on compliance with section 177 and Section 188 of the Companies Act, 2013
witl respect to transactions with related parties. However, details of related party
transactions, a certified by the management have been disclosed in Note 30 to the
standalone Ind A: financial statements.
xiv. Based upon the audit procedures performed and the information and explanations
given b the management, the company has not made any preferential allotment of equity
shares no any private placement of shares or fully or partly convertible debentures during
the yea under review. Hence, the provisions of clause 3 (xiv) of the Order are applicable
to th< company and are accordingly complied with.
xv. According to the information and explanation given to us, the company has not
entered int< any non-cash transactions with directors or persons connected with them
and henc< provisions of section 192 of the Act are not applicable.
xvi. The Company is not required to be registered under section 45-IA of the Reserve
Bank o India Act, 1934. Therefore, paragraph 3(xvi) of the Order is not applicable.
| For GMJ & Co. |
| Chartered Accountants |
| Firm Registration Ncfmber: 103429W |
| Haridas Bhat |
| Partner |
| Membership No.: 039070 |
| UDIN: 22039070AEEJTX3959 |
| Place: Mumbai |
| Date: March 05, 2022 |
Annexure "B" to the Independent Auditors Report
[The Annexure referred to under Report on Other Legal and Regulatory Requirements in
the
Independent Auditors Report of even date to the Resolution Professional of Satra
Properties (India)
Limited on the financial statements for the year ended March 31, 2021]
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the
Companies Act, 2013 ("the Act")
1. We were engaged to audit the internal financial controls with reference to financial
statements of Satra Properties (India) Limited ("the Company") as of
March 31, 2021 in conjunction with our audit of the financial statements of the Company
for the year ended on that date.
2. Managements / Resolution Professionals Responsibility for Internal Financial
Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control with reference to financial statements
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 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.
3. Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls with reference to financial statements based on 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 specified under section 143(10)
of the Act, to the extent applicable to an audit of internal financial controls, 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
with reference to financial statements was established and maintained and if such controls
operated effectively in all material respects.
Because of the matter described in the Disclaimer of Opinion paragraph below, we were
not able to obtain sufficient appropriate audit evidence to provide a basis for an audit
opinion on internal financial controls system with reference to the financial statements
of the Company.
4. Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control with reference to financial statements 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 with
reference to financial statements 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 expenditure 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.
5. 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.
6. Basis for Disclaimer of Opinion
The company has not documented Risk assessment and control matrix which enlists
processes, sub-processes, risk faced by them and controls implemented to mitigate such
risks. The company has not established its internal financial control over financial
reporting on criteria based on or considering the essential components of internal control
stated in the guidance note issued by the Institute of Chartered Accountants of India. We
were unable to obtain sufficient appropriate audit evidence on which to base our opinion
on the effectiveness of companys internal financial controls with reference to financial
statements.
7. Disclaimer of Opinion
As described in the Basis for Disclaimer paragraph above, because of the significance
of the matters, we are unable to obtain sufficient appropriate audit evidence to provide a
basis for our opinion on whether the Company had adequate internal financial controls with
reference to financial statements and whether such internal financial controls were
operating effectively for the year ended March 31, 2021 based on the internal control with
reference to financial statements 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 ICAI.
8. We have considered the disclaimer reported above in determining the nature, timing,
and extent of audit tests applied in our audit of the financial statements of the Company
for the year ended March 31, 2021, and the disclaimer has affected our opinion on the
financial statements of the Company and we have issued a disclaimer of opinion on the
financial statements for the year ended on that date.
| For GMJ & Co. |
| Chartered Accountants |
| ICAI Firm Registration Number: 103429W |
| Haridas Bhat |
| Partner |
| Membership No.: 039070 |
| UDIN: 22039070AEEJTX3959 |
| Place: Mumbai |
| Date: March 05, 2022 |
+91-9892691696
