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Valor Estate Ltd Auditor Reports

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Jul 19, 2024|09:44:55 AM

Valor Estate Ltd Share Price Auditors Report

To

The Members of D B Realty Limited

Report on the Audit of the Standalone Ind AS Financial Statements Qualified Opinion

We have audited the accompanying standalone Ind AS financial statements of D B Realty Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31, 2023, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended and notes to the standalone Ind AS financial statements including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "standalone Ind AS financial statements").

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report, the aforesaid standalone Ind AS 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 principles generally accepted in India including the Indian Accounting Standards ("Ind AS") prescribed under section 133 of the Act, of the state of affairs of the Company as at March 31,2023, its profit for the year, other comprehensive income (loss) , changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

1. As stated in Note 43.2D(xiv) to the standalone Ind AS financial statement - measurement of financial guarantees at fair value under ‘Indian Accounting Standard (Ind AS) 109 - Financial Instruments is not done:

a. During the year, one of the lenders has invoked the corporate guarantee given by the company on behalf of a related party (principal borrower). As per the communication the total demand is Rs 76,038.97 lacs, which has been contested by the company vide its response to the said communication. As explained to us, the lender had confirmed / acknowledged the amount of Rs 23,636 lacs vide its letter dated March 8, 2021. The company, in its response to the invocation of the corporate guarantee, has made an offer to pay Rs 25,400 lacs as a part of its obligation as a guarantor, further we are informed that the said amount would also be reimbursed to the Company by such related party.

The management based on the market value of the various other primary securities, corporate guarantee and undertaking by the holding company of the related party entity (for whom guarantee was provided) is confident of recovering the amount payable (if any) to the lenders from the said related party and its holding company and accordingly is of the view that provision is not required to be made.

b. Financial guarantees and securities given by the Company on behalf of certain entities (referred as principal borrowers) who have defaulted in their principal payment obligations to the lenders aggregating to Rs 24,547.62 lacs (excluding interest, penal interest and other charges). The loans taken by these entities have also been secured by charge on the underlying assets of the said entities and assets of other related parties. Valuation report of such primary / underlying assets provided as securities by the borrowing companies has not been obtained from an independent valuer. In view of the management, value of such primary / underlying assets provided as securities is greater than the outstanding loans and hence additional liability will not devolve on the Company. In the above amounts, interest and other charges are not included as the same cannot be quantified as the respective borrower/s had disputed the same and also since settlement proposal is in discussion by the respective borrowers with their lenders.

Further, out of Rs. 24,547.62 lacs above, during the year, one of the subsidiary companies (i.e. principal borrower), has entered into one-time settlement with lender equivalent to loans of Rs. 17,736.15 lakhs. The principal borrower has requested the lender for extension of time for the installment due on 31st March 2023, which has been in principle agreed by the lender subject to execution of necessary addendum to settlement agreement, which is in the process of being executed.

c. Further, financial guarantees and securities given by the Company on behalf of certain entities (related parties) who have defaulted in their principal payment obligations to the lenders aggregating to Rs. 35,240.50 lacs (excluding interest, penal interest and other charges). The loans taken by these entities have also been secured by charge on the underlying assets of the said entities and assets of other related parties. As per valuation reports obtained from independent valuer, the value of primary / underlying assets provided as securities by the borrowing companies is greater than the outstanding loans and hence in view of the management no additional liability is expected to devolve on the Company. In the above amounts, interest and other charges are not included as the same cannot be quantified as the respective borrower/s had disputed the same and also since settlement proposal is in discussion by the respective borrowers with their lenders.

Further, out of Rs. 35,240.50 lacs above, subsequent to the year end, one of the entities (i.e. principal borrower), has entered into a one-time settlement with lender equivalent to loans of Rs. 32,000 lakhs. Post completion of the settlement obligations by the said principal borrower, the companys guarantee obligation / securities would cease to exist.

With reference to above, during the year, Securities Exchange Board of India (SEBI) has issued administrative warning (i.e. impugned order) to the Independent Directors with respect to accounting and disclosure of financial guarantees based on the investigation carried out by SEBI. This order was specifically with respect to matters covered in note 43.2D(xiv)(a) of the standalone Ind AS financial statement and it also extends to other guarantees as well. The said order quantifies the expected credit loss / additional provision with respect to financial guarantees as mentioned in note 43.2D(xiv)(a) of standalone Ind AS financial statements of Rs. 59,130.18 lakhs to be made by the company in accordance with Ind AS 109 - Financial Instruments till 31st March 2021. The company has disputed the said order and in its opinion, no

provision is required to be made based on underlying assets of the various entities and ongoing discussion for settlement of the loans by the respective entities with their lenders. The Company has filed an appeal and application seeking stay against the said impugned order before the Securities Appellate Tribunal (SAT) seeking reliefs including (a) Setting aside the said impugned order and (b) To pass an order stating the effect, implementation and operations of the impugned order. During the year, the said appeal was heard and SAT has passed order against the Company. The Company is exploring further legal remedies and intends to file an appeal against the said order.

Further, during the year, the Company has filed settlement application with SEBI in relation to the above matters where the Company has offered monetary and non-monetary settlement terms.

Furthermore, during the year, the SEBI has issued a show cause notice to the Company and its directors for non-compliance of various provisions related to Securities Contracts (Regulation) Act, 1956 and non-compliance of accounting standard / Indian accounting standards related to guarantee and securities given by the Company to various entities. The Company has duly replied to the said show cause notice.

Considering the above, management view and ongoing dispute (already covered in basis of qualified opinion in para 1(a) above), the potential impact of the non-measurement of financial guarantee as required by ‘Ind AS 109 - Financial Instruments‘ on the profit (excluding other comprehensive income) for the year ended March 31, 2023, and consequently on the total equity as on March 31, 2023, cannot be ascertained.

2. As stated in Note 48 to the standalone Ind AS financial statements and considering the non-evaluation of impairment provision in accordance with Ind AS 109 - Financial Instruments and Ind AS 36 - Impairment of Assets, towards expected credit losses in respect of the loans and advances / deposits totaling to Rs. 1,63,711.06 lacs (disclosed under current financial asset considering repayable on demand) and towards diminution in the value on the Companys investments totaling to Rs. 42,984.38 lacs, respectively, as on March 31,2023, that were invested in / advanced to certain subsidiaries and other parties which have incurred significant losses and / or have negative net worth as at March 31, 2023 and / or have pending legal disputes with respect to the underlying projects / properties of respective entities, we are unable to comment on the impact of non-provision of impairment (if any) on the profit (excluding other comprehensive income) and classification of the loans and advance under current financial asset for the year ended March 31,2023 and consequently on the total equity as on March 31,2023.

3. Attention is invited to Note 25.5 to the standalone Ind AS financial statements, which mentions that consequent to the ongoing negotiations as regards one-time settlement, the Company has not provided for interest on loan from financial institutions (excluding penal interest, if any) amounting to Rs. 3,270.21. lacs pertaining to year ended March 31,2023 [cumulative unprovided interest of Rs 4,914.39 lacs till March 31, 2023] (these amounts exclude interest related to one-of the lender with whom settlement has been agreed upon during the year). Had this provision for interest on loan been made, profit (excluding other comprehensive income) for the year end would have been lower by the said amount and the balance in other equity would have been lower by cumulative unprovided interest of Rs. 4,914.39 lacs till March 31,2023. The above non provision of interest results in non-compliance with accounting treatment as prescribed by Ind AS 23 Borrowing Cost.

The cumulative impact of the above qualifications cannot be quantified since the cumulative and net impact of the above qualifications is not assessed by the management. Further on account of the above qualifications, the unreserved statement on compliance with Ind AS is also impacted to that extent.

Qualifications listed in para 1(a), 1(b), 2 and 3 have been reported by us in the audit report dated 30th May 2022 for the year ended March 31, 2022.

We conducted our audit in accordance with Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Ind AS 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 Ind AS financial statements under the provisions of the Act and Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the standalone Ind AS financial statements.

Material uncertainty related to going concern

The Company has various debt obligations (excluding corporate guarantee) aggregating to Rs. 99,389.12 lacs within the next 12 months. These obligations are higher than the current assets which are liquid in nature. This could result in significant uncertainty on its ability to meet these debt obligations and continue as going concern. The management is addressing this issue robustly, the Company has entered / negotiating one-time settlement with various lenders, raised funds through issued convertible warrants, entered in development agreement / joint ventures to revive various projects which have significantly high growth potential. The management is confident that they will be able to manage the liquidity position by restructuring the existing terms of borrowings, monetization of non-core assets and mobilization of additional funds. Accordingly, the unaudited standalone financial results are prepared on a going concern basis (Refer Note 53 of the standalone Ind AS financial statements).

Our opinion is not modified in respect of the above matter. Attention was also drawn by us in our audit report dated 30th May 2022 of previous financial year in respect of above matter.

Emphasis of Matter

We draw attention to the following matters in the notes to the standalone Ind AS financial statements:

1. As stated in note 55 of the standalone Ind AS financial statements with respect to security deposits aggregating to Rs 2,257.95 lacs, investments and loans & advances in certain subsidiary companies / entities aggregating to Rs 1,94,262.07 lacs and inventory of construction work in progress of Rs 34,098.04 lacs, we have relied upon management estimates and explanations as regards, various approvals obtained

/ pending, stage of completion, projections of expected cost and revenue, realization of construction work in progress and market value of the underlying developments rights. These estimates are dynamic in nature and are dependent upon various factors such as eligibility of the tenants, changes in the saleable area, acquisition of new Floor Space Index (FSI) and other factors. Changes in these estimates can have a significant impact on the financial results of the company for the year ended March 31,2023, and future periods, however quantification of the impact due to change in said estimates is not practical. Being a technical matter, these management estimates have been relied upon by us.

2. As stated in note 25.6 and 25.7 of the standalone Ind AS financial statements, during the year, the Company has entered into one-time settlement with one of the financial institutions subject to the compliance with the payment terms. As per the said settlement the Company is required to pay Rs. 18,560 lacs (plus interest as per agreed rate) upto 31st January 2025 as per repayment schedule specified therein. Additionally, the write-back / difference (if any) between the original loan amount plus accrued interest upto the date of settlement and the revised amount payable would be accounted in the period in which the condition of settlement arrangement are met. The Company has requested for extension of time for the installment due on 31st March 2023 from the lender which has been in principle agreed by the lender subject to execution of necessary addendum settlement agreement which is in the process of being executed.

3. The Company has recognized net deferred tax assets on changes in fair value of financial instruments aggregating to Rs 9,214.48 lacs in the earlier years. In the opinion of the management, there is a reasonable certainty as regards utilization/reversal (consequent to potential increase in fair value in future) of the said deferred tax assets. As regards the same also refer Note 10.1 of the standalone Ind AS financial statements.

4. With respect to various legal matters our comments are as under:

a. As regards certain allegations made by the Enforcement Directorate against the Company and its two Key Managerial Persons, in a matter relating to Prevention of Money Laundering Act, 2002, this matter is sub-judice and the impact, if any, of the outcome is unascertainable at this stage (refer Note 49 to the standalone Ind AS financial statements).

b. As regards attachment order issued by adjudicating authority under Prevention of Money Laundering Act, 2002, by which the Companys assets aggregating to Rs. 711.48 lacs have been attached on August 30, 2011. Consequently, the adjudicating authority has taken over the bank balance of Rs. 68.93 lacs, two flats having written down value of Rs. 85.72 lacs as on March 31,2023 and Investment in Redeemable Optionally Convertible Cumulative Preference Shares - Series A and Series C made by the Company aggregating to Rs. 556.83 lacs in earlier years. The impact, if any, of its outcome is currently unascertainable (refer Note 51 to the standalone Ind AS financial statements).

c. As stated in note 47A to standalone Ind AS financial statements, following are the Emphasis of Matters in their financial statements for the year ended March 31,2023, of the partnership firms (where Company is a partner), which have not been audited by us:

i. As regards the recoverability of Trade Receivables of Rs. 4,930.33 lacs as on March 31, 2023 which are attached under the Prevention of Money Laundering Act, 2002 and non-provision for expected credit loss based on the management assessment as regards the outcome of the said matter.

ii. Allegations made by the Central Bureau of Investigation (CBI) relating to the 2G spectrum case and regarding attachment order issued by adjudicating authority under Prevention of Money Laundering Act, 2002 and the undertaking given by the Company that it will bear the loss if there is any non / short realization of the attached asset.

These matters are sub-judice and the impact, if any, of its outcome is currently unascertainable.

d. In addition to the above, the Company is a party to various legal proceedings in normal course of business (including cases pending before the Honble National Company Law Tribunal under Insolvency and Bankruptcy Code, 2016) and does not expect the outcome of these proceedings to have any adverse effect on its financial conditions, results of the operations or cash flow. We have relied upon the representation from the in-house legal team as regards the same (refer Note 46.2 to the standalone Ind AS financial statements).

e. As stated in note 58.9 to the standalone Ind AS financial statements, during the previous year, Income tax authority carried out search operation at premises of the Company, firms in which Company is partner and KMPs and during the earlier year, Central Bureau of Investigation (CBI) has carried out searches on the premises of one of its wholly owned subsidiaries and KMP of the Company. Certain documents [including back-up of accounting software] were taken by the department and CBI. In view of ongoing proceedings, the company is not in a position to ascertain the possible liability, if any.

In respect of matter covered in above para 1,3 and 4 attention were drawn by us in the audit report of the previous financial year.

Our opinion is not modified in respect of the above matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements of the current year. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matters described in the Basis for Qualified Opinion, Material Uncertainty Related to Going Concern and Emphasis of Matter (other than those reported below) section above, we have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditors responsibilities for the audit of the standalone Ind AS financial statements section of our report including in relation to these matters.

Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key Audit Matter How the matter was addressed in the audit
Valuation of Inventory • Our audit procedure in respect of this area includes:
(Refer Note 2.11 and 13 to the standalone Ind AS financial statements)

• Obtained an understanding of managements process and evaluated design and tested operating effectiveness of controls for valuation of inventories.

Inventory consisting of projects under development has an aggregate value of Rs. 34,098.04 lacs as on March 31,2023.
These projects are under initial stages of development and the management estimates that net realizable value of these projects will be greater than the carrying cost based on the approved initial plans, future projections and future prospects of these projects. As on March 31, 2023, there is no significant progress in development activities of these projects. • Obtained valuation reports from independent valuer engaged by the management for all the material projects work-in-progress and evaluated the appropriateness of the underlying data, methodology applied by independent valuer and assumption given by the management for inventory valuation.

• Verified, on test check basis, the project related expenditure incurred during the year and analysed the movement of projects work-in-progress during the year. Our audit procedure also includes visits to major projects under inventory work in progress.

Considering the materiality of the amount involved and degree of management judgment in valuation, we have identified valuation of inventory as a key audit matter for the current year audit
• We did not identify any significant exceptions to the managements assessment as regards to valuation and no adjustment is necessary for the purpose of the valuation.
(Also refer Emphasis of Matter paragraph ‘1 above)

Information Other than the Standalone Ind AS 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 Management Discussion and Analysis, Boards report including annexure to board report, Business Responsibility and Sustainability Reporting, Corporate Governance and Shareholders information, but does not include the standalone Ind AS financial statements, consolidated Ind AS financial statements and our auditors report thereon.

Our opinion on the standalone Ind AS 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 Ind AS 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 Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to the date of this report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have concluded that material misstatement with respect to matters described in the basis of qualified opinion section of our report also exist in the other information.

Responsibilities of Management and Those Charged with Governance for the Standalone Ind AS Financial Statements

The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including Ind AS prescribed under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

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 standalone Ind AS 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 Ind AS 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 Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS 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 this standalone Ind AS financial statements. As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind AS 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 Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements 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 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 Ind AS 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 Ind AS financial statements, including the disclosures and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone Ind AS financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the 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 Ind AS 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 Ind AS financial statements of the current year 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.

Other Matters

a. We draw attention to Note 47 to the standalone Ind AS financial statements, regarding share of (loss) (net) from investment in three partnership firms, three limited liability partnerships and four association of person aggregating to Rs. (243.75) lacs for the year ended March 31, 2023, included in the standalone Ind AS financial statements, are based on the audited financial statement of such entities. These financial statements have been audited by their respective independent auditors of these entities, whose reports have been furnished to us by the Management and our audit report on the Statement is based solely on such audit reports of the other auditors.

b. During the year, the Board has approved the proposal for amalgamation of Platinumcorp Affordable Builders Private Limited ("Transferor Company") with one of its subsidiaries, Royal Netra Constructions Private Limited ("Transferee Company") and their respective shareholders under the scheme of amalgamation. The aforesaid scheme is subject to the approval of NCLT (refer note 6.12 to the standalone Ind AS financial statements).

Our opinion on the standalone Ind AS financial statements and our report on ‘Other Legal and Regulatory Requirements below, is not modified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of section 143(11) of the Act, we give in "Annexure 1", 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. Except for the possible effects of the matters described in the Basis for Qualified Opinion section above, 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 of the aforesaid standalone Ind AS financial statements;

b. Except for the possible effects of the matters described in the Basis for Qualified Opinion section above, in our opinion, proper books of account as required by law relating to preparation of the aforesaid standalone Ind AS financial statements have been kept by the Company so far as it appears from our examination of those books and the reports of the other auditors;

c. The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this report are in agreement with the books of account maintained for the purpose of preparation of standalone Ind AS financial statements;

d. Except for the possible effects of the matters described in the Basis for Qualified Opinion section above, in our opinion, the aforesaid standalone Ind AS financial statements comply with the Ind AS prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;

e. The matters described under the Basis for Qualified Opinion, Material Uncertainty Related to Going Concern and Emphasis of Matter section above, in our opinion, may have an adverse effect on the functioning of the Company;

f. On the basis of the written representations received from the directors as on March 31, 2023, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023 from being appointed as a director in terms of section 164(2) of the Act;

g. 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 2". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting;

h. The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified opinion paragraph above;

i. With respect to the other matter to be included in the Auditors Report in accordance with the requirements of section 197(16) of the Act, In our opinion and to the best of our information and according to the explanations given to us, the Company has not paid any remuneration to its directors during the year except sitting fees to independent directors and non-executive directors in accordance with the provision of section 197(5) of the Act; and

j. 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 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the pending litigations & disputes on its financial position in notes 46, 47A to 47F, 49 & 51 to the standalone Ind AS financial statements. Further as per the note 46.2, the Company is a party to various litigation proceeding in normal course of business (including cases pending before the Honble National Company Law Tribunal under Insolvency and Bankruptcy Code, 2016). The amounts / financial impact of these litigations cannot be estimated in the opinion of the management. For the purpose of said reporting, we have relied upon the opinion / confirmation received from the in-house legal team.

(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

(iv) As per the management representation provided, we report,

(a) no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company

(b) no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material mis-statement. Also refer note 58.2 of the standalone Ind AS financial statements.

(v) The Company has neither declared nor paid any dividend during the year and hence compliance with section 123 of the Companies Act 2013 does not arise.

(vi) Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from 1st April, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.

For N. A. Shah Associates LLP

Chartered Accountants

Firm Registration No.: 116560W / W100149

Milan Mody

Partner

Membership No.: 103286 UDIN: 23103286BGPZNG6174

Place: Mumbai Date: May 30, 2023

Annexure 1 to the Independent Auditors Report for the year ended March 31, 2023

(Referred to in paragraph 1 of the heading ‘Report on Other Legal and Regulatory Requirements section of our report of even date) i. In respect of Property, Plant and Equipment & Intangible Assets:

(a) (A) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and

Equipment.

(B) The company does not hold any intangible assets hence reporting under clause (i)(a)(B) of paragraph 3 of the order is not applicable.

(b) The Company has a program for the verification of Property, Plant and Equipment to cover all the items in a phased manner over a period of 3 years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain Property, Plant and Equipment were physically verified by the management subsequent to year end and no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of all the immovable properties (other than immovable properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company as at March 31,2023 except for the details given below and tabulated hereunder.

In case of two flats situated in Pune, Maharashtra, we are informed that original documents are attached by Enforcement Directorate (ED) under Prevention of Money Laundering Act, 2002 (refer note 3.1 of the standalone Ind AS financial statements). We have verified the scanned copy of the agreements and we have also relied on the order issued by ED with this regard.

Description of property Gross block as on

March 31, 2023 (Rs. In lacs)

WDV as on March 31, 2023 (Rs. In lacs) Held in name of Whether promoter, director or their relative or employee Period

held

Reason for not being held in the name of Company
Sale Office - Pune 139.45 85.74 Shri Mukund Bhavan Trust No Since

2003

The Company has development rights over the said land and is developing a real estate project. Sales office had been constructed which will be demolished upon completion of the project. The title of the land will be conveyed to the ultimate buyers (Also refer note 3.2 of standalone IND AS financial statements).

(d) The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use assets) and intangible assets during the year. Thus, clause (i)(d) of paragraph 3 of the Order is not applicable.

(e) In our opinion and according to the information and explanations given to us, there are no proceedings which have been initiated or are pending against the Company as at March 31,2023 for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (as amended) and rules made thereunder.

ii. (a) The inventories comprise of payments for acquisition of lands, tenancy rights, related compensation, contract payments and other

expenditure on construction and development of the projects of the Company, having regards to nature of inventory, physical verification is carried out by way of site visits by the management at reasonable intervals during the year. In our opinion, the coverage and the procedure of such verification by the management is appropriate. No material discrepancies were noticed on physical verification carried out during the year.

(b) The Company has not been sanctioned working capital limits in excess of Rs. 500 lacs, in aggregate, from banks or financial institutions at any point of time during the year on the basis of security of current assets. Accordingly, the requirement to report on clause (ii)(b) of paragraph 3 of the Order is not applicable to the Company.

iii. According to the information and explanations given to us, during the year, the Company has made investments in, provided guarantees or securities or granted unsecured loans and advances in the nature of loans to Companies, firms, Limited Liability Partnerships and other parties, in respect of which, our comments are as under:

(a) the Company has provided loans or advances in the nature of loans, stood guarantee and provided security to companies, firms, Limited Liability Partnerships or any other parties during the year as follows:

(Rs. in lacs)

Particulars Guarantees and securities Loans or advances in the nature of loan
Aggregate amount granted / provided during the year
Subsidiaries 34,500.00 66,802.65
Associates - -
Joint ventures - 28.55
Other than above - 1830.90
Balance outstanding as at balance sheet date
Subsidiaries 226,252.00 1,75,585.42
Associates 52,500.00 -
Joint ventures - 625.82
Other than above 373,300.00 735.90

(b) In our opinion and according to the information and explanations given to us, the terms and conditions of the investments made, guarantees provided, securities given during the year are not prejudicial to the Companys interest.

Loans and advances granted during the year, mainly interest free loans given to subsidiaries, associates or joint ventures entities, are not prejudicial to the interest of the Company because such infusion of funds is towards various projects undertaken by such parties in which the Company has commercial interest.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in respect of loans and advances in the nature of loans granted, the schedule of repayment of principal and payment of interest has not been stipulated. These loans are repayable on demand and the amounts have been received whenever demanded by the Company. Thus, we are unable to make a specific comment on the regularity of repayment in respect of such loans.

(d) As stated above, since repayment schedule is not stipulated, we are unable to comment on the amounts overdue for more than ninety days and reasonable steps for recovery as required under clause (iii)(d) of paragraph 3 of the Order.

(e) In our opinion and according to the information and explanations given to us, considering the fact that the loans granted to the entities are in the nature demand loans which have been repaid as and when demanded by the Company. Thus, we are unable to make a specific comment on the regularity of repayment in respect of such loans and also whether any loans where granted to settle the overdue of existing loans to the same party.

(f) Following are the details of the aggregate amount of loans or advances in the nature of loans granted during the year to promoters or related parties as defined in clause (76) of section 2 of the Companies Act, 2013 which are either repayable on demand or without specifying any terms or period of repayment:

(Rs. in lacs)

Particulars All parties Promoters Related parties
Aggregate amount of loans / advances in nature of loans either on repayable on demand or agreement does not specify any terms or period of repayment 68,662.10 - 66,831.20
Percentage of loans / advances in nature of loans to the total loans 100% - 97.33%

iv. According to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186(1) of the Act in respect of grant of loans, making investments and providing guarantees and securities, as applicable. Further, the provisions of section 186 [except for sub-section (1)] of the Act are not applicable to the Company as it is engaged in the business of providing infrastructural facilities.

v. In our opinion and according to the information and explanation given to us, the Company has not accepted any deposits from the public within the provisions of sections 73 to 76 of the Act and the rules framed there under. Accordingly, the provisions of clause (v) of paragraph 3 of the Order are not applicable to the Company.

vi. The maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Act and rules thereunder. However, at present the Company does not fall under the criteria for which such records are required to be maintained. Hence, reporting under the provisions of clause (vi) of paragraph 3 of the Order are not applicable to the Company.

vii. In respect of statutory dues:

(a) According to the information and explanations given to us and on the basis of our examination of records of the Company, in respect of amounts deducted / accrued in the books of account, the Company has been generally regular in depositing undisputed statutory dues including goods and services tax, professional tax, custom duty, cess and any other material statutory dues, as applicable to the Company, during the year with the appropriate authorities except significant delays in payment of tax deducted at source and provident fund. There are no undisputed amounts payable in respect of statutory dues outstanding as at March 31,2023 for a period of more than six months from the date they become payable except:

Name of the statute Nature of the dues Amount (Rs. in lacs) Period to which the amount relates Due Date Date of Payment
Mumbai Municipal Corporation Act, 1888 Property Tax 1,635.63*

(excluding interest and penalty#)

Upto August 2022 Various dates up to September 2022 Not paid
Income Tax Act, 1961 TDS on Salary 7.06

(excluding interest)

March, 2020 to March, 2021 Various dates ranging from May, 2020 to May, 2021 Not paid

* Amount disclosed above is based on project wise liability reflected on website of Brihanmumbai Municipal Corporation (BMC).

# Interest and penalty are not quantified, and it is also disclosed under contingent liability of the Company.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there are no dues referred to in sub-clause (a) above have not been deposited on account of any dispute as at March 31,2023 except the following disputed dues which have not been deposited since the matters are pending with the relevant forum:

Name of the statute Nature of dues Amount (Rs. in lacs) Period to which the amount relates Forum where dispute is pending
Finance Act, 1994

Service Tax along with penalty (excluding interest)

11,043.71 F.Y. 2011-12 to F.Y. 2017-18

Commissioner of Goods and Services Tax

1,063.06 F.Y. 2012-13
Service Tax (excluding interest and penalty) 189.73 F.Y. 2012-13 & F.Y. 2016-17 to F.Y. 2017-18
Maharashtra Value Added Tax VAT (including interest) 189.90 F.Y 2009-10 Maharashtra Sales tax Tribunal

viii. According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax assessments under the Income Tax Act, 1961 as income during the year. Accordingly, the requirement to report on clause 3(viii) of the Order is not applicable to the Company.

ix. (a) The Company has defaulted in repayment of loans, other borrowings and interest to financial institutions and banks during the year as

tabulated below. Further, loans and inter corporate deposits amounting to Rs. 60,805.79 lacs (including interest of Rs. 4,684.49 lacs) are repayable on demand and terms of interest thereon (wherever applicable) have not been stipulated. According to the information and explanation given to us, such loans and interest thereon have not been demanded for repayment during the relevant financial year. This matter has been disclosed in notes 23 & 25 to standalone IND AS financial statements.

Nature of borrowings including debt securities Name of the lender Amount not paid on due date *

(Rs. in lacs)

Whether principal or interest No. of days delay or unpaid (upto the date of audit report i.e. May 30, 2023 or date of settlement / repayment) Remarks, if unpaid
Loan ICICI Bank Limited 3,318.28 Principal and interest 1,827 Refer note 1 below
Loan Reliance Commercial Finance Limited 19,147.36 Settlement amount (principal and interest) 1,185 Refer Emphasis of matter para ‘2 to the main audit report.
Loan Reliance Commercial Finance Limited 498.77 Settlement amount (principal and interest) 2,006 Refer Emphasis of matter para ‘2 to the main audit report.
Loan

Reliance Home Finance Limited

6,670.00 Principal 1,551 Since March 2019
15,963.76A Interest 2,006 Since December 2017 onwards

* Principal and interest amount.

A Interest amount includes interest for which provision is not made in the books as mentioned in the basis of qualification section in our main audit report.

Note 1:

As mentioned in note 25.2 to standalone Ind AS financial statements, the Company has entered into restructuring and settlement arrangement with the ICICI Bank Limited and accordingly repaid the entire outstanding principal amount and the unpaid interest amount has converted into funded interest bearing term loan in current year. This loan (outstanding amount of Rs 1,645.92 lacs and interest outstanding of Rs 1,672.36 lacs) was under default till July 02, 2022, and the same is reported in the previous year.

(b) According to the information and explanations given to us and on the basis of our audit procedures, we report that the Company has not been declared willful defaulter by any bank or financial institution or government or any other lender.

(c) According to the information and explanations given to us, no fresh term loans were availed by the Company during the year except that there were term loans outstanding as at the beginning of the year, which were restructured and as per settlement arrangement the Company has paid the entire principal amount and converted unpaid interest into funded interest term loan and hence reporting under clause ix(c) of paragraph 3 of the order is not applicable.

(d) According to the information and explanations given to us and on the basis of our audit procedures, we report that no are funds raised on short-term basis by the Company. Accordingly, clause (ix)(d) of paragraph 3 of the Order is not applicable. Also refer paragraph "Material uncertainty Related to Going Concern" in our main audit report which highlights various debt obligations aggregating to Rs. 99,389.12 lacs within next 12 months and the same being higher than the current assets which are liquid in nature.

(e) On an overall examination of the standalone Ind AS financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures. Unsecured loans from subsidiaries, associates and joint ventures and other entities taken during the year are for general corporate purpose and have been utilized accordingly including granting of loans to subsidiary, associate and joint venture entities.

(f) According to the information and explanations given to us and on the basis of our audit procedures, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries, associates and joint venture entities and hence, the requirement to report on clause (ix)(f) of paragraph 3 of the Order is not applicable to the Company.

98

x. (a) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year.

Therefore, the clause (x)(a) of paragraph 3 of the Order is not applicable to the Company.

(b) The Company has complied with provisions of sections 42 and 62 of the Companies Act, 2013 in respect of the preferential allotment / private placement of convertible warrants and equity shares allotted on conversion of warrants during the year. According to the information and explanations given to us, the amount raised has been used for the purposes for which the funds were raised and as on March 31,2023, Rs. 15.35 lacs are unutilized.

xi. (a) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted

auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud by the Company or any fraud on the Company, noticed or reported during the year, nor have we been informed of any such instance by the management. However, we are informed that during the financial year 2010-2011, the CBI in its charge sheet filed in connection with irregularities in the allotment of 2G telecom license, has accused certain Directors of the Company (in their capacity as promoters of a telecom licensee company). Two other Management Personnel of the Company have also been charged sheeted in their capacity as Directors of another company (Refer Note 51 to the standalone IND AS financial statements) which is alleged to have paid an amount of Rs. 20,000 lacs as illegal gratification in the same connection. As explained to us, the Company is not directly a party to the allegations and Special Court has passed the order acquitting all the accused via order dated December 21,2017. However, the matter is sub-judice in the Delhi High Court as on reporting date due to appeal filed by CBI against the order of Special court.

Also, the Company is in receipt of summons from Special Court for Prevention of Money Laundering Act (PMLA), Mumbai as one of the accused in connection with a complaint filed by Enforcement Directorate under EcIR No. ECIR/MBZO/07/2015 and ECIR/ MBZO/08/2015. The Honble Court has also summoned two of the Key Managerial Personnels (KMP) of the Company as accused as per the said complaint. The matter in relation to the Company and the KMPs involves certain advances given by the Company to another company, which were subsequently refunded fully upon cancellation of the understanding (refer Notes 51 & 58.9 to the standalone IND AS financial statements).

(b) No report under sub-section (12) of section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and up to the date of this report.

(c) As represented to us by the management, there are no whistle blower complaints received by the Company during the year.

xii. The Company is not a Nidhi company. Therefore, clause (xii) of paragraph 3 of the Order is not applicable to the Company.

xiii. According to the information and explanations given to us and based on our examination of the records, transactions entered into by the Company with the related parties are in compliance with sections 177 and 188 of the Act, where applicable and the details have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards (Also refer Note 56 to the standalone Ind AS financial statements).

xiv. (a) In our opinion and based on our examination, the internal audit system including coverage is commensurate with the size and nature of

its business. The periodicity of the internal audit needs to be further increased.

(b) We have considered the internal audit reports for the year under audit issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.

xv. 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 them and hence, provisions of section 192 of the Act are not applicable to the Company.

xvi. (a) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 based on legal opinion obtained

by the Company (Refer Note 43.2 (G) to the standalone Ind AS financial statements). Hence, reporting under clause (xvi)(a), (b) and (c) of paragraph 3 of the Order is not applicable.

(b) As informed to us, there is no core investment company within the Group (as defined in the Core Investment Companies (Reserve Bank) Directions, 2016) and accordingly, reporting under clause (xvi)(d) of paragraph 3 of the Order is not applicable.

xvii. The Company has incurred cash losses of Rs. 2,140.33 lacs in the current year. In the immediately preceding financial year Company had incurred cash losses of Rs. 10,352.92 lacs. The impact of the qualification made in the audit report on reporting of the cash losses has not been considered as it is not quantified by the management of the Company in the current year as well as previous year.

xviii. There has been no resignation of the statutory auditors during the year. Therefore, clause (xviii) of paragraph 3 of the Order is not applicable.

xix. On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and as mentioned in notes 53 of the standalone Ind AS financial statements and ‘Material uncertainty related to Going concern paragraph in our main audit report, considering the fact that debt obligations due within next 12 months are significantly greater than the liquid current assets, there exist material uncertainty as on the date of the audit report that the company is capable of meeting its liabilities existing at the date of balance sheet as and when they fall due. Further as explained in the said note, the management is addressing this issue robustly and during the year, the Company has entered into one-time settlement with various lenders, raised funds through issue of convertible warrants, entered in development agreements / joint ventures to revive various projects which have significantly high growth potential. The management is confident that they will be able to arrange sufficient liquidity by restructuring the existing terms of borrowings, monetization of non-core assets and mobilization of additional funds. Accordingly, the standalone Ind AS financial statements are prepared on a going concern basis

We, further state that this is not an assurance as to the future viability of the Company and our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. The Company is not required to spend on CSR for ongoing or other than ongoing projects as per section 135 of the Companies Act, 2013. Accordingly, the requirement to report on clause 3(xx)(a) and (b) of the Order is not applicable to the Company.

For N. A. Shah Associates LLP

Chartered Accountants

Firm Registration No.: 116560W / W100149

Milan Mody

Partner

Membership No.: 103286 UDIN: 23103286BGPZNG6174

Place: Mumbai Date: May 30, 2023

Annexure 2 To the Independent Auditors Report for the year ended March 31, 2023

(Referred to in paragraph 2(g) under ‘Report on Other Legal and Regulatory Requirements section of our report of even date)

Report on the Internal Financial Controls under section 143(3)(i) of the Companies Act, 2013 ("the Act")

Opinion

We have audited the internal financial controls over financial reporting of D B Realty Limited ("the Company") as of March 31,2023 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

In our opinion, subject to our comments mentioned in Emphasis of Matter para below, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls system over financial reporting was operating effectively as at 31st March, 2023, 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).

Emphasis of matter

(a) We draw attention to para (a) and (b) of Qualified Opinion section of our main audit report as regards non-evaluation of impairment provision and expected credit loss in accordance with Ind AS 109 - Financial Instruments and Ind AS 36 - Impairment of Assets.

(b) Frequency of Internal audit of the Company needs to be further increased considering the size and nature of the business.

Our opinion on the internal financial controls over financial reporting is not modified in respect of the above matters.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls over Financial Reporting

The 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 issued by 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 Act.

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") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, 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 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 controls based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone Ind AS 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 over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial controls over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls 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 the standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures 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 standalone Ind AS 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 controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For N. A. Shah Associates LLP

Chartered Accountants

Firm Registration No.: 116560W / W100149

Milan Mody

Partner

Membership No.: 103286 UDIN: 23103286BGPZNG6174

Place: Mumbai Date: May 30, 2023

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