Independent Auditors’ Report
on the consolidated financial statements of Peninsula Land Limited
To the Board of Directors of Peninsula Land Limited.
We have audited the accompanying consolidated financial statements of Peninsula Land Limited (“the Company”) and its subsidiaries, associates and joint ventures (the Company, its subsidiaries, associates and joint ventures constitute “the Group”) which comprise the Consolidated Balance Sheet as at March 31, 2014, the Consolidated Statement of Profit and Loss and the Consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation of these consolidated financial statements on the basis of separate financial statements and other financial information regarding components that give a true and fair view of the consolidated financial position, consolidated financial performance and consolidated cash flows of the Group in accordance with accounting principles generally accepted in India. This includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and presentation of the consolidated financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
We report that the consolidated financial statements have been prepared by the Company’s Management in accordance with the requirements of Accounting Standard (AS) 21 “Consolidated Financial Statements”, Accounting Standard (AS) 23 “Accounting for Investments in Associates in Consolidated Financial Statements” and Accounting Standard (AS) 27 “Financial Reporting of Interests in Joint Ventures” as notified pursuant to the Companies (Accounting Standards) Rules, 2006 and on the basis of the separate financial statements of Peninsula Land Limited, its subsidiaries (including subsidiaries of subsidiaries), associates, joint ventures and step-down joint venture.
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditors on the financial statements of the subsidiaries, associates and joint ventures as mentioned in the ‘Other Matter’ paragraph below, the consolidated financial statements give a true and fair view in conformity with the accounting principles generally accepted in India:
(a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at March 31, 2014;
(b) in the case of the Consolidated Statement of Profit and Loss, of the profit for the year ended on that date; and
(c) in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date.
Emphasis of Matter
Attention is invited to:
- Note No.24(5) & 24(6) to the consolidated financial statements with regard to method of certain accounting being followed while giving effect to the amalgamation / merger of four entities with the Company as explained therein, (i) the restated / recorded values of work-in-progress and (ii) adjustment resulting there from & goodwill, merger scheme expenses etc. directly against general reserve / capital reserve / accumulated profits are not in conformity with the relevant provisions of Accounting Standard (AS) - 14 “Accounting for Amalgamations” and AS – 5 “Net Profit or Loss for the period, Prior Period Items and Changes in Accounting Policies”. Had the same accounting been in conformity with such Accounting Standards, the profit after tax would have been lower by ₹ 293.17 Crores.
- Note No.24(8) to the consolidated financial statements which states about pending approval of the Central Government for the excess managerial remuneration of ₹ 3.26 Crores. We are informed that the Company will recover such excess remuneration from the relevant Directors during Financial Year 2014-15 in case of non approval of the same from the Central Government.
- Note No. 24(10) to the consolidated financial statements which states that the recognition of expenses and income for ongoing projects which is based upon estimated costs and overall profitability of a project as per the judgment of management, which have been relied upon by us, these being technical matters.
- Note No.24 (29) to the consolidated financial statements with regard to MAT Credit Entitlement Claim of ₹ 61.01 Crores, which is based on the judgment of the management.
Our opinion is not qualified in respect of the above matters.
We did not audit the financial statements of the following subsidiaries (including one joint venture and two step down joint ventures) whose financial statements reflect total assets of ₹ 1,661.32 Crores, total revenue of ₹ 36.98 Crores and net cash inflows of ₹ 27.64 Crores.
- The standalone financial statements of six subsidiaries, which reflect total assets of ₹ 541.83 Crores as at 31st March, 2014, total revenue of ₹ 8.04 Crores and net cash inflow of ₹ 34.20 Crores for the year then ended; the standalone financial statements of one joint venture which reflects total assets of ₹ 378.46 Crores as at 31st March, 2014, total revenue of ₹ 0.00 Crores and net cash outflow of ₹ 6.47 Crores for the year then ended and consolidated financial statement of one of the subsidiaries (which comprises consolidation of twenty two step down subsidiaries and two step down joint ventures) which reflect total assets of ₹ 743.86 Crores as at 31st March, 2014, total revenues of ₹ 28.94 Crores and net cash outflows of ₹ 0.09 Crores for the year then ended were audited by other auditors whose reports have been furnished to us by the Management, and our opinion is based solely on the reports of the other auditors.
- The standalone financial statements of one step down subsidiary which reflect total assets of ₹ 103.15 Crores as at 31st March, 2014, total revenue of ₹ 0.56 Crores and net cash inflow of ₹ 0.01 Crore for the year then ended and three associate companies where the Group’s share of profit is ₹ 0.24 Crores for the year ended 31st March, 2014, whose financial statements are unaudited. These unaudited financial statements have been compiled and approved by the management of these associate companies which have been furnished to us by the Management and have been relied upon by us.
Our opinion is not qualified in respect of the above matters.
For Haribhakti & Co.
Firm Registration No.103523W
Date: 26th May, 2014