We have audited the accompanying standalone financial statements of SSPDL Limited ("the Company") which comprise the Balance Sheet as
at 31st March, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the
Statement of Cash Flows for the year ended on that date and notes to the financial statements, including a summary of significant accounting
policies and other explanatory information (herein after referred to as "standalone financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements
give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity
with the Indian Accounting Standards prescribed under section 1 33 of the Act read with the Companies (Indian Accounting Standards) Rules,
2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st
March, 2024, its loss including other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section
143(1 0) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for
the Audit of the standalone financial statements section of our report. We are independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of
the standalone financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled
our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Emphasis of Matter
We draw your attention to Note 8(a) of the standalone financial statements pertaining to receivables balances including trade receivables
which are due from related parties and others.
As at 31st March, 2024, the trade receivables amounted to Rs.11,21,76.75 Thousands which include receivables from related parties amounting
to Rs. 11,21,103.98 Thousands are outstanding for more than one year.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial
statements for the financial year ended 31sr March, 2024. These matters were addressed in the context of our audit of the standalone financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined
the matters described below to be the key audit matters to be communicated in our report.
|
S.
No
|
Key Audit Matters
|
Auditor's Response
|
|
1
|
Accuracy of recognition, measurement, presentation and
disclosures of revenues and other related balances in view
of adoption of Ind AS 115 "Revenue from Contracts with
Customers".
The application of the revenue accounting standard involves
certain key judgements relating to identification of the contract
with a customer, identification of distinct performance
obligations, determination of transaction price of the identified
performance obligations, the appropriateness of the basis used
to measure revenue recognized when a performance obligation
is satisfied. Additionally, new revenue accounting standard
contains disclosures which involves collation of information in
respect of disaggregated revenue and periods over which the
remaining performance obligations will be satisfied subsequent
to the balance sheet date.
Construction Revenue and Profit/Loss Recognition
|
Our procedures pertaining to Construction revenue included:
|
|
• Evaluation and testing of management's review and approval
of revenue and cost forecasting.
• Selection of a sample of contracts for testing using:
o Data Analytic routines based on a number of quantitative and
qualitative factors, related to size and risk of projects.
• For the sample selected, we:
o Conducted visits to a selection of project sites to understand
project schedule, forecast revenue/cost and risks and
opportunities.
o Read relevant contract terms and conditions to evaluate the
inclusion of individual characteristics and project risks in the
Company's estimates.
o Tested forecast costs for labour, subcontractors, equipment,
materials, and project overheads by comparing to actual
incurred spend and committed future contract.
o Tested the variations and claims included within revenue
against the criteria for recognition in the accounting standards
via assessment of:
|
|
The Company performs various building, engineering and
services construction contract works (projects) for a wide range
of customers. The Company contracts in a variety of ways. Each
project has a different risk profile based on its
|
|
S.
No
|
Key Audit Matters
|
Auditor's Response
|
|
1.
|
individual contractual and delivery characteristics. We focused
on construction revenue and profit recognition as a key audit
matter due to the judgment required by us in assessing the
range of factors that impact the Company's estimate of costs
and revenue, and the potential impact on profit. Estimating total
costs to complete during project life is complex and requires
judgment. Typical cost estimates include labour, subcontractors,
equipment, materials, and project overheads. Changes to these
cost estimates could give rise to variances in the amount of
revenue and profit/loss recognized. Judgment is also involved
by us in assessing the amount of revenue to be recognized
specifically in relation to contractual variations and claims
revenue, which has not been formally agreed with the customer
at the reporting date.
Development Revenue and Profit/Loss Recognition
|
• correspondence between the Company and the customer;
and
• the Company's legal and external experts' reports received
on contentious matters.
Our procedures pertaining to Development revenue included:
|
|
• Evaluation and testing of management's review and approval
of development revenue and cost forecasting.
• Selection of a sample of developments based on quantitative
and qualitative information such as transaction size, potential
settlement risk and the complexity of the contractual terms of
sale.
• For the sample selected we:
o compared revenue recognized to contractual terms of sale and
cash settlements.
o assessed the Company's determination of the transfer of control
by a detailed analysis of the contractual terms of sale against
the criteria in the accounting standards.
o assessed the customers' credit risk including evaluating public
information as to the financial position of the purchaser in the
context of the level of installments received by the Company.
o tested the completion of performance obligations by comparing
the work done to the fulfill the obligations with the contractual
terms of sale.
o assessed the Company's cost allocation methodology by
comparing costs allocated to sales recognized in the year
relative to the total project, against the Company's accounting
policy and the requirements of the accounting standards.
|
|
The Company develops for sale both built form product (for
example residential apartments, Villas and commercial/retail
buildings) and residential land communities. As development
revenue is recognized based on an assessment of when the
Control is transferred to the purchaser, an assessment of the
contractual terms of sale and of the status of completion of
performance obligations is required. This was a key audit matter
due to the number of judgments required by us in assessing
development revenue and profit recognition, in particular for
commercial/retail building sales and residential apartments/
villas. The assessment of profit recognition requires judgment
as cost allocation is typically a function of total forecast project
profit based on either revenue or area estimation.
Refer Notes 2.2h and 15 to the standalone financial statements.
|
|
2.
|
Recoverability of Development Property Inventory
The Company capitalizes development costs into inventory over
the life of its projects. Development costs include the purchase
of land, site infrastructure costs, construction costs for built form
product and borrowing costs. Inventory is carried at the lower
of cost and net realizable value and the recoverability of these
costs is a significant judgment as that assessment is based on
forecasts of:
o Sales prices
o Forecast construction and infrastructure costs to complete
the development
Where a development is forecast to be loss making and the
inventory is no longer considered to be recoverable, it is
considered to be impaired and an expense is recognized. This
is a key audit matter due to many developments being long
term which increases the level of forecasting judgment and
audit complexity in estimating sales prices and future costs to
complete the development.
Refer Note 7 to the standalone financial statements.
|
Our procedures included:
Selection of a sample of projects for testing using:
• Data Analytic routines based on a number of quantitative and
qualitative factors, related to size, duration and risk of projects.
• The Company's project reporting.
For the sample selected we:
o compared expected sales prices to published industry forecasts
and comparable sales prices achieved in the year.
o tested forecast construction and infrastructure costs to
underlying supplier contracts, historical experience of similar
costs and our industry expectation of cost contingency levels
and cost escalation assumptions.
|
|
3.
|
Valuation of Deferred tax assets
The Company has a significant amount of deferred tax assets,
mainly resulting from net operating losses. The valuation
of deferred tax assets is significant to our audit because the
assessment process is complex and is based on estimates of
future taxable income. The risk exists that future (fiscal) profits
will not be sufficient to recover all or part of these deferred tax
assets. Management has supported the recoverability of the
|
Principal Audit Procedures
In this area, our audit procedures included, amongst others:
• Using our own tax specialists to assist us in assessing the
appropriateness of the level of deferred taxes recognized in
the balance sheet.
• We paid attention to the long-term forecasts and critically
assessed the assumptions and judgments underlying these
|
|
S.
No
|
Key Audit Matters
|
Auditor's Response
|
| |
deferred tax assets mainly with taxable income projections
which contain estimates of and tax strategies for future taxable
income.
Changes in, for example, the industrial footprint, the business
and its markets and changes in regulations may impact these
projections.
Refer Note 6 to the standalone Ind AS financial statements.
|
forecasts by considering the historical accuracy of forecasts
and the sensitivities of the profit forecasts.
• We assessed the adequacy of the income tax disclosures to the
financial statements, setting out the basis of the deferred tax
balance and the level of estimation involved.
|
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the other information. The other information comprises the information
included in the Management Discussion and Analysis, Board's Report including Annexures to Board's Report, Business Responsibility Report,
Corporate Governance and Shareholder's Information, but does not include the standalone financial statements and our auditor's report
thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during
the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 1 34(5) of the Companies Act, 2013 ("the Act") with respect to
the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including
other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 1 33 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 financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether these standalone financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these standalone 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 financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal financial controls 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 system in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made
by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability
to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's
report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether
the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable
that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider
quantitative materiality and qualitative factors (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to
evaluate the effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit
of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh
the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section
(11) of section 143 of the Act, we give in the "Annexure-A", a statement on the matters specified in paragraphs 3 and 4 of the Order, to the
extent applicable.
As required by section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination
of those books.
c) The balance Sheet, the statement of profit and loss 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.
d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 1 33
of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the directors as on 31st March, 2024, taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2024, from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate report in "Annexure-B". Our report expresses an unmodified opinion on the adequacy and operating
effectiveness of the Company's internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 1 97(1 6) of the
Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company
to its directors during the year is in accordance with the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditor's 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 impact of pending litigations on its financial position in its standalone financial statements- Refer
Note 24(b) to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the
Company.
iv. a) The management has represented that, to the best of its knowledge and belief, 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
or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the
Intermediaries shall, whether, directly or indirectly lend or invest in other person or entity identified in any manner whatsoever
by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the company
from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or
otherwise, that the company shall, whether, directly or indirectly, lend or invest in other person or entity identified in any manner
whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf
of the Ultimate Beneficiaries; and
c) Based on the audit procedures that were 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 (a) and (b) contain any material misstatement.
v. No dividend has been declared or paid during the year by the Company.
vi. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account
for the financial year ended 31st March, 2024 which has a feature of recording audit trail (edit log) facility and the same has operated
throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across
any instance of audit trail feature being tampered with.
As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 01, 2023, reporting under Rule 11 (g) of the
Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not
applicable for the financial year ended 31st March, 2024
For. KARVY & Co.
Chartered Accountants
ICAI Firm Registration No: 001757S
(DEDEEPYA NALLURI)
Partner
Place: Hyderabad Membership No. 225106
Date: 23-05-2024 UDIN: 24225106BKEPBT6672
|
