We have audited the standalone financial statements ofKMF Builders and Developers Limited (“the Company”), which
comprise the standalone balance sheet as at 31 March 2024, the standalone statement of profit and loss (including other
comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year
then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies
and other explanatory information.
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 (“Act”) in the manner so required and
give a true and fair view in conformity with the accounting Principles generally accepted in India, of the state of affairs of
the Company as at 31 March 2024, and Profit and other comprehensive income, changes in equity and its cash flows for
the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act.
Our responsibilities under those SAs 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 oflndi a together with the ethical requirements that are relevant
to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that
the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone
financial statements.
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 of the current year. 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 thesematters.
B. Revenue recognition - refer note 2.2(a)(i) to the standalone financial statements
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Key Audit Matter
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How the Matter was addressed in Our Audit
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Measurement of revenue on contractual
construction projects recorded over time which is
dependent on the estimates of the costs to complete
Revenue recognition from contractual projects
represents a significant portion of the total revenues of
the Company.
Revenuerecognition from contractual projects involves
significant estimates primarily pertaining to
measurement of costs to complete the projects.
Revenue from projects is recorded based on Company's
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Our audit procedures on revenue recognition on
contractual construction projects included the
following:
♦ Evaluation of Company's accounting policies for
revenue recognition on contractual projects are in line
with the applicable accounting standards and their
application to customer contracts, including consistent
application.
♦ Identifying and testing operating effectiveness of key
controls around budgeting of project cost, approval of
purchase orders, recording of actual cost, raising of
invoices and estimating the cost to complete theproject.
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assessment of the work completed, costs incurred and
accrued and the estimate of the balance costs to
complete.
Due to inherent nature of the projects and significant
judgment involved in the estimate of costs to complete,
there is risk of overstatement or understatement of
revenue, hence this is considered as a key audit matter.
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♦ For samples selected during the year, verifying the
underlying documents - contracts with customers,
invoices raised and collections from the customers.
♦ Comparing the estimated costs to complete with the
budgeted costs and analysis of the variances, if any;
♦ Sighting approvals for budgeted costs with the rationale
forthechanges.
Assessment of costs incurred on projects, which is used by
the Company to determine thepercentage of completion.
♦ Considering the adequacy of the disclosures in note
2.2(a)(1) to the standalone financial statements in respect
of judgements taken to recognise revenue for contractual
projects; and
♦ Considering the adequacy of the disclosures in notes to
the standalone financial statements in respect of revenue
recognised, cost incurred, amount received/ retentions due
from customers, work in progress, value of inventories
and profit recognised till date.
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Company has Two Projects named Purab Manor
Located in Bangalore Karnataka and Another Project
Gokul Dham in MathuraUttrapradesh.
1. Gokul Dham Project
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1.Gokul Dham Project: In 2010-11 MVDA (Mathura
Vrindavan Development Authority ) put its land on
auction andSurinderKumar Chadha as a director ofKMF
Builders & Developers Limited filed a form on behalf of
company to apply for the purchase of the land GH-02
Rukmani Vihar and Company got the allotment and
payment schedule from MVDA (Mathura Vrindavan
Development Authority ) .From May 2011 to Dec 2011 ,
KMF Builders & Developers Limited made several
payments including Ten percent advance and other
charges including freehold charges. In Dec 2011
Company got allotment letter along with payment
schedule of Rs.5,76,69,750/- as rest 90 percent was to be
paid in eq ual EMI for the nex 13 years wi th 12.5 percen t.
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Company has Incurred Construction & Development
Expenses for Building the Residential Houses with
Rs.6,63,19,282.16from 02.06.2011 to03.06.2023.
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Company failed to Pay Equated annual instalments to
MVDA. company was forced by MVDA to make the
payment otherwise they will forfeit the land given against
the payment which was not made. KMF Builders wrote
many letters to MVDA and made certain meetings with the
concerned person from MVDA, but it didn't come up with
a solution as they were dis-agreed on the payment
schedule. In Dec 2017 MVDA Published cancellation of
the project in Newspaper for all the stakeholders,
company already spent amount of Rs 11.65cr in this
project. As per the Board of Directors, they were unable to
continue based on viability. Hence, they have decided to
sale this project to a third-party vendor i.e. M/s SKG
Infratech Pvt Ltd.
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SaleValueofRs 11,56,00,000/-
Less:
Project Cost Incurred till date: 19,56,69,281.14/-
Net Resulted Incurred a Loss of Rs.8,00,69,281.14/-
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Company has Unrecognised Revenue from Purab Manor
Project worth of Rs.7,92,20,348.74/-due to Transition of
AS-7 to tnd AS-115. Management Decides to Disclose it
as Income during this Year.
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Un-Recognised Revenue of Rs.8,54,90,068.74/- from
Purab Manor Project situated at Bangalore.
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Information Other than the Standalone Financial Statements and Auditors’ Report Thereon
The Company's management and Board of Directors are responsible for the other information. The other information
comprises the information included in the Company's annual report but does not include the financial statements and our
audi tors' report th ereon.
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 in the auditor 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.
Managements and Board of Directors’ Responsibility for the Standalone Financial Statements
The Company's Management and Board of Directors are responsible for the matters stated in section 134(5) of the Act
with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs,
profit/loss and 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 (tnd AS) specified under
section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that
were opera ting effectively for ensuring 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, the Management and Board of Directors are responsible for assessing
the Company's ability to continue as a going concern, disclosing, as Applicable, matters related to going concern and
using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to
cease operations, or has norealistic alternative but to do so.
TheBoardofDirectors is also responsible for overseeing the Company's financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 amaterial 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.
CIAL STATEMENTS
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We are 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 amaterial 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 understandingofintemal control relevant to the auditin orderto design audit procedures that
are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible forexpressing
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 in the standalone financial statements made by the Management and Board of Directors.
Conclude on the appropriateness of the Management and Board of Directors 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 therelated
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 amanner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
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 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors'Report) Order, 2020 (“the Order”) issued by the Central Government
in terms of section 143 (11) 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.
2. (A) 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
beliefwerenecessaryfor thepurposesofour audit.
b. In our op in ion, 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 standalone balance sheet, 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 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 IndAS specified under section 133 of the Act.
e. On the bas is of the wri tten represen tati ons recei ved from th e directors as on 31March 2023 taken on record
by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed
as a director in terms ofSection 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to financial statements of the
Company and the operating effectiveness of such controls, refer to our separate Report in “AnnexureB”.
(B) With respect to the other matters to be included in the Auditors' Report accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the
explanations given to us:
a. The Company has disclosed the impact of pending litigations as at 31 March 2024 on its financial position
in its standalone financial statements - Refernotes to the standalone financial statements;
b. The Company did not have any long-term contracts including derivative
contracts for which there were any material foreseeable losses.
c. There has been no delay in transferring amounts, required to be transferred,
to the Investor Education and Protection Fund by the Company; and
d. (i) The management has represented that, to the best of its knowledge and belief, other than as disclosed in
the notes to the accounts, 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 persons or
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 (“UltimateBeneficiaries”) by or
• on behalf of the Company or provide any guarantee, security or the like to or on behalf of the Ultimate
Beneficiaries.
(ii) The management has represented, that, to the best of its knowledge and belief, Other than as disclosed in the
notes to the accounts, no funds have been received by the Company from any persons or entities (“Funding
Parties”), with the understanding, whether recorded in wri ting or otherwise, that the Company shall:
• directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever (“UltimateBeneficiaries”) by or
• on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate
Beneficiaries.
iii) Based on such audit procedures as 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 (d) (i) and (d) (ii)
contain any material misstatement.
e. The dividend declared or paid during the year by the Company is in compliance with Section 123 of the
Act.
f. The reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is applicable from 1
April 2023. Based on our examination which included test checks, except for the instances mentioned
below, the Company has used accounting software's for maintaining its books of account, which have a
feature of recording audit trail (edit log) facility and the same has operated throughout the year for all
relevant transactions recorded in the Respective software:
a) The feature of recording audit trail (edit log) facility was not enabled at the database level to log any
direct data changes for the accounting software used for maintaining the books of account relating to
payroll, consolidation process and certain noneditable fields/tables of the accounting software used for
maintaining general ledger.
b) The feature of recording audit trail (edit log) facility was not enabled at the application layer of the
accounting software relating to revenue, trade recei vables for theperiod.
c) Further, for the periods where the audit trail (edit log) facility was enabled and operated throughout the
year for the respective accounting software, we did not come across any instance of the audit trail feature
being tampered with.
d) With respect to thematterto be included in the Audi tors' Report under
section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration paid by the
company to its directors during the current year is in accordance with the provisions of Section 197 of the Act.
The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The
Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be
commented upon by us.
For B Sreenivasa & Co
Chartered Accountants
rCAt Firm Reg No: 009287s
CA B Sreenivasa Setty
Place: Bangalore Proprietor
Date: 29/08/2024 ICAI Reg. No : 205645
UDIN: 242 05645BKGZUL3670
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