We have audited the accompanying standalone financial
statements of Prozone Realty Limited (formerly known as Prozone
Intu Properties Limited) ("the Company"), which comprise the
Balance Sheet as at March 31, 2025, and the Statement of Profit
and Loss, including Other Comprehensive Income, Statement of
Changes in Equity and Statement of Cash Flows for the year then
ended, and notes to the standalone financial statements, including
material accounting policy information and other explanatory
information (hereinafter referred to as the "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 133 of the Act read with 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 March 31,2025, 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 of the standalone financial statements
in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Act. 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 Act and the Rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit
evidence obtained by us is sufficient and appropriate to provide a
basis for our opinion.
Emphasis of matter
We draw attention to note 47 to the Statement, relating to the order
issued by the Ministry of Corporate Affairs ('MCA'), Government of
India, whereby the Company's application for the re-appointment
of its Deputy Managing Director made to the Central Government
in terms of section 196 read with provisions of Schedule V of the
Companies Act, 2013 ('the Act') has been rejected.
As on the date of approval of these standalone financial statement,
the Board of Directors of the Company are in the process of
evaluating the available recourse under the Act and will determine
the plan of action for remuneration and salary advances paid
aggregating to Rs. 682 lakhs to the said director from the date
of his reappointment i.e. February 27, 2020 till the date of the
aforesaid order.
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 year ended March 31, 2025. 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.
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Sr. Key Audit Matter
No
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How the Key Audit Matter was addressed in our audit
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1 Valuation of Investment in Subsidiaries and Joint Venture
Company and Recoverability of Loans to Subsidiaries
Refer Note 2.2(b) for material accounting policy information
and Note 5 and 6 to the standalone financial statements.
The Company has investments in subsidiaries and joint venture
company held at fair value through other comprehensive
income (FVOCI) aggregating to Rs. 80,420.63 lakhs and Loans
to Subsidiaries amounting to Rs. 12,264.22 lakhs as at March 31,
2025, which together constitute 96.91% of the total assets of
the Company.
Management assesses the valuation of these investments and
recoverability of loans at each reporting period.
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Our audit procedures with respect to this area included,
among others, following:
• Assessed the Company's accounting policies relating to
the investment in subsidiaries and joint venture company
and loans to subsidiaries are in compliance with applicable
Ind AS.
• Evaluated the design and implementation and verified,
on a test check basis, operating effectiveness of controls
over Company's process of valuation of investment in
subsidiaries and joint venture company and approval of
forecasts.
• Evaluated the design and implementation and verified, on
a test check basis, operating effectiveness of controls in
place for issuing new loans or amending terms of existing
loans and evidenced the Board of Directors approval
obtained thereof;
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Sr. Key Audit Matter
No
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How the Key Audit Matter was addressed in our audit
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The valuation process involves significant judgement including
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• Verified the valuation reports obtained from Independent
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Involvement of Independent external valuers in estimating the
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external valuers of the Company for valuation of
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underlying assumptions to be applied. The fair values of the
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investments and recoverability of loans;
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investments are assessed based on the relative fair values of the
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• Evaluated the qualification and competence of the valuers
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underlying properties in the books of the subsidiaries and joint
venture Company which comprise residential, commercial and
retail units located across the country.
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and understood their valuation methods and assumptions
and basis used, where relevant;
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Key Audit Matter How the Key Audit Matter was addressed in our audit
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This assessment Is based on the projected cash flows of the •
real estate projects in these underlying entities, which involve
significant estimation and judgement, due to the Inherent
uncertainty Involved in forecasting future cash flows. There Is
also significant judgment Involved in estimating the discount
rate, terminal occupancy, future lease rentals, capitalisation rate,
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Assessed the appropriateness of the valuation methodology
applied and reasonableness of the key assumptions used
i.e. the discount rate and long-term growth rates used
in the forecast including comparison to economic and
industry forecasts where appropriate.
Verified the accuracy and reasonableness of inputs of the
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average unit size, and average selling price. A change in these •
estimates and assumptions will have an impact on the valuation
of investments and recoverability of loans.
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projected cash flows used in the valuation to underlying
leases and other documents;
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We have identified valuation of investment in subsidiaries and •
joint venture company and recoverability of loans to subsidiaries
as a key audit matter considering:
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Involved internal valuation expert to evaluate discount
rate, capitalisation rate and terminal yield rates used in
the valuation by comparing them against historical rates
and available industry data, taking into consideration their
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• Significance of carrying value of investment in subsidiaries
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comparability and other market factors;
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and joint venture company and loans to subsidiaries in
the standalone financial statements; •
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Performed a sensitivity analysis over key assumptions,
including the cashflows and discount rates;
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• Exposure to risk in respect of the recoverability of the ^
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Evaluated that the cash flow projections reflect the most
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loans and advances granted to the subsidiaries due to the
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recent forecast as approved by the Company in consultation
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nature of the business in the real estate industry; and
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with the valuers and assessed the comparability of the
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• Significant judgement and estimation uncertainty that Is
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forecasts with the historical information;
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Inherent within the valuation process. •
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Performed recomputation of interest on the loans given to
subsidiaries;
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•
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Obtained Independent confirmations to test completeness
and existence of loans given to subsidiaries as on 31 March
2025; and
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•
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Assessed the adequacy and appropriateness of disclosures
made in the standalone financial statements in compliance
with applicable Indian Accounting Standards and
applicable financial reporting framework.
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Information Other than the Standalone Financial Statements and Auditor’s Report [
Thereon
The Company's Board of Directors Is responsible for the other information. The other information comprises the Director's report but does
not include the standalone financial statements and our auditor's report thereon. The Director's report Is expected to be made available
to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not cover the other information and we will 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 identified above
when it becomes available and, in doing so, consider whether the other information Is materially inconsistent with the standalone financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Director's report, if we conclude that there is a
material misstatement therein, we are required to communicate
the matter to those charged with governance under SA 720 'The
Auditor's responsibilities Relating to Other information'.
Responsibilities of Management and
Those Charged with Governance for the
Standalone Financial Statements
The Company's Board of Directors is 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 financial position, financial performance, changes in
equity and cash flows of the Company in accordance with the
accounting principles generally accepted in india, including
the Accounting Standards 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 operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the standalone financial
statement 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 no realistic
alternative but to do so.
The Board of Directors are 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 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.
We give in "Annexure A" a detailed description of Auditor's
responsibilities for Audit of the Standalone Financial Statements.
Report on Other Legal and Regulatory
Requirements
1. 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 "Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought 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 Flow
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 133 of the Act.
(e) On the basis of the written representations received from
the directors as on March 31,2025 taken on record by the
Board of Directors, none of the directors are disqualified
as on March 31,2025 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 with reference to standalone financial statements
of the Company and the operating effectiveness of such
controls, refer to our separate Report in "Annexure C"
(g) 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, 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 31 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 were no amounts which were required to be transferred
to the investor Education and Protection Fund by the
Company.
Iv. (1) 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(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 ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
(2) The Management has represented, that, to the best of
its knowledge and belief, 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.
(3) Based on the audit procedures performed that have
been considered reasonable and appropriate in the
circumstances, and according to the information and
explanations provided to us by the Management in this
regard, 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 (1) and (2)
above, contain any material mis-statement.
v. The Company has neither declared nor paid any dividend
during the year.
vI. Based on our examination, the Company has used an
accounting software for maintaining its books of account
during the year ended March 31,2025, which has a feature of
recording audit trail (edit log) facility, and the same has been
enabled and operated throughout the year for all relevant
transactions recorded in the accounting software. Further,
during the course of our examination, we did not come
across any instance of audit trail feature being tampered
with. Additionally, the audit trail has been preserved by
the Company as per the statutory requirements for record
retention.
3. In our opinion, according to the information, explanations
given to us, and based on requisite approvals as previously
obtained, the remuneration paid by the Company during the
year to its directors is within the limit prescribed under Section
197 read with Schedule V of the Act and the rules thereunder.
Also, refer the Emphasis of matter paragraph in respect of on¬
going matter on re-appointment and remuneration of one of
the Director.
For M S K A & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Bhavik L. Shah
Partner
Membership No. 122071
UDIN: 25122071BMMBEL5750
Place: Mumbai
Date: May 28, 2025
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