1. We have audited the accompanying standalone financial statements of Signatureglobal (India) Limited (‘the Company’), which comprise the Balance Sheet as at 31 March 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information.
2. I n 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 (‘Ind AS’) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
BASIS FOR OPINION
3. We conducted our audit in accordance with the Standards on Auditing 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 we have obtained is sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
4. 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 period. 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.
5. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Key audit matter
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How our audit addressed the key audit matter
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Revenue from Construction Contracts with related parties
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The Company recognises revenue over a period of Our audit procedures in relation to revenue from construction time in accordance with Ind AS 115, Revenue from contracts with related parties includes, but were not limited to the Contracts with Customers (Ind AS 115). Refer note following:
3(o) and 43 to the standalone financial statements
for accounting policy and related disclosures. • Evaluated the appropriateness of accounting policy on
revenue recognition for construction contracts with related The Company acts as a principal contractor for parties in terms of principles enunciated under Ind AS 115; providing construction services to its subsidiary
Evaluated the design and tested operating effectiveness of
companies and another related party (Sarvpriya
key controls around budgeting of project cost, approval of
Securities Private Li^nited).
purchase orders, recording of actual cost, raising of invoices and estimating the cost to complete the project;
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Key audit matter
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How our audit addressed the key audit matter
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The Company recognises revenue from construction
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•
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Assessed management evaluation of determining revenue
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contracts on the basis of stage of completion (input
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recognition for contractual construction projects over a period
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method) based on the proportion of contract costs
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of time in accordance with the requirements of Ind AS 115
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incurred till reporting date to the total estimated
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and the process for determining probable expected losses on
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costs of the contract at completion. The recognition
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contracts;
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of revenue is therefore dependent on estimates in relation to total estimated costs of each such contract, which is subject to inherent uncertainty as it requires ascertainment of progress of the
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•
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On a sample basis, tested cost incurred and accrued to date by examining underlying invoices and other supporting documents;
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project, cost incurred till date and balance cost to
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•
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Visited sites during the year for selected projects to
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be incurred to complete the project.
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understand the nature, status and progress of the projects;
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Significant judgments are also involved in determining when the underlying performance obligations are satisfied and in determining whether any contract has become onerous which required the Company to record expected losses in respect
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•
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On a sample basis, reviewed management’s estimate of costs to complete projects determined basis internal budgeting process of the Company, and critically challenged estimates basis our understanding of the projects and historical accuracy of such estimates;
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of such contracts. Cost contingencies are included
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•
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Compared actual cost with budgeted cost to determine
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in these estimates to take into account specific risks
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percentage of completion of the project;
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of uncertainties, arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the life of the contract and adjusted where appropriate.
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•
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Reviewed management expert’s report on arm’s length analysis for related party transactions by involving an auditor’s expert and comparing such contracts with market available data;
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Considering the significance of management
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Tested unusual non-standard journal entries impacting
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judgements and estimates involved and the
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revenue recorded during the year based on risk-based
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materiality of amounts involved, revenue from
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criteria; and
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construction contracts with related parties is identified as a key audit matter.
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•
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Assessed the adequacy of disclosures included in the standalone financial statements in compliance with the requirements of Ind AS 115.
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Recoverability of carrying value of Inventories, advances paid towards land procurement and deposits paid
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under joint development arrangements (JDA)
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Refer note 3(m), 3(g), 3(l) and 3(y) to the
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Our procedures in assessing the carrying value of the inventories,
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standalone financial statements for accounting
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land advances and deposits paid under joint development and
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policies on inventories, advances paid towards
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collaboration agreements included, but were not limited to the
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land procurement and deposits paid against joint
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following:
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development and collaboration agreements and related financial disclosures.
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•
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Evaluated the appropriateness of accounting policies with respect to inventories, land advances and deposits paid
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As at 31 March 2024, the carrying value of the inventory comprising of work in progress (including stock of units in completed projects) and stock at
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under joint development and collaboration agreements in terms of principles enunciated under applicable accounting standards;
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sites is ' 14,305.29 million, land advances is ' 34.50
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Evaluated the design and tested operation of internal controls
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million and deposits paid against joint development
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related to testing of NRV/ net recoverable value vis-a-vis
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and collaboration agreements is ' 939.48 million,
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carrying amount of inventory, land advances and deposits
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which represents a significant portion of the
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paid under joint development and collaboration agreements;
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Company’s total assets.
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1 nquired with management to understand key assumptions used in determination of the NRV/ net recoverable value; and
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Obtained and tested the computation of the NRV/ net recoverable value on a sample basis.
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Key audit matter How our audit addressed the key audit matter
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The inventories are carried at lower of cost and net For inventory balance: realisable value (‘NRV’). The determination of the
Obtained and assessed the Company’s methodology applied
NRV involves estimates based on prevailing market
and assumptions used in assessing the net realizable value
conditions and taking into account the estimated
based on current market conditions and having regard to
future selling price, cost to complete projects and
expected launch of the project, project development plan and
selling costs.
3 expected future sales less selling costs;
Advances paid by the Company to the landowners • Compared the NRV to recent sales in the project or to the towards outright purchase of land is recognised as estimated selling price; land advance under other assets during the course
Compared the estimated construction costs to complete each
of transferring the legal title to the Company after
project with the Company’s updated budgets; and
which it is transferred to land stock under inventories.
Further, deposits paid under joint development and • Where the management involved specialists to perform collaborationarrangements are in the nature of non- valuations, evaluated the objectivity and independence refundable and/or refundable deposits, for acquiring of those specialists and involved experts to review the the development rights. On the launch of the project, assumptions used by the management specialists;
the non-refundable amount is transferred as land # For land stock, on a sample basis, obtained the fair
cost to work-in-progress. valuation reports and reviewed the valuation methodology,
key estimates and assumptions adopted in the valuation by
The aforesaid deposits and advances are carried at
involving auditor’s valuation experts.
the lower of the amount paid and net recoverable
value which is based on the managements For land advances/ deposits paid under joint development and
assessment including the expected date of collaboration agreements: commencement and completion of the project and
the estimate of sale prices and construction costs obtained an update on the status of the land acquisition/ of the project. project progress from the management and verified the
underlying documents for related developments to assess We identified the assessment towards recoverabi|ity Company’s rights over the land parcels and evaluated
of carrying value of inventory, land advances management’s assessment of expected recoverability of
and deposits paid under joint development and land advances / deposits paid under joint development and
collaboration agreements as a key audit matter due collaboration agreements. to the significance of the balance to the standalone
financial statements as a whole and the involvement • Carried out external confirmation procedures on sample basis of estimates which require significant management and alternative procedures wherever confirmations were not judgement. received to obtain evidence supporting the carrying value of
land advance and deposits paid under joint development and collaboration agreements.
Assessed the adequacy of disclosures included in the standalone financial statements in compliance with the applicable accounting standards.
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Impairment assessment of investments, loans and other balances receivable from its subsidiaries
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Refer note 3(k) and 3(y) to the standalone financial Our procedures in relation to the impairment assessment of
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statements for the accounting policies on the investments, loans and other balances receivable from subsidiaries
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impairment assessment of the investments, loans included, but not limited to the following:
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and other balances (including trade receivables,
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unbilled receivables and security deposits) •
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Assessed the appropriateness of the relevant accounting
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receivable from its subsidiaries and Note 39 for
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policies of the Company, including those relating to
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related financial disclosures.
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recognition and measurement of investments by comparing
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with the applicable accounting standards;
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Key audit matter How our audit addressed the key audit matter
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As at 31 March 2024, the carrying value of •
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Obtained an understanding of the management process for
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investments in, loans extended to and other
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identification of possible impairment indicators and process
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recoverable from the subsidiaries aggregates to
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performed by the management for impairment testing;
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' 2,737.32 million, ' 7,911.45 million and ' 2,433.80
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million respectively (net of impairment of ' 20.08 million and ' 22.10 million on investments and other
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Evaluated the design and implementation of Company’s key financial controls in respect of impairment and recoverability assessment and tested the operating effectiveness of such
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recoverable respectively).
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controls with respect to identification of impairment indicators
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Management reviews regularly whether there are
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and consequential impairment tests performed, wherever
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any indicators of impairment as per the requirements
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necessary.
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under Ind AS 36 “Impairment of Assets”. •
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Assessed the valuation methods used, financial position of the subsidiaries to identify excess of their net assets over
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Significant judgements are involved in determining
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their carrying amount of investment by the Company and
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impairment/recoverability of the carrying value, which
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assessing profit history of those subsidiaries;
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includes assessment of conditions and financial indicators of the investee such as assessing net worth of investee, future business plans, upcoming
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Where the Company involved specialists to perform valuations, we also performed the following procedures:
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projects and estimation of projected cash flow from
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o Obtained and read the valuation report used by the
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the real estate projects in the underlying entities.
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management for determining the fair value (‘recoverable amount’);
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Considering the materiality of carrying value of investments, loans, and other receivables from subsidiaries in the context of the Company’s
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o Considered the competence and objectivity of the specialist involved in determination of value; and
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standalone financial statements as a whole and
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o Involved experts to review the key assumptions used by
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significant degree of judgement and subjectivity involved in the estimates and key assumptions used in determining the cash flows used in the impairment evaluation, impairment assessment of investments, loans and other balances receivable from subsidiaries is considered to be the area of most significance to the audit and accordingly, has been considered as a key audit matter for the
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the management specialists.
Tested the assumptions and understanding the forecasted cash flows of subsidiaries based on our knowledge of the Company and the markets in which they operate and assessed the comparability of the forecasts with historical information. Traced such projections to approved business plans;
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current year audit. •
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Assessed the adequacy of disclosures included in the standalone financial statements in compliance with the applicable accounting standards.
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INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR’S REPORT THEREON
6. The Company’s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report but does not include the standalone financial statements and our auditor’s report thereon. The Annual 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 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 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 Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance.
RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE STANDALONE FINANCIAL STATEMENTS
7. The accompanying standalone financial statements have been approved by the Company’s Board of Directors.
The Company’s Board of Directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation 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 Ind AS specified under section 133 of the Act and other accounting principles generally accepted in India. 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.
8. In preparing the standalone financial statements, the Board of Directors 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 the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
9. The Board of Directors is also responsible for overseeing the Company’s financial reporting process.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT
OF THE STANDALONE FINANCIAL STATEMENTS
10. 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 Standards on Auditing 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.
11. As part of an audit in accordance with Standards on Auditing, specified under section 143(10) of the
Act 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 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 standalone 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 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 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; and
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.
12. 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.
13. 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.
14. 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
15. As required by section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditor’s Report) Order, 2020 (‘the Order’) issued by the Central Government of India 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.
17. Further to our comments in Annexure A, as required by section 143(3) of the Act based on our audit, we report, to the extent applicable, 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 purpose of our audit of the accompanying standalone financial statements;
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 except for the matters stated in paragraph 17(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended),
c) The standalone financial statements dealt with by this report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply with Ind AS specified under section 133 of the Act;
e) On the basis of the written representations received from the directors and 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 of section 164(2) of the Act;
f) The modification relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph 17(b) above on reporting under section 143(3)(b) of the Act and paragraph 17(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended);
g) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company as on 31 March 2024 and the operating effectiveness of such controls, refer to our separate report in Annexure B, wherein we have expressed an unmodified opinion; and
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, as detailed in note 38 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2024;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2024;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2024;
iv. a. The management has represented
that, to the best of its knowledge and belief, as disclosed in note 47C to the
standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person or entity, including foreign entities (‘the intermediaries’), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries’) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;
b. The management has represented that, to the best of its knowledge and belief, as disclosed in note 47D to the standalone financial statements, no funds have been received by the Company from any person or entity, including foreign entities (‘the Funding Parties’), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether 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; and
c. Based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement.
v. The Company has not declared or paid
any dividend during the year ended 31
March 2024; and;
vi. As stated in Note 46 to the standalone financial statements and based on our examination which included test checks, the Company, in respect of financial year commencing on 1 April 2023, has used accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility and the same have been operated throughout the year for all relevant transactions recorded in the software, except for instance mentioned below:
The accounting software used for maintaining accounting records and customer and channel partner masters of the Company are operated by third-party software service providers. The ‘Independent Service Auditor’s Assurance Report on the Description of Controls, their Design and Operating Effectiveness’ (‘Type 2 report’ issued in accordance with ISAE 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial Information)’ were available for part of the year. These reports do not provide sufficient audit evidence on audit trail (edit logs) for any direct changes made at the database level. Accordingly, we are unable to comment on whether audit trail feature with respect to the database of the said software were enabled and operated throughout the year.
Further, during the course of our audit, we did not come across any instance of audit trail feature being tampered with, in respect of the accounting software where such feature is enabled.
For Walker Chandiok & Co LLP
Chartered Accountants Firm’s Registration No.: 001076N/N500013
Deepak Mittal
Partner
Place: Gurugram Membership No.: 503843
Date: 15 May 2024 UDIN: 24503843BKFAPB4161
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