We have audited the accompanying standalone financial
statements of Suratwwala Business Group Ltd ("the Company")
which comprise the Standalone Balance Sheet as at 31st March
2025, the Standalone Statement of Profit and Loss (including
other comprehensive income), Standalone Statement of Changes
in Equity and Standalone Cash Flow Statement for the year
then ended and notes to the standalone financial statements
including a summary of significant accounting policies and other
explanatory information (hereinafter 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 in the manner so required and give a true and fair view in
conformity with the Indian Accounting standards as prescribed
u/s 133 of the Act read with Companies (Indian Accounting
Standards) Rules, 2015 and other accounting principles generally
accepted in India, of the state of affairs of the Company as
at March 31, 2025, its Profit (including other comprehensive
income), statement of changes in equity and its cash flows
statement for the year ending 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 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
together with the ethical requirements that are relevant to our
audit of the financial statements under the provisions of the
Companies Act, 2013 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
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.
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Sr.
No.
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Key Audit Matters
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How Key Audit Matter Addressed in our audit
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1.
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Revenue Recognition under Ind AS 115 - Revenue from Contract with Customers
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The company applies Ind As -115 "Revenue received from
Contracts with Customers" for recognition of revenue from sale of
commercial and residential real estate, which is being recognised
at point in time/ over period of time depending upon the
Company satisfying its performance obligation and the control of
the underlying asset gets transferred to the customer.
Ind AS 115 requires significant judgment / estimation in
identifying performance obligations for determining when
'control' of the commercial/residential units are transferred to
the customer and estimating stage of completion, basis which
revenue is recognised. Further, for projects executed through
JDA, significant estimate is undertaken by management for
determining the fair value of the estimated construction service.
Considering the significance of management judgements and
estimates involved and the materiality of amounts involved,
aforementioned revenue recognition is identified as a key audit
matter.
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Our audit procedures in respect of this area, among others,
included the following:
• Obtained and understood the Company's process for
revenue recognition including identification of performance
obligations and determination of transfer of control of the
property to the customer;
• Read the Company's revenue recognition accounting policies
and evaluated the appropriateness of the same with respect to
principles of Ind AS 115 and their application to the significant
customer contracts;
• Assessed the consistency of the accounting principles
applied by the Company to measure its revenue from sales
of properties / flats with the applicable regulatory financial
reporting framework.
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Sr. Key Audit Matters
No.
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How Key Audit Matter Addressed in our audit
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Evaluated the design and implementation and verified, on a
test check basis, the operating effectiveness of key internal
controls over revenue recognition including controls around
transfer of control of the property and calculation of revenue
recognition which is based on various factors including
contract price, total budgeted cost and actual cost incurred;
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Verified the sample of revenue contract for sale of commercial/
residential units to identify the performance obligations of the
Company under these contracts and assessed whether these
performance obligations are satisfied over time or at a point in
time based on the criteria specified under Ind AS 115.
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•
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Visited certain sites during the year for selected projects to
understand the nature, status and progress of the projects.
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•
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Obtained the JDAs entered into by the Company, including
addendums thereto and compared the ratio of constructed
area/ revenue sharing arrangement between the Company
and the landowner as mentioned in the agreement to the
computation statement prepared by the management;
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•
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Obtained and read the legal opinion taken by the company
and provided to us to determine timing when the control gets
transferred in accordance with the underlying agreements.
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•
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Verified, on a test check basis, revenue transaction with the
underlying customer contract, Occupancy Certificates (OC)
and other documents evidencing the transfer of control
of the asset to the customer based on which the revenue is
recognized; and
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•
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Assessed the adequacy and appropriateness of the disclosures
made in standalone financial statements in compliance with
the requirements of Ind AS 115 - 'Revenue from contracts with
customers.
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2. Assessing the 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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As at March 31st 2025, the carrying value of Inventory of ongoing
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Our audit procedures/ testing included the following:
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and completed real-estate project is Rs. 10,345.70 lakhs.
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Obtained an understanding of the Management's process and
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The inventories are held at lower of cost and net realisable
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methodology of using key assumptions for determining the
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value("NRV")
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valuation of inventory as at the year-end;
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The determination of the NRV involves estimations of the future
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evaluated the design and operation of internal controls
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selling prices, expected costs to complete projects and the selling
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related to testing recoverable amounts with carrying amount
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costs based on the prevailing market conditions and the expected
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of inventory, including evaluating management processes for
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dates of commencement and completion of the projects
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estimating future costs to complete projects;
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Advances paid by the Company to the seller/ intermediary
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Inquired with management to understand key assumptions
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towards outright purchase of land is recognised as advances
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used in determination of the NRV/ net recoverable value;
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given for land purchase and amount given for development
rights under other non-current assets during the course of
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For inventory balance:
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transferring the legal title to the Company, whereupon it is
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- Compared the NRV to recent sales in the project or to the
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transferred to land stock under inventories. Further, deposits paid
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estimated selling price;
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under joint development arrangements are in the nature of non-
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- Compared the estimated construction costs to complete
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refundable/refundable deposits, for acquiring the development
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each project with the Company's updated budgets; and.
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rights. On the launch of the project, the non-refundable amount
is transferred as land cost to work-in-progress.
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For land advances/ deposits paid for acquisition of land/
development rights under JDA
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The aforesaid deposits and advances are carried at the lower of
the amount paid/payable and net recoverable value, which is
based on the management's assessment including the expected
date of commencement and completion of the project and the
estimate of sale prices and construction costs of the project.
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- Obtained update on the status of the land acquisition /
project progress from the management and verified the
underlying documents for related developments;
- Compared the acquisition cost of the underlying land with
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the current market price in similar locations / guidance
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We identified the assessment towards recoverability of carrying
value of inventory, land advances and deposits paid under JDA
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values; and;
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as a key audit matter due to the significance of the balance to the
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- Evaluated the management assessment w.r.t. recoverability
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standalone financial statements as a whole and the involvement
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of those advances and changes if any, in the business plans
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of estimates and judgement in the assessment.
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relating to such advances.
Assessed the adequacy and appropriateness of the
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disclosures made in the standalone financial statements with
respect to Inventory in compliance with the requirements
of applicable Indian Accounting Standards and applicable
financial reporting framework
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Information other than the Financials Statements and
Auditor's Report thereon
The Company's Board of Directors is 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.
Our opinion on the standalone financial statements does not
cover the other information and we do not express any form of
assurance 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 such other information is
materially inconsistent with the standalone financial statements
or our knowledge obtained during the course of the 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.
Responsibilities of Management and Those Charged
with Governance for the Standalone Financial
Statements
The Company's Board of Directors are responsible for the
matters stated in section 134(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 and cash flows of the
Company in accordance with the accounting principles as per
accounting principles generally accepted in India, including the
Indian Accounting Standards ("Ind As") 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 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 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.
Those 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.
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 control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)
(i) of the Companies Act, 2013, 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 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.
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.
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 Companies
Act, 2013, 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. 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 Standalone Balance Sheet and the Standalone
Statement of Profit and Loss 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 31st March, 2025 taken on
record by the Board of Directors, none of the directors
is disqualified as on 31st March, 2025 from being
appointed as a director in terms of Section 164(2) of the
Act.
(f) With respect of the adequacy of the internal financial
controls with reference to standalone financial
statements of the Company and the operative
effectiveness of such controls, refer to our separate
report in "Annexure B'; and
(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 does not have any pending litigations
which would impact its financial position;
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) (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,
including foreign entities ("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 ("Ultimate Beneficiaries") or provide
any guarantee, security or the like 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 standalone notes to the
accounts, no funds have been received by
the company from any persons or entities,
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 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
(iii) Based on such audit procedures that we have
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 (i) and (ii)
contain any material misstatement."
v) The company has not declared any dividend during
the year.
vi) Based on our examinations which included test
checks, the Company, in respect of financial
year commencing on April 01st 2024, 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 that,
the accounting software used for maintenance
of payroll records of the Company is operated
by a third party software service provider. In the
absence of Service Organisation Controls report
(SOC1 type 2 report), we are unable to comment
on whether audit trail feature is maintained by the
Company in compliance with the requirement of
Rule 11(g) of Companies (Audit and Auditors) Rule,
2014
Further, for the periods where audit trail (edit log) facility
was enabled we did not come across any instance of the
audit trail feature being tampered with in respect of
accounting software where audit trail has been enabled.
3. In our opinion and according to information and
explanations given to us and on examinations of
records of the company, the managerial remuneration
paid by the company to its directors is within the limits
prescribed under Section 197 read with Schedule V of
the Act and the rules thereunder.
For Parag Patwa & Associates
Chartered Accountants
Firm Reg. No. 107387W
UDIN: 25143690BMJHVL5934
(CA T. J. Trivedi)
(Partner)
(MembershipNo.143690)
Place: Pune
Date: May 27, 2025
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