We have audited the accompanying standalone financial
statements of Omaxe Limited ("the Company"), which
comprise the Balance Sheet as at 31st March 2025, the
Statement of Profit and Loss (including Other Comprehensive
Income), the Statement of changes in Equity and the
Statement of Cash Flows for the year then ended, and Notes
to Standalone Financial Statement including a summary
of the material accounting policies 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 Indian Accounting
Standards prescribed under section 133 of the Act read with
Companies (Indian Accounting Standards) Rules, 2015, as
amended and accounting principles generally accepted in
India, of the state of affairs of the Company as at 31st March
2025, its loss (including other comprehensive loss), changes
in equity and its cash flows for the year then ended.
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 independence requirements that are relevant to
our audit of the standalone financial statements under the
provisions of the Act and the Rules made thereunder, and we
have fulfilled our other ethical responsibilities in accordance
with these requirements and the ICAI's Code of Ethics. We
believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements.
Emphasis of Matters
We draw attention to note numbers 43, 44 and 45 to the
standalone financial statements:
a) In the financial year ended 31st March 2022, search
was initiated against the Company under section 132
of the Income Tax Act, 1961 and pursuant to that the
Company had received Income Tax Demand(s) pertaining
to Assessment Years from 2014-15 to 2022-23 under
section 147/143(3) of Income Tax Act, 1961. The Company
has filed Appeals before Appellate Authority within
the timelines as allowed under the Act. Based on the
decision of various appellate authorities, interpretation
of relevant provision of the Income Tax Act, 1961 and on
the basis of opinion from independent tax expert that
the demands raised will not be sustained on completion
of the appellate proceedings. Accordingly, pending the
decision by the appellate authorities, no provision of
any potential liability has been made in the Financial
Statements.
b) The Company had received an Award dated 31.05.2024
with respect to its Township Project situated in Patiala,
Punjab namely "Omaxe City, Patiala", whereby the
Majority Bench of the Arbitral Tribunal directed the
Company to surrender the 60 Acre land earmarked for
development of IT & Bio Tech Park and declared that
PUDA was entitled to forfeit 20% of the revenue share.
i.e. 53 Crore (kept in Escrow Account) along with interest
accrued thereon w.e.f. 08.08.2018 among other directions.
The Management of the Company offered to surrender
the 60 Acre land earmarked for development of IT & Bio
Tech Park back to PUDA as its development was not
viable at its current location. Accordingly, provision for
impairment of inventory of 60 acres land amounting to
Rs. 28.55 crore has been made in the financial statements
during the quarter ended June 30, 2024 and grouped
in changes in inventories of finished stock & projects
in progress. However, regarding forfeiture of 20% of
revenue share amounting to Rs. 53 crore and interest
thereon, the Company has filed an appeal against the
Award. Based on the opinion of an independent expert
on this matter, the management of the company is of the
opinion that the forfeiture of revenue share will not be
sustained in the court. Accordingly, pending decision by
the appellate authorities, no provision of any potential
liability towards forfeiture of revenue share has been
made in the financial statements.
c) The Company had received an Order dated July 30,
2024 from SEBI under section 11, 11B of SEBI Act, 1992
covering the period from 2018-19, 2019-20 and 2020¬
21, against which company had filed an appeal with the
Securities Appellate Tribunal (SAT) and SAT vide order
dated October 01, 2024 had granted stay on directions at
para 41 (i) of SEBI order dated July 30, 2024 relating to
restricting company and others from accessing securities
market and to deal in securities, enabling the company
to raise capital and continue all business activities as
usual without any restriction. The proceeding with SAT is
undergoing and in the opinion of the management of the
Company, the said order has no impact on the financial
results of the company.
Key Audit Matters
Key audit matters ("KAMI are those matters that, in our
professional judgement, were of the 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. In addition to our emphasis of
matters, we have determined the matters described below
to be the key audit matters to be communicated in our report.
Description of Key Audit Matters
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Sr.
No.
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Key Audit Matters
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How that matter was addressed in our audit report
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1
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Revenue Recognition
The Company applies Ind AS 115 "Revenue from
contracts with customers" for recognition of revenue
from real estate projects, which is being recognized at
a point in time upon transfer of control of promised real
estate property to customer at an amount that reflects
the consideration which the company expects to receive
in exchange for such booking.
Considering application of Ind AS 115 involves certain
key judgments relating to identification of contracts
with customer, identification of separate performance
obligation in the contract, satisfaction of performance
obligations, determination of transaction price,
allocation of transaction price to the performance
obligations and recognition of the revenue when the
company satisfies the performance obligation.
Refer note 30 to the standalone financial statements.
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Our audit procedure on revenue recognition from real
estate projects included:
Selecting samples to identify contracts with customers,
identifying separate performance obligations in
the contracts, determination of transaction price
and allocating the transaction price to separate
performance obligation.
On selected samples, we tested that the revenue
recognition is in accordance with accounting standards
by
i) Reading, analyzing and identifying the distinct
performance obligations in real estate
projects.
ii) Comparing distinct performance obligations
with those identified and recorded.
iii) Reading terms of agreement to determine
transaction price including variable
consideration to verify transaction price used
to recognize revenue.
iv) Performing analytical procedures to verify
reasonableness of revenue accounted by the
Company.
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Sr.
No.
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Key Audit Matters
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How that matter was addressed in our audit report
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2
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Pending Income Tax Cases
The Company has various tax litigations/matters that are
pending before tax authorities involving tax demands.
The Company assesses such litigations/matters on a
periodic basis. For the tax litigations/matters referred
to in note 40, 42 and 43 to the standalone financial
statements significant management judgement is
required in assessing the exposure due to the inherent
uncertainties as to likely outcome, and due to the
nature and timeframe involved, taxation exposures are
identified as a key audit matter.
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Our audit procedures included, among others:
i) We obtained an understanding of the Company's
process to identify claims, litigations and
contingencies.
ii) We obtained a list of tax litigations/matters from
the Company and performed inquiries with
the management, as to their likely outcome,
financial impact and repetitiveness and obtained
management representation thereon.
iii) We examined evidence to corroborate
management's assessment of the risk profile in
respect of these matters including reading the
Company's submissions to relevant authorities and
orders received in this regard.
iv) In relation to the material tax litigations/matters,
Company involved an independent tax expert,
as appropriate, to perform an independent
assessment of the conclusions reached by
management.
v) We read the disclosures in the standalone financial
statements to assess if they reflect the key facts
and circumstances of the underlying tax exposures
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3
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Liability for Non-performance of real estate agreements/
civil lawsuits against the Company
The Company may be liable to pay damages/ interest
for specific non- performance of certain real estate
agreements, civil cases preferred against the Company
for specific performance of the land agreement, the
liability on account of these, if any has been disclosed
as contingent liability. However, the amount is not
quantifiable.
Refer Note 40 to the standalone financial statements
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We obtained details/ list of pending civil cases and
reviewed on sample basis real estate agreements, to
ascertain damages on account of non-performance of
those agreements and discussed with the legal team
of the Company to evaluate management position.
We have been represented that owing to the nature of
Contingency, the amount is not quantifiable.
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4
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Inventories
The company's inventories comprise mainly of projects
under construction / development (projects-in-
progress), completed real estate projects and Land.
The inventories are carried at lower of cost and net
realizable value (NRV). NRV for completed inventory is
assessed including but not limited to market conditions
and prices existing at the reporting date and is
determined by the company based on net amount that
it expects to realise from the sale of inventory in the
ordinary course of business. NRV in respect of inventories
under construction is assessed with reference to market
prices (by referring to expected or recent selling prices)
at the reporting date less estimated costs to complete
the construction, and estimated cost necessary to make
the sale.
The carrying value of inventories is a material part of
the total assets of the company and involves significant
estimates and judgments in assessment of NRV.
Accordingly, it has been considered as key audit matter.
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Our audit procedures to assess the net realizable value
(NRV) of the inventories include the following:
We had discussions with Management to understand
Management's process and methodology to estimate
NRV, including key assumptions used and we also
verified project wise un-sold area and recent sale
prices and estimated cost of construction to complete
projects.
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Sr.
No.
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Key Audit Matters
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How that matter was addressed in our audit report
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5
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Recognition and measurement of Deferred Tax Assets
Under Ind AS, the company is required to reassess
recognition of deferred tax asset at each reporting
date. The company has deferred tax assets in respect
of brought forward losses and other temporary
differences, as set out in Note 6 and 38 to the standalone
financial statements.
The company's deferred tax assets in respect of
brought forward business losses are based on the
projected profitability. This is determined on the basis
of significant management judgement and estimation
given that is based on assumptions such as the likely
timing and level of future taxable profits which are
affected by expected future market and economic
conditions.
We have identified recognition of deferred tax assets as
a key audit matter because of the related complexity
and subjectivity of the assessment process.
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Our Audit procedures include:
i) Obtained an understanding of the process and
tested the control over recording of deferred tax
and review of deferred tax at each reporting date
ii) Evaluated management assumptions, used to
determine the probability that deferred tax assets
recognized in the balance sheet will be recovered
through taxable income in future years, by handing
over of major real estate projects.
iii) Tested the computations of amount and tax rate
used for recognition of deferred tax assets.
iv) We have also focused on the adequacy of the
company's disclosure on deferred tax.
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6
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Related Party Transactions
The company has undertaken transactions with its
related parties in the ordinary course of business at
arm's length. These include making new or additional
investments in its subsidiaries, project management
services, lending loans or advances to related parties,
sales or purchases of property, plant and equipment or
building materials/ consumables to and from related
parties etc. as disclosed in note 55 to the standalone
financial statements.
We identified the accuracy and completeness of the
related party transactions, and its disclosure as set out
in respective notes to the financial statements as a key
audit matter due to the significance of transactions with
related parties and regulatory compliances thereon
during the year ended 31st March 2025.
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Our procedures included:
i) Obtained and read the Company's policies and
procedures in respect of identifying related parties,
obtaining approval, recording and disclosure of
related party transactions.
ii) Read minutes of shareholder meetings, board
meetings and minutes of meetings of those charged
with governance in connection with Company's
assessment of related party transactions being in
the ordinary course of business at arm's length.
iii) Tested, related party transactions with the
underlying contracts, confirmation letters and
other supporting documents.
iv) Agreed the related party information disclosed
in the financial statements with the underlying
supporting documents, on a sample basis.
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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 preparation of the other information.
The other information comprises the information
included in the Management Discussion and Analysis,
Board's Report including Annexures to Board's Report,
Business Responsibili ty Report, Corporate Governance
and Shareholder's Information, but does not include the
standalone financial statements and our auditor's report
thereon. Our opinion on the standalone financial statements
does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the standalone financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial
statements, or our knowledge obtained during the course of
our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that
there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report
in this regard.
Management’s Responsibility for the Standalone Financial
Results
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 financial
position, financial performance, total comprehensive
income, changes in equity and cash flows of the Company in
accordance with the Ind AS 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 the assets of
the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to
the preparation and presentation of the standalone financial
statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
In preparing the standalone financial statements,
management is responsible for assessing the Company's
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the
Company's financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone
Financial Results
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 financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under
section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Company has
adequate internal financial controls system in place and
the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management's use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
significant doubt on the Company's ability to continue
as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention
in our auditor's report to the related disclosures in the
standalone financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the
date of our auditor's report. However, future events or
conditions may cause the Company to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content
of the standalone financial statements, including the
disclosures, and whether the standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the
standalone financial statements that, individually or in
aggregate, makes it probable that the economic decisions of
a reasonably knowledgeable user of the standalone financial
statements may be influenced. We consider quantitative
materiality and qualitative factors in (i) planning the scope of
our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in
the standalone financial statements.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the standalone financial
statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in
our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. 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, as stated in
the 'Other Matter' paragraph we give in the “Annexure
I” 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, based on our
audit, 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 loss), the Statement of
Cash Flow and the Statement of Changes in Equity dealt
with by this report are in agreement with the relevant
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 to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our
separate report in “Annexure-II”. Our report expresses
an unmodified opinion on the adequacy and operating
effectiveness of the Company's internal financial controls
with reference to standalone financial statements.
g. With respect to the other matters to be included in the
Auditor's Report in accordance with the requirements of
section 197(16) of the Act:
In our opinion and to the best of our information
and according to the explanations given to us, the
remuneration paid to all the other directors is within the
limits approved.
h. With respect to the other matters to be included in
the Auditor's Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended,
in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending
litigations on its financial position in its standalone
financial statements- Refer note 40 to the standalone
financial statements.
ii. The Company did not have any lone-term contracts
including derivative contracts for which there were
any material foreseeable losses.
iii. There were no amount required to be transferred to
the Investor Education and Protection Fund by the
Company - Refer note 27 to the standalone financial
statements.
iv. (a) The Management has represented that, to the
best of its knowledge and belief, as disclosed
in the note 59 (a) to the standalone financial
statements, 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, 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;
(b) The Management has represented, that, to the
best of its knowledge and belief, as disclosed
in the note 59 (b) to the standalone financial
statements 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,
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;
(c) Based on the audit procedures that have been
considered reasonable and appropriate in the
circumstances performed by us, nothing has
come to our notice that has caused us to believe
that the representations under sub-clause (a)
and (b) contain any material misstatement.
v. The company has not declared or paid any dividend
including interim dividend during the year.
vi. According to the information and explanations given
to us and based on our examination, which included
test checks, the Company has used accounting
software for maintaining its books of account for
the financial year ended 31st March 2025 which has
the feature of recording audit trail (edit log) facility
and the same has operated throughout the year for
all relevant transactions recorded in the software.
Further, during the course of our audit we did not
come across any instance of the audit trail feature
being tampered with and the audit trail has been
preserved by the Company as per the statutory
requirements for record retention.
For B S D & Co
Chartered Accountants
Firm Registration No: 000312S
Sd/-
Sujata Sharma
(Partner)
Membership No: 087919
UDIN: 25087919BMLFNA7726
Place: New Delhi
Date: 28th May 2025
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