The Members of
M/s RUNGTA IRRIGATION LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of M/s Rungta Irrigation Limited("the Company") having Regd. office at 101 Pragati Tower 26 Rajendra PlaceNew Delhi-110008 which comprise the Balance Sheet as at March 312016 and the Statementof Profit and Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Management's responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with rule 7 of the Companies (Accounts) rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safe guarding the assets of the Company and for preventingand detecting frauds and other irregularities selection and application of appropriateaccounting policies making judgments and estimates that are reasonable and prudent anddesign implementation and maintenance of adequate internal controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and the matters which are required to be included in the audit report under theprovisions of the Act and the rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal control relevant to the Company's preparation of financial statementthat gives a true and fair view in order to design audit procedures that are appropriatein the circumstances but not for the purpose of expressing an opinion on whether theCompany has in place an adequate internal financial controls system over financialreporting and the operating effectiveness of such controls. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
a) In the case of the Balance Sheet of the state of affairs of the Company as at March312016;
b) In the case of the Statement of Profit and Loss of the profit for the year ended onthat date; and
c) In the case of Cash Flow Statement of the cash flow of the company for the yearended on that date.
Report on other Legal and Regulatory Requirements:
As required by the Companies (Auditor's Report) Order 2015 (the Order) issued by theCentral Government of India in terms of sub-section (ii) of section 143 of the Act wegive in the Annexure a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
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 bestof our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet and the Statement of Profit and Loss dealt with by this Report arein agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of written representations received from the directors as on March312016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of section(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and
g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements -Refer Note no 26(3)to the financial statements.
ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii) There has been no delay in transferring amounts if required to be transferred tothe Investor Education and Protection Fund of the company.
| ||For ANDROS & CO. |
| ||CHARTERED ACCOUNTANTS |
| ||(Regn. No.-008976N) |
|Date : 20.05.2016 ||(BRIJ BHUSHAN GARG) |
|Place: New Delhi ||PARTNER |
| ||M. No. 084865 |
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in our report of even date]
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us the fixed assets have been physically verified by themanagement during the year in phased periodical manner which in our opinion isreasonable having regard to the size of the company and the nature of its assets. Nomaterial discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) (a) As explained to us inventory has been physically verified by the managementat regular intervals during the year. In our opinion the frequency of such verificationis reasonable.
(b) The discrepancies noticed on verification between the physical stocks and the bookrecords have been properly dealt with in books of account.
(iii) (a) The company has given unsecured advances to Ramgarh Sponge Iron Pvt. Ltd.which is covered under clause 76 of section 2 of the Companies Act 2013. During the saidyear company has also taken unsecured advances from the said company and transactionsthereof are duly recorded in the register maintained for this purpose. At the end of theyear the net amount of Rs.Nil(Previous year Rs Nil) stands Receivable/ payable by thecompany under audit (Refer Note no 26(17)b. As per explanation given to us all the abovetransactions have been made in the normal course of business and are prima facie notprejudicial to the interest of the company.
(b) The company has taken un-secured long term deposits as disclosed in Note no 4 ofthe financial statements which includes Rs 493.21 lacs from Vaishno Devi Vinimay Pvt Ltdpayable as on 31.03.2016(Previous year Rs 899.62 lacs) which is covered under Clause 76 ofthe Companies Act 2013.
(c) In our opinion the terms and conditions on which advances /deposits were given ortaken by the Company secured or un secured are prima facie not prejudicial to theinterest of the Company.
(d) According to information and explanations given to us no interest is charged orgiven on the above transactions.
(iv) In case of Loan given by the company or investment made by the company theprovisions of Section 185 & 186 of the companies Act2013 have been complied with. Noguarantee is provided by the company to any other person.
(v) The Company has not accepted any deposits from the public in accordance with theProvisions of sections 73 to 76 of the Companies Act and the rules framed there under.
(vi) We have broadly reviewed the records maintained by the Company pursuant to therules prescribed by the Central Government for maintenance of cost records undersub-section 1 of Section 148 of the Companies Act and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. However we have notmade a detailed examination of the records with a view to determine whether they areaccurate or complete.
(vii) (a) According to the records of the company the company has generally beenregular in depositing with appropriate authorities the undisputed statutory duesincluding Provident Fund Investor Education and Protection Fund (except the unpaiddividend of Rs. 9.89Lac(Prev.year 9.89lac) held in abeyance due to pending legal cases)Employees' State Insurance Income Tax Sales Tax Wealth Tax Service Tax Custom DutyExcise Duty Cess and other statutory dues applicable to it.
According to the information and explanation given to us no undisputed amounts payablein respect of the aforesaid dues were outstanding as at March' 31.2016 for a period ofmore than six months from the date they became payable except the dues of unpaid Dividendof Rs. 9.89 Lacs (Previous year Rs. 9.89 lacs) which is held in abeyance due to pendinglegal cases.
(b) According to the information given by the company and its record the following arethe details of dues outstanding as on 31.03.2016 on account of disputed cases in respectof Sales Tax Excise Duty
Income Tax Custom Tax Wealth Tax Cess and Service Tax:
|S. No ||Name of Statute ||Nature of dues ||Forum where dispute is pending ||Amount (Rs. In Lac) |
|1. ||Central Excise Act ||Service Tax ||Commissioner Appeals ||1.52 |
(viii) Based on our audit procedures and according to the information and explanationsgiven by the management we are of the opinion that the company has not defaulted inre-payment of dues to Bank or Financial Institutions.
(ix) According to the records of the company the term loans obtained by the companyhave been applied for the purpose for which it is obtained. No money is raised by thecompany by way of Public offer including debt instruments during the year.
(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For ANDROS & CO.
(BRIJ BHUSHAN GARG)
Date : 20.05.2016
Place : New Delhi
Annexure - "B" to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of RungtaIrrigation Limited ("the Company") as of 31 March 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For ANDROS & CO. |
| ||CHARTERED ACCOUNTANTS |
| ||(Regn. No-008976N) |
|DATED: 20.05.2016 ||Sd/- |
|PLACE: DELHI ||(BRIJ BHUSHAN GARG) |
| ||PARTNER |
| ||M. No.084865 |