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Rainbow Foundations Ltd.

BSE: 531694 Sector: Infrastructure
NSE: N.A. ISIN Code: INE230F01014
BSE 00:00 | 11 Aug 11.45 -0.51
(-4.26%)
OPEN

12.20

HIGH

12.25

LOW

11.25

NSE 05:30 | 01 Jan Rainbow Foundations Ltd
OPEN 12.20
PREVIOUS CLOSE 11.96
VOLUME 29090
52-Week high 18.74
52-Week low 5.83
P/E 190.83
Mkt Cap.(Rs cr) 57
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12.20
CLOSE 11.96
VOLUME 29090
52-Week high 18.74
52-Week low 5.83
P/E 190.83
Mkt Cap.(Rs cr) 57
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rainbow Foundations Ltd. (RAINBOWFOUNDAT) - Auditors Report

Company auditors report

To

The Members of M/s Rainbow Foundations Limited

Report on the audit of the financial statements Opinion

We have audited the financial statements of Rainbow Foundations Limited ( the Company) which comprise the balance sheet as at March 31 2021 and the statement of profit andloss (including other comprehensive income) the statement of changes in equity and thestatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statement give the information required by theCompanies Act 2013 ( the Act ) in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended ( Ind AS )and other accounting principles generally accepted in India of the state of affairs ofthe Company as at 31st March 2021 and its profit total comprehensive income its cashflows and the changes in equity for the year ended on that date.

Basis for opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor s Responsibility for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI s Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.

Emphasis of Matter

We draw your attention to Note 33 of the financial statements which describes thatcertain estimates and judgments were made related to the COVID-19 pandemic wherein theeventual outcome of the impact of this global health pandemic may be different from thoseestimated by the management.

Our opinion is not modified in respect of this matter.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Key Audit Matter Auditor's Response
Principal Audit Procedures
Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) Accounting for construction contracts is considered as a Key Audit Matter as there are significant accounting judgements in estimating revenue to be recognised on contracts with customers including estimation of costs to complete and determining the timing of revenue recognition. Our audit process included to identify the impact of adoption of the new revenue accounting standard.
The Company recognises revenue and profit/loss based on stage of completion based on the proportion of contract costs incurred at balance sheet date relative to the total estimated costs of the contract at completion. The recognition of revenue is thus dependent on estimates in relation to total estimated costs of each contract. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing.
Cost contingencies are included in these estimates to take into account specific uncertain risks or disputed claims against the Company arising within each contract. These contingencies are reviewed by the Management on a regular basis throughout the contract life and adjusted where appropriate. The revenue on contracts may also include variable consideration (variations and claims). Variable consideration is recognised when the probability of reversal of such revenue is low. Evaluating the design and implementation of key internal controls over the contract revenue and cost estimation process through the combination of procedures involving inquiry and observations reperformance and inspection of evidence in respect of operations of these controls.

Information other than the financial statements and auditors' report thereon

The Company s board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board s Report including Annexures to Board s Report BusinessResponsibility Report Corporate Governance and Shareholder s Information but does notinclude the financial statements and our auditor s report thereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained duringthe 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 materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's responsibility for the financial statements

The Company s board of directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Rules 2016 as amended from time to time and other accounting principlesgenerally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany s ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Theboard of directors are also responsible for overseeing the Company s financialreporting process.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor s report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

l Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

l Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

l Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

l Conclude on the appropriateness of management s use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor s report to the related disclosures inthe 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 sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

l Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor s report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on other legal and regulatory requirements

1. 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 bestof 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 theCompany so far as it appears from our examination of those books.

(c) The balance sheet the statement of profit and loss Statement of cash flow andStatement of changes in Equity dealt with by this report are in agreement with the booksof account.

(d) In our opinion the aforesaid Financial Statements comply with the AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended.

(e) On the basis of the written representations received from the directors as on March312021 taken on record by the board of directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct.

(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 . Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company s internal financial controls over financialreporting.

(g) With respect to the other matters to be included in the Auditor s Report inaccordance with the requirements of section 197 (16) of the Act as amended in ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act; and

(h) 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:

a. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements;

b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and

c. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

As required by the Companies (Auditor s Report) Order 2016 ( the Order ) issued bythe Central Government of India in terms of sub-section (11) of section 143 of theCompanies Act 2013 we give in Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order.

Place: Chennai For M/s. GASM DANSR AND CO.
Date: 30.06.2021
(GANESAN)
(Partner)
(Mem No: 218179)
2-G II floor J. P. Tower 1/1Dr.Thirumurthy Nagar Main Road
Chennai 600034
Firm Reg No: 005986S
UDIN: 21218179AAAACE6498

Annexure-A

ANNEXURE TO THE AUDITORS REPORT

The Annexure referred to in Paragraph 2 under the heading Report on Other Legal andRegulatory Requirements of our Independent Auditors Report to the shareholders of M/sRAINBOW FOUNDATIONS LIMITED for the year ended 31st March 2021 and in terms of theinformation and explanations given to us and also on the basis of such checks as weconsidered appropriate we further state that: (i) In respect of the Company s propertyplant and equipment a. The company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets. b. All the assets have notbeen physically verified by the management during the year but there is a regularprogramme of verification which in our opinion is reasonable having regard to the sizeof the company and the nature of its assets. No material discrepancies were noticed onsuch verification. c. According to the information and explanations given to usManagement has represented that the title deeds of immovable properties are held in thename of the Company.

(ii) a. The inventory has been physically verified during the year by the management.In our opinion the frequency of verification is reasonable. b. The discrepancies noticedon physical verification of inventory as compared to books of accounts and the recordshas been properly dealt with in the books of accounts and were not material.

(iii) According to the information and explanations given to us and in our opinion thecompany has not granted any loans secured or unsecured to Companies Firms LLPs or otherparties covered in the register maintained under section 189 of the Companies Act.Accordingly provisions of clause 4(iii) of the Companies (Auditor s Report) Order 2016are not applicable to the company and hence not commented upon.

(iv) According to the information and explanations given to us and in our opinion inrespect of loans investments guarantees and security the provisions of section 185 and186 of Company Act 2013 have been complied with.

(v) According to the information and explanations given to us and in our opinion thecompany has not accepted any deposits from public and hence the directives issued by theReserve Bank of India and provisions of Sections 73 to 76 or any other relevant provisionsof the Companies Act 2013 and the rules framed thereunder with regards to the depositsaccepted from the public are not applicable and no order have been passed by Company LawBoard or National Company Law Tribunal or Reserve Bank of India or any court or any othertribunal.

(vi) In our opinion and according to the information and explanations given to us themaintenance of cost records has not been specified by the central Govt. under sub section(1) of section 148 of the Act in respect of activities carried on by the company.

(vii) a. According to the information and explanations given to us and on the basis ofour examination of the books of accounts and the records the company has been generallyregular in depositing undisputed statutory dues including provident fund employee s stateinsurance income-tax sales-tax service tax duty of customs duty of excise valueadded tax Goods and Service Tax cess and any other statutory dues with the appropriateauthorities.

According to the information and explanations given to us no undisputed amounts payablein respect of the above were in arrears as at March 312021 for a period of more than sixmonths from the date when they became payable. b. According to the information andexplanation given to us there are no dues of sale tax duty of customs duty of excisevalue added tax Good and Service Tax have not been deposited on account of any dispute.The particulars of Income Tax as at 31st March 2021 which have not been deposited onaccount of dispute are as follows

Name of the Statue Nature of Dues Amount under dispute not yet deposited Rs. Period to which amount relates Forum where the dispute is pending
Income Tax Act 1961 Income tax including interest till the date of assessment Rs. 285218 AY2002-03 The Commissioner of Income Tax (Appeals) Chennai
Income Tax Act 1961 Income Tax Along with Interest till the date of Assessment Rs. 7301330/- AY2013-14 The Commissioner of Income Tax (Appeals) Chennai
Income Tax Act 1961 Income Tax Along with Interest till the date of Assessment Rs. 80929010/- AY2012-13 The Commissioner of Income Tax (Appeals) Chennai

(viii) According to the information and explanations given to us and in our opinionthe company has not defaulted in repayment of loans or borrowing to a financialinstitution bank and company has no loans or borrowing from Government or dues todebenture holders.

(ix) Based on the audit procedures performed and according to the information andexplanation given to us and in our opinion no moneys were raised by way of initial publicoffer or further public offer (including debt instruments) and term loans were applied forthe purposes for which those are raised.

(x) Based on the audit procedures performed and according to the information andexplanations given to us and in our opinion no fraud by the company or on the company byits officers or employees has been noticed or reported during the year.

(xi) Based on the audit procedures performed and according to the information andexplanations given to us the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.

(xii) According to the information and explanations given to us and in our opinion theCompany is not a Nidhi Company.

Therefore the provisions of clause 4(xii) of the Companies (Auditor s Report) Order2016 are not applicable to the company.

(xiii) All transactions with the related parties are in compliance with section 177 andsection 188 of Companies Act 2013 wherever applicable and the details have been disclosedin the Financial Statements etc. as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us during the year theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures and hence reporting under paragraph 3 (xiv) of the Order isnot applicable to the Company.

(xv) Based on the audit procedures performed and according to the information andexplanations given to us and in our opinion the Company has not entered into any non-cashtransaction with directors or persons connected with him.

Accordingly the provisions of clause 3 (xv) of the Companies (Auditor s Report) Order2016 are not applicable to the company and hence not commented upon.

(xvi) According to the information and explanations given to us and in our opinion theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly the provisions of clause 3(xvi) of the Companies (Auditor sReport) Order 2016 are not applicable to the company and hence not commented upon.

Place: Chennai For M/s. GASM DANSR AND CO.
Date: 30.06.2021
(GANESAN)
(Partner)
(Mem No: 218179)
2-G II floor J. P. Tower 1/1Dr.Thirumurthy Nagar Main Road
Chennai 600034
Firm Reg No: 005986S
UDIN: 21218179AAAACE6498

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