TO THE MEMBERS AND BOARD OF DIRECTORS OF RAJ OIL MILLS LTD.
We have audited the accompanying Standalone Financial Statements of Raj Oil MillsLimited ("the Company") which comprise the Standalone Balance Sheet as at March31 2021 the Standalone Statement of Profit and Loss (including Other ComprehensiveIncome) the Standalone Statement of Changes in Equity and the Standalone Statement ofCash Flows for the year then ended and notes to the Standalone Financial Statementsincluding a summary of the significant accounting policies and other explanatoryinformation (hereinafter referred to as the "Standalone Financial Statements")
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ('the Act') in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under Section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(Ind AS) and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2021 and its profit total comprehensive incomeits cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing specified underSection 143 (10) of the Act (SAs). Our responsibilities under those SAs are furtherdescribed in the 'Auditors' Responsibilities for the Audit of the Standalone FinancialStatements' section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI)together with the ethical requirements that are relevant to our audit of the StandaloneFinancial Statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements andICAIs Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificant in our audit of Standalone Financial Statements of the current period. Thesematters were addressed in the context of our audit of the Standalone financial statementsas a whole and in forming our opinion thereon and we do not provide a separate opinionon these matters.
Information other than the Financial Statements and Auditor's Report thereon
The Board of Directors of the Company are responsible for the other information. Theother information comprises the information included in the Company's annual report butdoes not include the Standalone Financial Statements and our auditors' report thereon.
Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's responsibility for the Standalone Financial Statements
The Board of Directors of the Company are responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Standalone financial statementsthat give a true and fair view of the State of Affairs (financial position) Profit orLoss (financial performance including Other Comprehensive Income) Changes in Equity andCash Flows of the Company in accordance with the Ind AS and other accounting principlesgenerally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the company and for preventing and detecting frauds and other irregularities;selection and application of appropriate implementation and maintenance of accountingpolicies; making judgments and estimates that are reasonable and prudent and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the Standalone Financial Statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.
In preparing the Standalone Financial Statements the Management and Board of Directorsare responsible for assessing the ability of the Company to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Management and Board of Directors either intend toliquidate the Company or to cease operations or has no realistic alternative but to doso.
The Board of Directors are also responsible for overseeing financial reporting processof the Company.
Auditor's Responsibilities for the Audit of Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors' report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
a) Identify and assess the risks of material misstatement of the Standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
b) 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 theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls
c) Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management and Board of Directors inStandalone financial statement.
d) 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 Standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
e) Evaluate the overall presentation structure and content of the Standalone financialstatements including the disclosures and whether the Standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
f) Obtain sufficient appropriate audit evidence regarding the financial information ofthe Company to express an opinion on the Standalone Financial Statements.
Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in i) planning the scope of ouraudit work and in evaluating the results of our work and ii) to evaluate the effect of anyidentified misstatements in the Standalone 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 with those charged with governance we determine thosematters that were of most significance in the audit of the Standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. 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 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 including Other ComprehensiveIncome the Statement of Cash Flows Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account.
(d) In our opinion the aforesaid Standalone Financial Statements comply with the IndAS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March31 2021 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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the internal financial controls over financialreporting of the Company.
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) of the Act whichare required to be commented upon by us.
(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 our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its Directors during the year is in accordance withthe provisions of Section 197 of the Act.
(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 as amended inour opinion and to the best of our information and according to the explanations given tous:
(i) The Company has disclosed the impact of pending litigations as at March 31 2021 onits financial position in its Standalone Financial Statements.
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of Section 143 (11) of the Act we give in the"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder
For Kailash Chand Jain & Co.
Firm Registration No.: 112318W
Membership No. : 167453
Place : Mumbai
Date: June 24 2021
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT MARCH 31 2021
Referred to in Paragraph 1(g) under Report on Other Legal and Regulatory Requirement'ssection of our report to the Members of Raj Oils Mills Limited of even date
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 Raj OilMills Limited ("the Company") as of March 31 2021 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 Board of Director of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting ('Guidance Note') issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required 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 issued by ICAI and the Standards on Auditing prescribed undersection 143 (10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsboth issued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects except which stated in Audit Report.
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 judgement 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 appropriateexcept which stated in Audit Report to provide a basis for our audit opinion on thecompany's internal financial controls system over 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material 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 and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2021 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of internalFinancial Controls over Financial Reporting issued by the ICAI.
For Kailash Chand Jain & Co.
Firm Registration No. : 112318W
Membership No. : 167453
Place : Mumbai
Date : June 24 2021
ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT MARCH 31 2021
With reference to the Annexure B referred to in the Independent Auditor's Report to theMembers of the company on the standalone financial statement for the year ended March 312021 we report following.
(i) (a) The Company has maintained records showing full particular includingquantitative detail and situation of Property plant and equipment.
(b) The Company has program of verification to cover all the items in a phased mannerwhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. Pursuant to the program certain fixed assets have been physicallyverified by the Management during the year. According to the information and explanationsgiven to us no material 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) As explained to us the inventories were physically verified during the year bythe Management and the discrepancies noticed on physical verification have been properlydealt with in the books of accounts. In respect of inventory lying with third parties atthe year end written confirmations have been obtained by the Management.
(iii) According to the information and explanations given to us the Company has notgranted any loan secured or unsecured to companies firms Limited LiabilityPartnerships (LLPs) or other parties covered in the register maintained under Section 189of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b) and 3(iii)(c) ofthe Order are not applicable.
(iv) In our opinion and according to the information and explanations given by themanagement the Company has not granted any loans or made any investments or provided anyguarantees or security to the parties covered under Section 185 and 186.Therefore theprovisions of Clause 3(iv) of the said Order are not applicable to the Company.
(v) In our opinion and according to the information and explanation given to us theNational Company Law Tribunal ('NCLT order') has passed its order dated April 19 2018directed to company to repay the public fixed deposit amounting to INR 5.36 Crores inquarterly instalments in accordance with the approved Resolution Plan. In our opinion thecompany is repaying the deposits in accordance with the approved Resolution Plan.
Further the Company during the year has not accepted any deposits from the publicwithin the meaning of Sections 73 74 75 and 76 of the Act and the Rules framed thereunder to the extent notified.
(vi) The Central Government has prescribed the maintenance of cost records underSection 148 (1) of the Act.
However as per information and explanation given to us by the Management the Companyis in process of maintaining records cost of material consumed on actual consumptionbasis.
(vii) According to the information & explanation given to us in respect ofstatutory dues:
a) The Company has been regular in depositing the undisputed statutory dues includingprovident fund employees state insurance income tax goods and services tax customsduty cess and any other material statutory dues as applicable to it with the appropriateauthorities though there has been a slight delay in a few cases.
Further in accordance with the NCLT order dated April 19 2018 the crystalliseddemand in respect of statutory liabilities (i.e. Income Tax and Sales/VAT) aggregating toINR 31200000 (INR 23200000 in case of Income Tax and INR 8000000 in case of SalesTax/VAT) are required to be paid in at 4 equal quarterly instalments beginning fromNovember 02 2020.
The details of outstanding amounts as on March 31 2021 are given below:
|Nature of dues ||Amount outstanding as on |
| ||March 31 2021 (INR) |
|Income Tax Tax Deducted at Source ||11600000 |
|Sales tax/VAT/Service Tax ||4000000 |
|Total ||15600000 |
|Name of the statute ||Nature of dues ||Amount unpaid (in INR) ||Period to which the amount relates ||Forum where dispute is pending |
|The Central Sales Tax Act 1956 ||Value Added Tax and Central Sales Tax ||27000000 ||F.Y. 2005-06 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||82900000 ||F.Y. 2006-07 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||118900000 ||F.Y. 2007-08 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||71500000 ||F.Y. 2008-09 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||158500000 ||F.Y. 2009-10 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||104800000 ||F.Y. 2010-11 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||322600000 ||F.Y. 2011-12 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||119300000 ||F.Y. 2012-13 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||55700000 ||F.Y. 2013-14 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||40239418 ||F.Y. 2014-15 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||1200196 ||F.Y. 2015-16 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||39957773 ||F.Y. 2016-17 ||Honorable Supreme Court |
|The Central Sales Tax Act ||Value Added Tax and Central Sales Tax ||5353518 ||F.Y. 2017-18 ||Honorable Supreme Court |
|Income Tax Act 1961 ||Income Tax ||833234 ||F.Y. 2004-05 ||Honorable Supreme Court |
|Income Tax Act 1961 ||Income Tax ||27280862 ||F.Y. 2005-06 ||Honorable Supreme Court |
|Income Tax Act 1961 ||Income Tax ||166551585 ||F.Y. 2006-07 ||Honorable Supreme Court |
|Income Tax Act 1961 ||Income Tax ||1184327727 ||F.Y. 2007-08 ||Honorable Supreme Court |
|Income Tax Act 1961 ||Income Tax ||671334189 ||F.Y. 2008-09 ||Honorable Supreme Court |
|Income Tax Act 1961 ||Income Tax ||1199548263 ||F.Y. 2009-10 ||Honorable Supreme Court |
|Income Tax Act 1961 ||Income Tax ||136496264 ||F.Y. 2010-11 ||Honorable Supreme Court |
|The Employees' Provident Funds & Miscellaneous Provisions Act 1952 ||Provident Fund ||6085756 ||F.Y. 2014-15 to F.Y. 2017-18 ||National Company Law Tribunal |
Accordingly the un-disputed amounts payable as on date in respect thereof which wereoutstanding at the year-end for a period of more than six months from the date they becamepayable have been provided in the books and the payments are being settled as stated inthe table above as prescribed under the aforementioned Order of the NCLT. - Bonus and LTApayable - INR 7064
b) According to the information and explanations given to us by the management thedetail of statutory dues of sales tax / VAT and income tax which have not been depositedon account of dispute is as under:
(viii) Pursuant to the continuing defaults of the Company with respect to the loans andborrowings to banks and financial institutions a Corporate Insolvency Resolution Processunder the Insolvency and Bankruptcy Code 2016 was initiated against the Company on July10 2017. The NCLT vide its order dated April 19 2018 approved the Resolution Plan andcrystallized the settlement payments to be made to the said banks and financialinstitutions pursuant to which debts owed by the Company as at that date have beenpartially settled through repayments and the balance amounts has subsequently been waivedoff. Accordingly the table below provides the relevant information in respect of suchdebts:
|Sr. No. Particulars ||Amount outstanding as on March 31 2021 (INR) |
|Name of the lenders: Fund Based || |
|1 SVC Bank ||50000000 |
|2 Public Deposits ||17700000 |
(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under Clause 3(ix) ofthe CARO 2016 Order is not applicable.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid managerial remuneration in accordance with the requisite approvalsmandated by the provisions of Section 197 and rules made thereunder.
(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofClause 3(xii) of the Order are not applicable to the Company.
(xiii) In our opinion and according to the information and explanation given to us theCompany is in compliance with section 177 and 188 of Companies Act 2013 where applicablefor all transactions with the related parties and the details of related partytransactions have been disclosed in the Standalone Financial Statements as required by theapplicable Ind AS.
(xiv) According to the information and explanation given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review and hence reporting under theprovisions of Clause 3(iv) of the Order are not applicable to the Company.
(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with its directors or persons connected with thedirectors and hence the provisions of Clause 3(xv) of the Order are not applicable to theCompany.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
Accordingly the provisions of Clause 3(xvi) of the Order are not applicable to theCompany.
For Kailash Chand Jain & Co.
Firm Registration No. : 112318W
Membership No. : 167453
Place : Mumbai
Date : June 24 2021