The Members of
Rajeswari Infrastructure Limited
Report on the Ind AS Financial Statements
We have audited the accompanying Ind AS financial statements of RajeswariInfrastructure Limited ("the Company") comprising of the Balance Sheet as at31st March 2021 and the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2021 and its profit includingother comprehensive income its cash flows and the changes in equity for the year ended onthat date.
Basis of Opinion
We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing issued by the ICAI as specified under Section 143(10) of the Act.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of Ind AS Financial Statements section of our report.
We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the Ind AS financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
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 period. 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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
1. Loss due to Floods: Due to floods in Chennai office situated at Ekattuthangal duringDecember 2015 main Plant and Machinery (Printing Division) and all computers andfurniture were lost and damaged beyond repair. The Printing Plant and Machinery weredamaged in full and due to disputes between the Insurance company and the financiers onlypart settlement from Insurance company is accounted for in the books of account and thefinal settlement is under arbitration. The effect of the same could not be reflected inthe books of account. However on confirmation from the Insurance Company the necessaryadjustments will be made in the books of account. Refer Note 6.6.
2. Loan settlement arrangements: The Company has entered into a Memorandum ofUnderstanding with the certain financial Institution for settlement of loan of Rs.899.20lakhs after 1 1 months by offering Block A of constructed property at Pallikaranai if theamount due is not settled within the agreed period. Since the
1. Loss due to Floods:.
Due to floods in Chennai office situated at Ekattuthangal during December 2015 mainPlant and Machinery (Printing Division) and all computers and furniture were lost anddamaged beyond repair. The Printing Plant and Machinery were damaged in full and due todisputes between the Insurance company and the financiers only part settlement fromInsurance company is accounted for in the books of account and the final settlement isunder arbitration. The effect of the same could not be reflected in the books of account.However on confirmation from the Insurance Company the necessary adjustments will be madein the books of account. Refer Note 6.6
2. Loan settlement arrangements:
The Company has entered into a Memorandum of Understanding with the certain financialInstitution for settlement of loan of Rs.899.20 lakhs after 1 1 months by offering Block Aof constructed property at Pallikaranai if the amount due is not settled within theagreed period. Since the eventuality has not happened as at the closing of accounts theeffect of the same could not be incorporated in the books of account. Interest has notbeen accounted as account is classified as NPA. Refer Note 6.5 and 15.2.
Information Other than the Ind AS Financial Statements and Auditor's 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 Ind AS financial statements and our auditor's report thereon.
Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the Ind AS financial statements or our knowledge obtainedduring 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 materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Audit of Ind AS 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Ind AS and other accountingprinciples generally accepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessingthe Company'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.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibility for the Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS 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 SAs
will 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 Ind AS financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the IndAS 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.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act 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.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting 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 Ind AS 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.
Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the Ind AS 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 with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements ofthe current period and are therefore the key audit matters.We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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 the Companies (Auditors Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub section (1 1) of section 143 ofthe Act we give in the AnnexureA" a statement on the matters specifiedin paragraphs 3 & 4 of the Order.
2. As required by section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164(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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
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 1 1 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 did not have any pending litigations which would impact its financialposition in its Ind AS financial statements;
ii. Company did not have any long-term contracts including derivative contracts forwhich 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.
Annexure "A" to the independent Auditor's Report of even date to the membersof Rajeswari Infrastructure Limited on the IND AS financial statements for the year ended31 st March 2021
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanation given to us and the books of accounts and other recordsexamined by us in the normal course of the audit and to the best of our knowledge andbelief we report that
I. In respect of its Fixed assets:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The management during the year has physically verified all the assets and there is aregular programme of verification which in our opinion is reasonable having regard tothe size of the Company and the nature of its assets. According to the information andexplanations given to us no serious discrepancy have been noticed on such physicalverification.
c. According to the records produced and according to the information and explanationsfurnished to us the title deeds of the immovable properties are held in the name of theCompany as at the balance sheet date.
II. In respect of its inventories:
a. According to the information and explanations given to us in respect of finishedgoods semi finished goods raw material stores and spares physical verification has beencarried out during the year by the management. In our opinion the frequency ofverification is reasonable.
b. In our opinion and according to the information and explanations given to us theprocedures of physical verification of stocks followed by the management are reasonableand adequate in relation to the size of the Company and the nature of its business.
c. On the basis of our examination of records of inventory in our opinion the Companyhas maintained proper records of inventory. The discrepancies noticed on physicalverification of inventory as compared to the book records were not material and have beenproperly dealt with in the books of accounts.
Note: Kindly refer Note No. 15.2 of the financial statements with regard to LoanSettlementArrangements with Financial Institutions.
III. In our opinion and according to the information and explanations given to us theCompany has neither granted nor taken any loans secured or unsecured to companies firmsor other parties covered in the register maintained under Section 189 of the Act.Accordingly clauses (iii) (a) & (b) of Paragraph 4 of the order are not applicable tothe Company for the current year.
IV. The Clause regarding loans investments and guarantees and security as perprovisions of section 185 & 186 of Companies Act 2013 is not applicable for theCompany.
V The Company has not accepted any deposits from the public within the meaning ofsections 73 to 76 of the Companies Act and the rules framed there under.
VI. In our opinion and according to the information and explanations given to us theCentral Government has not prescribed the maintenance of cost records for any productunder section 148(1) of the Companies Act.
VII. In respect of statutory dues
a. According to the information and explanations given to us and according to the booksand records as produced and examined by us in our opinion the undisputed statutory duesincluding provident fund investor education and protection fund employees stateinsurance income-tax sales tax wealth tax service tax customs duty excise duty cessand other material statutory dues as applicable have not been regularly deposited by theCompany during the year with the appropriate authorities.
Undisputed statutory dues which are outstanding for more than six months as at theBalance Sheet date are:
|Service Tax - ||Rs. 1750431.00 |
|LuxuryTax - ||Rs.4892348.00 |
|PropertyTax - ||Rs. 134280.00 |
b. According to the information and explanations given to us and according to the booksand records as produced and examined by us there were no cases of disputed income-taxsales tax wealth tax service tax customs duty excise duty cess there are no dueswhich have not been deposited as on 31st march 2021 other than on account of dispute asgiven below:
|. Name of the Statute ||Nature of the Dues ||Amount (in lakhs) ||Period ||Forum where it is pending |
|1 1961 ||Dispute regarding assessment of Income tax for -07 ||2 2.95* ||FY 2005-06 ||High Court Chennai |
| ||Dispute re assessment of Income tax for -08 ||25.26* ||FY 2006-07 || |
* Includes Rs.31.79 lakhs paid under protest
VIII. The company has defaulted in repayment of loans to a financial institution anddues to debenture holders.The period and the amount of default are reported as under:
|Name of the Institution ||Amount of default as on 31.3.2019 ||Period of Default ||Remarks |
|Rellgare Flnvest Ltd. ||89920339 ||More than 6 months ||Loan has been classified as NPA and interest not recognized in books. Block A of constructed property at Pallikaranai has been attached under MOU with the party on the condition of payment of 60% of the dues within 11 months ending Feb 2017 and a further moratorium period of 3 months. |
|Corporation Bank ||11933781 ||More than 6 months ||Classified as NPA |
|Intec Ltd. ||24991433 ||More than 6 months ||Loan taken for Printing Machinery. Machinery damaged in Floods and Insurance process initiated. Under dispute regarding coverage of Insurance. Classified as NPA. |
21 has been included above.
IX. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.
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 ScheduleV 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 noncashtransactions 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 IndiaAct 1934.
Annexure "B" to the IndependentAuditors' Report
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of RajeswariInfrastructure Limited ("the Company") as of March 3 12021 in conjunction withour audit of the Ind AS 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to respective 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 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 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 authorisations of management and directors of the company; and
3. Provide reasonable assurance regarding prevention or timely detection ofunauthorised 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
|Place: Chennai ||For N.Sankaran & Co Chartered Accountants |
|Date: 21/06/2021 ||(Firm's Registration No.003590S) AARTHI R |
| ||Partner |
| ||(Membership No. 23 1758) |
| ||UDIN : 21231758AAAAAM2313 |