The Members of
M/s. Rajratan Global Wire Limited
Report on the Audit of the Standalone Ind AS financial Statements Opinion
We have audited the standalone financial statements of Rajratan Global Wire Limited(the company) which comprise the balance sheet as at 31st March 2020 thestatement of profit and loss including statement of Other Comprehensive Income statementof changes in equity and statement of cash flows for the year the ended and notes to thefinancial statements including a summary of significant policies and other explanatoryinformation.
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 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2020 its profit changes in equity and in cashflows for the year ended on that date.
Basis of Opinion
We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under Section 143(10) of the Companies Act2013. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Ind AS 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 Indiatogether with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Companies Act 2013 and the Rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Standalone Ind ASfinancial statements.
Key Audit Matters
Key audit matters are those matters that in our professional accounting judgment wereof most significance in our audit of the Standalone Ind AS financial statements for thefinancial ended March 31 2020. These matters were addressed in the context of our auditof the Standalone Ind AS financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters. For each matter belowour description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying Standalone Ind AS financialstatements.
|Key Audit Matters ||How our audit addressed the Key Audit Matters |
|Revenue Recognition || |
|(as described in note 2.2(n) of the standalone Ind AS financial statements) || |
|The management is of the opinion that it controls the goods before transferring them to the customer. ||We assessed the Company's process to identify the impact of adoption of new Revenue Accounting Standard (Ind AS 115). Our audit approach included assessment of design and testing of operating effectiveness of internal controls related to revenue recognition calculation of discounts and rebates and other substantive testing. We carried out: |
|The variety of terms that define when control are transferred to the customer as well as the high value of the transactions give rise to the risk that revenue is not recognized in the appropriate accounting period. || |
|Revenue is measured net of returns and allowances trade discounts and volume rebates (collectively Discount and rebates'). There is a risk that these discount and rebates are incorrectly recorded as it also requires ascertain degree of estimation resulting in understatement of the associated expenses and accrual. ||Evaluation of the design of internal controls relating to implementation of new revenue accounting standard. |
| ||Selection of samples of both continuing and new contracts for |
| ||- testing of operating effectiveness of the internal control |
|Accordingly due to the significant revenue recognition in accordance with terms of Ind AS 115 ||- identification of contract wise performance obligations and risk associated with |
| ||- Determination of transaction price. |
|Revenue from Contracts with Customers' it was determined to be a key audit matter in our audit of the standalone Ind AS financial statements. || |
| ||Verification of individual sales transaction on sample basis and traced to sales invoices sales orders and other related documents. Further the samples were checked for revenue recognition as per the shipping terms. |
| ||Sample of sales transactions were selected pre- and post- year end agreeing the period of revenue recognition to third party support such as transporter invoice and customer confirmation of receipt of goods. |
| ||Direct confirmations were obtained from customers to support existence assertion of trade receivables and assessed the relevant disclosures made in the financial statements; to ensure revenue from contracts with customers are in accordance with the requirements of relevant accounting standards. |
| ||In the cases where direct confirmations are not available additional procedures were applied in respect of receipts in the Subsequent period. |
|Expected Credit Loss || |
|(as described in note 2.2(o)(i)(E) of the standalone Ind AS financial statements) || |
|The Company determines expected credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. ||Our audit procedures related to verification of expected credit losses for trade receivables included the following among others: |
|The Company considered current and anticipated future economic conditions and effect from the pandemic relating to COVID -19. We identified expected credit losses as a key audit matter because the Company exercises significant judgment in calculating the same. ||We tested the effectiveness of controls over the |
| ||(1) development of the methodology for the allowance for credit losses including consideration of the current and estimated future economic conditions |
| ||(2) completeness and accuracy of information used in the estimation of probability of default and |
| ||(3) Computation of the allowance for credit losses based on the age wise details of trade receivables provided to us. |
| ||We tested the mathematical accuracy and computation of the allowances by using the same input data used by the Company. |
We have determined that there are no other key audit matters to communicate in ourreport.
Information Other than the financial Statements and Auditor's Report Thereupon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report 2019-20 but does notinclude the Standalone Ind AS financial report thereon.
Our opinion on the Standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. 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 Standalone 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 standalone Ind AS financial statements that give a true and fair view of thefinancial position financial comprehensive income cash flows and changes in equity ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified read with the Companies(Indian Accounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate controls system in placeaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone Ind AS financial statements the Board of Directors isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting
Auditor's Responsibility for the Audit of Standalone Ind AS financial Statementsstatements and our auditor's Our objectives are to obtain reasonable assurance aboutwhether the Standalone Ind AS financial whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Ind AS financialstatements.
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 Standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementincluding other resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control. under section 133 of the Act
- 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 the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
- 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 a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the Standalone Ind AS financial statementsor if such disclosures are inadequate to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. However futureevents or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation structure and content of the Standalone Ind ASfinancial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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 Ind AS 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 (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure-A a statement on the matters par 3 and 4 ofthe Order. specifiedin
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 the Statement ofOther Comprehensive
Income 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 standalone financial statements comply with theIndian Accounting Standardsspecifiedunder Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended.
(e) On the basis of the written representation received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164(2) of theCompanies Act 2013.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report inAnnexure-B to this report.
(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) Rules2014 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 on its financialposition in its financial statements Refer Note 41 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 required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure - A to the Auditors' Report
As referred to in our Independent Auditor's Report of even date to the members ofRajratan Global Wire Limited for the year ended March 31 2020
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) As informed and explained to us the management during the year has physicallyverifiedthe items of the property plant and equipment of the company at reasonableinterval and no significant discrepancies were noticed on such physical 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 informed and explained to us the inventory has been physically verified In ouropinion the frequency of verification No material discrepancies were noticed on suchphysical verification.
(iii) The company has granted unsecured loans amounting to Rs. 1007.85 Lakhs (PreviousYear Rs. 1002.51 Lakhs) to Wholly Owned Subsidiary covered in the register maintainedunder Section 189 of the Companies Act 2013 (the Act).
(a) The terms and conditions of the grant of such loans are not prejudicial to thecompany's interest.
(b) The terms of arrangements do not stipulate any repayment schedule and the loans arerepayable on demand.
(c) Accordingly paragraph 3(iii)(c) of the Order is not applicable to the Company inrespect of repayment of the principal amount.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(v) According to the information and explanations given to us the company has notaccepted any deposits under sections 73 to 76 or any other relevant provisions of theCompanies Act and the rules framed there under.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained.
(vii) (a) According to the books of accounts and records examined by us as per thegenerally accepted auditing practices in India in our opinion the company has beenregular in depositing undisputed statutory dues. According to the information and .explanations given to us there were no undisputed amounts payable in respect of ProvidentFund Employees State Insurance Income tax Sales Tax Customs Duty Excise Duty ServiceTax Cess and other material statutory dues which have remained outstanding as at 31stMarch 2020 for a period of more than six months from the date they became payable. duringthe year by the management. (b) There are no disputed dues on account of Custom isreasonable. Duty Wealth Tax/ Cess Income Tax and Service Tax that have not beendeposited. The disputed dues on account of the Sales Tax and Excise Duty are as under:-
|Particulars ||Period ||Amount ||Forum where the dispute is pending |
| || ||(Rs. In || |
| || ||Lakhs) || |
|VAT ||FY 2014-15 ||4.32 ||Additional CCT(A) Indore |
|Excise ||Apr16 -Jun17 ||2.99 ||CESTAT New Delhi |
(viii) According to the information and explanations given to us the company has notdefaulted in repayment of dues to financial institutions banks or debenture holders.
(ix) Paragraph 3(ix) of the Order is not applicable to the Company in respect ofinitial public offer or further public offer.
(x) According to the information and explanations given to us no material fraud on orby the Company has been noticed or reported during the year under 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 the company is not a chit fund or a Nidhi mutual benefit fund/society. Therefore the provisions of clause (xii) of Para 3 of the said order are notapplicable to the company.
(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.
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 RajratanGlobal Wire Limited (the Company) as of 31 March 2020 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 internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal financial Controls over financial Reporting issued by the Institute ofChartered Accountants of India (ICAI'). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal financial Controls over financial Reporting (the Guidance Note)and the Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial both applicable to an audit of Internal financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement ofthe financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is for our audit opinion on theCompany's internal financial over financial
Meaning of Internal financial Controls over financial Reporting
A company's internal financial a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of Ind AS financialcontrols based on the with generally accepted accounting principles. A company's internalfinancial control over financial reporting includes policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation ofInd AS financial accounting principles and that receipts and expenditures of the companyare being made only in accordance with authorizations of management and directors of thecompany; 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 Ind AS financial statements.
Inherent Limitations of Internal financial Controls over over financial reporting basedon financial Reporting Because of the inherent limitations of internal financial controlsover financial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future controls periods are subject to the risk that the internalfinancial control over financial reporting may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting over financial and such internalfinancial reporting were operating effectively as at 31 March 2020 based on the internalcontrolover 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 Institute of CharteredAccountants of India.reportingassessing