The Members of Rajivr Industries Limited
Report on the Audit of the Standalone financial statements Opinion
We have audited accompanying standalone financial statements of Rajvir IndustriesLimited (the Company') which comprise of the balance sheet as at March 31 2019the statement of Profit and Loss (including other comprehensive income) statement ofchanges in equity and statement of cash flows for the year ended on that date and notesto the standalone financial statements including a summary of significant accountingpolicies and other explanatory information (hereafter referred to as "the auditedstandalone financial statements")
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid stand-alone financial statements give the information requiredby The 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 March 31 2019 loss and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
The attached financial results for which no provision for impairment of financialassets has been made by the company as per Ind AS 109 for Assets included under"Assets held for sale and discontinued operations" pertaining to Claim of refundof interest subsidy made under TUFS receivable of Rs. 1288.86 lakhs Insurance claimreceivable of Rs.337.87 lakhs accounted in earlier years pending acceptance by theInsurance company and Incentive receivable from Government of Telangana of Rs.740.09 lakhspertaining to financial year 2013-14 to 2015-16 has not been recovered till the date ofaudit for which the management is of view that these financial assets are recoverable. Basisfor Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specifie under section 143(10) of the Companies Act 2013. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone financial statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the independent requirementthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the rules made there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on standalone 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:
| ||Key Audit Matter ||Auditors Response |
|1 ||Evaluation of disputed direct and indirect tax demands: The company has material disputed uncertain tax demands of direct and indirect taxes which are matter under dispute which involves significant judgement to determine the possible outcome of their disputes. ||Principal Audit Procedures Obtained details of pending and completed tax assessments and demands status from the management which are pending as on 31st March 2019. We have reviewed the management's assumptions in estimating the tax provision and possible outcome of the disputed statutory dues. We have additionally assessed for the opening balances of disputed statutory dues whether a change was required to management's view for the year ended march 31 2019. We have involved our internal experts and considered legal case laws and other rulings in evaluating management's position on these uncertain tax positions. |
Information other than 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 of the information included in the managementdiscussion and analysis Boards report including Annexure to Boards Report CorporateGovernance and Shareholders information but does not include the financial statements andour auditor's report thereon. Our opinion on financial statements does not cover the otherinformation and we do not express any form of assurance or conclusion thereon.
In connection with our audit of the financial statement our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statement or other information 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.
Responsibilities of Management for the Standalone financial statement
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 financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. The Board of Directors are responsible for overseeingthe Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone financial statement
Our objectives are to obtain reasonable assurance about whether thestandalone 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 standalone 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 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.
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 Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness 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 significan 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 inthestandalone 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 standalonefinancial statements including the disclosures and whether thestandalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in thestandalone financialstatements that individually or inaggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the standalone financialstatements.
We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
From the matters communicated with those charged with governance we determinethose matters that were of most significations in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication
10. We draw attention to Notes to accounts of the accompanying financial statement inrespect of:
(a) Note no. 34(e): contingency related to recompense payable in lieu of banksacrifice' as per Corporate Debt Restructuring by banks the outcome of which ismaterially uncertain and cannot be determined currently;
(b) Note no. 40 : the confirmation/reconciliations
of balances of certain secured and unsecured loans balances with banks trade payabletrade receivable other payable and loans and advances have not been received and aresubjected to reconciliation review and adjustment thereof;
(c) Note no. 34(f): The company has made a claim of refund of interest subsidy underTUFS receivable on eligible machinery and accounted in earlier years which is stillpending for final decision before appropriate authorities. The management expects fullrealization thereof.
(d) Note No 34(g): The Company has made and accounted Insurance claim receivable ofRs.337.87 lakhs in earlier years pending acceptance by the Insurance Company which is notyet confirmed or realized from the Insurance Company. The management expects fullrealization thereof.
(e) Note No. 39: The accumulated losses have
eroded the net-worth of the Company. The statement regarding preparation of anfinancial results of the company on going concern basis notwithstanding the fact that thecompany continue to incur cash losses its net worth has been fully eroded defaulted inrepayment of principle and interest to its lenders loans have been called back by securedlenders non-current assets are significantly impaired current liabilities exceeded thetotal assets of the company etc. this conditions indicate the existence of a materialuncertainty that may cast significant doubt on the company's ability to continue as goingconcern. That appropriateness of assumption of going concern is critically dependent uponthe company's ability to raise requisite finance/ generate cash flows in future to meetits obligations.
Our opinion is not qualified in respect of above matters
Report on Other Legal and Regulatory Requirements
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 Companies Act 2013 we give in the Annexure A a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable. As required by Section143(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 change in equity and the Cash Flow Statement dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.
f) 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.
g) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".
h) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements - Refer Note 34 to the standaloneInd AS financial statements
ii. The Company has made provision as required under the applicable law or AccountingStandards for material foreseeable losses if any on long term contracts. The Companyneither entered into any derivative contract during the year nor have any outstandingderivative contract at the end of the year;
iii. There has been delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended March 312019.
For K.C. Bhattacharjee & Paul. Chartered Accountants (ICAI FRN: 303026E)
(Manoj Kumar Bihani)
Membership No. 234629
Annexure - A to the Independent Auditors' Report
Referred to in Report on Other Legal and Regulatory Requirements of the IndependentAuditors' Report of even date to the members of Rajvir Industries Limited on thestandalone Ind AS financial statements as of and for the year ended March 312019
1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and nomaterial discrepancies between the book records and the physical inventory have beennoticed.
(c) The title deeds of immovable properties as disclosed in Note no. 1 A on fixedassets to the financial statements are held in the name of the company.
2. (a) The inventory has been physically verified by the management during the year. Inour opinion the frequency of verification is reasonable.
(b) On the basis of our examination of the inventory records the company ismaintaining proper records of inventory. The discrepancies noticed on physicalverification of inventory as compared to book records have been properly dealt with by thecompany.
3. The Company has not granted any loans secured or unsecured loan to companies firmsor other parties covered in the register maintained under Section 189 of the CompaniesAct 2013.
4. In respect of loans investments guarantees and securities which are covered underthe provisions of Section 185 and 186 of the Companies Act 2013 as per information andexplanations given to us the company has complied with the provisions of the Act.
5. In our opinion and according to the information and explanation given to us thecompany has not paid the interest on public deposits of Rs.16.49 lakhs as on 31.03.2019and as such has not complied with the relevant provisions of section 73 to 76 and otherrelevant provisions of the Companies Act and the Companies (Acceptance of Deposit) Rules2015 as applicable with regards to the deposits accepted from members and the public. Asinformed by the management no order has been passed by the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any Court or any other Tribunal withregard to the Deposits.
6. We have broadly reviewed the books of accounts maintained by the Company pursuant tothe rules made by the Central Government of India the maintenance of cost recordsspecified under subsection (1) of Section 148 of the Act and are of the opinion thatprima facie the prescribed accounts and records have been made and maintained. We havenot however made a detailed examination of the Records with a view to determine whetherthey are accurate or complete.
7. (a)According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is irregular in depositing undisputedstatutory dues including provident fund employees state insurance income tax sales taxvalue added tax service tax custom duty excise duty cess GST and other statutory duesas applicable to it with appropriate authorities and there have been serious delays inlarge number of cases. There are no undisputed statutory dues except as stated below whichremained unpaid for a period of more than six months as on the reporting date.
|Particulars ||Period ||Amount (In lakhs) |
|Provident fund ||April 2017 to June 2018 ||28.84 |
|Tax deducted and collected at source ||April 2016 to September 2018 ||133.57 |
|Service Tax ||April 2015 to June 2017 ||22.26 |
|Sales tax deferment ||Upto March 2019 ||352.79 |
(b) According to the information and explanations given to us there are no disputedstatutory dues as at the year end.
8. According to the records examined by us the Company has defaulted in principalrepayment of dues to financial institutions/banks during the current financial year. Thelender wise details of the amount of default as at Balance sheet date are as under:
|Particulars (Name of the Lender) ||Amount of default as at the Balance sheet date (In lakhs) ||Period of Default ||Remarks if any |
|Central Bank of India ||81.33 ||Jan.2018 to March 2019 ||The account is classifie as NPA by bank. |
|State Bank of India ||782.86 ||Jan.2018 to March 2019 ||The account is classified as NPA by S B I. |
|IDBI Bank ||177.75 ||Jan.2018 to March 2019 ||The account is classified as NPA by IDBI Bank |
|Axis Bank ||252.26 ||July 2017 to March 2019 ||The account is classified as NPA by bank. |
9. On the basis of our review of utilization of funds pertaining to term loans onoverall basis and related information and explanations as made available to us the termloans taken by the company has been utilized for the purpose of which they were obtained.Further the company has not raised moneys by way of initial public offers or furtherpublic offers during the year.
10. 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 its officers or employeesnoticed or reported during the year nor have we been informed by any such case by themanagement.
11. The company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
12. As the company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the company.
13. The company has entered into transactions with related parties in compliance withthe provisions of Section 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandards (AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.
14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.
15. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.
16. 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 notapplicable to the Company.
For K.C. Bhattacharjee & Paul. Chartered Accountants (ICAI FRN: 303026E)
(Manoj Kumar Bihani)
Membership No. 234629
Annexure - B to the Independent 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 RajvirIndustries Limited ("the Company") as of 31stMarch 2019 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.
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 company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material 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 Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the Ind ASfinancial 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. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For K.C. Bhattacharjee & Paul. |
| ||Chartered Accountants |
| ||(ICAI FRN: 303026E) |
| ||(Manoj Kumar Biham) |
|Place: Hyderabad ||Partner |
|Date: 29-05-2019. ||Membership No. 234629 |