To the Members of Rane Holdings Limited
Report on the Audit of the Standalone Financial Statements
We have audited the standalone financial statements of Rane Holdings Limited ("theCompany") which comprise the standalone balance sheet as at March 31 2021 and thestandalone statement of profit and loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows for the year thenended and notes to the standalone financial statements including a summary of thesignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by The Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the standalone financial statements.
Emphasis of matter
We draw attention to Note 2.3.3 of the standalone financial statements which describesthe economic and social consequences / disruption as a result of COVID-19 which impactmatters relating to supply chain and customer demand of the subsidiaries and jointventures personnel available for work being able to access offices etc.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
|The key audit matter ||How the matter was addressed in our audit |
|Impairment of investment in subsidiary - Rane T4u Private Limited ||In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence: |
|Refer note 6 to the standalone financial statements. || |
|The Company has an investment in subsidiary Rane t4u Private Limited amounting to Rs 2912 lakhs (gross) as at March 31 2021. The Company records the investment at cost less accumulated impairment losses. If triggers for an impairment exists the recoverable value of the investment is estimated in order to determine the extent of the impairment loss if any. || Assessed the appropriateness of accounting policy for impairment as per relevant accounting standard. |
| || Assessed the design and implementation of key internal financial controls with respect to impairment of investment in its subsidiary and tested the operating effectiveness of such controls. |
|Due to significant losses incurred by the subsidiary there is a risk that the carrying value of the investment is higher than its recoverable value as at the year end thereby triggering impairment. Consequently the Company carried out an impairment assessment and recognized an impairment loss of Rs 1557 lakhs during the year ended March 31 2021. || Involved our valuation specialist to assist us in evaluating the appropriateness of the valuation model the assumptions and methodologies used by the Company for assessing the recoverable value of the investment in its subsidiary. |
|The determination of the recoverable value of investments which is based on the fair value less cost to sell involves significant judgements and estimates including determination of comparable companies and transactions implied market multiples and projected revenue. || Evaluated the objectivity independence and competence of the valuation specialist engaged by Company. |
| || Evaluated the appropriateness of the key assumptions used in estimating the recoverable value such as comparable companies and transactions implied market multiples and projected revenue used in the fair value less cost to sell model. This evaluation was based on our knowledge of the Company its subsidiary and the industry and observable market data past performances consistency with the Board approved plans and inquiries of the auditors of the subsidiary. |
|We have identified the assessment of impairment as a key audit matter since it involves significant judgement in making the above estimates especially in view of the highly uncertain economic environment and hence the actual results may differ from those estimated at the date of approval of these financial statements. || Performed sensitivity analysis of the key assumptions used in the impairment assessment. |
| || Assessed the adequacy of the disclosures relating to impairment of investment in its subsidiary in the standalone financial statements. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises of reports such as Board's Report ManagementDiscussion and Analysis Corporate Governance Report and Business Responsibility Report(but does not include the financial statements and our auditors' report thereon) which weobtained prior to the date of this Auditor's Report and the remaining sections of Annualreport which are expected to be made available to us after that date.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon. nI connection with ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. fI based on the work we haveperformed on the other information that we obtained prior to the date of this Auditor'sReport we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
When we read the remaining sections of Annual Report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance and take necessary actions as applicable under the applicable laws andregulations.
Management's and Board of Directors' Responsibility for the Standalone FinancialStatements
The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error. Inpreparing the standalone financial statements the Management and Board of Directors areresponsible 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.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the 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 auditor's 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 inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial 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 misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the companyhas adequate internal financial controls with reference to financial statements in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.
Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
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.
The standalone financial statements of the Company for the year ended March 31 2020were audited by the predecessor auditors who had expressed an unmodified opinion on thosestandalone financial statements dated June 24 2020.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
2. A ( ) 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
(B) 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 as at March 31 2021 onits financial position in its standalone financial statements - Refer Note 32 to thestandalone 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.
iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended March 31 2021.
(C) With respect to the matter to be included in the Auditors' Report under section197(16): 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) which arerequired to be commented upon by us.
For B S R & Co. LLP
Firm's Registration Number: 101248W/W-100022
| ||S Sethuraman |
| ||Partner |
|Place: Chennai ||Membership no: 203491 |
|Date: May 27 2021 ||UDIN: 21203491AAAADH1381 |
ANNEXURE A TO THE IN DEPENDENT AUDITORS' REPORT
to the members of Rane Holdings Limited for the year ended March 31 2021 (referred toin our report of even date)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets / property plant and equipment.
(b) The Company has a programme of physical verification of its property plant andequipment by which property plant and equipment are verified once in two years. Pursuantto such programme no portion of property plant and equipment was required to bephysically verified by the management during the year .
(c) With respect to immovable properties of acquired land and buildings that arefreehold according to the information and explanations given to us and the recordsexamined by us and based on the examination of the registered sale deeds / court orderapproving scheme of arrangement / amalgamation provided to us we report that the titledeeds of such immovable properties are held in the name of the Company as at the balancesheet date.
In respect of certain immovable properties of land and buildings whose title deeds havebeen pledged with banks / financial institutions as security for term loans our reportingunder this clause is based on confirmations received from such banks that the immovableproperties are held in the name of the Company.
(ii) The Company does not have inventory and hence paragraph 3(ii) of the Order is notapplicable.
(iii) In our opinion and according to the information and explanations to us theCompany has granted unsecured loans to one Company covered in the register maintainedunder Section 189 of the Act in respect of which:
a) The rate of interest and other terms and conditions on which the loans had beengranted were not prima facie prejudicial to the interest of the Company.
b) The schedule of repayment of principal and payment of interest has been stipulatedfor the loan granted. However as per the terms of the loan the repayment of loan andinterest does not fall during the year under audit and accordingly the reporting underthis clause as to whether the borrower has been regular in payment of interest andprincipal is not applicable.
c) There are no overdue amounts in respect of the loan granted to the Company coveredunder the register maintained under section 189 of the Act.
(iv) According to the information and explanations given to us the Company hascomplied with the provisions of section 185 and 186 of the Act with respect to the loansinvestments and guarantees given. As explained the Company has not given any security asat March 31 2021.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits as mentioned in the directives issued by ReserveBank of India and the provisions of sections 73 to 76 or any other relevant provisions ofthe Act and the rules framed thereunder. Accordingly paragraph 3 (v) of the Order is notapplicable.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148 (1) of the Act in respect of any of the activities of the Company.Accordingly paragraph 3 (vi) of the Order is not applicable.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccounts in respect of undisputed statutory dues including provident fund employees'state insurance income-tax duty of customs goods and services tax and any othermaterial statutory dues have generally been regularly deposited during the year by theCompany with the appropriate authorities. As explained to us the Company did not have anydues on account of sales-tax service tax duty of excise value added tax and cess.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax goods andservice tax and other material statutory dues were in arrears as at March 31 2021 for aperiod of more than six months from the date they became payable.
(b) According to the information and explanations given to us the dues of income taxand duty of customs which have not been deposited with the appropriate authorities onaccount of disputes are as under
|Name of statute ||Nature of the dues ||Disputed Amount (`lakhs) ||Amount unpaid ` ( lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|Income Tax Act 1961 ||Income tax ||96 ||35 ||AY 2005-06 ||Assessing Officer |
| || || || ||AY 2008-09 || |
|Income Tax Act 1961 ||Income tax ||50 ||50 ||AY 2015-16 ||ITAT |
|Income Tax Act 1961 ||Income tax ||92 ||92 ||AY 2017-18 AY 2018-19 ||CIT(A) |
|Customs Act 1962 ||Customs duty ||6 ||6 ||AY 2012-13 ||CESTAT |
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to banks or financial institutions. TheCompany has not taken any loans or borrowings from government and have not issued anydebentures. (ix) The Company did not raise any money by way of initial public offer orfurther public offer (including debt instruments) during the year. According toinformation and explanations given to us money raised through term loans during the yearhas been utilised for the purpose for which they were raised.
(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 given to us and on the basis of ourexamination of the records of the Company the managerial remuneration for the year endedMarch 31 2021 has been paid or provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Act and rules framedthereunder.
(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 the provisions of section 188 and 177 of the Act where applicable and thedetails of the such transactions have been disclosed in the standalone financialstatements as required by the Indian Accounting Standards.
(xiv) According to the information and explanations given 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. Accordingly paragraph 3(xiv) of the Order is not applicable.
(xv) According on the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable.
(xvi) TheCompanyisnotrequiredtoberegisteredundersection 45-IA of the Reserve Bank ofIndia Act 1934. Accordingly paragraph 3(xvi) of the Order is not applicable.
For B S R & Co. LLP
Firm's Registration Number: 101248W/W-100022
| ||S Sethuraman |
| ||Partner |
|Place: Chennai ||Membership no: 203491 |
|Date: May 27 2021 ||UDIN: 21203491AAAADH1381 |
ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT
on the standalone financial statements of Rane Holdings Limited for the year endedMarch 31 2021
Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (Referred to in paragraph 2(A)(f) under Report on Other Legal andRegulatory Requirements' section of our report of even date) Opinion
We have audited the internal financial controls with reference to financial statementsof Rane Holdings Limited ("the Company") as of March 31 2021 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at March 31 2021 based on the internal financial controls withreference to financial statements 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 (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").
Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. 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 with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 standalone financial statements whether due to fraud orerror.
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 withreference to financial statements.
Meaning of Internal Financial controls with Reference to Financial Statements
A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those 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 offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Standalonefinancial statements.
Inherent Limitations of Internal Financial controls with Reference to FinancialStatements
Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to Standalone financial statements to future periods are subject to the riskthat the internal financial controls with reference to standalone financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.
For B S R & Co. LLP Chartered Accountants Firm's Registration Number:101248W/W-100022
| ||S Sethuraman |
| ||Partner |
|Place: Chennai ||Membership no: 203491 |
|Date: May 27 2021 ||UDIN: 21203491AAAADH1381 |