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Rasandik Engineering Industries India Ltd.

BSE: 522207 Sector: Auto
NSE: N.A. ISIN Code: INE682D01011
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NSE 05:30 | 01 Jan Rasandik Engineering Industries India Ltd
OPEN 93.00
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VOLUME 2583
52-Week high 197.00
52-Week low 60.40
P/E
Mkt Cap.(Rs cr) 54
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 93.00
CLOSE 92.50
VOLUME 2583
52-Week high 197.00
52-Week low 60.40
P/E
Mkt Cap.(Rs cr) 54
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rasandik Engineering Industries India Ltd. (RASANDIKENGG) - Auditors Report

Company auditors report

To the Members of Rasandik Engineering industries india Limited

Report on the Audit of Financial Statements

OPINION

We have audited the accompanying financial statements of RasandikEngineering Industries India Limited ("the Company") which comprise the BalanceSheet as at 31 March 2021 the Statement of Profit and Loss (including othercomprehensive income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 accounting principles generally accepted in India ofthe state of affairs of the Company as at 31 March 2021 its loss total comprehensiveincomeits cash flows and the changes in equity for the year ended on that date.

BASIS FOR OPINION

We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the financial statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.

MATERIAL UNCERTAINTY RELATING TO GOING CONCERN

We draw attention to Note no. 36 to the financial statement regardingpreparation of the financial statements on going concern basis for the reasons statedtherein. The appropriateness of going concern assumption is dependent upon realization ofthe initiatives to be undertaken by the Company such as ability to raise funds / generatecash flows including monetization of non-core assets and projected increase in turnover.Further we draw attention to note no. 37 to the financial statement which explains howthe economic environment surrounding the automotive industry has become highly uncertaindue to COVID 19.

The financial statement indicate that the Company has recorded a lossafter tax of Rs. 577.28 Lacs during the year ended 31 March 2021. As ofdate the Company's total current liabilities exceeds total current assets by Rs. 2806.31Lacs.

These conditions indicate existence of a material uncertainty that maycast significant doubt about the Company's ability to continue as going concern in theevent the proposed initiative/ plans to infuse sufficient funds is not implemented.

Our opinion is not modified in respect of the above matter.

EMPHASIS OF MATTER

a. We draw attention to footnote to Note no. 12 to the financialstatement regarding classification of borrowings in the financial statement as per theterms & conditions of One-time restructuring (OTR) approved by the bankers subsequentto the end of the year.

b. We draw attention to note no. 33 and 34 to the financial statementregarding certain plant and equipment classified as "capital work in progress"as explained therein and possible interest liability on non-fulfilment of exportobligations.

Our opinion is not modified in respect of the above matters.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report

Key Audit matter Auditor's Response
1 Revenue recognition:
For the year ended 31 March 2021 the Company has recognized revenue from contracts with customers amounting to Rs. 13684.26 lakhs. Our audit procedure included among others • Assessed the Company's revenue recognition policy prepared as per Ind AS 115 'Revenue from contracts with customers'.
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company is entitled in exchange for those goods or services. • Performed sample tests of individual sale transactions and traced to sales invoices sales orders and other related documents.
The Company has generally concluded that as principal it controls the goods or services before transferring them to the customer. Revenue is also an important element of how the Company measures its performance. The Company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the risk and rewards have been transferred. • Tested the provision calculations related to price revisions/ increase etc. by agreeing a sample of amounts recognized to underlying arrangements with customers and other supporting documents.
Accordingly due to the risk associated with revenue recognition in accordance with terms of Ind AS 115 'Revenue from contracts with customers' it is determined to be a key audit matter in our audit of the financial statements. • To test cut off selected sample of sales transactions made 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.

INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORTTHEREON

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.

Based on the work we have performed if we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FORTHE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

In preparing the financial statements the Management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

AUDITOR'S RESPONSIBILITY FOR THE AUDIT OF FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether thefinancial 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 financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thefinancial 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 theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3) (i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters 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 wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the 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.

OTHER MATTERS

Due to complete lockdown imposed by the Government to restrict thespread of COVID19 the audit finalization process for the year under report was carriedout from remote locations i.e. other than the Office of the Company where books ofaccount and other records are kept based on the data / details made available and basedon financial information / records remitted by the management through digital medium. Ourreport is not modified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by Section 143 (3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The balance sheet the statement of profit and loss including othercomprehensive income the cash flow statement and the statement of changes in equity dealtwith by this report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of written representations received from the directorsas on 31 March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 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 controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in "Annexure A".

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended inour opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid/provided by the Company to its directors during theyear is in accordance with the provisions of section 197of the Act.

(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact if any of pending litigationson its financial position in its financial statements - Refer Note No. 32(a) to thefinancial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferredduring the year to the Investor Education and Protection Fund by the Company.

2. 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 of the Act and on the basis of such checks of the books and recordsof the Company as we considered appropriate and according to the information andexplanations given to us we give in the "Annexure B" a statement on the mattersspecified in the paragraphs 3 and 4 of the said Order.

Annexure "A"to the Independent Auditors' Report

(Referred to in Paragraph 1(f) under ‘Report on Other Legal andRegulatory requirements' of our report on even date)

Report on the internal Financial Controls over Financial Reportingunder Clause (i) of sub-section 3 of section 143 of the Act

We have audited the internal financial controls over financialreporting of the Company as of 31 March 2021 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financialreporting included obtaining an understanding of internal financial controls overfinancial reporting assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS

OVER FINANCIAL REPORTING

A Company's internal financial control over financial reporting 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 control overfinancial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of management and directors of theCompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assets thatcould have a material effect on the financial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING

Because of the inherent limitations of internal financial controls overfinancial 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 periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

OPINION

The Company has represented that by virtue of its procedures itconsider that its internal financial control system over financial reporting is adequate.However the operating effectiveness of such internal financial control over financialreporting considering the essential components of internal control stated in the guidancenote issued by ICAI needs improvement so far as it relates evaluation of recoverability ofold balances of advances / trade receivables and old balances of inventories as this couldpotentially result in the company not recognizing appropriate provisions in respectof assets that are doubtful of recovery / impaired.

Annexure "B" to the Independent Auditors' Report

(Referred to in Paragraph 2 under ‘Report on Other Legal andRegulatory Requirements' section of our Report on even date)

i a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

b) As explained to us the fixed assets are physically verified by theManagement according to a phased periodical manner which in our opinion is reasonablehaving regard to the size of the Company and nature of its business. No materialdiscrepancies were noticed on such verification.

c) The title deeds of immovable properties as disclosed in Note 2 tothe financial statements on fixed assets are held in the name of the Company.

ii Read with note b of emphasis of matter paragraph as informed to usinventories have been physically verified during the year by the management except stockslying with third parties for which confirmation are not available. In our opinion thefrequency of verification is reasonable. Discrepancies noticed on physical verification ofthe inventories between the physical inventories and book records were not materialhaving regard to the size and nature of the operations of the Company.

iii The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties required to be coveredin the register maintained under section 189 of the Act. Therefore the provisionsof clause 3(iii) (a) to (c) of the Order are not applicable.

iv The Company has not granted any loans or provided any guarantees orsecurity to the parties covered under section 185 of the Act. The Company has not made anyinvestment given any loan given any guarantee or provided any security in connectionwith a loan within the provisions of section 186 of the Act.

v The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

vi The Central Government has not prescribed maintenance of costrecords under section 148(1) of the Act in respect of Company's activities.

vii a) According to the records of the Company the Company hasbeen generally regular in depositing undisputed statutory dues including provident fundemployees' state insurance income-tax duty of customs cess and other material statutorydues with the appropriate authorities except for goods and service tax (GST). There wereno arrears of undisputed statutory dues as at 31 March 2021 which were outstanding for aperiod of more than six months from the date they became payable.

b) There are no disputed dues which have remained unpaid as on 31March 2021 in respect of income tax or sale tax or service tax or duty of customs or dutyof excise or value added tax except as follows.

Nature of dues Financial Year

Rs. in Lacs

Forum where pending
Central Sales Tax 2014-15 39.70 Excise & Taxation officer Mewat
Central Sales Tax 2015-16 69.21 Excise & Taxation officer Mewat
Central Sales Tax 2016-17 30.26 Excise & Taxation officer Mewat

viii Read with footnote to Note no. 12 of the financial statement andon the basis of the verification of records and information and explanations given to usthe Company has not defaulted in repayment of loans and borrowings to banks. The Companydoes not have any loans or borrowings from financial institution or government in thebooks of accounts at any time during the year. The Company has not issued any debentures.

ix The Company did not raise any money by way of initial / furtherpublic offer (including debt instruments) and term loans during the year. Therefore theprovisions of clause 3(xii) of the Order are not applicable.

x Based on the audit procedure performed and the representationobtained from the management no material fraud by the Company or on the Company by itsofficers and employees has been noticed or reported during the year.

xi According to the information and explanations given to us and basedon our examination of the records of the Company the Company has paid / provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V of the Act.

xii The Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable.

xiii According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with section 177 and 188 of the Act where applicable and detailsof such transactions have been disclosed in the financial statements as required by theapplicable accounting standards.

xiv During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures.Therefore the provisions of clause 3(xiv) of the Order are not applicable

xv According to the information and explanations given to us and therepresentation obtained from the management the Company has not entered into anynon-cash transactions with directors or persons connected with them under section 192 ofthe Act. Therefore the provisions of clause 3(xv) of the Order are not applicable.

xvi In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.

For V. Sankar Aiyar & Co.
Chartered Accountants ICAI Firm Regn. No. 109208W
(Karthik Srinivasan)
Partner
Place : New Delhi Membership No. 514998
Dated : 29th June 2021 UDIN:21514998AAAAHA5941

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