TO THE MEMBERS OF RDB RASAYANS LIMITED
Report on the Audit of the Ind AS Financial Statements
1. We have audited the accompanying Ind AS financial statements of RDB RASAYANS LIMITED("the Company") which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended on that dateincluding a summary of significant accounting policies and other explanatory information(herein after referred to as "Ind AS Financial Statements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 its profit (including OtherComprehensive Income) Changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
2. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of the IndAS Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of the Ind ASfinancial statements under the provisions of the Companies Act 2013 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 opinion.
Key Audit Matters
3. 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 ||Auditor's Response |
|1. Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) ||Principal Audit Procedures |
| ||We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. |
| ||Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: |
|The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period. Additionally new revenue accounting standard contains disclosures which involves collection of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. || Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. |
| || Selected a sample of continuing and new contracts and performed the following procedures: |
| ||1. Read analysed and identified the distinct performance obligations in these contracts. |
| ||2. Compared these performance obligations with that identified and recorded by the Company. |
| ||3. Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration. |
| ||4. Samples in respect of revenue recorded for material contracts were tested using a combination of customer acceptances subsequent invoicing and historical trend of collections and disputes. |
| || In respect of samples relating to fixed price contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual and estimated efforts. |
| || Performed analytical procedures for reasonableness of revenues disclosed. |
|2. Recoverability of Indirect tax receivables ||Principal Audit Procedures |
|As at March 31 2019 other assets includes input credits and indirect taxes recoverable which are pending adjudication/ adjustment. ||With the assistance of internal tax specialists who have knowledge of relevant tax regulations we assessed management's processes and tested internal controls implemented for the identification recognition and measurement of tax positions. As part of our audit procedures for uncertain tax positions we evaluated whether management's assessment of the tax effect of significant business transactions and events in current fiscal year which could result in uncertain tax provisions or impact the measurement of existing uncertain tax positions comply with the applicable tax laws. |
1. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and Analysis;Board's Report including Annexures to Board Report Corporate Governance and Shareholders'Information but does not include the financial statements and our auditor's reportthereon. These other information is expected to be made available to us after the date ofthis auditor's report.
2. Our opinion on the Ind AS financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
3. In connection with our audit of the Ind AS financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Ind AS financial statements or our knowledge obtainedin the audit or otherwise appears to be materially misstated.
4. When we read the other information consisting of the information included in theManagement Discussion and Analysis; Board's Report including Annexures to Board ReportCorporate Governance and shareholder information if we conclude that there is a materialmisstatement therein we are required to communicate the matters to those charged withgovernance.
Management's Responsibility for the Ind AS Financial Statements
5. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards 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 wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS financial statementthat give a true and fair view and are free from material misstatement whether due tofraud or error.
6. In preparing the Ind AS 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.
7. The Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibility for the Audit of the Ind AS Financial Statements
8. Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with 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 Ind AS financial statements.
9. 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 Ind AS 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.
Obtained 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 Companies Act 2013 we are also responsible for expressing our opinion onwhether 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 significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
10. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
11. 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.
12. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about thematters or when we determine that a matter should not be communicated in our reportbecause the adverse consequences of doing so would reasonably be expected to outweigh thepublic interest benefits of such communication.
13. Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
14. The Comparative financial information of the Company for the year ended 31st March2018 included in these Ind AS financial Statements is based on the Ind AS financialstatement for the year ended 31st March 2018 which were audited by the Predecessorauditor who expressed an unmodified opinion on those statements.
Our Opinion on the Ind AS financial statements and our report on Other Legal andRegulatory Requirements below is not modified in respect of above matters.
Report on Other Legal and Regulatory Requirements
15. 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 specified inparagraphs 3 and 4 of the Order to the extent applicable.
16. As required by Section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) and the Cash Flow Statement Statement of Changes in Equity dealt with by thisreport are in agreement with the books of account .
(d) In our opinion the aforesaid Ind AS financial statements comply with 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 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the
Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us:
a. The Company does not have any pending litigations that could affect its financialposition in its financial statements as at 31 March 2019
b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
c. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
|Place: Kolkata ||For L. B. Jha & Co. |
|Chartered Accountants |
|Date: 30th day of May 2019 ||Firm Registration No : 301088E |
| ||(B.N.Jha) |
| ||Partner |
| ||Membership No. 051508 |
ANNEXURE-A: TO THE INDEPENDENT AUDITOR'S REPORT
To the Members of RDB RASAYANS LIMITED
[Referred to in paragraph 18 of the Auditors' Report of even date]
1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of Property plant and equipments.
(b) As explained to us the company has a system of verifying all its major PropertyPlant & Equipments according to the phased programme designed to cover all the itemswhich considering the size and nature of operations of the company appears to bereasonable. The Property Plant & Equipments so scheduled for verification during thisyear have been physically verified. The discrepancies noticed on such verification werenot material and have been properly dealt with in the books of accounts.
(c) The title deeds of immovable properties are held in the name of the company.
2. The inventory (excluding stock lying with third parties) has been physicallyverified by the management at regular intervals. The discrepancies noticed on physicalverification of inventory as compared to book records were not material and have beenproperly dealt with in the books of account. In respect of the inventory lying with thethird parties these have been substantially confirmed by them.
3. The company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act2013. Hence clause is not applicable.
4. According to the records of the company examined by us and according to theinformation and explanations given to us in our opinion the company has not granted anyloan to any parties covered u/s 185 of the Companies Act 2013. Further loan granted u/s186 of the Companies Act 2013 are in compliance with the relevant section. The companyhave not given any guarantees or security nor has made any investments covered under theprovisions of section 185 and 186 of the Companies Act 2013.
5. The Company has not accepted any deposits and directives issued by the Reserve Bankof India and the provisions of sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 and the rules framed there under are not applicable.
6. We have broadly reviewed the books of accounts maintained by the Company pursuant tothe order made by the Central Government for the maintenance of cost records under section148(1) of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. We have not however carried out any detailedexamination of such records and accounts.
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 generally regular in depositing theundisputed statutory dues including provident fund employees' state insuranceincome-tax duty of customs goods and services tax cess and any other statutory dues asapplicable with the appropriate authorities. (b) According to the information andexplanations given to us and the records of the Company examined by us there were noundisputed statutory dues that remain unpaid on account of income tax service tax customduty Goods and Services Tax cess etc as on 31st March 2019.
8. According to the information and explanation given to us and the records of theCompany examined by us the Company has not defaulted in repayment of dues of any of loansor borrowings to any banks.
The Company has neither taken any loan from financial institutions or Government norissued any debentures.
9. In our opinion and according to the information and explanation given to us on anoverall basis the money raised by Company during the year by way of term loan have beenapplied for the purpose for which they were obtained.
The Company has not raised any money by way of initial public offer or further publicoffer (including debt instruments).
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 fraud on or by the Company nor on the company by its officers/employees hasbeen noticed or reported during the year nor have we been informed of such case by themanagement.
11. According to the information and explanations given to us and the records of thecompany examined by us total managerial remuneration paid as reflected in the financialstatements for the year ended 31st March 2019 are in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V of the Act.
12. The related statutes are not applicable as the Company is not a Nidhi Company.
13. According to the information and explanations given to us and the records of theCompany examined by us the company has complied with the requirements of sections 177 and188 of the Act with respect to its transactions with the related parties. Pursuant to therequirement of the applicable Accounting Standard details of the related partytransactions have been disclosed in Note 36 of the Ind AS financial statements for theyear under audit.
14. The Company has neither made any preferential allotment of shares nor fully orpartly convertible debentures during the year under audit.
15. According to the information and explanations given to us and the records of theCompany examined by us the Company has not entered into any non-cash transactions withany director of the Company and the holding company or persons connected with theminvolving acquisition of assets by or from them for consideration other than cash.
16. In our opinion and according to the information and explanations given to us notbeing a non-banking financial company the Company is not required to be registered undersection 45-IA of the Reserve Bank of India Act 1934.
|Place: Kolkata ||For L. B. Jha & Co. |
| ||Chartered Accountants |
|Date: 30th day of May 2019 ||Firm Registration No : 301088E |
| ||(B.N.Jha) |
| ||Partner |
| ||Membership No. 051508 |
ANNEXURE- B TO THE INDEPENDENT AUDITOR'S REPORT
To the Members of RDB RASAYANS LIMITED
[Referred to in paragraph 19 (f) of the Independent Auditor's Report of even date]
Report on the Internal Financial Control under Clause (i) of Sub -sections 3 of Section143 of the Companies Act 2013("the Act")
1. We have audited the internal financial controls over financial reporting of RDBRASAYANS LIMITED ("the Company") as of 31st March 2019 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 Control
2. The Company's management is responsible for establishing and maintaining internalfinancial control 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
3. 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" and the Standard on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includesobtaining an understanding of internal financial control over financial reportingassessing the risk that a material Weakness exists and testing and evaluating the designand operating effectiveness of internal controls based on the assessed risk. The procedureselected depends on the auditor's judgment including the assessment of the risk ofmaterial misstatement of the financial statement whether due to fraud or error.
5. 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 Control over Financial Reporting
6. A Company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of 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. Pertains to the maintenance of the records that in reasonable detail accuratelyand fairly reflect the transactions and dispositions of the assets of the company;
2. Provide reasonable assurance that the transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditure of the Company are being madeonly in accordance with authorization of management and directors of company; 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 financial statements.
Inherent Limitations of Internal Financial Control over
7. Because of inherent limitation of internal financial control over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to errors or fraud may occur and not be detected.Also projections of any evaluations of the internal financial control over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
8. In our opinion and based on audit tests performed in our audit of the financialstatements for the year ended 31st March 2019 the Company has in all material respectan adequate internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as at 31st March2019. The Company had established informal practices which are effective in having aproper internal control over financial reporting. A formal system of internal control overfinancial reporting criteria needs to be established by the Company considering theessential components of internal control as stated in the Guidance Note on Audit ofInternal Financial Control over Financial Reporting issued by the Institute of CharteredAccountants of India.
9. We have considered the material weakness identified and reported above indetermining the nature timing and extent of audit tests applied in our audit of the 31stMarch 2019 financial statements of the Company and these material weakness does notaffect our opinion on the financial statements of the Company
| ||For L.B. Jha & Co. |
| ||Chartered Accountants |
| ||(Registration number: 301088E) |
|Place: Kolkata ||(B. N. Jha) |
| ||Partner |
|Date: 30th day of May 2019 || |
| ||(Membership Number 051508) |