THE MEMBERS OF REAL STRIPS LIMITED.
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of REAL STRIPS LIMITED(the Company) which comprise the Balance Sheet as at 31 st March2018 the Statement of Profit and Loss (including the Statement of Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity for the year thenended and a summary of significant accounting policies and other explanatory information(hereinafter referred to as Standalone Financial Statements).
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the Act') with respect to the preparation ofthese Standalone Financial Statements that give a true and fair view of the State ofAffairs (Financial Position) Profit or Loss (Financial Performance including OtherComprehensive Income) Cash Flows and Statement of Changes in Equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS') specified under Section 133 of the Act readwith the Companies (Indian Accounting Standards) Rules 2015 as amended.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these Standalone Financial Statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under.
We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing issued by the Institute of Chartered Accountants of India asspecified under Section 143(10) of the Act. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the Standalone Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Financial Statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe Standalone Financial Statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Standalone Financial Statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances but not forthe purpose of expressing an opinion on whether the Company has in place an adequateinternal financial controls system over financial reporting and the operatingeffectiveness of such controls.
An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company's Directors aswell as evaluating the overall presentation of the Standalone Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on these Standalone Financial Statements.
Basis for Qualified Opinion
We draw attention to Note No.40 of non- provision of interest on NPA accounts of banksof Rs. 134821390/- for the year under consideration and the total amount of suchun-provided interest till date is Rs. 252192039/-. The exact amounts of the said nonprovisions of interest are not determined and accounted by the Company. To the extentBankers loan liabilities and Retained Earnings are understated and loss for the year areunderstated by Rs. 134821390/-.
In our opinion and to the best of our information and according to the explanationsgiven to us subject to the notes to accounts except for the effects of the matterdescribed in the Basis for Qualified Opinion paragraph above and the matter of Emphasisstated hereinafter the aforesaid Standalone Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the State of Affairs(Financial Position) of the Company as at 31 March 2018 and it's the Statement of Profitand Loss (Financial Performance including Other Comprehensive Income) its Cash Flows andthe Changes in Equity for the year ended on that date.
Matter of Emphasis
1. We draw attention to Note No.35 of the accompanying StandaloneFinancial Statements regarding third party balance confirmations and its classification.
2. We draw attention to Note No. 36 of the accompanying StandaloneFinancial Statements regarding Inclusion of provision of disputed charges ofRs.213251946/- in the raw material consumption and the provision of privilege leave andother incentive of Rs.45117230/- on estimate basis and which subject to payment.
3. We draw attention to Note No. 38 of the accompanying StandaloneFinancial Statements regarding writing off Trade Receivable of Rs.522241394/-
4. We draw attention to Note No. 41 of the accompanying StandaloneFinancial Statements regarding non-provision of Deferred Tax Liability.
5. We draw attention to Note No. 42 of the accompanying StandaloneFinancial Statements in respect of proceedings instituted by State Bank of India and IDBIBank against company before Debt Recovery Tribunal for recovery of its debt and accountingof One Time Settlement & its payment to State Bank of India.
6. We draw attention to Note No. 43 of the accompanying StandaloneFinancial Statements in respect of notices served upon company by various bank undersection 13(2) & 13(4) of Securitization and Reconstruction of financial Assets andenforcement of security interest Act 2002 for taking physical possession of the of theirsecured asset/ property of the company.
The Comparative financial information of the Company for the year ended 31st March 2017included in the Standalone Financial Statement is based on the previously issuedstatutory Standalone Financial Statements for the year ended 31st March 2017 and 31stMarch 2016 were audited by the predecessor auditor vide their audit report dated 29 thMay 2017 and 30th May 2016 respectively. The Adjustments to those StandaloneFinancial Statements for the difference in accounting principles adopted by the Company ontransition to IND AS have been audited by us. Our report is not qualified in respect ofthis matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (theOrder) issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure A statement on the matters specified inthe paragraph 3 and 4 of the Order to the extent applicable for the year underconsideration.
2. As required by Section 143 (3) of the Act we broadly on the concept ofmateriality 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 Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;
(d) In our opinion the aforesaid Standalone Financial Statements comply with the IndAS specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 (e) On the basis of the written representations received from thedirectors as on 31 st March 2018 taken on record by the Board of Directorsnone of the directors is disqualified as on 31 st March 2018 from beingappointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Financial Statements and theoperating effectiveness of such controls refer to our separate report in Annexure B;
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014(as amended) inour opinion and to the best of our information and according to the explanations given tous: (i) The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements- Refer Note No. 30 to the StandaloneFinancial Statements;
(ii) There are no long term contracts including derivative contracts and accordingly noprovision is required to be made for any loss from the same;
(iii) There is no fund which is pending to be transferred to the Investor Education andProtection Fund by the Company.
(iv) The disclosure requirements relating to holdings as well as dealings in thespecified bank notes were applicable for the period from 8th November 2016 to 30thDecember 2016 which is not relevant to these Standalone Financial Statements and hencereporting under clause is not applicable.
| ||FOR HITESH PRAKASH SHAH &CO |
| ||(FIRM REGD.NO: 127614W) |
| ||CHARTERED ACCOUNTANTS |
|PLACE: AHMEDABAD ||HITESH P SHAH |
|DATE: 30th MAY 2018 ||PROPRIETOR |
| ||MEMBERSHIP NO. 124095 |