THE MEMBERS OF
REAL STRIPS LIMITED.
Report on the audit of Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS Financial Statements of REALSTRIPS LIMITED (?the Company ) which comprise the Balance Sheet as at March 31 2020the Statement of Profit and Loss (including other comprehensive income) Statement of CashFlows and Statement of Changes in Equity for the year then ended and notes to thestandalone financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as ?the Standalone Ind ASFinancial Statements ).
In our opinion and to the best of our information and according to the explanationsgiven to us read with the notes to accounts the aforesaid Standalone Financial Statementsgives the information required by the Companies Act 2013 as amended (the ?Act ) in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 and its Profit (including other comprehensive income) changes in equityand its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) the Act. Ourresponsibilities under those Standards are further described in the ?AuditorsResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the ?Code of Ethics issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules there under and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the Standalone Financial Statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements for the financial yearended March 31 2020. These matters were addressed in the context of our audit of theStandalone Financial Statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.
|Key Audit Matters ||How the matter was addressed in our audit |
|Recoverability of Trade Receivable balances - Trade receivables (as described in note 9 of the Standalone Financial Statements) ||Our audit procedures among other things included the following: |
|Year-end outstanding trade receivables represent balance outstanding from domestic customers. ||? Understood and tested on a sample basis the design and operating effectiveness of management control over the customer acceptance process collection and the assessment of the recoverability of receivables; |
|? Trade receivables by nature carry certain risks in general || |
|which include overdue balances customers in weaker economic and geopolitical environment customer's ability to pay provision in relation to expected credit loss assessment of recovery process and compliance with risk management controls. ||? tested on a sample basis the ageing of trade receivables at year end; |
| ||? in respect of material trade receivables balances inspected relevant contracts and correspondence with the customers; |
|? Procedures to mitigate such risks includes element of management's judgment and are important to access recoverability of trade receivables. ||? In respect of material trade receivables balances which are past due additional procedures were performed to evaluate their historical payment trends terms & conditions of customer contracts assessed whether the customers are experiencing financial difficulties and assessed expected credit loss assessment provided by the management; |
|? Trade receivable has been considered a key audit matter in the audit due to size of the outstanding balance of trade receivables and elements of judgement involved in overall management assessment of customers' ability to repay the outstanding balances during Covid-19 disruption. ||? Verified subsequent collection in relation to receivable outstanding as at March 31 2020 and |
| ||? Evaluated the nature of customers and obtained the understanding from management about whether there was any impact on those customer's business because of Covid-19 pandemic. |
The Companys Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the Annualreport but does not include the Standalone Financial Statements and our AuditorsReport thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this information we arerequired to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements
The Companys Board of Directors is responsible for matter stated in section134(5) of the Act with respect to the preparation and presentation of the StandaloneFinancial Statement that gives a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards (Ind AS) specified under Section 133 of the Act readwith the Companies (Indian Accounting Standards) Rules 2015 as amended including theCompanies (Indian Accounting Standards) Amendment Rules 2019. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provision 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 the 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 Standalone FinancialStatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the statement management is responsible for assessing the Companysability to continue as a going concern disclosing as applicable matters related togoing concern and using the going concern basis of accounting unless management eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so.
Those charged with governance are also responsible for overseeing the Companysfinancial reporting process.
Auditorfs Responsibilities for the Audit of the Standalone Ind AS FinancialStatements
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 auditors report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statement.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
? Identify and assess the risks of material misstatement of Standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
? Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
? Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
? Conclude on the appropriateness of managements 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 theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the Financial Statement or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors report. However future events or conditions may cause theCompany to cease to continue as a going concern.
? Evaluate the overall presentation structure and content of the Standalone FinancialStatement including the disclosures and whether the Standalone Financial Statementrepresents 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 statementsfor the financial year ended March 31 2020 and are therefore the key audit matters. Wedescribe these matters in our auditors report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunications.
Report on Other Legal and Regulatory Requirements
(A) As required by the Companies (Auditors Report) Order 2016 (?the Order )issued by the Central Government of India in terms of Section 143(11) of the Act we givein gAnnexure Ah a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable for the year ended on March 31 2020.
(B) As required by Section 143(3) of the Act we broadly report that: -
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisreport are in agreement with the books of account;
(d) In our opinion the aforesaid Standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended including the Companies (Indian AccountingStandards) Amendment Rules 2019.
(e) On the basis of the written representations received from the Directors as on March31 2020 taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2020 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 over financialreporting of the Company with reference to these standalone financial statement and theoperating effectiveness of such controls refer to our separate Report in Annexure Bto this report.
(g) The managerial remuneration for the year ended March 31 2020 has not beenpaid/provided by the Company to its directors.
(C) 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 as amended in our opinion and to the bestof our information and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements- Refer Note No 31 to the StandaloneFinancial Statement;
(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 has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
The Annexure A referred to in Independent Auditors Report to the membersof REAL STRIPS LIMITED on the Standalone Financial Statements for the year ended onMarch 31 2020 we broadly for the year under consideration report that :-
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As informed to us the Company has a program of physical verification of its fixedassets by which the fixed assets are verified by the Management at periodic manner. Inaccordance with this program fixed assets were verified during the year and as informed tous no material discrepancies were noticed on such verification. In our opinion theperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets.
(c) According to the information and explanation given to us the title deeds ofimmovable properties (which are included under the Note 3- Property plant andequipment) are held in the name of the Company.
(ii) The physical verification of inventory has been conducted at reasonable intervalsby the Management during the year. As informed to us the discrepancies noticed onphysical verification of inventory as compared to book records were not material and havebeen appropriately dealt with in the books of accounts.
(iii) As informed and explained to us the Company has not granted loans (other thanBusiness advances) secured or unsecured to Companies Firm Limited liability partnershipfirms or other parties covered in the register maintained under section 189 of theCompanies Act 2013 ( the Act) and accordingly the paragraph (iii) (a) (b) and (c)of the Order are not applicable and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities granted except staff advancein respect of which provision of section 185 and 186 of the Companies Act 2013 areapplicable and hence not commented upon.
(v) In our opinion and according to the information and explanations given to usduring the year under consideration the Company has not accepted any deposits (other thanexempted deposit) within the meaning of sections 73 to 76 of the Act and Companies(Acceptance of Deposits) Rules 2014 (as amended). Accordingly the provisions of clause3(v) of the Order are not applicable to the Company.
(vi) Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including Provident Fund Employees State InsuranceIncome Tax Goods and Service Tax Sales Tax Duty of Customs Cess and other materialstatutory dues as applicable with the appropriate authorities though there has been aslight delay in a few cases.
(b) There are undisputed amounts payable in respect of above dues which were in arrearsas at March 31 2020 for a period of more than six months from the date they becamepayable.
|Name of the Statue ||Nature of Dues ||Amount (In Rupees) ||Period to which amount relates ||Due dates |
|Central Excise Act 1944 ||Penalty ||Rs.187721/- ||Financial Year 2002-03 ||29th June 2019 |
(c) According to the information and explanations given to us and the records of theCompany examined by us following are the details of outstanding dues in respect of IncomeTax Goods and Service Tax Sales Tax service tax duty of customs duty of excise valueadded tax or cess etc which have not been deposited/adjusted/reversed on account of anydispute:-
|Name of the Statue ||Nature of Dues ||Amount (In Rupees) ||Period to which amount relates ||Forum Where Dispute is Pending |
|Income Tax Act 1961 ||Income Tax and Interest ||6786540/- ||Financial Year 2010-11 ||Commissioner of Income Tax (Appeals) |
(viii) In our opinion and according to the information and explanation given by themanagement the Company has not defaulted in repayment of loans or borrowings to a bank.The Company did not have any outstanding loans or borrowings due in respect of a financialinstitution or to government or dues to debenture holders during the year.
(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordingly theprovisions of Clause 3
(ix) of the Order are not applicable to the Company.
(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
(xi) In our opinion and according to the information and explanations given to us theCompany has not paid / provided managerial remuneration. Accordingly the provisions ofclause 3(xi) of the order are not applicable to the company.
(xii) In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.
(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 sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Financial Statements as required by the applicableInd AS-24 Related Party Disclosures.
(xiv) According to the information and explanation given to us and on overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.
(xv) As explained to us the Company has not entered into any non-cash transactionswith its Directors or persons connected with him and accordingly paragraph 3(xv) of theOrder is not applicable to the Company.
(xvi) According to the information and explanations provided to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly the paragraph 3
(xvi) of the Order is not applicable to the Company.
Annexure B referred to paragraph B of Report on Other Legal Regulatory Requirements ofIndependent Auditor's report of even date for year ended March 31 2020.
Report on the Internal Financial Controls under Clause (i) of Sub - section 3 ofSection 143 of the Companies Act 2013 (?the Act ).
We have audited the internal financial controls over financial reporting of
REAL STRIPS LIMITED (?the Company ) as of March 31 2020 in conjunction with ouraudit of the Standalone Financial Statements of the company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial Controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to companys policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting with reference to these standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the ?Guidance Note ) and theStandards on Auditing as specified under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these standalone financial statements was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these standalonefinancial statements 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 auditors judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls over financialreporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseStandalone Financial Statements
A companys internal financial control over financial reporting with reference tothese standalone financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A companys internal financial control over financialreporting with reference to these standalone financial statements includes those policiesand procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the companys assets that could havea material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting withReference to these Standalone Ind AS Financial Statements
Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone financial statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects; except stated otherwise orreported to the management an adequate internal financial controls over financialreporting with reference to these standalone financial statements and such internalfinancial controls over financial reporting with reference to these standalone financialstatements were operating effectively as at March 31 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.