THE MEMBERS OF REAL STRIPS LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of REALSTRIPS LIMITED ("the Company") which comprises the Balance Sheet as at 31March 2019 the Statement of Profit and Loss (including other comprehensive income)Statement of Changes in Equity and Statement of Cash Flows for the year then ended andnotes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"Standalone Ind AS Financial 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 Ind AS financialstatements give the information required by the Companies
Act 2013 ("the Act") in the manner so required and give a true and fair viewin conformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and profit (including other comprehensiveincome) changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Companies Act 2013. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the standalone Ind ASFinancial 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 thefinancial statements under the provisions of the Act and the Rules there under and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Standalone Ind ASFinancial Statements.
Emphasis of Matter
1. We draw attention to Note No. 36 of the accompanying Standalone FinancialStatements regarding reversal of provision of disputed charges of Rs.213251946/- inrelation to supplies of material and the provision of privilege leave and other incentiveof Rs.42308615/-made in previous year on estimate basis and which are not payable.
2. We draw attention to Note No. 40 of the accompanying Standalone FinancialStatements regarding Settlements with Banks their legal case and its accounting treatmentin relation to its payment and waiver of the amounts in the books of the accounts.
In respect of the above matters emphasized we do not provide any modified opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind AS financial statements for the nancialyear ended March 31 2019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.
|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 Ind AS Financial Statements) || |
|? Year-end outstanding trade receivables represent balance outstanding from domestic customers. ? 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. ? Procedures to mitigate such risks includes element of management judgment and are important to access recoverability of trade receivables. ? Trade receivable has been considered a key audit matter in the audit due to size of the outstanding balance of trade receivables. ||Our audit procedures among other things included the following: ? 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; ? 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; ? 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; ? Compared the collateral in the nature of bank guarantees/letter of credits provided by customers as applicable and; ? Evaluated the level of provisions made by management for trade receivables. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon. The Other information is expected to be made available to us after thedate of this auditor's report.
Our opinion on the standalone Ind AS 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 standalone Ind AS 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 in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information; we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance for the Standalone IndAS Financial Statements
The Company's Management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view
nancial position nancial performance including other comprehensive income cash owsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) speci edunder section 133 of the Act read with the Companies (Indian Accounting
Standards) Rules 2015 as amended. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone Ind AS financial statements management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone Ind AS financial statements.
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 standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3) (i) ofthe Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to standalone financial statements inplace and the 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 management's use of the going concern basis ofaccounting 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the standalone Ind ASfinancial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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 Ind AS financialstatements for the nancial year ended 31 March
2019 and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. 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 "Annexure A" a statement on the matters specified in paragraphs 3 and4 of the Order to the extent applicable for the year under consideration.
2. 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 accounts 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 Ind AS financial statements comply with the AccountingStandards specified under section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;
e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors Mr. Ugamraj Mishrimal HundiaDirector of the Company is disqualified as on March 31 2019 from being reappointed as adirector in terms of Section 164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure B'.
(g) In our opinion the managerial remuneration for the year ended March 31 2019 paid/ provided by the Company to their directors is in accordance with the provisions ofsection 197 read with Schedule V to the Act.
3. With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the
Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of ourinformation and according to the explanations given to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS Financial Statements- Refer Note No. 31 to theStandalone Financial 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 disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these standalone Ind AS financial statements since they do notpertain to the financial year ended 31 March 2019.
The Annexure A referred to in Independent Auditor's Report to the members of REALSTRIPS LIMITED on the
Standalone Financial Statements for the year ended on March 31 2019 webroadly report that:
i. (a) The Company has maintained 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 explanationgiven to us the title deeds of immovable properties (which are included under the note 3-Property plant and equipment') 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. The Company has not granted any loans secured or unsecured to companies firmsLimited liability partnership firms or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (the Act') and accordingly theparagraph (iii) (a) (b) and (c) of the Order are not applicable.
iv. In our opinion and according to the information and explanations given to us thereare no loans investments guarantees and securities granted except staff advance inrespect of which provision of section 185 and 186 of the Companies Act 2013 are applicableand 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 thanthe exempted 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 sales-tax duty of custom goods and service tax cess and other statutorydues as applicable with the appropriate authorities.
There are no undisputed amounts payable in respect of above dues which were in arrearsas at 31st March 2019 for a period of more than six months from the date they becamepayable.
(b) 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 and service tax which have not been deposited/adjusted/reversed on account of anydispute:-
|Name of the Statue ||Nature of dues ||Amount (In Rupees) ||Period to which the amount relates ||Forum Where Dispute is pending |
| ||Service Tax ||149641/- ||Financial Year 2008-2009 & 2009-2010 ||Hon'ble Gujarat High Court |
|Finance Act1994 ||Service Tax ||301486/- ||Financial Year 2008-09 ||Hon'ble Gujarat High Court |
| ||Service Tax ||2974148/- ||Financial Year 2012-2013 & 2013-2014 ||Hon'ble CESTAT |
| ||Service Tax ||25636/- ||Financial Year 2012-13 ||Hon'ble CESTAT |
|Income Tax Act 1961 ||Income Tax ||6786540/- ||Financial Year 2010-11 ||Commissioner of Income Tax (Appeals) |
viii. According to the records of the Company examined by us and the information andexplanation given to us during the year the Company has not defaulted in repayment ofloans or borrowings to financial institution and bank as at the balance sheet date.
ix. In our opinion and according to the information and explanations given to usduring the year under consideration company has not raised any money by way of initialpublic offer or further public offer (including debt instruments) and term loans duringthe year. Accordingly the provisions of Clause 3(ix) of the Order are not applicable tothe 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. According to the information and explanations given by the management themanagerial remuneration paid / provided is in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.
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. According to the information and explanation given to us the Company has notentered into any non-cash transactions with its directors or persons connected with him.Accordingly paragraph 3(xv) of the Order 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.
FOR HITESH PRAKASH SHAH &CO (FIRM REGD.NO: 127614W) CHARTERED ACCOUNTANTS
PLACE: AHMEDABAD HITESH SHAH DATE: 30th MAY 2019 PARTNER
MEMBERSHIP NO 124095
ANNEXURE B Referred to in paragraph 2(f) of the Independent Auditor's Report of theeven date to the members of
REAL STRIPS LIMITED on the Financial Statement for the year ended 31 March 2019.
Report on the Internal Financial Controls under Clause (i) of Sub - section 3 ofSection 143 of the Companies Act
2013 ("the Act") for the year ended on 31stMarch 2019.
We have audited the internal financial controls over financial reporting of REALSTRIPS LIMITED ("the Company") for the year ended on 31st March2019 in conjunction with our audit of the Standalone Ind AS Financial Statements of theCompany for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing and maintaining internalnancial controls based on the internal control over nancial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India. These responsibilities include thedesign implementation and maintenance of adequate internal nancial controls that wereoperating effectively for ensuring the orderly and ef cient conduct of its businessincluding adherence to the Company's 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 nancial information asrequired under the Companies
Our responsibility is to express an opinion on the Company's internal nancial controlsover nancial reporting with reference to these Standalone Ind AS 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 the Standards on Auditing as speci ed under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal nancial controls both issued bythe Institute of Chartered Accountants of India.
Those Standards and the Guidance Note require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal nancial controls over nancial reporting with reference to these Standalone Ind ASFinancial Statements was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal nancial controls over nancial reporting with reference to these StandaloneInd AS Financial Statements and their operating effectiveness. Our audit of internalnancial controls over nancial reporting included obtaining an understanding of internalnancial controls over nancial reporting with reference to these Standalone Ind AS
Financial Statements assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgment including theassessment of the risks of material misstatement of the nancial statements whether due tofraud or error.
We believe that the audit evidence we have obtained is suf cient and appropriate toprovide a basis for our audit opinion on the internal nancial controls over nancialreporting with reference to these Standalone Ind AS
Meaning of Internal Financial Controls over Financial Reporting With Reference to theseStandalone Ind AS Financial Statements
A company's internal nancial control over nancial reporting with reference to theseStandalone Ind AS Financial Statements is a process designed to provide reasonableassurance regarding the reliability of nancial reporting and the preparation of nancialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal nancial control over nancial reporting with reference tothese Standalone Ind
AS Financial Statements includes those policies and procedures that
(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly re ect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of
nancial statements in accordance with generally accepted accounting principles andthat receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the 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 nancial 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 nancial controls over nancial reportingwith reference to these
Standalone Ind AS Financial Statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal nancialcontrols over nancial reporting with reference to these Standalone Ind AS FinancialStatements to future periods are subject to the risk that the internal nancial controlover nancial reporting with reference to these Standalone Ind AS Financial Statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.
In our opinion the Company has in all material respects except otherwise stated orreported to the Company adequate internal nancial controls over nancial reporting withreference to these Standalone Ind AS Financial
Statements and such internal nancial controls over nancial reporting with reference tothese Standalone Ind AS
Financial Statements were operating effectively as at 31 March 2019 based on theinternal control over nancial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
FOR HITESH PRAKASH SHAH &CO (FIRM REGD.NO: 127614W) CHARTERED ACCOUNTANTS
PLACE: AHMEDABAD HITESH SHAH DATE: 30th MAY 2019 PARTNER
MEMBERSHIP NO 124095