To the Members of RELIANCE INDUSTRIAL INFRASTRUCTURE LIMITED
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying Standalone Financial Statements of Reliance IndustrialInfrastructure Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2019 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "Standalone FinancialStatements").
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Financial Statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 its Profit including OtherComprehensive Income its Cash Flows and the Statement of Changes in Equity for the yearended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing ("SA")specified under Section 143(10) of the Act. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial 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 (ICAI) together with the ethical requirements that are relevant to our audit of theStandalone Financial Statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's 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
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
|Key Audit Matter ||How our audit addressed the key audit matter |
|Revenue Recognition ||Our audit procedures considering the significant risk of material misstatement related to revenue recognition included amongst other: |
|Refer to note 18 of the Standalone Financial Statements || |
|Revenue from contracts with customers is recognised when services are rendered to the customer at an amount that reflects the consideration entitled in exchange for those services which will be due upon satisfaction of performance obligations. ||- assessing the application of company's accounting policies over revenue recognition and comparing the accounting policies over revenue recognition with applicable accounting standards; |
| || |
|The company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the services are rendered or nonsatisfaction of performance obligations or consideration is not measurable. ||- testing the revenue recognized including testing of company's controls on revenue recognition. |
| ||- Our testing included tracing the information of revenue recognised to agreements and receipts. |
| || |
|Revenue recognition was determined to be a key audit matter and a significant risk of material misstatement due to the aforesaid risk related to the recognition of revenue ||- assessing the revenue recognized with substantive analytical procedures and |
| ||- assessing the company's disclosures on revenue recognition. Based on above procedures we conclude that recognition of the revenue for the year is appropriate. |
| || |
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON
The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual report but does notinclude the Standalone Financial Statements and our auditor's report thereon.
Our opinion on the Standalone 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 Financial Statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
If based on the work we have performed on the other information that we obtained priorto the date of this auditor's report we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.
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 Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the Financial Position Financial Performanceincluding Other Comprehensive Income Cash Flows and the Statement Of Changes in Equity ofthe Company in accordance with the Ind AS and other accounting principles generallyaccepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofthe appropriate accounting policies; making judgements and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and fair presentation of theStandalone Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Standalone 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.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
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 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 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 StandaloneFinancial 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 an error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the 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 Standalone 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 StandaloneFinancial Statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the Standalone Financial Statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the Standalone Financial Statements.
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 Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 (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.
2. 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 appears from our examination of those books;
c) The Balance Sheet Statement of Profit and Loss including Other Comprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealt with by this report arein 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;
e) On the basis of written representations received from the directors as on March 312019 taken on record by the Board of Directors none of the directors is disqualified ason March 312019 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 statements and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB" Our report expresses an unmodified opinion on the adequacy and operatingeffectiveness of the Company's internal financial controls over financial reporting withreference to these Standalone Financial Statements;
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 Rules 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 does not have any pending litigations which would impact on itsfinancial position.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company except Rs 1.36 Lakh which areheld in abeyance due to pending legal cases.
For D T S & Associates
(Firm registration number: 142412W)
Ashish G. Mistry
Membership No.: 132639
Date: April 15 2019
"Annexure A" to the Independent Auditors' Report
"Annexure A" to the Independent Auditors' Report on the Standalone FinancialStatements of Reliance Industrial Infrastructure Limited
(Referred to in Paragraph 1 under the heading of "Report on other legal andregulatory requirements" of our report of even date)
i) In respect of its fixed assets :
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.
b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.
c) According to the information and explanations given to us and the title deeds /lease deeds and other records examined by us we report that the title deeds / lease deedsin respect of all the immovable properties of lands which are freehold immovableproperties of land that have been taken on lease and disclosed as fixed assets in thefinancial statement and buildings are held in the Company's name or in the Company'serstwhile name as at the balance sheet date.
ii) As explained to us physical verification of the inventories have been conducted atreasonable intervals by the management which in our opinion is reasonable having regardto the size of the Company and nature of its inventories. No material discrepancies werenoticed on such physical verification.
iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Consequently the requirement of clause (iii) (a) to clause (iii)(c) of paragraph 3 of the Order is not applicable to the Company.
iv) The Company has not directly or indirectly advanced loan to the persons coveredunder Section 185 of the Act or given guarantees or securities in connection with the loantaken by such persons. The Company has complied with the provisions of Sections 185 and186 of the Act in respect of grant of loans making investments and providing guaranteesand securities as applicable.
v) According to the information and explanations given to us the Company has notaccepted any deposits within the meaning of provisions of sections 73 to 76 or any otherrelevant provisions of the Act and the rules framed there under. Therefore the clause (v)of paragraph 3 of the Order is not applicable to the Company.
vi) We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014 prescribed by the Central Government undersubsection (1) of Section 148 of the Act applicable in respect of certain activitiesundertaken by the company and are of the opinion that prima facie the prescribed costrecords have been maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.
vii) In respect of Statutory dues :
a) According to the records of the Company undisputed statutory dues includingprovident fund employees' state insurance income tax goods and service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues have beenregularly deposited with appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of the aforesaid dueswere outstanding as at March 31 2019 for a period of more than six months from the datethey became payable.
b) According to the information and explanations given to us there are no dues ofincome tax goods and service tax duty of customs duty of excise value added tax cesson account of any dispute which have not been deposited.
viii) The Company has not raised loans from financial institutions or banks orgovernment or by issue of debentures and hence clause (viii) of paragraph 3 of the Orderis not applicable to the Company.
ix) The company has not raised money by way of initial public offer or further publicoffer (including debt instruments) or term Loan and hence clause (ix) of paragraph 3 ofthe Order is not applicable to the Company.
x) Based on the audit procedures performed for the purpose of reporting the true andfair view of the Standalone Financial Statements and as per information and explanationsgiven to us no fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the year.
xi) In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
xii) In our opinion the company is not a nidhi company. Therefore the provisions ofclause (xii) of paragraph 3 of the Order are not applicable to the company.
xiii) According to the information and explanations provided by the managementtransactions with related parties are in compliance with section 177 and section 188 ofthe Act where applicable and the details have been disclosed in the financial statementsas required by the applicable accounting standards.
xiv) In our opinion and according to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year and hence clause (xiv) of paragraph 3 of theOrder is not applicable to the company.
xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transaction with the directors or personsconnected with him and covered under section 192 of the Act. Hence clause (xv) of theparagraph 3 of the Order is not applicable to the Company.
xvi) To the best of our knowledge and as explained the Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act 1934.
For D T S & Associates Chartered Accountants (Firm registration number: 142412W)
Ashish G. Mistry Partner
Membership No.: 132639
Date: April 15 2019
Annexure "B" To the Independent Auditor's Report
(Referred to in paragraph 2 (f) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date) Report on the Internal Financial Controls OverFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 ("the Act")
We have audited the internal financial controls over financial reporting of RelianceIndustrial Infrastructure Limited ("the Company") as of March 31 2019 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act. Auditor'sResponsibility
Our responsibility is to express an opinion on the Company's 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 issued byICAI and the Standards on Auditing prescribed under Section 143(10) of the Act to theextent applicable to an audit of internal financial controls. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting with reference to these Standalone Financial Statements wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system 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 auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting with reference to these Standalone Financial Statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference To TheseStandalone Financial Statements
A company's internal financial control over financial reporting with reference to theseStandalone Financial Statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these Standalone Financial Statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the FinancialStatements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting WithReference To These Standalone 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 adequate internal financialcontrols over financial reporting with reference to these standalone financial statementsand such internal financial controls over financial reporting with reference to thesestandalone financial statements were operating effectively as at March 31 2019 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by ICAI.
For D T S & Associates Chartered Accountants (Firm registration number: 142412W)
Ashish G. Mistry Partner
Membership No.: 132639
Date: April 15 2019