To the Members of Ridings Consulting Engineers India Limited Report onthe Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of RidingsConsulting Engineers India Limited ("the Company") which comprise the BalanceSheet as at March 31 2019 the Statement of Profit and Loss and the Statement of CashFlows for the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 its loss and its cash flows forthe year ended on that date.
Basis for Opinion
We conducted our audit in accordance with Standards on Auditing (SAs)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 financialstatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and Rules thereunder 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 opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key auditmatters to be communicated in our report.
1. Accuracy of recognition measurement presentation and disclosuresof revenues and other related balances in view of Accounting Standard- 9- "RevenueRecognition"
We have compared the company's policy for accounting sales withthe significant accounting policies mentioned in the Notes to the Accounts.
We have ensured that an appropriate consistent revenuerecognition policy is applied at the year end and ensured that the policy adopted is inline with generally accepted accounting principles. We have considered the accounting forlong term contracts spread over the year end.
We have checked entries in the sales day-book with copies ofinvoices and credit notes and ensured separate classification of amounts for differentclass of services given with by the company
We have also ensured that where a sale includes a deferredelement a portion of revenue is deferred where appropriate.
We have determined whether there are any bill and hold sales atyear end and also applied revenue recognition criteria to these sales.
We have checked last 10 invoices/ credit notes of the currentaudit period and first 10 invoices/ credit notes of the next financial year to ensurecut-off procedures related to revenue recognition.
We have vouched sample of sales invoices to supportingdocumentation
We have checked the invoices raised by the company to ensure thesame is in line with the terms of sales order and company's sales policy.
We have checked if the sales invoices are serially numberedwith particular attention to invoices cancelled during the audit period.
We have scrutinised sales journal on overall basis & discussany discrepancies/queries with client.
We have also ensured disclosure as per Schedule III of the Act.
2. Recoverability of Trade Receivables
As at March 31 2019 trade receivables amounting Rs. 267096512 areoutstanding for long period. Refer note _17 to the financial statements.
Obtained the schedule of trade receivables giving the age wiseanalysis of trade receivables and sought reasons for old outstanding receivables to ensurerecoverability of the same.
Verified balances at the end of the year for subsequentrealization.
We have reviewed policy of the Company for provision fordoubtful debts/ dad debts and ensured that the same is being followed consistently.
We have sent the balance confirmation to trade receivables onsample basis and reconcile the year-end balance for confirmations received back.
We have checked the amounts due from foreign parties convertedinto Indian Rupees at the year-end exchange rates to ensure compliance to the provisionsAS-11 and verified the calculation and accounting effects for the same.
We have ensured disclosure as per Schedule III of the Act.
3. Accuracy Completeness and Existence of Cost of Services
Reviewed policy of the Company for incurring the project relatedexpenses and the matrix for level of approvals for expenses made by the client.
We have obtained the list of expenses related to cost ofservices and ensured that the same are correctly classified as cost of services.
We have vouched samples of costs of service as recognised inaudit period.
We have reviewed the purchase orders/ agreements with variousvendors to understand the terms & conditions.
We have checked accounting entry agrees to supplier invoice andreceipts documentation.
We have ensured the expense represents a genuine business cost.
We have checked foreign exchange translation treatment ofindirect taxes if any and cost classification on supplier invoice to recognition inexpense general ledger.
We have ensured disclosure as per Schedule III of the Act.
Emphasis of Matter
We draw attention to the following matters in the notes to thefinancial statements:
(i) Note 38 of the accompanying Statement wherein the managementhas explained certain discrepancies identified by it in the previous year balances i.e.opening balances as on April 1 2018. The Management has rectified the said discrepancieswhile preparing audited financial statements for the year ended March 31 2019 withoutrestating the opening balances.
(ii) Note 17 of accompanying statement wherein the managementhas explained reasons for considering old outstanding receivables as good and fullyrecoverable.
Our opinion is not modified in respect of these matters.
Responsibilities of Management and Those Charged with Governance forthe Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under section 133 of theAct read with relevant rules issued thereunder. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; 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 financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the FinancialStatements
Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of this financial statements. As part of an audit inaccordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial 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 theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
i. The financial statements of the Company for the year endedMarch 31 2018 were audited by another firm of Chartered Accountants who vide their reportdated May 30 2018 expressed an unmodified opinion on those statements.
ii. As explained in sub para (i) above and note 38 of theaccompanying statement we are not commenting upon the opening balances as on April 12018. Further the Company has properly accounted for the effect of all discrepancies andadequately disclosed the same while presenting audited financial statements for the yearended March 31 2019.
Our audit report is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditor's Report) Order2016 ("the Order") issued by the Central Government of India in terms of section143(11) of the Act we give in "Annexure 1" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
(2) As required by section 143(3) of the Act we report that:
a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;
b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;
d. The Balance Sheet the Statement of Profit and Loss and theStatement of Cash Flows dealt with by this report are in agreement with the books ofaccount;
e. In our opinion the aforesaid financial statements comply with theAccounting Standards specified under section 133 of the Act read with relevant rulesissued thereunder; f. On the basis of the written representations received from thedirectors as on March 31 2019 and taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2019 from being appointed as a director in termsof section 164(2) of the Act;
g. With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols we give our separate report in "Annexure 2".
h. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
(i) The Company does not have any pending litigations which wouldimpact its financial position; (ii) The Company did not have any long-term contractsincluding derivative contracts. Hence the question of any material foreseeable lossesdoes not arise; (iii) There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.
|For NKSC & Co. |
|Chartered Accountants |
|ICAI Firm Registration No.020076N |
|Naresh Sharma |
|Membership No.: 089123 |
|Place: New Delhi |
|Date: May 30 2019 |