To the Members of Ridings Consulting Engineers India Limited Report on the Audit of theFinancial Statements Opinion We have audited the accompanying financial statements ofRidings Consulting Engineers India Limited ("the Company") which comprise theBalance Sheet as at March 31 2021 the Statement of Profit and Loss and the Statement ofCash Flows for the year then ended and notes to the financial statements including asummary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 its profit 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 undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the financial statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ("ICAI")together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto 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 financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
1. Accuracy of recognition measurement presentation and disclosures of revenues andother related balances in view of Accounting Standard- 9- "Revenue Recognition"
- We have compared the company's policy for accounting sales with the significantaccounting policies mentioned in the Notes to the Accounts. - We have ensured that anappropriate consistent revenue recognition policy is applied at the year end and ensuredthat the policy adopted is in line with generally accepted accounting principles. We haveconsidered the accounting for long term contracts spread over the year end. - We havechecked entries in the sales daybook with copies of invoices and credit notes and ensuredseparate classification of amounts for different class of services given with by thecompany.
- We have also ensured that where a sale includes a deferred element a portion ofrevenue is deferred where appropriate. - We have determined whether there are any bill andhold sales at year end and also applied revenue recognition criteria to these sales.
- We have checked last 10 invoices/ credit notes of the current audit period and first10 invoices/ credit notes of the next financial year to ensure cut-off procedures relatedto revenue recognition. - We have vouched sample of sales invoices to supportingdocumentation. - We have checked the invoices raised by the company to ensure the same isin line with the terms of sales order and company's sales policy.
- We have checked if the sales invoices are serially numbered with particularattention to invoices cancelled during the audit period.
- We have scrutinised sales journal on overall basis & discuss anydiscrepancies/queries with client. - We have also ensured disclosure as per Schedule IIIof the Act. 2. Recoverability of Trade Receivables As at March 31 2021 trade receivablesamounting Rs. 100216353 are outstanding for long period. Refer note 16 to the financialstatements.
- Obtained the schedule of trade receivables giving the age wise analysis of tradereceivables and sought reasons for old outstanding receivables to ensure recoverability ofthe same.
- Verified balances at the end of the year for subsequent realization. - We havereviewed policy of the Company for provision for doubtful debts/ dad debts and ensuredthat the same is being followed consistently.
- We have sent the balance confirmation to various customers on sample basis andperformed alternative audit procedures where no confirmations were received.
- We have checked the amounts due from foreign parties converted into Indian Rupees atthe year-end exchange rates to ensure compliance to the provisions AS-11 and verified thecalculation and accounting effects for the same. - We have ensured disclosure as perSchedule III of the Act.
3. Accuracy Completeness and Existence of Cost of Services
- Reviewed policy of the Company for incurring the project related expenses and thematrix for level of approvals for expenses made by the client. - We have obtained the listof expenses related to cost of services and ensured that the same are correctly classifiedas cost of services.
- We have vouched samples of costs of service as recognised in audit period. - We havereviewed the purchase orders/ agreements with various vendors to understand the terms& conditions.
- We have checked accounting entry agrees to supplier invoice and receiptsdocumentation.
- We have ensured the expense represents a genuine business cost. - We have checkedforeign exchange translation treatment of indirect taxes if any and cost classificationon supplier invoice to recognition in expense general ledger. - We have ensured disclosureas per Schedule III of the Act.
Emphasis of Matter
We draw attention to the following matters in the notes to the financial statements: Wedraw attention to Note 38 to the accompanying Financial Statements which explains themanagement's evaluation of the financial impact on the Company due to lockdown and otherrestrictions imposed on account of COVID-19 pandemic situation. The assessment of theimpact in the subsequent period is highly subjective and is dependent upon circumstancesas they evolve. Our opinion is not modified in respect of this matter.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
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 financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under section 133 of the Act read withrelevant rules issued thereunder. 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 financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error. In preparing thefinancial statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of this financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the 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 todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act 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 reasonablenessof accounting estimates and related disclosures made by 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 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 auditor'sreport. 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our audit. We also provide thosecharged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence and whereapplicable related safeguards. From the matters communicated with those charged withgovernance we determine those matters that were of most significance in the audit of thefinancial statements of the current period and are therefore the key audit matters. Wedescribe these 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.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of section 143(11) of theAct we give in "Annexure 1" a statement on the matters specified in paragraphs3 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 explanations which to thebest of 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 bythe Company so far as it appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss and the Statement ofCash Flows dealt with by this report are in agreement with the books of account; d. Inour opinion the aforesaid financial statements comply with the Accounting Standardsspecified under section 133 of the Act read with relevant rules issued thereunder;
e. On the basis of the written representations received from the directors as onMarch 31 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2021 from being appointed as a director in terms of section164(2) of the Act;
f. 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".
g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact itsfinancial position;
ii. The Company did not have any long-term contracts including derivativecontracts. Hence the question of any material foreseeable losses does not arise;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of RidingsConsulting Engineers India Limited on the financial statements for the year ended March31 2021]
(i) (a) The Company has not maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) During the year fixed assets have not been physically verified by the management.However there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets.
(c) There is no immoveable property held in the name of the Company.
(ii) The Company does not hold any inventory. Accordingly paragraph 3 (ii) of theOrder is not applicable to the Company. (iii) As informed the Company has not granted anyloans secured or unsecured to companies firms Limited Liability Partnerships or otherparties covered in the register maintained under section 189 of the Act. Accordinglyparagraph 3 (iii)(a)
3 (iii) (b)and 3 (iii)(c) of the Order are not applicable to the Company. (iv)According to the information and explanation given to us there are no loans investmentsguarantees and securities. Accordingly paragraph 3(iv) of the Order is not applicable tothe Company.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the provisions of Sections 73to 76 of the Act and the rules framed there under.
(vi) The Central Government has not prescribed the maintenance of cost records for anyof the products of the Company under sub-section (1) of Section 148 of the Act and therules framed there under.
(vii) (a) The Company is generally regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income tax goods and service tax and any other material statutory duesapplicable to it. According to the information and explanations given to us no undisputedamounts payable in respect of provident fund employees' state insurance income taxgoods and service tax customs duty cess and any other material statutory dues applicableto it were outstanding at the year end for a period of more than six months from thedate they became payable.
(b) According to the information and explanation given to us there are no dueswith respect to service tax value added tax customs duty excise duty which have notbeen deposited on account of any dispute. (viii) According to the information andexplanations given to us the Company has defaulted in repayment of loans or borrowings tofinancial institutions and banks. The details of which is as follows:-
|Particulars ||Amount of default (In Rs.) ||Period of Default |
|Tata Capital Finance Services Limited ||80100 ||28-301 days |
|Deutsche Bank Limited II ||845118 ||360-513 days |
|HDFC Bank Limited ||1473693 ||27-393 days |
|Capital First Limited ||431754 ||291-483 days |
|Capital First Limited II ||1206790 ||29-395 days |
|Kanika Investment Limited ||244290 ||547 days |
|Religare Finvest Limited ||1519215 ||120-456 days |
|Intec Capital Limited ||172118 ||83-102 days |
There are no dues to government and debenture holders.
(ix) The Company has neither raised money by way of public issue offer nor has obtainedany term loans. Therefore paragraph 3(ix) of the Order is 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 fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instance by themanagement.
(xi) According to the information and explanations given to us managerial remunerationhas been paid/ provided in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore paragraph 3(xii) of the Order is not applicableto the Company.
(xiii) According to the information and explanation given to us all transactionsentered into by the Company with the related parties are in compliance with sections 177and 188 of Act where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforeparagraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him duringthe year.
(xvi) According to the information and explanation given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' in the Independent Auditor's Report of even date to the members of RidingsConsulting Engineers India Limited on the financial statements for the year ended March31 2021]
Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of RidingsConsulting Engineers India Limited ("the Company") as of March 31 2021 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls The Company'smanagement is responsible for establishing and maintaining internal financial controlsbased on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India ("ICAI"). These responsibilities include thedesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth issued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due 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 Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting Becauseof the inherent limitations of internal financial controls over financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting 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 an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal control over financial 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 ICAI.
For NKSC & Co.
ICAI Firm Registration No.020076N
Membership No. 521986
Place: New Delhi
Date: June 25 2021