To the Members of Ridings Consulting Engineers India Limited Report on the Audit of theFinancial Statements Opinion
We have audited the accompanying financial statements of Ridings Consulting EngineersIndia Limited ("the Company") which comprise the Balance Sheet as at March 312020 the Statement of Profit and Loss and the Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significant accountingpolicies and other explanatory information. In our opinion and to the best of ourinformation and according to the explanations given to us the aforesaid financialstatements give the information required by the Companies Act 2013 ("the Act")in the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 its loss and its cash flows for the 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.We have determined the matters described below to be the key audit matters to becommunicated in our report.
1. Accuracy of recognition measurement presentation and disclosures of revenues andother related balances in view of Accounting Standard- 9- "Revenue Recognition"
3 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 an appropriate consistent revenue recognition policy is appliedat the year end and ensured that the policy adopted is in line with generally acceptedaccounting principles.
We have considered the accounting for long term contracts spread over the year end.
We have checked entries in the sales day-book with copies of invoices and credit notesand ensured separate classification of amounts for different class of services given withby the company
We have also ensured that where a sale includes a deferred element a portion of revenueis deferred where appropriate.
We have determined whether there are any bill and hold sales at year end and alsoapplied revenue recognition criteria to these sales.
We have checked last 10 invoices/ credit notes of the current audit period and first 10invoices/ credit notes of the next financial year to ensure cut-off procedures related torevenue recognition.
We have vouched sample of sales invoices to supporting documentation
We have checked the invoices raised by the company to ensure the same is in line withthe terms of sales order and company's sales policy.
We have checked if the sales invoices are serially numbered with particular attentionto 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 III of the Act.
III of the Act.
2. Recoverability of Trade Receivables
As at March 31 2020 trade receivables amounting Rs. 116478602 are outstanding forlong period. Refer note _16 to the financial statements.
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 have reviewed policy of the Company for provision for doubtful debts/ dad debts andensured that the same is being followed consistently.
We have sent the balance confirmation to trade receivables on sample basis andreconcile the year-end balance for confirmations received back.
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 per Schedule III of the Act.
. 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 list of expenses related to cost of services and ensured that thesame are correctly classified as 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 receipts documentation.We have ensured the expense represents a genuine business cost.
We have checked foreign exchange translation treatment of indirect taxes if any andcost classification on supplier invoice to recognition in expense 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 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 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 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 ofaccounting policies used and the reasonableness of accounting estimates and relateddisclosures 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 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 among othermatters 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 we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards. From the matters communicatedwith those charged with governance we determine those matters that were of mostsignificance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.
We could not observe the physical verification of cash at the year end as it was notpractically possible due to lockdown conditions and therefore we have performedalternative procedures and relied upon internal controls in respect of existence of cashat the year end. Our opinion is not modified in respect of this matter.
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 section 143(11) of the Act we givein "Annexure 1" a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.
(2) As required by section 143(3) of the Act we report that: a. We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit;
b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
d. The Balance Sheet the Statement of Profit and Loss and the Statement of Cash Flowsdealt with by this report are in agreement with the books of account;
e. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with relevant rules issuedthereunder;
f. On the basis of the written representations received from the directors as on March31 2020 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2020 from being appointed as a director in terms of section164(2) of the Act;
g. With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controls wegive our separate report in "Annexure 2".
h. 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 its financialposition;
ii. The Company did not have any long-term contracts including derivative contracts.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.
For NKSC & Co. Chartered Accountants
ICAI Firm Registration No.020076N
Membership No.: 089123 UDIN: 20089123AAAACB1474
Place: New Delhi Date: July 31 2020
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 2020]
(a) The Company has not maintained proper records showing full particulars includingquantitative 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.
3333 The Company does not hold any inventory. Accordingly paragraph 3 (ii) of theOrder is not applicable to the Company.
33333 As informed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Act. Accordingly paragraph 3 (iii)(a) 3 (iii)(b) and3 (iii)(c) of the Order are not applicable to the Company.
3333 According to the information and explanation given to us there are no loansinvestments guarantees and securities. Accordingly paragraph 3(iv) of the Order is notapplicable to the Company.
333 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.
3333 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.
(a) The Company is not regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income tax goods andservice tax and any other material statutory dues applicable to it and there have beendelays in a large number of cases.
According to the information and explanations given to us there are undisputed dues inrespect of provident fund employees' state insurance goods and service tax and any othermaterial statutory dues applicable to it which were outstanding at the year end for aperiod of more than six months from the date they became payable. Details of which ismentioned below
|Name of the statute ||Nature of the dues ||Amount ||Perio d ||Due Date ||Date of Paymen t |
|Income Tax Act 1961 ||Tax Deducte d at source ||1683625 ||2019- 20 ||Variou s dates ||Not yet paid |
|Finance Act 2016 ||Goods and Service Tax ||938171 ||2018- 19 ||Variou s dates ||Not yet paid |
|Finance Act 2016 ||Goods and Service Tax ||1595592 ||2019- 20 ||Variou s dates ||Not yet paid |
|Employe e Provident Fund Act 1952 ||Provident Fund ||1057812 ||2019- 20 ||Variou s dates ||Not yet paid |
|Employe e State Insuranc e Act 1948 ||Employe e State Insuranc e ||218969 ||2019- 20 ||Variou s dates ||Not yet |
(b) According to the information and explanation given to us there are no dues withrespect to service tax value added tax customs duty excise duty which have not beendeposited on account of any dispute.
333333 According to the information and explanations given to us the Company hasdefaulted in repayment of loans or borrowings to financial institutions and banks. Thedetails of which is as follows: -
|Particulars ||Amount of default (In Rs.) ||Period of Default |
|Intec Capital Limited ||860590 ||12-178 days |
|Deutsche Bank Limited ||1201840 ||12-147 days |
|HDFC Bank Limited ||1133610 ||24-118 days |
|Aditya Birla Finance Limited ||1003328 ||2-178 days |
|Capital First Limited ||719590 ||3-117 days |
|Capital First Limited II ||928300 ||15-150 days |
|Infoline Finance Limited ||636200 ||16-180 days |
|Kanika Investment Limited ||911736 ||1-181 days |
|Religare Finvest Limited ||1281950 ||16-121 days |
|Tata Capital Finance Services Limited ||72090 ||3-48 days |
There are no dues to government and debenture holders.
The Company has neither raised money by way of public issue offer nor has obtained anyterm loans. Therefore paragraph 3(ix) of the Order is not applicable to the Company.
During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India and accordingto the information and explanations given to us we have neither come across any instanceof fraud by the Company or any fraud on the Company by its officers or employees noticedor reported during the year nor have we been informed of any such instance by themanagement.
According to the information and explanations given to us managerial remuneration hasbeen paid / provided in accordance with the requisite approvals mandated by the provisionsof section 197 read with Schedule V to the Act.
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.
According to the information and explanation given to us all transactions entered intoby the Company with the related parties are in compliance with sections 177 and 188 ofAct where applicable and the details have been disclosed in the Financial Statementsetc. as required by the applicable accounting standards.
The Company has not made any preferential allotment or private placement of shares orfully or partly convertible debentures during the year under review. Therefore paragraph3(xiv) of the Order is not applicable to the Company.
According to the information and explanations given to us the Company has not enteredinto any non-cash transactions with directors or persons connected with him during theyear.
According to the information and explanation given to us the Company is not requiredto be registered under section 45-IA of the Reserve Bank of India Act 1934.
For NKSC & Co. Chartered Accountants
ICAI Firm Registration No. 020076N
[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 2020]
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 2020 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'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 Reportingissued by the Institute of Chartered Accountants of India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the 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 audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree 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 2020 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. Chartered Accountants
ICAI Firm Registration No.020076N
Membership No. 089123
Place: New Delhi Date: July 31 2020