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Rishi Techtex Ltd.

BSE: 523021 Sector: Industrials
NSE: RISHIPACK ISIN Code: INE989D01010
BSE 00:00 | 23 May 38.50 -1.40
(-3.51%)
OPEN

41.40

HIGH

41.40

LOW

38.20

NSE 05:30 | 01 Jan Rishi Techtex Ltd
OPEN 41.40
PREVIOUS CLOSE 39.90
VOLUME 311
52-Week high 69.75
52-Week low 35.15
P/E 8.23
Mkt Cap.(Rs cr) 28
Buy Price 38.50
Buy Qty 51.00
Sell Price 41.90
Sell Qty 10.00
OPEN 41.40
CLOSE 39.90
VOLUME 311
52-Week high 69.75
52-Week low 35.15
P/E 8.23
Mkt Cap.(Rs cr) 28
Buy Price 38.50
Buy Qty 51.00
Sell Price 41.90
Sell Qty 10.00

Rishi Techtex Ltd. (RISHIPACK) - Auditors Report

Company auditors report

TO THE MEMBERS OF RISHI TECHTEX LIMITED

Report on the Indian Accounting Standards (lnd AS) Financial Statements

We have audited the accompanying Ind AS financial statements of Rishi Techtex Limited("the Company") which comprise the Balance Sheet as at 31st March 2018 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the state of affairs(financial position) profit or loss (financial performance including other comprehensiveincome) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards (Ind AS)prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; 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 presentation of the lnd ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind J\S financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the nd AS financial statements that give a true and fair view in order toIdesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.

Basis for Qualified Opinion

The confirmations related to overdue trade receivables amounting to ` 3.91 crores havenot been received by the Company. Accordingly no provision of ` 3.91 crores has been madefor such receivables in the enclosed financial results. This has resulted in theoverstatement of Trade receivables by ` 3.91 crores and overstatement of Profit by ` 3.91crores.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph the aforesaid Ind AS financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including the Ind AS of the state ofaffairs (financial position) of the Company as at 31st March 2018 and its profit(financial performance including other comprehensive income) its cash flows and thechanges in equity for the year ended on that date.

Other Matters

The comparative financial information of the company for the year ended 31st March 2017and the transition date opening balance sheet as at 1st April 2016 prepared in accordancewith ndI AS included in these lnd AS financial statements have been audited by thepredecessor auditor who had audited the financial statements for the relevant periods. Thereport of the predecessor auditor on the comparative financial information and the openingbalance sheet dated 30th May 2017 expressed an unmodified opinion.

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 in terms of section 143 (II) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

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 except for thematter described in the Basis for Qualified Opinion paragraph.

(b) Except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.

(d) except for the possible effects of the matter described in the Basis for QualifiedOpinion paragraph in our opinion the aforesaid Ind AS financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31stMarch 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms of Section164 (2) of the Act.

(f) The matter described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

(h) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above. (i)With respect to the other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financialposition in its lnd AS financial statements. Enforcement Directorate vide provisionalattachment order No. 01/2017/KZSZO (IN ECIR/KZSZ0/4/2015) dated 15.03.2017 issueddirections for freezing Bank accounts of the Company. The Company filed writ petition inthe High Court of Kerala and the court vide order dated 12.05.2017 asked the Company tofurnish the bank guarantee equivalent to the amount lying in the frozen bank accounts. TheCompany vide letter dated 23.05.2017 furnished the required bank guarantee of Rs. 20.33Lacs in favour of DIRECTORATE OF ENFORCEMENT KOCHI. The Enforcement Directorate videtheir letters dated 08.06.2017 released the frozen accounts of the Company. The said bankguarantee was renewed further as requested by Enforcement Directorate vide their letterdated 27.04.2018 and furnished to DIRECTORATE OF ENFORCEMENT KOCHI vide letter dated07.05.2018.

This amount has been shown as contingent liability in the accounts.

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. there were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For B. D. Jokhakar & Co.
Chartered Accountants
Firm Registration No: 104345W
Pramod Prabhudesai
Place: Mumbai Partner
Date: 26th May 2018 Membership No. 032992

ANNEXURE A TO THE AUDITOR'S REPORT

(R eferred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of Independent Auditors' Report on Ind AS financial statements ofeven date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) According to the information and explanations given to us fixed assets have beenphysically verified by the management during the year and in our opinion the frequency ofverification is reasonable having regard to the size of the Company and the nature of itsassets. We are informed that no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records ofthe Company the title deeds of immovable properties are heldin the name of Company which are mortgaged to Canara bank as collateral security for CashCredit facility based on the confirmations directly received by us from banks.

(ii) As explained to us the inventories have been physically verified during the yearby the management. The intervals at which the inventories have been verified are in ouropinion reasonable in relation to the size of the Company and the nature of its business.The Company is maintaining proper records of inventory and no material discrepancies werenoticed on physical verification.

(iii) 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. Consequently sub clause (a) (b) and (c) of theparagraph 3 (iii) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act in respect ofloans investments guarantees and security given for the year under report.

(v) In our opinion and according to the information and explanations given to us theCompany has in respect of deposits accepted by it has complied with the directives issuedby the Reserve Bank of India to the extent applicable and the provisions of Section 73 to76 of the Act read with rules framed thereunder. According to the information andexplanations given to us and to the best of our knowledge and belief no order has beenpassed by the Company Law Board or the National Company Law Tribunal or the RBI or anyother court or tribunal which is to be complied with by the Company.

(vi) We have broadly reviewed the books of account and records maintained by theCompany pursuant to the Companies (Cost Records and Audit) Rules 2014 as prescribed bythe Central Government for the maintenance of cost records under Section 148 (1) of theAct and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have however not made a detailed examination of the saidrecords with a view to determine whether they are accurate or complete.

(vii) (a) According to information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax goods and services tax duty of customsduty of excise value added tax cess and other material statutory dues have beenregularly deposited during the year by the Company with the appropriate authorities. Asexplained to us there were no undisputed statutory dues as mentioned above in arrears asat 31st March 2018 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no disputed amounts payable in respect of income taxsales tax service tax duty of customs and value added tax outstanding as at theyear-end.

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment ofloans or borrowings to financial institutions and banks. TheCompany has not taken any loans from the Government. It has not issued any debentures.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. According to the informationand explanations given to us and the records of the Company examined by us the Companyhas utilised the monies raised by way of term loans for the purpose for which the loan wasobtained.

(x) To the best of our knowledge and belief and according to the information andexplanations given to us no material fraud on or by the Company has been noticed orreported during the course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 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 notapplicable. (xiii) In our opinion and according to the information and explanations givento us and based on our examination of the records of the Company all transactions withthe related parties are in compliance with sections 177 and 188 of the Act whereapplicable and the details have been disclosed in the financial statements etc. asrequired by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company no preferential allotment or private placementof shares or fully or partly convertible debentures has been made by the Company duringthe year under review except 304000 share warrants at ` 17 each which were pendingconversion as on 31.03.2017 have been converted during the year to equity shares of ` 10each. The Company has complied with the requirement of Section 42 of the Act for theallotment of warrants/shares and has applied the funds received there from for the purposefor which the funds were raised.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with him as specified under section 192of the Act. Therefore paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of lndia Act 1934 and therefore the provisions of paragraph 3(xvi) of the Order isnot applicable.

For B. D. Jokhakar & Co.
Chartered Accountants
Firm Registration No: 104345W
Pramod Prabhudesai
Place: Mumbai Partner
Date: 26th May 2018 Membership No. 032992

ANNEXURE B TO THE AUDITOR'S REPORT

(R eferred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of lndependent Auditors' Report on Ind AS financial statements ofeven date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We were engaged to audit the internal financial controls over financial reporting ofRishi Techtex Limited ("the Company") as of March 31 2018 in conjunction withour audit of the financial statements of the Company for the year 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 Reportingissued by the Institute of Chartered Accountants of India (I CAl). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit conducted in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing to the extent applicable to anaudit of internal financial controls both issued by the Institute of CharteredAccountants of India.

Because of the matter described in Disclaimer of Opinion paragraph below we were notable to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on internal financial controls system over financial reporting of the Company.

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.

Basis for Disclaimer of Opinion

According to the information and explanation given to us the Company has notestablished its internal financial control over financial reporting on criteria based onor considering 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. Because of this reason we are unable to obtain sufficientappropriate audit evidence to provide a basis for our opinion.

Disclaimer of Opinion

Because of the significance of the matter described in the Basis for Disclaimer ofOpinion paragraph we do not express an opinion on whether the Company has in allmaterial respects adequate internal financial controls system over financial reportingand such internal financial controls over financial reporting were operating effectivelyas at March 31 2018 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.

We have considered the disclaimer reported above in determining the nature timing andextent of audit tests applied in our audit of the Ind AS financial statements of theCompany and the disclaimer does not affect our opinion on the Ind AS financial statementsof the Company.

For B. D. Jokhakar & Co.
Chartered Accountants
Firm Registration No: 104345W
Pramod Prabhudesai
Place: Mumbai Partner
Date: 26th May 2018 Membership No. 032992