TO THE MEMBERS OF RISHI TECHTEX LIMITED
Report on the Standalone Financial Statements Opinion
1. We have audited the accompanying standalone financial statements of Rishi TechtexLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2019 and the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith accounting principles generally accepted in India of the state of affairs (financialposition) of the Company as at 31st March 2019 and its profit (financialperformance including other comprehensive income) its cash flowsand changes in
equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SA's) specified under Section 143(10) of the Companies Act 2013.Our responsibility under those Standards are further described in the Auditor'sResponsibilities for the audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the code of ethics issued by the Instituteof Chartered Accountants of India together with ethical requirements that are relevant toour audit of the standalone financial statements under the provisions of the CompaniesAct 2013 and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Key Audit Matters
4. Key audit matters are those that in our professional judgement were of mostsignificance in our audit of the standalone financial statements of the current year. Wehave determined the matters described below to be the key audit matters and were addressedin the context of our audit of the standalone financial statements as a whole and informing our opinion thereon. We do not provide a separate opinion on these matters.
|Key Audit Matters ||How our audit addressed the key audit matters |
|Uncertain Indirect unsettled and disputed tax provision (as described in note 34 of the financial statements) || |
| The Company has ongoing litigation with Enforcement Directorate .This dispute is pending with Appellate authorities. || We obtained all the details of litigation upto 31st March 2019 |
|The management has assessed the future outcome of this ongoing proceeding and exposure which directly affects the valuation of indirect tax liability provision in the financial statement || We performed test controls of management process of assessment and estimates with regard to uncertain indirect tax position |
| As the future outcome of this matter and the accounting effect thereof is based on assessment of complex matter which may take time to finally resolve the valuation of indirect tax provision related to uncertain indirect tax position has been considered as key audit matter in our audit of the standalone financial statement. || We inspected written communication between the Company and indirect tax authorities and involved indirect tax specialist to assess the management's underlying assumptions in estimating the indirect tax provision and the possible outcome of the dispute. |
| || We also considered the effect of the new information in the financial year 2019-20 to evaluate if there is any change in the management's position on these uncertainties |
| || We tested the adequacy of disclosure relating to uncertain indirect tax position for the year in the standalone financial statement |
|Accounting for Expected Credit Loss on trade receivables || |
| Management has considered estimates in computing the expected credit losses after considering credit history of customers and current market realities. || We have performed audit procedures that included management discussions on Company's understanding in relation to the adoption of the standard and installing a process of its implementation. |
| || We reviewed the past data customer history and assumptions arising therefrom in deciding and computing loss rate for different ageing buckets identified by the management. |
| || We also reviewed the application of any specific provision for customers which was necessary in the given circumstances. |
| ||With respect to forward looking assumption considered by the Company held discussions with the management and corroborated the assumption using both internal and externally available information on attest basis. |
5. The comparative financial information of the company for the year ended 31stMarch 2018 have been audited by the predecessor auditor who had audited the financialstatements for the relevant periods. The report of the predecessor auditor on thecomparative financial information dated 26 th May 2018 have expressed a modified opinion.
Our opinion is not modified in respect of this matter.
6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe financial statements and our auditor's report thereon. The annual report is expectedto be made available to us after the date of this auditor's report thereon.
Our opinion on the financialstatements does not cover the other information and we willnot express any form of assurance conclusion thereon.
In connection with our audit of financial statements our responsibility is to read theother information identified above
when it becomes available and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.
When we read the Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance andtake appropriate action as applicable under the relevant laws and regulations.
We have nothing to report in this regard.
Management's Responsibility for the Standalone Ind AS 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 and presentation of these standalone IndAS financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133 ofthe
Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financialcontrols thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialmisstatement whether due to fraud or error.
In preparing the standalone Ind AS 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 Ind AS Financial Statements
7. Our objectives are to obtain reasonable assurance about whether the standalone IndAS financial statements as a whole are free from material misstatement whether due tofraud or 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 Ind AS financialstatements.
8. 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 standalone Ind ASfinancial error design and perform audit procedures responsive to those risks and obtainaudit evidence that is sufficientand appropriate to provide a basis for our opinion. Therisk of not detecting a material misstatement resulting from fraud is higher than for oneresulting from error as fraud may involve collusion forgery intentional omissionsmisrepresentations 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 in place and the operating effectiveness of suchcontrols.
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 Company's ability tocontinue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions 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 standalone Ind ASfinancial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
9. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal ol that we identify during our audit.
10. 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.
11. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone Ind ASfinancial statements for the financial year ended March 31 2019 and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
12. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of section 143 (11) of the Act ("the Order") wegive in "Annexure A" a statement on the matters specified in paragraphs 3 and 4of the Order.
13. 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 it appears from our examination of those books.
The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and
Statement of Changes in Equity dealt with by this Report are in agreement with thebooks of account.
(d) In our opinion the aforesaid standalone 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 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164 (2) of the Act.
(f) 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".
(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 opinion and to the best of our information and accordingto the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements
The Company has disclosed the impact of pending litigation with Enforcement Directorateand subsequent development in its standalone financial statement Note
No. 34. This amount has been shown as contingent liabilities in
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 during the year ended 31st March2019.
| ||For Attar & Associates |
| ||Chartered Accountants |
| ||Firm Registration No: 116443W |
| ||S.G.Gangal |
|Place: Mumbai ||Partner |
|Date: 28th May 2019 ||Membership No.037699 |