To the Members of Royal Cushion Vinyl Products Limited Report on the Audit of theFinancial Statements
1. We have audited the accompanying standalone financial statements of Royal CushionVinyl Products Limited (the 'Company') which comprise the Balance Sheet as at March 31st2020 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary 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 financial statements give the information requiredby the Companies Act 2013 (the 'Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India includingIndian Accounting Standards ('Ind AS') specified under Section 133 of the Act of thestate of affairs (financial position) of the Company as at March 31st 2020 andits profit (financial performance including other comprehensive income) its cash flowsand the changes in equity for the year ended on that date.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing 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 withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.
Key Audit Matters
4. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone 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.
5. We have determined the matters described below to be the key audit matters to becommunicated in our report. Revenue recognition in view of adoption of Ind AS 115"Revenue from Contracts with Customers" (new revenue accounting standard)
Revenue recognition is significant audit risk within the Company. Risk exists indetermination of transaction price in off-market transfer of investment by the company.The application of the new revenue accounting standard involves certain key judgmentsrelating to identification of distinct performance obligations determination oftransaction price of the identified performance obligations the appropriateness of thebasis used to measure revenue recognized over a period.
Principal Audit Procedures
- Our audit consisted testing of the design and operating effectiveness of the internalcontrols and substantive testing as follows:
- We evaluated the design of internal controls relating to revenue recognition.
- We selected sample of Sales transactions and tested the operating effectiveness ofthe internal control relating to revenue recognition.
- We carried out a combination of procedures involving enquiry and observation reperformance and inspection.
- We have tested sample of Sale transactions to their respective customer contractsunderlying invoices and related documents.
- We have performed cut-off procedures for sample of revenue transactions at year-endin order to conclude on whether they were recognised in accordance with Ind-AS 115
INFORMATION OTHER THAN THE FINANCIAL STATEMENTS AND AUDITORS' REPORT THEREON
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 include the financialstatements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information 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. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
7. 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 standalone financial statements that give a true and fair viewof the state of affairs
(financial position) profit or loss (financial performance including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Ind AS specifiedunder Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
8. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
9. Those Board of Directors are also responsible for overseeing the Company's financialreporting process. Auditor's Responsibilities for the Audit of the Financial Statements
10. 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 withStandards on Auditing 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 these financial statements.
11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit.
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 explaining our opinion on whether the Companyhas adequate internal financial controls system in place
and the 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 exists we are required to drawattention in our auditor's report to the related disclosures in the financial statementsor if such disclosures are inadequate to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the standalone financialstatements.
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.
12. 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 control that we identify during our audit.
13. 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.
14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
15. As required by Section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under Section 197 read with Schedule V to the Act.
16. As required by the Companies (Auditor's Report) Order 2016 (the 'Order') issued bythe Central Government of India in terms of Section 143(11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
17. Further to our comments in Annexure A as required by Section 143(3) of the Act wereport that:
a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
b ) in o ur o p ini o n pro per boo ks of acco unt as req uir ed by l aw ha v e be enkept by the C ompa ny so far as i t
appears from our examination of those books;
c) the standalone financial statements dealt with by this report are in agreement withthe books of account;
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules 2016.
e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on March 31st2020 from being appointed as a director in terms of Section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting(IFCOFR) of the Company as on March 31st 2020 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date and ourreport as per "Annexure B" expressed an unmodified opinion;
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended. In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. the Company has disclosed the impact of pending litigations on its financialposition in the standalone financial statements;
ii. the Company has made provision as required under the applicable law or Ind AS formaterial foreseeable losses if any on long-term contracts including derivativecontracts;
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 31st2020;
iv. The disclosures in the consolidated financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in the financial statements since they do not pertain to thefinancial year ended March 31st 2020.
For Bipin & Co Chartered Accountants Firm Registration No.101509W
| ||CA Amit D Shah |
|PLACE: Vadodara ||Partner |
|DATE: 30 July 2020 UDIN:20126337AAAACH2675 ||Membership No.: 126337 |
Annexure "A" to the Independent Auditor's Report of even date to the membersof Royal Cushion Vinyl Products Limited on the standalone financial statements for theyear ended March 31st 2020 Annexure A
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and
situation of property plant and equipment.
(b) The Company has a regular program of physical verification of its property plantand equipment under which property plant and equipment are verified in a phased mannerover a period of three years which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. In accordance with this program certainproperty plant and equipment were verified during the year and no material discrepancieswere noticed on such verification.
(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date. In respect ofimmovable properties of land and building that have been taken on lease and disclosed asfixed assets in the standalone financial statements the lease agreements are in the nameof the Company.
(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year except for goods-in-transit and stocks lying withthird parties. For stocks lying with third parties at the yearend written confirmationshave been obtained by the management. No material discrepancies were noticed on theaforesaid verification.
(iii) The Company has not granted unsecured loans to companies covered in the registermaintained under Section 189 of the Act; and with respect to the same:
(iv) In our opinion the Company has complied with the provisions of Sections 185 and186 of the Act in respect of loans investments guarantees and security.
(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public. Therefore the directives issued by the ReserveBank of India and the provisions of sections 73 to 76 or any other relevant provisions ofthe Companies Act and the rules framed there under are not applicable to the Company.
(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for the maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of Company's products and servicesand are of the opinion that prima facie the prescribed accounts and records have beenmade and maintained. However we have not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete.
(vii) a) According to the records of the Company the Company is generally not regularin depositing undisputed
statutory dues including Provident Fund Employees' State Insurance Income Tax SalesTax Service Tax Duty of Custom Duty of Excise Valued Added Tax and Cess and otherstatutory dues with the appropriate authorities. According to the information andexplanations given to us the undisputed statutory due which have remained outstanding asat 31st March 2020 for a period of more than six months from the day they become payableare as unde r.
|NAME OF THE STATUTE ||NATURE OF THE DUE ||AMOUNT |
|Custom Act ||Custom Duty ||568394779 |
b) The disputed statutory dues that have not been deposited on account of disputedmatters pending before appropriate authorities are as under.
|Sr. No. ||Nature of the Status ||Nature of the due ||Amount ||Period to which the amount relate ||Forum where dispute is Pending |
|1. ||The Central Excise Act ||Custom Duty ||2105053 ||Various year ||Commissioner Va doda ra |
|2. ||The FERA Act ||Penalty ||10000000 ||2002-03 ||Appellate Authority FERA New Delhi |
|3 ||The Income Tax Act ||Penalty ||4662473 ||Various years ||Various Authorities |
|4 ||The Central Excise Act ||Excise Duty ||998743 ||Va rio u s Ye ar ||Commissioner Va doda ra |
viii) The Company has defaulted in repayment of dues to financial institution andBanks the Company was registered with the Board for industrial and financialreconstructions (BIFR) since Sep 2003. Total amount payable as on 31st March2020 to various Banks & Financial Institutions are as under as per Books of Account(subject to reconciliation in absence of bank statements)
|NAME OF BANKs/ INSTITUTIONs ||AMOUNT ( ') |
|SWAMINARAYAN CO-OP BANK LTD. ||2214671 |
|BARODA PEOPLES CO-OP BANK TERM LOAN ||1944225 |
|PANCHMAHAL DIST. CO-OP BANK LTD. ||8200934 |
|BARODA CITY CO-OP BANK ||3268089 |
|FINQUEST FINANCIAL SOLUTION PRIVATE LIMITED ||2372044523 |
(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
(x) Based upon the audit procedures performed and the information and explanationsgiven by the management We report that No fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.
(xiii) Based upon the audit procedures performed and the information and explanationsgiven by the management all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the financial statements etc. as required by the applicable Ind AS.
(xiv) According to the information and explanations given by the management and basedon our examinations of the records of the Company during the year the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures. Accordingly provisions of clause 3(xiv) of the Order are notapplicable.
(xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
(xvi) The company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934 and accordingly the provisions of clause 3 (xvi) of the Order isnot applicable to the Company and hence not commented upon.
For Bipin & Co Chartered Accountants Firm Registration No.101509W
| ||CA Amit D Shah |
|PLACE: Vadodara ||Partner |
|DATE: 30 July 2020 ||Membership No.: 126337 |
|UDIN:20126337AAAACH2675 || |
Annexure "B" to the Auditors' Report
Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under section 143(3)(i) of
the Companies Act 2013
Independent Auditor's report on the Internal Financial Controls under Clause (i) ofsub-section 3 of Section 143 of the
Companies Act 2013 (the "Act")
1. In conjunction with our audit of the standalone financial statements of RoyalCushion Vinyl Products Limited (the "Company") as at and for the year endedMarch 31st 2020 we have audited the internal financial controls over financialreporting (IFCOFR) of the Company as of that date.
Management's Responsibility for Internal Financial Controls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company's IFCOFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theICAI and deemed to be prescribed under Section 143(10) of the Act to the extentapplicable to an audit of IFCOFR and the Guidance Note issued by the ICAI. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate IFCoFR wereestablished and maintained and if such controls operated effectively in all materialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCOFR and their operating effectiveness. Our audit of IFCOFR included obtaining anunderstanding of IFCOFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCOFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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
7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31st 2020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Noteissued by the ICAI.
| ||For Bipin & Co |
| ||Chartered Accountants |
| ||Firm Registration No.101509W |
| ||CA Amit D Shah |
|PLACE: Vadodara ||Partner |
|DATE: 30 July 2020 UDIN:20126337AAAACH2675 ||Membership No.: 126337 |