Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of RubfilaInternational Limited (the Company') which comprise the Balance Sheet as at 31March 2021 the Statement of Profit and Loss (including Other Comprehensive Income) thestandalone statement of changes in equity and the standalone cash flow Statement for theyear then ended and a summary of the significant accounting policies and otherexplanatory infor -mation (hereinafter referred to as standalone financialstatements).
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 (Act) in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in
India of the state of affairs of the Company as at 31
March 2021 and profit and other comprehensive income changes in equity and its cashflows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143 (10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the stan-dalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other 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 on the Standalone financial statements.
Key Audit Matters
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 standalone financialstatements and in forming our opinion thereon and we do not provide a separate opinionon these matters.
Considering the materiality of the amounts involved the significant managementjudgement required in estimating the quantum of diminution in the value of investment andsuch estimates and judgements being inherently subjective this matter has been identifiedas a key audit matter for the current year audit.
|Key Audit Matter ||How our audit addressed the key audit matter |
|Duty Draw Back ||Our procedures included but were not limited to the fol- lowing: |
|The assessment of the duty drawback claimed for the fi - nancial years 2001-2003 by the Commissioner of Customs has issued an order for recovery of Duty Drawback awarded amounting to Rs. 391.73 Lakhs (previous year Rs. 391.73 Lakhs) in 2008-09 and the case is pending before the Tribu- nal. Refer note -39 || Obtained an understanding of management's stand on the submissions filed with various appellate authorities and has considered the rulings of various courts in similar cases to determine the possible result of the case. |
|As per the assessment of the management no provisioning is required for year considering the merits of the case and the legal stand taken by the company || Obtained an opinion from expert on the possible outcome of the pending litigation in respect of the financial impact of the various outcomes. |
|Considering the materiality of the amounts involved the sig- nificant management judgement required in estimating the quantum of diminution in the value of investment and such estimates and judgements being inherently subjective this matter has been identified as a key audit matter for the cur - rent year audit. || Assessed the professional competence objectivity and capabilities of the valuation specialist engaged by the management; |
|Provision for Contingencies ||Our procedures included but were not limited to the fol- lowing: |
|The management is required to make judgements and esti- mates in relation to the issues and exposures arising from a range of matters relating to direct tax indirect tax general legal. proceedings and other eventualities arising in the reg- ular course of business. The Company is also subject to com- plexities arising from uncertain direct / indirect tax positions on deductibility of expenses. || We tested the design implementation and operating ef- fectiveness of key internal controls around the recogni- tion and measurement of provisions. |
| || We inquired the status in respect of significant with the Company's internal tax and legal team. |
|The key judgement lies in determining the likelihood and mag- nitude of the possible cash outflows and interpretations of the legal aspects tax legislations and judgements previously made by authorities. By nature these are complex and include many variables. Refer note -17 || We involved our subject matter experts wherever re- quired to assess the value of material provisions in light of the nature of the exposures applicable regulations and related correspondence with the authorities. |
| || We challenged the assumptions and critical judgements made by the Company which impacted their estimate of provision required considering judgements previously made by the authorities in the relevant jurisdictions or any relevant opinions given by the Company's advisors and assessing whether there was an indication of man- agement bias. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone finan -cial statements and our auditors'report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's and Board of Directors' Responsibility for the Standalone FinancialStatements
The Company's Management and Board of Directors are responsible for the matters statedin Section 134 (5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the state of affairs profit/loss-prehensive income changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the standalone financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements the Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Stan-dalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also: and other com lIdentify and assess the risks of material misstatement of the standalone 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. lObtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Actwe are also responsible for expressing our opinion on whether the Company has adequateinternal financial controls with reference to standalone financial statements in place andthe operating effectiveness of such controls. l Evaluate the appropriateness ofaccounting policies used and the reasonableness of accounting estimates and relateddisclosures in the stan-dalone financial statements made by the Management and Board ofDirectors. l Conclude on the appropriateness of the Management and Board ofDirectors use of the going concern basis of accounting and based on the audit evidenceobtained whether a material uncertainty exists related to events or conditions that maycast significant doubt on the Company's ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the standalone financial statements or ifsuch disclosures are inadequate to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor's report. l However futureevents or conditions may cause the Company to cease to continue as a going concern. lEvaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the stan-dalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant -ing any significant identify duringour audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone finan -cialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditors' report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of such communi-cation.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors' Report) Order 2016 (the Order)issued by the Central Government in terms of Section 143 (11) of the Act we give in theAn-nexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
(A) 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 ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c. The standalone balance sheet the standalone statement ofprofit and loss (including other comprehensive income) the standalone statement ofchanges in equity and the standalone statement of cash flows dealt with by this report arein agreement with the books of account; d. In our opinion the aforesaid standalonefinancial auditfindingsinclud statements comply with the Ind AS specified undeficienciesininternal control thatwe -der Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. e. On the basis of the written representations receivedfrom the directors as on 31 March 2021 taken on record by the Board of Directors none ofthe directors is disqualified as on 31 March 2021 from being appointed as a director interms of Section 164(2) of the Act; f. With respect to the adequacy of the internal fi-nancial controls over financial reporting of the Company and the operating effectivenessof such controls refer to our separate Report in Annexure A. Our reportexpresses an unmodified opinion on the adequacy and operating ef -fectiveness of theCompany's internal financial controls over financial reporting.
(B) With respect to the other matters to be included in the Auditors' 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 has disclosed the impact of pending litigations as at 31 March 2021 onits financial position in its standalone financial statements - Refer Note 39.1 to thestandalone financial statements;
II. The Company did not have any long-term contracts for which there were any materialforeseeable losses. The Company does not have any derivative contracts; III. There hasbeen no delay in transferring amounts required to be transferred to the InvestorEducation and Protection Fund by the Company; and IV. The disclosures in the standalonefinancial statements regarding holdings as well as dealings in specified bank notes duringthe period from No-vember 8 2016 to December 30 2016 have not been made in thesefinancial statements since they do not pertain to the financial year ended 31 March 2021.
(C) With respect to the matter to be included in the Auditors' Report under Section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
| ||For Cyriac & Associates |
| ||Chartered Accountants |
| ||Firm No.014033 S |
| ||Jim Cyriac |
|Thiruvananthapuram ||(Partner) |
|25 May 2021 ||Mem No. 230039. |
Annexure A to the Independent Auditors' Re-port of even date on the financialstatements of Rubfila International Limited
With reference to the Annexure A referred to in the Independent Auditors' Report to themembers of the Company on the standalone financial statements for the year ended 31 March2021 we report the following: i) a) The Company has maintained proper records showingfull particulars including quantitative details and situation of property plant andequipment and investment properties. b) The Company has a regular programme of physicalverification of its property plant and equipment and investment properties by which theproperty plant and equipment and investment properties are verified by the managementaccording to a phased programme designed to cover all the items over a period of threeyears. In our opinion this periodicity of physical verification is reasonable havingregard to the size of the Company and the nature of its assets. In accordance with thepolicy the Company has physically verified certain property plant and equipment duringthe year and we are informed that no material discrepancies were noticed on suchverification and the same have been dealt with in the books of accounts. c) The titledeeds of all the immovable properties except for the extent of land mentioned in note 2.1- Property plant and equipment' are held in the name of the Company.
ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. The discrepancies noticedon verification between the physical stocks and the book records were not material andhave been dealt with in books of account.
iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of the
Companies Act 2013 (the Act'). Accordingly paragraphs 3 (iii) (a) (b) and (c)of the Order are not applicable to the Company
iv) The Company has not granted any loans to companies covered in the registermaintained under Section 189 of the Act; In our opinion the Company has complied with theprovisions of Sections 185 and 186 of the Act in respect of loans investments guaranteesand security.
v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia and the provisions of Sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.
vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules prescribed by the Central Government for the maintenance of cost recordsunder Section 148(1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained.
vii) a. According to the information and explanations given to us and on the basis ofour examination 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 Duty of Customs Goods and Services Tax Cess and other materialstatutory dues have been regularly deposited during the year by the Company with theappropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income-tax Duty ofcustoms Goods and Services Tax Cess and other material statutory dues were in arrears asat 31 March 2021 for a period of more than six months from the date they became payable.
b. The Company is regular in depositing undisputed statutory dues including providentfund employees' state insurance income-tax sales-tax goods and services tax servicetax duty of customs duty of excise value added tax cess and other material statutorydues as applicable with the appropriate authorities. Further no undisputed amountspayable in respect thereof were outstanding at the year-end for a period of more than sixmonths from the date they became payable.
c. According to the information and explanations given to us the Company has no loansor borrowings to any financial institution or a bank or any dues to debenture-holdersduring the year. The Company did not have any outstanding loans or borrowings fromgovernment during the year.
viii) The Company has made preferential issue of 45 Lakhs number of share warrants inthe year 2019-2020 out of which 22.5 Lakhs number of shares of face value Rs. 5/- at apremium of Rs. 37.50/- has been allotted during the year thereby raising Rs.956.25 Lakhsand 25.5 lakhs shares in the year
2020-2021 at a premium of Rs.28.50 has been allotted during the year raising Rs. 854.25Lakhs. Other than this the company did not raise moneys by way of initial public offer orfurther public offer (including debt instruments).
ix) 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 material fraud by the company or on the company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement. x) 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.
xi) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3 (xii) of the Order is not applicable to the Company.
xii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone financial statements as required byapplicable Ind
AS. xiii) During the year the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures other than asdisclosed in clause IX above. In our opinion the company has complied with the requirementof section 42 of the Companies Act 2013.
xiv) 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 noncashtransactions with directors or persons connected with them. Accordingly paragraph 3 (xv)of the Order is not applicable to the
xv) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.
| ||TFor Cyriac & Associates |
| ||Chartered Accountants |
| ||Firm No.014033 S |
| ||Jim Cyriac |
|Thiruvananthapuram ||(Partner) |
|25 May 2021 ||Mem No. 230039. |
Annexure B to The Independent Auditors' Report 31 March 2021
Report on the Internal Financial Controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (the Act)
(Referred to in paragraph (A)(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
We have audited the internal financial controls with reference to standalone financialstatements of Rubfila In -ternational Limited (RIL) (the Company) as of 31March 2021 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal -cialcontrols were operating effectively as at 31 March 2021 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the Guidance Note).
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal controls with referenceto standalone financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 with respect to standalone financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls with reference to standalone financial statements. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to standalone financial statements were established and maintainedand whether 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 with respect to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with respect tostandalone financial statements included obtaining an understanding of internal financialcontrols with respect to standalone financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors' judgement including the assessment of the risks of materialmisstatement of the standalone 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 systemwith reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to Standalone FinancialStatements
A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.
Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements Because of the inherent limitations of internal financial controlswith reference to standalone financial statements including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the internalfinancial controls with reference to standalone financial statements to future periods aresubject to the risk that the internal financial control with reference to standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
| ||For Cyriac & Associates |
| ||Chartered Accountants |
| ||Firm No.014033 S |
| ||Jim Cyriac |
| ||(Partner) |
|Thiruvananthapuram ||Mem No. 230039. |
|25 May 2021 ||UDIN: |