To the members of Rubfila International Limited
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements ofRubfila International Limited (the 'Company')which comprise the Balance Sheet as at 31March2020 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 information (hereinafter referred to as"standalone financialstatements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and profit and other comprehensive income changes in equity and its cash flows for theyear ended on that date.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the 'Act') in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at 31 March2020 and profit and othercomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under 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 standalone financial statementsunder the provisions of the Act and the Rules thereunder 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 on the Standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.
Considering the materiality of the amounts involved the significantmanagement judgement required in estimating the quantum of diminution in the value ofinvestment and such estimates and judgements being inherently subjective this matter hasbeen identified as a key audit matter for the current year audit.
|Key Audit Matter ||How our audit addressed the key audit matter |
|Recoverability of Intercorporate deposits ||Our procedures included but were not limited to the following: |
|The company has made inter corporate deposits to unrelated companies based on factors such as track record size of organisation market reputation and value of the security. As at 31 March 2020 the company has intercorporate advances to the tune of Rs 500 Lakhs (previous year Rs. Rs 1735 Lakhs) of which interest is not being serviced by one of the companies named M/s Raveena Hotels Private Limited to whom Rs. 50 Lakhs is advanced. ||Obtained an understanding of management's process and evaluated design and tested operating effectiveness of controls around identification of loanee companies and the amount of loan to be sanctioned; |
|As per the assessment of the management the amount is fully recoverable and the company has approached the National Company Law Tribunal for legal action. ||Obtained and verified the financial due diligence report to understand the financial stability of the unrelated companies and the ability of the company to repay the deposits |
| ||Obtained and verified the promissory notes furnished to 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. |
| ||Assessed the professional competence objectivity and capabilities of the valuation specialist engaged by the management; |
|Duty Draw Back ||Our procedures included but were not limited to the following: |
|The assessment of the duty drawback claimed for the financial years2001-2003by 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 Tribunal. Refer note -XX ||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 significant 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 current year audit. ||Assessed the professional competence objectivity and capabilities of the valuation specialist engaged by the management; |
The Company's management and Board of Directors are responsible for theother information. The other information
comprises the information included in the Company's annual report butdoes not include the standalone financial statements and our auditors' report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.
Management's and Board of Directors' Responsibility for the StandaloneFinancial Statements
The Company's Management and Board of Directors are responsible for thematters stated in Section 134 (5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairsprofit/loss and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing 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 accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the standalone financial statements the Management andBoard of Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.
The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Standalone FinancialStatements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
l Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
l Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to standalone financialstatements in place and the operating effectiveness of such controls.
l Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures in the standalone financialstatements made by the Management and Board of Directors.
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 there lated 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.
However future events or conditions may cause the Company to cease tocontinue as a going concern.
l Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope andtiming of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order2016("the Order") issued by the Central Government in terms of Section 143 (11) ofthe Act we give in the"Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. (A) As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books; c) Thestandalone balance sheet the standalone statement of profit and loss (including othercomprehensive income) the standalone statement of changes in equity and the standalonestatement of cash flows dealt with by this report are in agreement with the books ofaccount;
d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act;
e) On the basis of the written representations received from thedirectors as on March31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed asa director in termsof Section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".
(B) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 as atMarch 31 2020 on its financial position in its standalone financial statements - ReferNote XX to the standalone financial statements;
ii. The Company did not have any long-term contracts for which therewere any material foreseeable losses. The Company does not have any derivative contracts;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company; and iv. Thedisclosures in the standalone financial statements regarding holdings as well as dealingsin specified bank notes during the period from November 8 2016 to December30 2016 havenot been made in these financial statements since they do not pertain to the financialyear ended March 31 2020.
(C) With respect to the matter to be included in the Auditors' Reportunder Section 197(16):
In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section197 of the Act. The Ministryof Corporate Affairs has not prescribed other details under Section 197(16)which arerequired to be commented upon by us.
|Place: Thiruvananthapuram |
|Date: 26-06-2020 |
Annexure A to the Independent Auditors' Report - March 31 2020
With reference to the Annexure A referred to in the IndependentAuditors' Report to the members of the Company on the standalone financial statements forthe year ended March 312020 we report the following:
a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment andinvestment properties.
b) The Company has a regular programme of physical verification of itsproperty plant and equipment and investment properties by which the property plant andequipment and investment properties are verified by the management according to a phasedprogramme designed to cover all the items over a period of three years. In our opinionthis periodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. In accordance with the policy the Company hasphysically verified certain property plant and equipment during the year and we areinformed that no material discrepancies were noticed on such verification and the samehave been dealt with in the books of accounts.
c) The title deeds of all the immovable properties (which are includedunder the Note 2 - 'Property plant and equipment') are held in the name of the Companyexcept for the land pending transfer (refer note 2.1).
II. The inventory has been physically verified by the management duringthe year. In our opinion the frequency of such verification is reasonable. Thediscrepancies noticed on verification between the physical stocks and the book recordswere not material and have been dealt with in books of account.
III. According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under Section189 of the Companies Act2013 ('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 theregister maintained 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 explanationsgiven to us the Company has not accepted deposits as per the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder. Accordingly paragraph 3 (v) of theOrder is not applicable to the Company.
VI. We have broadly reviewed the books of accounts maintained by theCompany pursuant to the rules prescribed by the Central Government for the maintenance ofcost records under Section 148(1) of the Act and are of the opinion that prima facie theprescribed accounts and records have been made and maintained.
VII. The Company is regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income-tax sales-tax goods andservices tax service tax duty of customs duty of excise value added tax cess andother material statutory dues as applicable with the appropriate authorities. Furtherno undisputed amounts payable in respect thereof were outstanding at the year-end for aperiod of more than six months from the date they became payable.
VIII. According to the information and explanations given to us theCompany has no loans or borrowings to any financial institution or a bank or any dues todebenture-holders during the year. The Company did not have any outstanding loans orborrowings from government during the year.
IX. The Company the company has made preferential issue of 45 Lakhsnumber of share warrants in the year
2019-2020out of which 22.5 Lakhs number of shares of face value Rs. 5/-at a premium of Rs. 42.50/- has been allotted during the year thereby raising Rs. 956.25Lakhs. Other than this the company did not raise moneys by way of initial public offer orfurther public offer (including debt instruments).
X. During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of material fraud by the Company or on the Company by its officers oremployees noticed or reported during the year nor have we been informed of any such caseby the management.
XI. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has paid / provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.
XII. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company and the Nidhi Rules 2014 are notapplicable to it. Accordingly paragraph 3 (xii) of the Order is not applicable to theCompany.
XIII. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with Sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone financial statements asrequired by applicable Ind AS.
XIV. During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures otherthan as disclosed in clause IX above. In our opinion the company has complied with thecompany has complied with the requirement of section 42 of the Companies Act 2013.
XV. According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not entered into anynoncash transactions with directors or persons connected with them. Accordingly paragraph3 (xv) of the Order is not applicable to the Company.
XVI. In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is notapplicable to the Company.
|Place: Palakkad |
|Date: 26-06-2020 |
Annexure B to The Independent Auditor's Report - March 31 2020
Report on the Internal Financial Controls with reference to theaforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013 ("the Act")
(Referred to in paragraph (A)(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)
We have audited the internal financial controls with reference tostandalone financial statements of Rubfila International Limited (RIL) ("theCompany") as of March 31 2020 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.
In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at March 31 2020 based on theinternal financial controls with reference to standalone financial statements 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 (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal controlswith reference to standalone financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls with respect to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with respect to standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with respect to standalone financial statements included obtaining anunderstanding of internal financial controls with respect to standalone financialstatements assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors' judgement including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system with reference to standalone financial statements.
Meaning of Internal Financial Controls with reference to StandaloneFinancial Statements
A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements include those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2)provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of un authorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.
Inherent Limitations of Internal Financial Controls with referenceto Standalone Financial Statements Because of the inherent limitations of internalfinancial controls with reference to standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls with reference to standalone financialstatements to future periods are subject to the risk that the internal financial controlwith reference to standalone financial statements may become inadequate because of changesin conditions or that the degree of compliance with the policies or procedures maydeteriorate.
For Cyriac & Associates
Firm No.014033 S
Mem No. 230039.