The Members of
Ruchi Infrastructure Limited
Report on the Standalone Financial Statements
We have audited the standalone financial statements of Ruchi Infrastructure Limited (theCompany) which comprise the balance sheet as at March 31 2020 and the statementof Profit and Loss (including other comprehensive income) statement of changes in equityand statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
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 Act in the manner so required and give a true and fair view in conformity withaccounting principles generally accepted in India of the state of affairs of the companyas at March 31 2020 and its loss (including other comprehensive income) the changes inequity and its cash flows 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 Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report.
We are independent of the Company in accordance with the Code of Ethics issuedby the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules there under and we have fulfilled ourother 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 financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
|Key Audit Matters ||Auditor's Response |
|Recoverability of Export Trade Receivable ||Audit Procedure |
|As at the year end March 31 2020 Trade receivable includes Export trade receivable amounting to Rs. 3981.27 lacs doubtful of recovery. Permission is pending with RBI for its write off. ||We have verified the documents filed by company with RBI and RBI has recommended to recover the dues. However company has made adequate provision for the same. |
|Adoption of Ind AS 116 Leases ||Our audit procedures on adoption of Ind AS 116include: |
|The Company has adopted Ind AS 116 which is effective from April 1 2019 and applied the standard to its leases using Modified Retrospective Approach. ||Assessed the Company's procedure and evaluation on the identification of leases. It was based on the contractual agreements and our knowledge of the business. We have also considered and evaluate there as on ableness of the discount rates applied in determining the lease liabilities; |
|Accordingly the Company has not restated comparative information instead the cumulative effect of initial applicable standard has been recognised as an adjustment to the opening balance of retained earnings as on April 1 2019. ||Assessed and tested controls in respect of the lease accounting standard (Ind AS 116); |
|Ind AS 116 introduces a new lease accounting model wherein lessees are required to recognize a right-of-use (ROU) asset and a lease liability arising from a lease on the balance sheet. The lease liabilities are initially measured bydiscounting future lease payments during the lease term as per the contract/ arrangement. ||Evaluated the method of transition and related adjustments as at April 1 2019: |
|Adoption of the standard involves significant judgments and estimates including determination of the discount rates and the lease term. ||Tested completeness of the lease by reconciling the Company's operating lease commitments to computing ROU asset and the lease liabilities. |
| ||On a statistical sample we performed the following procedures: |
| ||Assessed the key terms and conditions of each lease with the underlying lease contracts; and |
| ||Evaluated computation of lease liabilities and the key estimates such as discount rates and the lease term. |
| ||Assessed and tested the presentation and disclosures relating to Ind AS 116 including disclosures relating to transition. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's 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 during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 (the Act) with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the accounting Standards specified under section 133 of theAct.
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 implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessingthe Company'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.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
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 with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
a. Identify 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.
b. Obtain an understanding of internal financial controls 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 in place and the operating effectivenessof such controls.
c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
d. Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. 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.
e. Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone 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 audit findings including anysignificant deficiencies in internal control that we identify during our 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 financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or 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
As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143(3) of the Actwe 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.
c. The Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the books of account.
d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.
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 did not have any long term of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 32 to the financial statements;
ii. The Company did not have any long term contract including derivative contract forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
h. With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act 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 197 of the Act.
Annexure A to Independent Auditor's Report
Referred to in paragraph (1) under the heading of Report on Other Legal andRegulatory Requirements of our report of even date to the members of RuchiInfrastructure Limited on the standalone financial statements for the year ended 31 March2020.
i. In respect of its Fixed Assets : a. The Company is maintaining proper recordsshowing full particulars including quantitative details and situation of fixed assets. b.The company has a program of verification to cover all the items of fixed assets in aphased manner which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year and no material discrepancies havebeen noticed on such verification. In our opinion the frequency of verification isreasonable. c. According to the information and explanations given to us and on the basisof our examination of the records of the Company the title deeds of immovable propertiesare held in the name of the Company.
ii. In respect of its Inventories:
The inventories has been physically verified by the Management during the year. In ouropinion the frequency of verification is reasonable and no material discrepancies werenoticed. iii. According to the information and explanations given to us the Company hasgranted unsecured loans to two companies covered in the register maintained under section189 of the Companies Act 2013. The company has not granted any loans secured or unsecuredto firms LLPs or other parties covered in the register maintained under section 189 ofthe Companies Act 2013. In respect of the aforesaid loans granted :
a. The terms and conditions of the grant of such loans are not prejudicial to thecompany's interest;
b. The repayment of principal and receipts of interest is regular as stipulated.
c. There is no amount overdue for more than 90 days as on balance sheet date.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made and guarantee given. The company has not provided anysecurity in terms of section 185 and 186 of the Act.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from the public within the meaning of Section 73 to 76or any other relevant provisions of the Companies Act 2013 and the Rules framed thereunder. As informed to us no Order has been passed by the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any court or any other Tribunal.
vi. We have broadly reviewed the cost records maintained by the Company pursuant to therules made by the Central Government under sub-section (1) of Section 148 of the CompaniesAct 2013 and are of the opinion that prima facie the prescribed records have been madeand maintained. We have however not made a detailed examination of the cost records witha view to determine whether they are accurate or complete.
vii. In respect of Statutory dues :
a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including provident fund employee's state insurance incometax goods and service tax duty of customs cess and other statutory dues applicable toit with the appropriate authorities. There were no undisputed statutory dues in arrearsas at 31 March 2020 for a period of more than six months from the date they becamepayable.
b) According to the information and explanations given to us the dues of sales taxvalue added tax income tax service tax which have not been deposited with appropriateauthorities on account of any dispute are as follows :
|Name of the Statute ||Nature of Liability ||Amount ||Related Period ||Forum where dispute is pending |
|Sales Tax / VAT Acts ||Sales Tax /Vat ||4548.08 ||2009-2010 ||Gujarat VAT Tribunal |
|Sales Tax / VAT Acts ||Entry Tax ||70.54 ||2013-2014 ||The High Court Kolkatta |
|Sales Tax / VAT Acts ||Sales Tax /Vat ||126.88 ||2012-13 to 2015-16 ||The Commissioner Appeals Cuttack |
|Central Excise & Service Tax Act ||Service Tax ||260.76 ||2009-2010 to 2014-15 ||CESTAT New Delhi |
|Central Excise & Service Tax Act ||Service Tax ||145.89 ||2009-2010 2011-12 & 2012-13 ||The High CourtNew Delhi |
|Central Excise & Service Tax Act ||Service Tax ||104.41 ||2014-15 to 2016-17 ||The Commissioner Indore |
|Income Tax Act ||Income Tax ||5.78 ||2007-2008 to 2009-10 ||CIT ( Appeals) Mumbai |
|Income Tax Act ||Income Tax ||22.92 ||2016-17 ||CIT ( Appeals) Mumbai |
viii. According to the records of the company examined by us and as per the informationand explanations given to us the Company has not defaulted in repayment of loans andborrowings to a financial institution bank or government as on the balance sheet date.The Company has not issued any debenture. Further in view of the extension of timegranted vide a circular of Reserve Bank of India (RBI) RBI/2019-20/186 dated March 272020 and RBI/2019-20/244 dated May 23 2020 for the payment of interest and principal forterm loans falling due between March 1 2020 and May 31 2020 which is further extendedto August 31st 2020 the Company has availed the moratorium for payment of the aforesaiddues on term loans outstanding to South Indian Bank as at the year end. Accordinglyinterest of Rs.46.17 lacs and Principal of Rs. 187.50 lacs is deferred by bank.
ix. In our opinion and according to the information and explanations given to us thecompany has not raised money by way of initial public offer or further public offer(including debt instruments) and In our opinion and according to the information andexplanations given to us the company has not raised any term loan during the year.
x. According to the information and explanations given to us and to the best of ourknowledge no material fraud by the Company or on the company by the officers or employeeshas been noticed or reported during the year.
xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
xii. In our opinion and according to information and explanation given to us thecompany is not a Nidhi Company therefore the provision of para 3 (xii) of the Order isnot applicable to the company.
xiii. 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 financial statements as required by the applicableaccounting standards.
xiv. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year therefore the provision of para 3 (xiv) of the Order is not applicable to thecompany.
xv. In our opinion and according to the information and explanations given to us thecompany has not entered into any non-cash transactions with directors or persons connectedwith him during the year hence the provision of para 3 (xv) of the Order is notapplicable to the company.
xvi. The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 therefore the provision of para 3 (xvi) of the Order is notapplicable to the company for the year under audit.
Annexure B To the Independent Auditor's Report of even date on the Standalone FinancialStatements of Ruchi Infrastructure Limited Report on the Internal Financial Controls overFinancial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act2013 (the Act) We have audited the internal financial controls overfinancial reporting of RuchiInfrastructure Limited (the Company) as of March31 2020 in conjunction with our audit of the standalonefinancial statements of theCompany for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to respective company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the Guidance Note) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls over financialreporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2020 based on the criteriafor internal financial control over financial reporting established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.