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Rushil Decor Ltd.

BSE: 533470 Sector: Others
NSE: RUSHIL ISIN Code: INE573K01017
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OPEN 284.25
PREVIOUS CLOSE 285.95
VOLUME 1971
52-Week high 319.00
52-Week low 68.00
P/E 43.06
Mkt Cap.(Rs cr) 542
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 284.25
CLOSE 285.95
VOLUME 1971
52-Week high 319.00
52-Week low 68.00
P/E 43.06
Mkt Cap.(Rs cr) 542
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rushil Decor Ltd. (RUSHIL) - Auditors Report

Company auditors report

To the Members of RUSHIL DECOR LIMITED

REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

Opinion

We have audited the accompanying standalone Ind AS financial statements of M/s RUSHILDECOR LIMITED (''the Company") which comprise the standalone balance sheet as at31st March 2020 and the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone financial statementsincluding a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 (the Act) in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting standards (Ind AS) specified under section 133 of the Act ofthe state of affairs (financial Position )of the Company as at 31st March 2020 and itsProfits (financial performance including other comprehensive income) its Cash flows andchanges in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act.

Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the standalone Ind AS Financial Statements section ofour 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 the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Emphasis of Matter

We draw attention to Note 52 in the accompanying standalone Ind AS Financial statementsof the Company which describes the management's assessment of the likely impact ofuncertainties related to outbreak of COVID 19 global pandemic on the operations of theCompany.

Our opinion is not modified on the above matters.

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 financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

Key Audit Matters:

1. Revenue Recognition

Refer Note 49 to the standalone Ind AS financial statements

Description of Key audit Matter Our response and results
Our key audit procedures to assess the recognition of revenue on sale of goods included the following:
Revenue of the company comprises of sale of industrial and decorative laminates and sale of medium density fiber boards (plane and pre laminated) to its domestic and international customers. The company sells its products through a network of distributors and dealers in the relevant markets and a part of the sales is also made as institutional sales/project sales directly to the end use customers. • We assessed the appropriateness of the Company's revenue recognition policies including those related to discounts and incentives;
Revenue recognition is a significant audit risk across the company. Specifically there is a risk that revenue is recognized on sale of goods before the control in the goods is transferred. • We obtained an understanding of process and assessed the design implementation and operating effectiveness of management's key internal controls in relation to revenue recognition from sale of goods. We also tested the Company's controls over timing of revenue recognition;
• We also tested on a sample basis whether specific revenue transactions around the year end had been recognized in the appropriate period on the basis of the terms of sale of the contract particularly with reference to the transfer of control in the goods in question with regard to the year end transactions.
• We inspected key customer contracts/ purchase orders to identify terms and conditions related to acceptance of goods and the right to return and assessing the Company's revenue recognition policies with reference to the requirements of the prevailing accounting standards;
2. Delay in commissioning of the Andhra pradesh MDF project:
Description of Key audit Matter Our response and results
The company is in the process of implementing a Greenfield Project involving setting up of a plant for manufacture of thick as well as thin MDF at Achutapuram in Andhra Pradesh with an installed capacity of manufacture of 800 CBM per day of MDF Boards. This project was earlier scheduled to be commissioned before 31.03.2020. However on account of the impact of Covid-19 Pandemic in the early part of last quarter of FY 2019-20 in countries like Germany and China where the suppliers of the principal equipments are located there were delays in the nature of last mile delays in commissioning of the said project and now as informed by the company the commissioning has been deferred to the next fiscal year and the said project is likely to be commissioned somewhere in the last quarter of fiscal year 2020-21. As a result the CWIP as of 31.03.2020 comprising of Rs 338.47 crores represents the capital outlay incurred on this project but which has not been capitalised due to this reason and has been carried as capital work in progress. Implementation of a major Greenfield project has significant risks more particularly there is a risk of cost overrun and also delay in generation of revenues expected out of this project. 1. We assessed the appropriateness of company's capitalization policies including those relating to capitalization of project related expenses.
2. We obtained an understanding of the principal reasons resulting into the delay. We also inspected the key loan agreements of the lenders so as to judge the possibility of deferment of the loan instalments matching with the delay in commissioning of the project more particularly relating to the correspondences/communications with the key suppliers of machinery and equipments who were not in a position to deploy their engineers for the final commissioning testing and commencement of production - more particularly the key German supplier who also sited force majeure as a reason for their inability for this purpose.

Information other than the Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone Ind AS financial statements and our auditor's report thereon.

Our opinion on the Standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. 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.

Responsibilities of Management and Those Charged with Governance for the Standalone IndAS Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the state of affairs (financialposition)Profit or loss(financial performance including other comprehensive income)changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards ('IndAS') specified under section 133 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate 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 standalone Ind AS financial statements that give atrue and fair view and are free from material misstatement whether due. to fraud orerror.

In preparing the standalone Ind AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 Standards 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 standalone Ind AS financial statements

As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone Ind AS financial statement or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's 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 suchcommunication.

Report on Other Legal and Regulatory Requirements

1. 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. The remuneration paidto any director is not in excess of the limit laid down under section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

2. 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 Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

3. As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit

b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books

c. The standalone Balance Sheet the standalone Statement of Profit and Loss includingother Comprehensive Income standalone Statement of Changes in Equity and the standaloneStatement of Cash Flow dealt with by this Report are in agreement with the books ofaccount.

d. In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards specified under section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.

e. On the basis of written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the Directors isdisqualified as on March 312020 from being appointed as a director in terms of Section164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the company's internal financial control overfinancial reporting.

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014as 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 Ind AS Financial Statements (Refer Note No 36 to the StandaloneInd AS Financial Statements.)

II. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

III. During the year there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For Parikh & Majmudar
Chartered Accountants
Firm Registration No.: 107525W
(C.A (Dr) Hiten M. Parikh)
Partner
Membership No. 040230
UDIN:20040230AAAAFV7471
Place: Ahmedabad
Date: 30th July 2020

ANNEXURE A to the Independent Audit Report of Even Date to the Members Of Rushil DecorLtd: on the standalone Ind as Financial Statements for the Year Ended 31St March 2020

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) According to the information and explanations given to us the property plant andequipment. are verified in a phased manner by the management during the year which inour opinion is reasonable having regard to the size of the Company and nature of itsassets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) As explained to us the inventories have been physically verified by themanagement at reasonable intervals during the year. The discrepancies noticed onverification between physical stocks and the books of accounts were not material.

(iii) The company has not granted any loans secured or unsecured loans to Companiesfirms Limited Liability Partnership or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (the Act). Accordingly the provisions ofclause 3(iii) (a) (b) and (c) of the Order are not applicable to the Company.

(iv) According to the information and explanations given to us the company has notmade any investment or given loans during the year. Accordingly paragraph 3(iv) of theorder is not applicable.

(v) The Company has not accepted any deposits from the public during the year underreview.

(vi) As explained to us the Central Government has not prescribed the maintenance ofCost records under sub section (1) of section 148 of the companies Act 2013.

(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 income-taxsales tax value added tax duty of customs duty of excise service tax Goods &Service Tax cess and other material statutory dues have been regularly deposited duringthe year by the Company with the appropriate authorities. As explained to us the Companydid not have any dues on account of employees' state insurance.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax value added tax duty ofcustoms duty of excise service tax Goods & Service Tax cess and other materialstatutory dues were in arrears as at 31ST March 2020 for a period of more than six monthsfrom the date they became payable.

(b) According to the information and explanations given to us there are no materialdues of sales tax service tax Goods & Service Tax and value added tax and Incometax which have not been deposited with the appropriate authorities on account of anydispute However according to information and explanations given to us the followingdues of duties of Custom and Duty of Excise have not been deposited by the company onaccount of Dispute:

Nature of Statues Nature of Dues Amount (In Rs) (net of payments) Period to which the amount relates Forum where dispute is pending
Central Excise Act1944 Excise Duty Interest& Penalty 1320210/- April 2015 to Feb 2016 Custom Excise & Service Tax Appellate Tribunal Ahmedabad
Central Excise Act1944 Excise Duty Interest& Penalty 7212185/- up to Sept-2012 Custom Excise & Service Tax Appellate Tribunal Ahmedabad
The Customs Act 1962 Custom Duty with Interest & Penalty 2255536/- with Interest 500000/- Penalty FY 2014-15 Custom Excise & Service Tax Appellate Tribunal Ahmedabad

(viii) According to information & explanations given to us the company has notdefaulted in repayment of its dues to Banks or Financial institutions or Government. Thecompany does not have any borrowings from debenture holders.

(ix) According to the information & explanations given to us the Company did notraise any money by way of initial public offer or further public offer (including debtinstruments) during the year under review. However the term loans raised during the yearhas been applied for the purpose for which they were raised.

(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.

(xi) According to the information and explanations give 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 the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(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 standalone financial statements as required by theapplicable Ind AS.

(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.

(xv) 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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For Parikh & Majmudar
Chartered Accountants
Firm Registration No.: 107525W
(C.A (Dr) Hiten M. Parikh)
Partner
Membership No. 040230
UDIN:20040230AAAAFV7471
Place: Ahmedabad
Date: 30th July 2020

ANNEXURE B to the Independent Auditor's Report of Even Date to the Members of RUSHILDECOR LIMITED on the Standalone Ind AS Financial Statements for the year ended on 31stMarch 2020

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")

In conjunction with our audit of the standalone Ind AS financial statements of M/sRUSHIL DECOR LIMITED ("the Company") as at and for the year ended 31st March2020 We have audited the internal financial controls over financial reporting of thecompany as of that date.

Management's Responsibility for Internal Financial Controls

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 issued by the Institute of Chartered Accountants of India ('ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of the company's 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 Act.

Auditor's' Responsibility

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 Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlsover financial reporting and the Guidance Note issued by ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial 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 system 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.

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 systemover financial reporting.

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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations 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

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.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020

based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote issued by the ICAI.

For Parikh & Majmudar
Chartered Accountants
Firm Registration No.: 107525W
(C.A (Dr) Hiten M. Parikh)
Partner
Membership No. 040230
UDIN:20040230AAAAFV7471
Place: Ahmedabad
Date: 30th July 2020

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