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Shree Rama Multi-Tech Ltd.

BSE: 532310 Sector: Industrials
NSE: SHREERAMA ISIN Code: INE879A01019
BSE 00:00 | 14 May 12.09 -0.40
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NSE 00:00 | 14 May 12.10 -0.45
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OPEN 12.71
PREVIOUS CLOSE 12.49
VOLUME 11305
52-Week high 14.00
52-Week low 3.65
P/E 5.40
Mkt Cap.(Rs cr) 77
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12.71
CLOSE 12.49
VOLUME 11305
52-Week high 14.00
52-Week low 3.65
P/E 5.40
Mkt Cap.(Rs cr) 77
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Shree Rama Multi-Tech Ltd. (SHREERAMA) - Auditors Report

Company auditors report

To

The Members of

Shree Rama Multi-Tech Limited

Report on the Audit of the Standalone Financial Statements

Quali ed Opinion

We have audited the accompanying standalone financial statements of Shree RamaMulti-Tech Limited (the ‘Company') which comprise the Balance Sheet as at March31 2020 and the statement of Profit and Loss (including other comprehensive income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the matters described in the basis for qualified opinionpara below the aforesaid standalone financial statements give the informationrequired by the Companies Act 2013 (the "Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder Sec. 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2020 and its profit totalcomprehensive income the changes in equity and its cash flows for the year then ended onthat date.

Basis for Qualified Opinion

a. The Company has made borrowings in the form of loans debentures etc. in earlieryears which are under settlement. During the year the Company has not provided interest ofRs. 854.72 Lakhs on such outstanding borrowings. The accumulated interest on suchborrowings not provided for past several years upto 31/3/2020 is Rs. 15537.93 Lakhs.

If the provision for interest is made the profit for the current year would havedecreased by Rs. 854.72 Lakhs and accumulated losses upto 31/3/2020 would have increasedby Rs. 854.72 Lakhs and accordingly net profit for the current year would have been1269.10 Lakhs and accumulated losses upto 31/3/2020 would have been Rs. 45390.39 Lakhs(Refer Note No. 51.6 of financial statements).

b. Non-consolidation of accounts of Shree Rama (Mauritius) Limited (Wholly OwnedSubsidiary) as per Section 129 of the Act & Ind AS 110 issued by the Institute ofChartered Accountants of India for the reasons specified in Note No. 40 of the financialresults.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by Institute ofChartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the standalone financial statements under the provisions of theAct and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our opinion on the standalone financial statements.

Emphasis of Matter

a. We draw attention to Note No. 51.5 of the financial statements. The Hon'ble HighCourt of Gujarat has passed an order dated 20/2/2020 whereby the O.J. Appeal led by theCompany against the order of single bench dated 15/7/2015 of Hon'ble High Court of Gujaratin respect of Scheme of Compromise and Arrangement u/s 391(1) of Companies Act 1956 hasbeen dismissed. The Company is under the process of ling the review petition.

b. We draw attention to Note No.41 of the financial statements which describes thatthe potential impact of COVID-19 pandemic on the operations and financial statements ofthe company is dependent on future developments which are uncertain.

Our opinion is not modified in respect of 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 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. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matter Auditor's Response
Physical Veri cation of Inventories Principal Audit Procedures
The company's inventories include raw materials work in progress nished goods and stores & spares. We have carried out alternative audit procedures to obtain sufficient appropriate audit evidence regarding the existence and condition of inventories which include the followings:
The company has adequate inventory records and internal control systems over inventory movements. The company has established procedures to carry out physical inventory during the year and at the year-end. Evaluated the control design in respect of physical inventory veri cation process and veri ed whether such controls have operated effectively during veri cation process.
However due to various restrictions imposed under COVID 19 outbreak physical verification could not be carried out at the year-end but the same was carried out subsequent to the year- end. At the time of such subsequent veri cation it was impracticable for us as auditors to physically attend the inventory counting and hence alternative audit procedures were performed. Obtained sufficient and appropriate audit evidences of existence and condition of physical inventories as carried out by the management during the year and subsequent to the year-end.
Rollback procedures were applied to the inventories veri ed by the company at subsequent of the year-end to arrive inventories at the year-end.
Litigations & Uncertain Tax Positions Principal Audit Procedures
The Company has material uncertain tax & legal positions including matters under dispute for income tax which involves significant judgment to determine the possible outcome of these disputes. In order to get a suf cient understanding of litigations contingent liabilities and related provisions we have reviewed the process of identi cation quali cation and valuation implemented by Company's management for such disclosure/ accounting treatment through discussion with Company's legal and nance departments.
The identi cation of risks and litigations the valuation of provisions / disclosure of contingent liabilities for such risks and litigations constitute a key audit matter given the amounts involved and the high degree of estimate and judgment required by management.
We conducted a critical review of the internal analysis notes for the likelihood and potential impact of each risk examining the available procedural elements (letters claims judgments notifications etc.).
We have obtained details of status for each case/assessment from the lawyers/consultants involved to con rm our understanding of risks and litigations and assessed the adequacy of the amount of provisions accrued.
Reasonableness of carrying amount of assets held for sale Principal Audit Procedures
Assets held for sale carried at lower of book value and net realizable value which has been estimated using significant unobservable inputs including non-binding offers from and negotiations held with prospective buyers as a result of which fair value is sensitive to changes in input assumptions. Our audit procedures consisted of obtaining understanding evaluating management's assumptions relating to business projections and expectation of outcome of negotiations with prospective buyers.

Information other than Standalone 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 Board's Report including Annexuresto Board's Report but does not include the standalone financial statements and ourauditor's reports 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 identified above 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.

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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the

Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgement and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyor ensuring accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The 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 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 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 financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

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.

Obtain an understanding of internal financial 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 polices used and the reasonableness ofaccounting estimates and related disclosures made by the management.

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.

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.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be in uenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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 mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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 are necessary for the purpose 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) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report 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 read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the 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 31st March 2020 from being appointed as a director in terms of Section164(2) of the Act.

(f) With respect to the adequacy of 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 the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid/provided by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 on the financialposition of its financial statements (Refer Note No.51 to the financial statements);

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company except dividend mentioned in Note No.51.3(b).

For Chandulal M. Shah & Co.
Chartered Accountants
Firm Reg. No. 101698W
Place: Ahmedabad Arpit D. Shah
Date: 21/07/2020 Partner
Membership No. 135188
UDIN: 20135188AAAABQ6590

Annexure "A" to the Independent Auditors' Report

(Referred to in paragraph 1 under the heading ‘Report on Other Legal &Regulatory Requirements' of our report of even date to the standalone Ind AS financialstatements of the Company for the year ended March 31 2020)

i. In respect of Fixed Assets :

(a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;

(b) The Fixed Assets have been physically veri ed by the management in a phased mannerdesigned to cover all the items over a period of three years which in our opinion isreasonable having regard to the size of the company and nature of its business. Accordingto information and explanation given to us no material discrepancies were noticed on suchverification.

(c) The title deeds of immovable properties as disclosed in Note No. 2 on PropertyPlant and Equipment to the financial statement are mortgaged with lenders and as informedto us same are in the name of the company.

ii. The inventory has been physically veri ed by the management during the year. In ouropinion the frequency of such veri cation is reasonable. The Company has maintainedproper records of inventory. The discrepancies noticed on veri cation between the physicalstock and the book records were not material.

iii. According to information and explanation given to us the Company has not grantedany loans secured or unsecured to companies rms Limited Liability partnerships or otherparties covered in the Register maintained under section 189 of the Act. Accordingly theprovisions of clause 3 (iii) (a) to (C) of the Order are not applicable to the Company andhence not commented upon.

iv. In our opinion and according to the information and explanations given to us theCompany has not granted loan or made investment or given guarantee or provided security asprovided in the section 185 and 186 of the Companies Act 2013.

v. The Company has not accepted any deposits from the public within the meaning of thedirectives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 orany other relevant provisions of the Act and the relevant rules framed thereunder.

vi. We have broadly reviewed the books of accounts maintained by the Company pursuantto the Rules made by the Central Government for maintenance of cost records under section148 of the Act and are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. We have however not made a detailed examinationof the said records with a view to determine whether they are accurate or complete.

vii. According to information and explanations given to us in respect of statutory duesand on the basis of our examination of the books of accounts and records of the Company

(a) The company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-Tax Goods and Service TaxCustoms Duty Cess and any other statutory dues with the appropriate authorities.According to the information and explanations given to us no undisputed amounts payablein respect of the above were in arrears as at March 31 2020 for a period of more than sixmonths from the date on when they become payable.

(b) According to the information and explanations given to us there are no materialdues of Income Tax Goods and Service Tax and Value Added Tax which have not beendeposited with the appropriate authorities on account of any dispute except thefollowing:

Name of the Statute Nature of dues Amount (Rs. In Lakhs) Period to which the amount relates Forum where the dispute is ending
Income Tax Act 1961 Penalty Sec.271(1)(c) 331.07 A.Y.2002-03 ITAT-AHEMDABAD
453.46 A.Y.2003-04
291.98 A.Y.2004-05
71.27 A.Y.2009-10

viii. (i) The Company had defaulted in respect of past borrowing loans debentures etcfor which the company has led scheme of Arrangement and Compromise as mentioned in NoteNo.51.5 of the Notes on Accounts.

(ii) There is no current default in repayment of dues to Financial Institutions orbanks or debenture holders.

ix. According to the information and explanations given by the management the companyhas not raised moneys by way of initial public offer or further public offer includingdebt instruments and term Loans during the year. Accordingly the provisions of clause3(ix) of the Order are not applicable to the Company.

x. Based on the audit procedures performed for the purpose of reporting the true andfair view of financial statements and according to the information and explanations givenby the management we report that no fraud by the Company or on the company by its of cersor employees has been noticed or reported during the year.

xi. According to the information and explanations given by the management themanagerial remuneration has been paid or provided in due compliance of section 197 readwith Schedule V to the Companies Act;

xii. The Company is not a Nidhi Company. Hence the provisions of clause 3(xii) of theOrder are not applicable to the Company.

xiii. In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required under Ind AS 24 Related Party Disclosures specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2015.

xiv. According to the information and explanations given by the management the Companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly the provisions of clause3(xiv) of the Order are not applicable to the Company and hence not commented upon.

xv. According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim. Accordingly the provisions of clause 3(xv) of the Order are not applicable to theCompany and hence not commented upon.

xvi. In our opinion and according to information and explanations given to us theCompany is not required to be registered under section 45IA of the Reserve Bank of IndiaAct 1934 and accordingly the provisions of clause 3(xvi) of the Order are not applicableto the Company and hence not commented upon.

For Chandulal M. Shah & Co.
Chartered Accountants
Firm Reg. No. 101698W
Place: Ahmedabad Arpit D. Shah
Date: 21/07/2020 Partner
Membership No. 135188
UDIN: 20135188AAAABQ6590

Annexure "B" to the Independent Auditors' report

Report on the Internal Financial Controls under Clause (1) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Shree RamaMulti-Tech Limited ("the Company") as of March 31 2020 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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 company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these Standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting withreference to these Standalone financial statements was established and maintained and ifsuch controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's Judgment including theassessment of the risks of material misstatement of the financial statements whether dueto 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 with reference to these standalone financial statements.

Meaning of Internal Financial Controls over Financial Reporting with reference to thesestandalone financial statements

A company's internal financial control over financial reporting with reference to thesestandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purpose in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these standalone financial statements includes 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 withauthorizations of management and directors of the company and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting WithReference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with Reference to these 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 of anyevaluation of the internal financial controls over financial reporting With Reference tothese Standalone Financial Statements to future periods are subject to the risk that theinternal financial control over financial reporting With Reference to these StandaloneFinancial Statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies of procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting with Reference to these Standalone Financial Statements wasoperating effectively as on March 31 2020 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal controls stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reports issued by the Institute of Chartered Accountants of India.

For Chandulal M. Shah & Co.
Chartered Accountants
Firm Reg. No. 101698W
Place: Ahmedabad Arpit D. Shah
Date: 21/07/2020 Partner
Membership No. 135188
UDIN: 20135188AAAABQ6590

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