The Members of
Sree Rayalaseema Hi-Strength Hypo limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements ofSree Rayalaseema Hi- Strength Hypo Limited (the Company') which comprise theBalance Sheet as at March 31 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year ended on that date and a summary of the significant accounting policies andother explanatory information (here in after referred to as the 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 (the Act') in the manner so requiredand give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended (Ind AS') and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021the profit and total comprehensive income changes in equity and its cash flows for theyear ended on that date.
Basis for opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone financial statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the 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. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter ||Auditor's Response |
|1 Revenue Recognition ||Principal Audit Procedures |
|The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. ||We reviewed the Company's implementation of Ind AS 115 including recognition of the effect on opening equity and changes to procedures accounting guidelines disclosures and systems to support correct revenue recognition. |
|Revenue from sale of goods is recognized when control of the products being sold is transferred to our customer and when there are no longer any unfulfilled obligations. ||We reviewed and discussed the accounting policy including the key accounting estimates and judgements made by management. |
|The application of the new revenue accounting standard involves certain significant judgements and estimates made by the management including identification of distinct performance obligations determination of transaction price of the identified performance obligations determination of transaction price the appropriateness of the basis used to measure revenue recognized over a period. ||We tested the relevant internal controls used to ensure the completeness accuracy and timing of revenue recognised. |
|Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur. Accumulated expenses are used to estimate provisions of discounts rebates. ||We read a sample of contracts to assess whether the method for recognition of revenue was relevant and consistent with Ind AS 115 and had been applied consistently. |
|Refer note 2.12 of the financial statements. Principal Audit Procedures ||We focused on contract classification allocation of income and cost to the individual performance obligations and timing of transfer of control. |
| ||We evaluated the significant judgements and estimates made by management in applying accounting policy to sample of contracts and we obtained evidence to support them including contractual agreements delivery records. |
| ||We also considered the historical outturns of estimates used in prior periods. |
| ||We applied Audit Techniques to establish whether any revenue has been recognized where no corresponding accounts receivable or cash has been recorded in the general ledger. |
Information Other than the Standalone financial statements andAuditor's Report Thereon
The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the standalone financial statements and our auditor's 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 statements ourresponsibility 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 during the course of our audit or otherwise appears to bematerially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding 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 the accuracy and completeness ofthe accounting 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 management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the 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 financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also :
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 controls.
Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's Report. However future events or conditions maycause the Company to cease to continue as a going concern.
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.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing 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 auditor's 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 (Auditor's Report) Order 2016(the Order') issued by the Central Government in terms of Section 143 (11) of theAct we give in Annexure-A a statement on the matters specified in paragraphs 3 and 4 ofthe Order.
2. As required by Section 143(3) of the Act based on our audit wereport that :
a) We have sought and obtained all the information and explanationswhich to thebest of 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 beenkept by the Company so far as it appears from our examination of those books.
c) the Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
e) On the basis of the written representations received from thedirectors as on March 312021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312021 from being appointed as a director in termsof Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in Annexure-B'. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial
3. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended 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 itsfinancial position in its financial
ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the company.
4. With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of amendments to section 197(16)of the Act:
In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act. The remuneration paidto any director is not in excess of the limit laid down under Section 197 of the Act.
Annexure A to Independent Auditors' Report
With reference to Annexure A as referred to in paragraph 1 underReport on Other Legal and Regulatory Requirements' section of our report to theMembers of the company on the standalone financial statement for the year ended 31 March2021 we report the following:
|Ref.to CARO ||Report by Independent Auditors |
|1 3(i) ||Fixed Assets |
|3(i)(a) ||The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information. |
|3(i)(b) ||As explained to us all the fixed assets have been physically verified by the management in a phased periodical manner which in our opinion is reasonable have regard to the size of the Company and nature of its assets no material discrepancies were noticed on such verification. |
|3(i)(c) ||According to the information and explanations given to us and the records examined by us and based on the examination of sale deeds conveyance deeds encumbrance certificates verified by us we report that the title deeds comprising all the immovable properties of lands buildings which are free hold are in the name of the company as at the balance sheet date. |
|Particulars of immovable property location & other details ||Gross block as at the Balance sheet date ||Net Block as at the balance sheet date ||Remarks |
|1 Land located at GondiparlaKurnool Survey No. 16 admeasuring 2.02 acres ||237576 ||237576 ||As per the information given to us this was received in scheme of amalgamation. Change of title is under process. |
|2 Land located at manjawadi Laxmapuram Tamilnadu Survey No. 38/1A 38/5A 38/ 3A1 143RAc admeasuring 6.340 acres ||357772 ||357772 ||As per the information given to us this was received in scheme of amalgamation. Change of title is under process. |
|3 Land located at kaluvekkam Tiruporur Tamilnadu Survey No. 245-2B 217 admeasuring 3.0 acres ||1492627 ||1492627 ||As per the information given to us this was received in scheme of amalgamation. Change of title is under process. |
|4 Land located at Konapapapeta U.Kothapally Mandal East Godavari DistrictSurvey No. 263/2 263/ 3admeasuring 16.60 acres ||2330990 ||2330990 ||As per the information given to us this was received in scheme of amalgamation. Change of title is under process. |
|5 Land located at NenamVillage East Godavari District Survey No. 306 301 301/1301/2 302/2 admeasuring51.858 acres ||4254639 ||4254639 ||As per the information given to us this was received in scheme of amalgamation. Change of title is under process. |
|Ref.to CARO ||Report by Independent Auditors |
|2 3(ii) ||Inventories |
| ||As explained to us the inventories has been physically verified by the management during the year. In our opinion the frequency of such verification is reasonable. The Company has maintained proper records of inventory. There were no material discrepancies noticed on verification between the physical stock and the book records. |
|3 3(iii) ||Loans to parties covered by Sec.189 of the Companies Act2013 (the Act' ) |
| ||According to the information and explanation given to us the Company has not granted any loans secured or unsecured to body corporate firms Limited Liability Firms or other parties covered in the register required to be maintained under section 189 of the Act. Accordingly the provisions of the clause 3 (iii) of the Order are not applicable to the Company for the year under review. |
|4 3(iv) ||Loans guarantees securities to and investments in other companies |
| ||In our opinion and according to the information and explanation given to us the company has no transactions for compliance with the provisions of Sections 185 and complied with the provisions of Section 186 of the Act in respect of investments made and loans given. |
|5 3(v) ||Acceptance of deposits |
| ||In our opinion and according to the information and explanations given to us the Company has not accepted any deposits during the year as per provisions of Section 73 or 76 of the Act or any other relevant provisions of the Act and the relevant Rules framed there under. Accordingly the provisions of the Para 3 (v) of the Order are not applicable to the Company for the year under review. |
|6 3(vi) ||Maintenance of cost records |
| ||The maintenance of cost records as specified by the Central Government u/s 148(1) of the Companies Act2013(The Act') is applicable to the company for the Financial Year ending 31st March2021. We have broadly verified the cost records maintained by the company u/s 148(1) of the Act and we are of the opinion that prima facie the prescribed accounts and cost records have been maintained. |
|7 3(vii) ||Statutory Dues |
|3(vii)(a) ||According to the information and explanations given to us and on the basis of our examination of the records of the Company amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident Fund Employee's State insurance Income Tax Goods and Service Tax duty of Customs Cess and other material statutory dues have been generally deposited during the year by the Company with the appropriate authorities. According to the information and explanations given to us no undisputed amounts payable in respect of Provident Fund Employees' State Insurance Income tax Goods and Service Tax duty of Customs Cess and other material statutory dues in arrears as at March 31 2021 for a period of more than six months from the date they became payable. |
|3(vii)(b) ||According to the information and explanation given to us there are no material dues of statutory dues of Income tax sales tax Service tax Goods and Service tax Customs duty Excise duty Value added tax cess and other dues that have not been deposited by the Company on account of any disputes however the following dues of excise duty service tax and income tax have not been deposited by the company on account of pending disputes as detailed here under. |
|Name of the statute ||Nature of dues ||Amount Involved in the SCN ||Forum where dispute is pending ||Period to which amount is related |
|C.No.V/01/ 115/2015-16- CE- Audit-G-I dtd.23.02.2017 issued by Addl. Commr TPT ||Wrong availment of Cenvat Credit in respect of various Input Services for the period Apriil-15 to March-2016 ||Rs.308243/- ||Pending at Addl. Commissioner Tirupati. ||2015-2016 |
|2 C.No.V/01/ 115/2015-16- CE- Audit-G-I dticrmiDi^cm// 01/115/2015- 16-CE- Audit- G - I dtd.20.03.2017 issued by Asst Commissioner Tirupati ||Wrong availment of Cenvat Credit in respect of job work for the period Feb-15 to March-2016 ||Rs.121707/- ||(SCN issued for Rs.171676/- but an amount of Rs.49969/- dropped by A.C Kurnool vide OIO No.1/ 2 0 1 8 ( C . E ) Dt:31.03.2018 Pending as CESTAT Hyderabad . ||2015-2016 |
|8 3(viii) ||Defaults in repayments to Financial Institutions/Banks/ Debenture holders |
| ||In our opinion and according to the information and explanation given to us the Company has not defaulted in the payment/ repayments of loans or borrowings to the banks. |
|9 3(ix) ||Initial public offer/further offer |
| ||In our opinion and according to the information and explanation given to us the company during the year has not raised any monies by the way of any initial public offer (IPO) or further public offer of securities (including debt instruments) and hence reporting for IPO or further public offer under Para 3(ix) of the Order is not applicable to the company and the term loans availed during the year have been utilised for the purpose they were raised. |
|10 3(x) ||Frauds by or on the company |
| ||In our opinion and according to the information and explanation given to us no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit. |
|11 3(xi) ||Managerial Remuneration |
| ||In our opinion and according to the information and explanation professional opinon given to us based on the examination of the records of the Company the company has paid/provided managerial remuneration in accordance with the requisite approvals and compliances mandated by the provisions of section 197 read with Schedule V to the Act. |
|12 3(xii) ||Nidhi company |
| ||In our opinion and according to the information and explanation given to us the company is not a Nidhi Company as prescribed under Section 406 of the Act and hence paragraph 3(xii) of the Order is not applicable to the company. |
|13 3(xiii) ||Transactions with Related parties |
| ||In our opinion and according to the information and explanation given to us and based on our examination of the records of the Company all transactions with related parties are in compliance with provisions of section 177 and section 188 of the Act where applicable and the details of transactions as required by the applicable Indian Accounting Standards have been disclosed in the financial statements. |
|14 3(xiv) ||Preferential allotment u/s 62 or private placement u/s 42 of the Act |
| ||According to the records of the Company the Company has not made any preferential allotment. The Company has not made private placement of shares or fully /partly convertible debentures U/s 42 of the Act during the year under report for such Private Placement. |
|15 3(xv) ||Non-cash transactions with directors u/s 192 of the Act |
| ||In our opinion and according to the information and explanation given to us and based on our examination of the records of the Company the company has not entered during the year into any non-cash transactions with its Directors or persons connected to its Directors and hence provisions of Sec 192 of the Act and paragraph 3(xv) of the Order are not applicable to the company. |
|16 3(xvi) ||Registration u/s 45-1A of Reserve Bank of India Act1934 |
| ||According to the information and explanation given to us the company is not required to be registered under section 45-1A of the Reserve bank of India Act 1934 and hence paragraph 3(xvi) of the Order is not applicable to the company. |
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2(f) under Report on Other Legal andRegulatory Requirements' section of our report to the Members of Sree RayalaseemaHi-Strength Hypo Limited of even date)
Report on the Internal Financial Controls Over Financial Reportingunder Para (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (theAct')
We have audited the internal financial controls over financialreporting of Sree Rayalaseema Hi-Strength Hypo Limited ("the Company") as ofMarch 31 2021 in conjunction with our audit of the financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishingand maintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective 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 Act 2013.
Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting 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 auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures 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 asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us 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 March 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For T. Adinarayana & Co. |
| ||Chartered Accountants |
| ||Regn. No. 000041S Sd/- |
| ||Y. Pullarao |
| ||Partner |
|Place: Kurnar ||Membership No. 25266 |
|Date : June 30 2021 ||UDIN:21025266AAAADB3971 |