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INDEPENDENT AUITORS REPOKT
The Member of
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Rasoya Proteins Limited (He Company!), which comprise the Balance Sheet as at March 31,2016, the Statement of profit and Loss, the Cash Row Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management Responsibility for the Standalone financial Statements
The Company Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (He Act of) with respect to the preparation of these standalone financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditors ‘ s responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
W e have taken into account the provisions of the Act and the Rules made there under including the accounting standards and matters which are required to be included in the audit report.
W e conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company Directors, as well as evaluating the overall presentation of the financial statements.
W e believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Basis for Qualified Opinion
a) During the year, the company has written off trade receivable to the extent of Rs. 197.91 crores. W e are not completely satisfied about the write off of these trade receivables without the company having taken proper recovery efforts or legal action.
b) During the year, the company has written off stock worth Rs. 92.82crores. However, subsequently the company has sold the stock at scrap value, proceeds of which are shown under miscellaneous receipts. However, we cannot comment on the quality of the stock since there was no appropriate certification from any outside agency regarding such stock.
c) Statement / confirmation for the bill discounting facility taken by the company for Rs. 19.99 crores from Bank of Baroda, cash credit facilities from State Bank of India for Rs. 68.32crores and secured loan taken from a ISBF Outstanding for Rs. 5crores was not made available for verification and the same is subject to confirmation from the respective companies.
d) As per the accounting policy of the company and as per the Accounting Standard -11 The Effects of Changes in Foreign Exchange rates; the exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the Company monetary items at the closing rate are recognized as income or expense in the period in which they arise. However, the company has not recognized exchange gain of Rs. 41 crores on account of advance given to a subsidiary company.
e) The company in contravention of section 138oftheCompaniesAct,2013hasnotappointed any internal auditor with regards to the internal audit of the company. A so, the company has not appointed any cost auditor for the year under review which is contravention of sub section (2) of section 148 of the Companies Act, 2013.
f) Attention of the members is invited to note no. 30regarding the financial statements of the Company having been prepared on a going concern basis, notwithstanding the fact that its net worth is completely eroded due to cash losses in previous and the year under review, inability to pay bank debts, substantial write offs of trade receivables and stock. The appropriateness of the said basis is in dependent on the Company ability to infuse requisite funds for meeting its obligations.
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2016, and its loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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 best of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, except for the effect of the matters described in paragraph for Basis of Qualified Opinion above, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Row Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, except for the effect of the matters described in paragraph for Basis of Qualified opinion above, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Art, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2016from being appointed a said director in terms of Section 164 (2) of the Art.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A
(g) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2016onitsfinancial position in litigations financial statements as referred to in Note No. 31 to the financial statements.
ii. The Company has made provision as at March 31,2016, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31,2016.
2. As required by the Companies (Auditor Report) Order, 2016) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Art (hereinafter referred to as the order), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3and 4of the order.
For Ms. V.N. Bhuwania & Co.,
Firm Fteg. No.: 101482W
pace: Nagpur V.N. Bhuwania
Date : May 30,2016 Proprietor