To the Members of Raw Edge Industrial Solutions Limited Report on the
audit of Standalone Financial Statements
Opinion
I have audited the accompanying standalone financial statements of Raw
Edge Industrial Solutions Limited (‘the Company?), which comprise the balance
sheet as at 31st March 2023, the statement of profit and loss (including Other
Comprehensive Income), the Cash Flow Statement and the statement of Changes in Equity for
the year then ended, and notes to the financial statements, including a summary of the
significant accounting policies and other explanatory information.
In my opinion and to the best of my information and according to the
explanations given to me, the aforesaid standalone financial statements give the
information required by the companies Act,2013 ("the act") in the manner so
required and give a true and fair view in confirmity with accounting principles generally
accepted in India, of the state of affairs of the company as at March 31,2023 and its
profit and loss, changes in equity and its cashflows for the year ended on that date.
Basis of opinion
I have conducted my audit in accordance with standards on Auditing
specified under section 143(10) of the Act My responsibilities under those standards are
further described in the Auditors Responsibilities for the Audit of the Financial
statemements section of my report I am independent of the company in accordance with the
code of Ethics issued by the Institute of Chartered Accountants of India (ICA1) together
with ethical requirements that are relevant to my audit of financial statements under the
provisions of the companies Act, 2013 and the rules thereunder, and I have fulfilled my
other ethical responsibilities in accordance with these requirements and the Code of
Ethics. I believe that the audit evidence which 1 have obtained is sufficient and
appropriate to provide a basis for my opinion.
Key Audit Matters
I have determined that there are no key audit matters to communicate in
my report.
Management?s Responsibility for the Standalone Financial
Statements
The Company?s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to
the preparation of these standalone financial statements that give a true and fair view of
the financial position, financial performance. Changes in equity and cash flows of the
Company in accordance with the accounting principles generally accepted in India,
including the Indian 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 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.
In Preparing the financial statements, management is responsible for
assessing the companys ability to continue as a going concern, and using the going
concern basis of accounting unless the Board of Directors either intends to liquidate the
company or to cease operations, or has no realistic alternative but to do so.
The board of Directors are also responsible for overseeing the
companys financial reporting process. Auditors Responsibility
My objective is to obtain reasonable assurance about whether the
financial statements as a whole are free from material mistatement, whether due to fraud
or error, and to issue an auditors report that includes my opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with SAs, I exercise professional
judgment and maintain professional skepticism throughout the audit. I also:
• Identify and assess the risks of material misstatement of the
standalone financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for my opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in the circumstances. Under
section 143(3)(i) of the Companies Act, 2013, I am also responsible for expressing my
opinion on whether the company has adequate internal financial controls system in place
and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management?s use of the
going concern basis of accounting and, based on the audit evidence obtained, whether a
material uncertainty exists related to events or conditions that may cast significant
doubt on the ability of the company and its associates and jointly controlled entities to
continue as a going concern. If I conclude that a material uncertainty exists, I am
required to draw attention in my auditors report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify my opinion. My
conclusions is based on the audit evidence obtained up to the date of my auditor?s
report. However, future events or conditions may cause the Group and its associates and
jointly controlled entities to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
I communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that I identify during my
audit.
1 also provide those charged with governance with a statement that 1
have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought
to bear on my independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order, 2020 ("the
Order") issued by the Central Government of India in terms of sub-section (11) of
section 143 of the Act, I give in the "Annexure A", a statement on the matters
specified in the paragraph 3 and 4 of the order, to the extend applicable.
As required by section 143(3) of the Act, 1 report that:
(a) I have sought and obtained all the information and explanations
which to the best of my knowledge and belief were necessary for the purposes of my audit.
(b) In my opinion proper books of account as required by law have been
kept by the Company so far as it appears from my examination of those books;
(c ) The balance sheet, the statement of profit and loss and the Cash
flow statement dealt with by this Report are in agreement with the relevant books of
account;
(d) In my opinion, the aforesaid standalone financial statements comply
with the Indian Accounting Standards 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 the
directors as on 31st March 2023 taken on record by the Board of Directors, none of the
directors is disqualified as on 31st March 2023 from being appointed as a director in
terms of Section 164 (2) of the Act;
(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 my separate report in "Annexure B";
(g) With respect to the other matters to be included in the
Auditor?s Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in my opinion and to the best of my information and according to the
explanations given to me:
(i) The Company has no pending litigation which would impact its
financial position.
(ii) The Company did not have any long-term contracts including
derivatives contracts for which there were any material foreseeable losses.
(iii) There were no amounts which required to be transferred, to the
Investor Education and Protection Fund by the Company.
(iv) (a) The management has represented that, to the best of its
knowledge and belief, other than as disclosed in the notes to the accounts, no funds have
been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the company to or in any other person(s) or
entity(ies), including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall,
whether, directly or indirectly lend or invest in other persons or entities identified in
any manner whatsoever by or on behalf of the company ("Ultimate Beneficiaries")
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The management has represented, that, to the best of it?s
knowledge and belief, other than as disclosed in the notes to the accounts, no funds have
been received by the company from any person(s) or entity(ies), including foreign entities
("Funding Parties"), with the understanding, whether recorded in writing or
otherwise, that the company shall, whether, directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or
the like on behalf of the Ultimate Beneficiaries; and
(c) Based on audit procedures which we considered reasonable and
appropriate in the circumstances, nothing has come to their notice that has caused them to
believe that the representations under sub-clause (i) and (ii) contain any material
mis-statement.
(h) The company has not declared or paid any dividend during the year
in contravention of the provisions of section 123 of the Companies Act, 2013.
With respect to the matter to be included in the Auditors? Report
under Section 197(16) of the Act, in my opinion and according to the information and
explanations given to me by the management, the remuneration paid by the Company to its
directors during the current year is in accordance with the provisions of Section 197 of
the Act. The remuneration paid to any director is not in excess of the limit laid down
under Section 197 of the Act
RAW EDGE INDUSTRIAL SOLUTIONS LIMITED
As required by the Companies (Auditors Report) Order, 2020 and
according to the information and explanations given to me during the course of audit and
on the basis of such checks as were considered appropriate, I report that:
ANNEXURE "A" TO THE AUDITORS REPORT
I) Property, Plant & Equipments and Intangible Assets
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of Property, Plant & Equipments,
intangible assets and following component accounting to the extend it was possible by
management;
b) According to the information and explanations given to me by
managemement, the Property, Plant & Equipments have been physically verified by the
management during the year at reasonable intervals. As explained to me, no material
discrepancies were noticed as compared to the books records, on such physical
verification.
c) According to the information and explanations given to me by the
management, all the immovable properties are in the name of the company.
d) The company has not revalued its Property, Plant and Equipment
including Right-of-use or intangible assets during the year.
e) No Proceeding have been initiated or pending against the company for
holding any benami property under the Prohibition of Benami Property Transactions Act,
1988.
II) Inventory
a) According to information and explanation given to me by the
management, inventory of the company has been physically verified during the year by the
management at regular intervals. In my opinion and according to the information and
explanation given to me by the management, the procedures of physical verification of
inventory followed by the management is reasonable and adequate in relation to the size of
the company and nature of its business.
In my opinion and according to the information and explanation given to
me by the management, the company is maintaning proper records of the inventory and no
material discrepancies were noticed on physical verification.
b) The quaterly returns or statements filed by the company with
bank/financial institutions are in agreement with the books of accounts of the company
except for following case:
For quarter ended December 2022, the value of closing stock as per
books of the accounts is Rs. 1133.76 lacs whereas the value of provisional closing stock
filed with bank is Rs. 1126.50 Lacs.
III) Loans & Advances
As per the information and explantions given to me by the management,
during the year the company has not granted loans, secured or unsecured, to companies,
firms or other parties covered by clause (76) of Section 2 of the Companies Act, 2013.
IV) Compliance with provisions of Section 185 and 186 of the Act
In my opinion and according to the information and explanations given
to me by the management, the Company has complied with the provisions of section 185 and
186 of the Act, with respect to the loans and investments made.
V) Public Deposits
According to the information and explanations given to me by the
management, the company has not accepted any deposits during the year from the public and
consequently, the directives issued by the Reserve Bank of India, provisions of Section 73
to 76 or any other relevant provisions of the Companies Act and the rules framed
thereunder, where applicable with regard to the acceptance of deposit are not applicable.
VI) Cost Records
According to the information and explanations given to me by the
management, the company has maintained the proper cost records as required under Section
148(1) of the Companies Act, 2013 for the products of the Company.
VII) Statutory Dues
According to the information and explanation given to me by the
management and according to records, the company is generally regular in depositing
undisputed statutory dues and there is no oustanding due of the company.
VIII) Unrecorded Income
According to the information and explanations given to me by the
management. There were no transactions relating to previously unrecorded income that have
been surrendered or disclosed as income during the year in the tax assessments under the
Income Tax Act, 1961 (43 of 1961).
IX) Repayment of financial dues
Based on my audit procedures and according to the information and
explanations given to me by the management, I am of the opinion that the company has not
defaulted in repayment of dues to a financial institutions or banks or debenture holders.
X) Utilization of moneys raised by way of IPO/FPO
According to the information and explanations given to me by the
management, no money has been raised by way of initial public offer or further public
offer during the year.
Utilization of moneys raised by way of preferential allotment or
private placement of shares or convertible debentures
According to the information and explanations given to me by the
management, no money has been raised by way of any preferential allotment or private
placement of shares or convertible debentures during the year.
XI) Fraud noticed or Reported
In my opinion and according to the information and explanation given to
me by the management, no fraud by the Company and no material fraud on the company has
been noticed or reported during the year.
XII) Provision relating to Nidhi Company
In my opinion and according to the information and explanations given
to me by the management, the Company is not a nidhi company. Accordingly, paragraph 3(xii)
of the Order is not applicable.
XIII) Transactions with the Related Parties
According to the information and explanations given to me by the
management and based on my examination of the records of the Company, transactions with
the related parties are in compliance with sections 177 and 188 of the Act where
applicable and details of such transactions have been disclosed in the financial
statements as required by the applicable accounting standards.
XIV) Internal Audit System
In my opinion the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
I have considered, the internal audit reports for the year under audit,
issued to the Company during the year and till date.
XV) Non-Cash transactions
According to the information and explanations given to me by the
management and based on my examination of the records of the Company, the Company has not
entered into any noncash transactions with directors or persons connected with him.
Accordingly, paragraph 3(xv) of the Order is not applicable.
XVI) Registration u/s. 45-IA of the Reserve Bank of India Act, 1934
The Company is not required to be registered under section 45-IA of the
Reserve Bank of India Act, 1934. and Accordingly, paragraph 3(xvi) of the Order is not
applicable.
XVII) Cash losses
The company has not incurred any cash losses in the financial year and
in the immediate preceeding financial year.
XVIII) Resignation of statutory Auditor
During the year, there has been no resignation of the statutory
auditor.
XIX) Capability of company in meeting liabilities
On the basis of the financial ratios, ageing and expected dates of
realisation of financial assets and payment of financial liabilities, other information
accompanying the financial statements and my knowledge of the Board of Directors and
Management plans and based on my examination of the evidence supporting the assumptions,
nothing has come to my attention, which causes me to believe that any material uncertainty
exists as on the date of the audit report indicating that Company is not capable of
meeting its liabilities existing at the date of balance sheet as and when they fall due
within a period of one year from the balance sheet date. I, however, state that this is
not an assurance as to the future viability of the Company. 1 further state that my
reporting is based on the facts up to the date of the audit report and 1 neither give any
guarantee nor any assurance that all liabilities falling due within a period of one year
from the balance sheet date, will get discharged by the Company as and when they fall due.
XX) Transfer of unspent amount to Fund specified in schedule VII to the
companies Act
There are no unspent amounts towards Corporate Social Responsibility
(CSR) requiring a transfer to a Fund specified in Schedule VII to the Companies Act in
compliance with second proviso to sub-section (S) of Section 135 of the said Act.
Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable for the year.
Qualifications or adverse remarks by the respective auditors in the
CARO reports of ? the companies included in the consolidated financial statements
This clause is not applicable as company is not required to prepare
consolidated Financial Statement.
RAW EDGE INDUSTRIAL SOLUTIONS LIMITED
Report on the Internal Financial Controls under Clause (i) of
Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
ANNEXURE "B" TO THE AUDITORS REPORT
1 have audited the internal financial controls over financial reporting
of Raw Edge industrial Solutions Limited ("the Company") as of 31st March 2023
in conjunction with my audit of the standalone financial statements of the Company for the
year ended on that date.
Management?s Responsibility for Internal Financial Controls
The Board of the Directors of the company is responsible for
establishing and maintaining internal financial controls based on the internal control
over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting issued by the Institute of Chartered Accountants of
India. These responsibilities include the design, implementation and maintenance of
adequate internal financial controls that were operating effectively for ensuring the
orderly and efficient conduct of its business, including adherence to respective companys
policies, the safeguarding of its assets, the prevention and detection of frauds and
errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors Responsibility
My responsibility is to express an opinion on the internal financial
controls over financial reporting of the Company based on my audit. I conducted my audit
in accordance with the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting (the "Guidance Note") issued by Institute of Chartered
Accountants of India and the Standards on Auditing prescribed under section 143(10) of the
Companies Act, 2013, to the extent applicable to an audit of internal financial controls.
Those Standards and the Guidance Note require that 1 comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting was established and maintained and if such
controls operated effectively in all material respects.
My audit involves performing procedures to obtain audit evidence about
the adequacy of the internal financial controls system over financial reporting and their
operating effectiveness. My audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial controls over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. 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.
I believe that the audit evidence I have obtained is sufficient and
appropriate to provide a basis for my audit opinion on the internal financial controls
system over financial reporting of the company.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company?s internal financial control
over financial reporting includes those policies and procedures that
(1) Pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the
company;
(2) Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorisations of management and directors of the
company; and
(3) Provide reasonable assurance regarding prevention or timely
detection of unauthorised acquisition, mee, or disposition of the companys 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
financial reporting, including the possibility of collmeion or improper management
override of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial controls over
financial reporting to future periods are subject to the risk that the internal financial
control over financial reporting may become inadequate becamee of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In my opinion, to the best of my information and according to the
explanations given by me, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting Ire operating effectively as at 31st March 2023, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
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