To
The Members of,
ROYAL INDIA CORPORATION LIMITED Report on the Audit of the Financial
Statements Opinion
We have audited the accompanying financial statements of Royal India
Corporation Limited (the "Company"), which comprise the Balance Sheet as at
March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income),
Statement of Cash Flows and the Statement of Changes in Equity ended on that date, with
Notes to the Financial Statements including a summary of significant accounting policies
and other explanatory information (hereinafter referred to as the "financial
statements").
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 con format with the Indian Accounting Standards prescribed under section
133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as
amended, ("Ind AS") and other accounting principles generally accepted in India,
of the state of affairs of the Company as at March 31, 2023, the loss and total
comprehensive income, changes in equity and its cash flows for the year ended on that
date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with
the Standards on Auditing ("SAs") specified under section 143(10) of the
Act. Our responsibilities under those Standards are further described in the
Auditors Responsibilities for the Audit of the Financial Statements section of our
report. We are independent of the Company in accordance with the Code of Ethics issued by
the Institute of Chartered Accountants of India ("ICAI")
together with the ethical requirements that are relevant to our audit
of the financial statements under the provisions of the Act and the Rules made thereunder,
and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the ICAIs Code of Ethics. We believe that the audit evidence
obtained by us is sufficient and appropriate to provide a basis for our audit opinion on
the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the current period.
These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
We have determined the matters described below to be the key audit
matters to be communicated in our report.
Sr. No. Key
Audit Matter |
Auditors Response |
Allowance for credit losses |
Our audit procedures related
to the allowance for credit losses for trade receivables and unbilled revenue included the
following, among others: |
The Company determines the
allowance for credit losses based on historical loss experience adjusted to reflect
current and estimated future economic conditions. |
We tested the effectiveness
of controls over the |
The Company considered
current and anticipated future economic conditions relating to industries the Company
deals with and the countries where it operates. In calculating expected credit loss, the
Company has also considered credit reports and other related credit information for its
customers to estimate the probability of default in future and has taken into account
estimates of possible effect from the pandemic relating to COVID -19. |
i. Development of the
methodology for the allowance for credit losses, including consideration of the current
and estimated future economic conditions |
We identified
allowance for credit losses as a key audit matter because the Company exercises
significant judgment in calculating the expected credit losses. |
ii. Completeness and accuracy of information used in the estimation of
probability of default and |
| iii. Computation of the
allowance for credit losses. |
| We tested the mathematical
accuracy and computation of the allowances by using the same input data used by the
Company. |
2 Inventory |
Our audit procedures are as
follow: |
Valuation, accuracy,
completeness and disclosures pertaining to inventories with reference to IND AS 2. |
i. We have
assessed the companys process regarding maintenance of records; valuation and
accounting of transaction relating to inventory are as per IND AS 2. |
Inventories
constitutes material component of financial statement. Correctness, completeness,
valuation and physical verification are critical for reflecting true and fair financial
results of operations. |
| ii. We have carried out
substantive audit procedures at financial and assertion level to verify the allocation of
overheads to inventory. |
Emphasis of Matter paragraph
We draw attention to note no. 13 forming part of the standalone
financial statements, which reflects the provision created towards compensation payable as
per managements assessment and its consequential financial impact on its liabilities
as at March 31, 2023 and operations of the Company. Our opinion is not modified in respect
of this matter.
Information Other than the Financial Statements and Auditors
Report Thereon
The Companys Board of Directors is responsible for the other
information. The other information comprises the information included in the Management
Discussion and Analysis, Boards Report including Annexure to Boards Report,
Business Responsibility Report, Corporate Governance and Shareholders Information,
but does not include the financial statements and our auditors report thereon.
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial statements or our
knowledge obtained during the course of our audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a
material misstatement of this other information; we are required to report that fact. We
have nothing to report in this regard.
Managements Responsibilities for the Financial Statements
The Companys Board of Directors is responsible for the matters
stated in section 134 (5) of the Act with respect to the preparation of these financial
statements that give a true and fair view of the financial position, financial
performance, including other comprehensive income, changes in equity and cash flows of the
Company in accordance with the Ind AS and other accounting principles generally accepted
in India. 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, disclosing, as
applicable, matters related to going concern and using the going concern basis of
accounting unless management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Companys
financial reporting process.
Auditors Responsibilities for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditors report that includes our 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, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
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 our 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 financial control relevant
to the audit in order to design 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 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 the management.
• Conclude on the appropriateness of managements 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 Companys ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditors
report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditors report. However, future events or conditions
may cause the Company 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.
Materiality is the magnitude of misstatements in the financial
statements that, individually or in aggregate, makes it probable that the economic
decisions of a reasonably knowledgeable user of the financial statements may be
influenced. We consider quantitative materiality and qualitative factors in (i) planning
the scope of our audit work and in evaluating the results of our work; and (ii) to
evaluate the effect of any identified misstatements in the financial statements.
We 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 we identify during our
audit.
We also provide those charged with governance with a statement that we
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 our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we
determine those matters that were of most significance in the audit of the standalone
financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditors report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit 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, 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 including Other
Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt
with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid financial statements comply with 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 the
directors as on March 31, 2023 taken on record by the Board of Directors, none of the
directors is disqualified as on March 31, 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 our separate Report in "Annexure A". Our report expresses an unmodified
opinion on the adequacy and operating effectiveness of the Companys internal
financial controls over financial reporting.
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, as amended in our opinion and 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 its
financial
position in its financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable losses.
iii. The Company is not required to transfer any amount to the Investor
Education and Protection Fund.
2. As required by the Companies (Auditors Report) Order, 2016
("the Order") issued by the Central Government in terms of Section 143(11) of
the Act, we give in "Annexure B" a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
For and on behalf of
Agarwal Desai & Shah
Chartered Accountants
FRN.124850W
Rishi Sekhri Partner
Membership No.: 126656
Place: Mumbai Dated: 14-08-2023
UDIN: 23126656BGWJHQ1419
ANNEXURE "A" TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 (f) under ‘Report on Other Legal and
Regulatory Requirements section of our report to the Members of Royal India
Corporation Limited of even date)
Report on the Internal Financial Controls Over Financial Reporting
under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the
Act")
We have audited the internal financial controls over financial
reporting of Royal India Corporation Limited (the "Company") as of March 31,
2023 in conjunction with our audit of the financial statements of the Company for the year
ended on that date.
Managements Responsibility for Internal Financial Controls
The Management 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 (the
"ICAI"). 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
Our responsibility is to express an opinion on the Companys internal
financial controls over financial reporting of the Company based on our audit. We
conducted our audit in accordance with the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting (the "Guidance Note") issued by the ICAI 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 we 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.
Our audit involves performing procedures to obtain audit evidence about
the adequacy of the internal financial controls system over financial reporting and their
operating effectiveness. Our 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.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the Companys internal
financial controls system over financial reporting.
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 companys internal financial control over
financial reporting includes those policies and procedures that pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; 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 authorization of management and directors
of the company; and provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, 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 collusion 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 because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the
explanations given to us, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2023, based on the
internal financial 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 ICAI.
For and on behalf of Agarwal Desai & Shah Chartered Accountants
FRN.124850W
Rishi Sekhri
Partner
Membership No.: 26656
Place: Mumbai Dated: 14-08-2023
UDIN: 23126656BGWJHQ1419
ANNEXURE ‘B TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory
Requirements section of our report to the Members of Royal India Corporation Limited
of even date)
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we report that: -
1. In respect of the Companys property, plant and equipment:
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of Property, Plant and Equipment.
b) All property, plant and equipment have been physically verified by
the management during the year. No material discrepancies were noticed on such
verification.
c) According to the information and explanations given by the
management, the title deeds of immovable properties included in property, plant and
equipment are held in the name of the Company.
d) No, the company has not revalued its Property, Plant and Equipment
(including Right of Use assets) or intangible assets or both during the year.
e) There are no proceedings initiated or are pending against the
company for holding any benami property under the Benami Transactions (Prohibition) Act,
1988 (45 of 1988) and rules made thereunder.
2. As explained to us, inventories have been physically verified during
year by the management at reasonable intervals. No material discrepancy was noticed on
physical verification of stocks by the management as compared to book records.
3. According the information and explanations given to us and on the
basis of our examination of the books of accounts, the Company has not granted secured or
unsecured loans to bodies corporate, firms, LLP or other parties covered in the
register maintained under section 189 of the Companies Act, 2013. Accordingly, reporting
under this clause is not applicable to the company.
4. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections 185 and 186 of the
Act in respect of grant of loans, making investments and providing guarantees and
securities, as applicable.
5. The Company has not accepted deposits from public within the meaning
of the directives issued by the Reserve Bank of India, provision of Section 73 to 76 of
the Act, any other relevant provision of the Act and the relevant rules framed thereunder
and therefore, the provisions of the clause 3 (v) of the Order are not applicable to the
Company.
6. The maintenance of cost records has not been specified by the
Central Government under section 148(1) of the Companies Act, 2013 for the business
activities carried out by the Company. Thus, reporting under clause 3(vi) of the order is
not applicable to the Company.
7. According to the information and explanations given to us and on the
basis of our examination of the books of accounts and records, in respect of statutory
dues:
a) The Company has been regular in depositing undisputed statutory
dues, including Provident Fund, Employees State Insurance, Income Tax, Goods and
Service Tax, Customs Duty, Cess and other material statutory dues applicable to it with
the appropriate authorities.
b) There were no undisputed amounts payable in respect of Provident
Fund, Employees State Insurance, Income Tax, Goods and Service Tax, Customs Duty,
Cess and other material statutory dues in arrears as at March 31, 2023 for a period of
more than six months from the date they became payable.
c) However, details of dues of Income Tax, which have not been
deposited as at March 31, 2023 on account of dispute are given below:
Name of the Statute |
Amount (in Rs.) |
Period to which the amount
relates |
Before |
Income Tax Act, 1961 |
13,27,20,716 |
2004-05 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
5,72,482 |
2006-07 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
50,825 |
2009-10 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
31,99,31,150 |
2012-13 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
55,68,89,180 |
2013-14 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
130,96,94,730 |
2013-14 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
8,39,510 |
2014-15 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
44,75,00,840 |
2014-15 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
2,00,54,725 |
2015-16 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
2,65,93,800 |
2015-16 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
37,59,71,330 |
2017-18 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
28,56,95,900 |
2017-18 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
42,27,96,120 |
2018-19 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
100,89,21,550 |
2018-19 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
16,52,49,632 |
2019-20 |
CIT(A), Mumbai |
Income Tax Act, 1961 |
73,94,207 |
2016-17 |
Bombay High Court |
Income Tax Act, 1961 |
2,97,98,855 |
2020-21 |
Bombay High Court |
8. According to information and explanations given to us, there were no
transactions which were recorded in the books of account have been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax, 1961.
9. a) Based on our audit procedures and on the basis of information and
explanations given by the management, we are of the opinion that the Company has not
defaulted in repayment of loans or borrowings from banks and debenture holder. The company
has not taken any loans from Government or any Financial Institution.
b) During the course of audit, funds raised on short term basis have
not been utilized for long term purposes.
c) As per the examination of books the company has not taken any funds
from anyentity or person on account of or to meet the obligations of its subsidiaries,
associates or joint ventures.
d) As per the examination of books the company has not raised loans
during the year on the pledge of securities held in its subsidiaries, joint ventures or
associate companies.
10. a) Based on our audit procedures and on the basis of information
and explanations given by the management, we are of the opinion that money raised by the
Company by way of term loan has been applied for the purpose for which they were raised.
The Company has not raised money by way of initial public offer or further public offer.
b) In our opinion and according to the information and explanation
given by the management, the company has not made any preferential allotment (Sec. 62) or
private placement (Sec. 42) of shares or convertible debenture (fully, partially or
optionally convertible) during the year.
11. a) To the best of our knowledge and according to the information
and explanations given to us, no fraud by the Company or no material fraud on the Company
by its officers or employees has been noticed or reported during the year.
b) There is no reporting u/s 143(12) of the Companies Act 2013 has been
filed by us (the auditors) in from ADT-4 as prescribed under Rule 13 of companies (Audit
and Auditors) Rules, 2014 with the central Government.
c) No whistle blowers complain has been received by the company.
12. The Company is not a Nidhi Company and hence reporting under clause
3 (xii) of the Order is not applicable to the Company.
13. According to the information and explanations given to us, all
transactions with the related parties are in compliance with sections 177 and 188 of the
Companies Act, 2013 where applicable, for all transactions with the related party and the
details of related party transactions have been disclosed in the Ind AS Financial
Statements as required by the applicable accounting standards.
14. a) To the best of our knowledge the company has internal audit
system which is commensurate with the size and nature of its business.
b) The audit report of internal auditors was considered while
conducting statutory audit.
15. In our opinion and according to the information and explanations
given to us, during the year the Company has not entered into any non-cash transactions
with its Directors or persons connected to its directors and hence provisions of section
192 of the Companies Act, 2013 are not applicable to the Company.
16. The Company is not required to be registered under section 45-IA of
the Reserve Bank of India Act, 1934.
17. As per the information and explanation given by the management,
company has incurred cash losses in the financial year 2022-23 and the immediately
preceding financial year 2021-22.
18. There was no resignation of auditor during the financial year, so
the said clause is not applicable to company.
19. On the basis of the financial ratios, ageing and expected dates of
realization of financial assets and payment of financial liabilities, other information
accompanying the financial statements, our knowledge of the Board of Directors and
management plans, we are of the opinion that no material uncertainty exists as on the date
of the audit report and that company is 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.
21. The said clause is not applicable to company.
For and on behalf of Agarwal Desai & Shah Chartered Accountants
FRN.124850W
Rishi Sekhri Partner
Membership No.: 126656
Place: Mumbai Dated: 14-08-2023
UDIN: 23126656BGWJHQ1419
+91-9892691696
