To the Members of
RTS Power Corporation Limited
Report on the Audit of the Standalone Ind AS Financial Statements
Opinion
We have audited the standalone Ind AS financial statements of RTS Power Corporation Limited ("the Company"), which comprises the Balance sheet as at 31st March 2023, and the Statement of Profit and Loss (Including Other Comprehensive Income), Cash Flow Statement and the Statement of changes in equity for the year ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information for the year ended on that date (hereinafter referred to as "standalone Ind AS financial statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and its profits (including other comprehensive income) and its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit 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 Standalone Ind AS 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 together with the ethical requirements that are relevant to our audit of the standalone Ind AS financial statements under the provisions of the Companies Act, 2013 and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on standalone Ind AS 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 standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Sl No. | Key Audit Matters |
Auditors Response |
Verification of Inventories and Valuation thereof |
||
1. | The size of the Inventory relative to the total assets of the Company and the estimates and judgements described below, the determination and valuation of Inventory required significant audit attention. |
Our audit procedures based on which we arrived at the conclusion regarding reasonableness of determination of year-end inventory and valuation thereof include the following: |
As disclosed in Note 3.11, Inventories are held at lower of cost or Net Realizable Value determined using the First in First Out method. At year end, valuation of Inventories is reviewed by the management and the cost of Inventory is reduced in cases where the Net Realizable value is lower. | Evaluating the accounting policy followed for valuation of inventory and appropriateness thereof with respect to relevant accounting standards in this respect. | |
Management reviews the Ageing reports together with historical trends to estimate the likely future salability of slow moving and older inventory items and performed a line-by-line analysis to ensure that it is stated at the lower of cost or net realizable value. | Review of the process of physical verification and reconciliation with the book stock. | |
Understanding and testing the design and operating effectiveness of controls as established by the management in determination of cost of production and inventory and consistency with respect to policy followed in this regard. | ||
Assessing the adequacy of the method used, relevance and reliability of data and the systems & procedures followed for arriving at the cost of inventory. | ||
We have examined the valuation process/ methodology and checks being performed at multiple levels to ensure that the valuation is consistent with and as per the policy followed in this respect. |
Sl No. | Key Audit Matters |
Auditors Response |
2. | Trade Receivables |
|
Gross Trade Receivable of the Company includes significant amounts, which have fallen due for payment and are lying outstanding for a considerable period of time. (Note No. 15 of the standalone Ind AS financial statements) | Our audit procedures based on which we arrived at the conclusion regarding the carrying amount of Trade Receivables include the following: | |
The Company evaluates whether there is any objective evidence that trade receivables are impaired and determines the amount of impairment allowance as a result of the inability of the customers to make required payments. The Company bases the estimates on the ageing of the trade receivables balance, creditworthiness of the trade receivables and historical write-off experience. | We obtained an understanding from the Management, assessed and tested the design and operating effectiveness of the Companys key controls over the recoveries against the outstanding amounts and resultant impairment assessment of material Trade Receivables; | |
We reviewed Managements assessment and evaluation on the credit worthiness of the major trade receivables and historical trends and current dealing with the customers; | ||
We further discussed with the Management the adequacy of the impairment as recognized and reviewed the supporting documents provided in relation to such assessment. |
3. | Provisions and Contingencies |
|
Recognition of provision and/or disclosure for contingencies are based on estimates requiring application of judgement with respect to existing facts and circumstances which are subject to variation on actual crystallization. | Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the Contingent Liabilities include the following: | |
The Company has certain outstanding matters involving direct and indirect taxes which are pending before appropriate authorities. (Note 44 of Standalone Ind AS Financial Statements) | We tested the effectiveness of controls for estimating the possible effect of matters keeping in view the provisions of the relevant laws and regulations; | |
Management judgment for estimating the possible outflow of resources, if any, in respect of contingencies/ claim/ litigations/ against the Company is essential as it is not possible to predict the outcome of pending matters with accuracy. | We discussed with management the recent developments and the status of the matters having significant application; | |
We reviewed Managements judgements relating to the estimates keeping in view the expected outcome thereof; | ||
Due consideration has been given to experts view and opinion on the matters of significance; | ||
Reviewed the appropriateness and adequacy of amounts involved, as required in terms of the requirement of IND AS 37 "Provisions, Contingent Liabilities and Contingent Assets". |
Information Other than the Standalone Ind AS 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 Annexures to Boards Report, Corporate Governance and Shareholders Information, but does not include the standalone Ind AS financial statements and our auditors report thereon.
Our opinion on the standalone Ind AS 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 standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.
Responsibility of the Management for the Standalone Ind AS 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 standalone Ind AS financial statements that gives a true and fair view of the standalone financial position, standalone financial performance, standalone changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.
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 standalone Ind AS financial statements that gives a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS 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 are also responsible for overseeing the companys financial reporting process.
Auditors Responsibilities for the Audit of Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS 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 standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
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.
Report on Other Legal and Regulatory Requirements
Company to or in any other person or entity, including foreign entity ("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;
For Jain Shrimal & Co.
Chartered Accountants
FRN: 001704C
(Anshul Chittora)
Partner
Place: Jaipur Membership Number: 414627
Date: May 30, 2023 UDIN:23414627BGXOLD3745
The Annexure referred to in our Independent Auditors Report to the members of RTS Power Corporation Limited (the Company) on the Ind AS financial statements for the year ended on 31st March 2023. We report that:
(Rs in Lakhs)
Name of the Statute | Nature of Dues | Period to which the Amount relates | Amount (Rupees in Lakhs) |
Forum Where dispute is Pending |
Value Added Tax and Central Sales Tax Act, 1956 |
VAT, CST, including interest thereon on Freight and Insurance | 2007-08 | 14.99 | Revision pending before Tax Board, Rajasthan |
2008-09 | 20.84 | |||
2009-10 | 19.44 | |||
2010-11 | 24.13 | |||
The Central Excise Act, 1944 | Excise Duty | Apr-14 to Jun-17 | 59.94 | Revision pending before Commissioner Appeals |
The Central Excise Act, 1944 | Excise Duty | Oct-16 to Jun-17 | 5.01 | Revision pending before Commissioner Appeals |
West Bengal Value Added Tax Act, 2003 | Value Added Tax | 2009-10 | 40.46 | Revision pending before Appellate Authority of Sales Tax |
West Bengal Value Added Tax Act, 2003 | Value Added Tax | 2016-17 | 2.5 | Revision pending before West Bengal Taxation Tribunal |
Income Tax Act, 1961 | Demand u/s 156 | AY 2014-15 | 66.09 | Appeal pending before Commissioner Appeals |
Income Tax Act, 1961 | Penalty u/s 274 | AY 2018-19 | 52.59 | Appeal pending before Commissioner Appeals |
b) In our opinion and according to the information and explanations given to us, Company has not made any preferential allotment or private placement of shares or convertible debentures during the year and accordingly reporting under clause 3 (x)(b) of the order is not applicable.
b) According to the information and explanations given to us and based on our examination of the books and records of the Company there are no amount unspent under section 5 of section 135 of the Act pursuant to any ongoing project. Accordingly, reporting under clause 3(xx)(b) of the order is not applicable.
For Jain Shrimal & Co.
Chartered Accountants
FRN: 001704C
(Anshul Chittora)
Partner
Place: Jaipur Membership Number: 414627
Date: May 30, 2023 UDIN:23414627BGXOLD3745
"Annexure B" to the Independent Auditors Report :
(Referred to in paragraph 2 (f) under Report on Other Legal and Regulatory Requirements of our report of even date)
Report on the Internal Financial Controls with reference to Standalone Ind AS Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act").
We have audited the internal financial controls with reference to the Standalone Ind AS Financial Statements of RTS Power Corporation Limited ("the Company") as at March 31, 2023 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to Standalone Ind AS Financial Statements 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 (the "Guidance Note") 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 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 Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial controls with reference to Standalone Ind AS Financial Statements based on our audit. We conducted our audit in accordance with the Guidance Note issued by the ICAI and the Standards on Auditing notified under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to the Standalone Ind AS Financial Statements. 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 control with reference to Standalone Ind AS Financial Statements were 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 with reference to Standalone Ind AS Financial Statements and their operating effectiveness. Our audit of internal financial controls with reference to Standalone Ind AS Financial Statements included obtaining an understanding of such internal financial controls with reference to Standalone Ind AS Financial Statements, 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 judgement, including the assessment of the risks of material misstatement of the Standalone Ind AS 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 with reference to Standalone Ind AS Financial Statements.
Meaning of Internal Financial Controls with reference to Standalone Ind AS Financial Statements
A Companys internal financial control with reference to Standalone Ind AS Financial Statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone
"Annexure B" to the Independent Auditors Report :
Ind AS Financial Statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control with reference to Standalone Ind AS Financial Statements 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 Standalone Ind AS 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, use, or disposition of the Companys assets that could have a material effect on the Standalone Ind AS Financial Statements.
Inherent Limitations of Internal Financial Controls with reference to Standalone Ind AS Financial Statements
Because of the inherent limitations of internal financial controls with reference to Standalone Ind AS Financial Statements, 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 with reference to Standalone Ind AS Financial Statements to future periods are subject to the risk that the internal financial control with reference to Standalone Ind AS Financial Statements 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 with reference to Standalone Ind AS Financial Statements and such internal financial controls with reference to Standalone Ind AS Financial Statements were operating effectively as at March 31, 2023, based on the internal financial controls with reference to Standalone Ind AS Financial Statements criteria established by the Company considering the essential components of internal control stated in the
Guidance Note issued by the Institute of Chartered Accountants of India.
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