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Raasi Refractories Ltd.

BSE: 502271 Sector: Engineering
NSE: N.A. ISIN Code: INE858D01017
BSE 00:00 | 20 Feb 2020 Raasi Refractories Ltd
NSE 05:30 | 01 Jan 1970 Raasi Refractories Ltd

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OPEN 3.33
PREVIOUS CLOSE 3.33
VOLUME 100
52-Week high 6.48
52-Week low 3.03
P/E 0.78
Mkt Cap.(Rs cr) 2
Buy Price 3.18
Buy Qty 20.00
Sell Price 3.65
Sell Qty 90.00
OPEN 3.33
CLOSE 3.33
VOLUME 100
52-Week high 6.48
52-Week low 3.03
P/E 0.78
Mkt Cap.(Rs cr) 2
Buy Price 3.18
Buy Qty 20.00
Sell Price 3.65
Sell Qty 90.00

Raasi Refractories Ltd. (RAASIREFRACTOR) - Auditors Report


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Company auditors report

To

The Members of Raasi Refractories Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Raasi Refractories Limited("the Company") which comprise the balance sheet as at 31st March 2019 and thestatement of Profit and Loss statement of changes in equity and statement of cash flowsfor the year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2019 and profit changes in equity and its cash flows for the yearended on that date.

Basis for Qualified Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountantsof India together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our qualified opinion.

Qualified Opinion

The company has claimed excess Input Tax Credit as per the returns submitted under theGoods and Service Tax Act 2017 for an amount of Rs.25289088/-. The same was reportedto Ministry of Corporate affairs through form ADT-4 dated 10th April 2019.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with6 the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

Paragraph 40(b) of this SA explains that the shaded material below can be located in anAppendix to the auditor's report. Paragraph 40(c) explains that when law regulation orapplicable auditing standards expressly permit reference can be made to a website of anappropriate authority that contains the description of the auditor's responsibilitiesrather than including this material in the auditor's report provided that the descriptionon the website addresses and is not inconsistent with the description of the auditor'sresponsibilities below.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe 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 auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

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 bestof our knowledge and belief were necessary for the purposes of our

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books

(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

(e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules

(f) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A".

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

1. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements – Refer Note XX to the financial statements;

2. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable.

3. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For GMK Associates
Chartered Accountants
Firm Regd. No. 006945S
(M S PRAKASA RAO)
Place : Hyderabad Partner
Date : 30-05-2019 (M.No.027278)

ANNEXURE-A TO THE AUDIT REPORT

The Annexure referred to in Independent Auditor's Report to the members of the Companyon the financial statements for the year ended 31st March 2019 we report that:

1. a) The Company has maintained requisite records showing required particularsincluding quantitative details and situation of its fixed assets.

b) According to the information and explanation given to us by the management most ofthe fixed assets of the company have been physically verified by the management during theyear and the intervals of such verification had also been reasonable.

2. As explained to us by the management and as observed by us the inventory of rawmaterial finished goods stores and spares etc. has been physically verified during theyear and specifically at the year-end by the management and no material discrepancies wereobserved in the inventories.

3. Based on our scrutiny and as per information and explanations provided to us by themanagement the company has not granted any loans during the period under review coveredin the registers maintained under section 189 of the Companies Act 2013. Since there areno loans granted sub-clauses a b and c are not applicable.

4. Based on our scrutiny and as per the information provided by the management thecompany has transactions in respect of unsecured loans with 3 parties. Accordingly thedetails have been entered in the respective registers and the company has generallycomplied with the provisions of Sections 185 and 186 of the Companies Act 2013.

5. Based on our scrutiny and as per the information provided by the management thecompany has not accepted any deposits during the year under review.

6. According to the information and explanations given the maintenance of cost recordsas specified under sub-section (1) of section 148 of the Companies Act 2013 are notapplicable for the year under review.

7. a) According to the books and records as produced and examined by us in accordancewith Generally Accepted Auditing Practices in India and also based on managementrepresentations undisputed statutory dues in respect of provident fund employee stateinsurance income tax service tax sales tax value added tax excise duty cess andother material statutory dues have not been regularly deposited by the company during theyear with the appropriate authorities and the outstanding statutory dues as at the end ofthe financial year outstanding for more than 6 months are as follows:

Nature of Statutory Dues Amount (Rs. in Lakhs)
Provident Fund 65.25
Employees State Insurance 6.59
Income Tax 23.11
Sales Tax 38.63
Tax Deducted at Source 7.92
Goods and Service Tax 471.95

b) According to information and explanations given to us disputed amounts payable inrespect of Income Tax and Provident Fund and outstanding as on 31st March 2019are as follows:

Nature of dues Dispute Pending Before Amount (Rs. in Lakhs)
Income Tax Commissioner of Income Tax (Appeals) 14.48
Provident Fund High Court of Judicature at Hyderabad for the state of Telangana and state of Andhra Pradesh 90.47

8. As observed by us and as per the information and explanations given by themanagement the company has delayed the repayment of dues to financial institution andbanks during the year under audit.

9. As observed by us the company has not availed any Term Loans from Banks during theyear. The clause regarding the moneys raised by way of IPO or FPO are not applicable tothe company for the year under review.

10. Based upon the audit procedures performed and information and explanations given bythe management we report that no material fraud on or by the company by its officers oremployees has been noticed or reported during the course of our audit.

11. According to the information and explanations given to us and based on ourexamination of the records of the company the managerial remuneration paid/providedduring the year by the company is as per the provisions of section 197 read with ScheduleV of the Companies Act 2013.

12. In our opinion and according to the information and explanations given to us thecompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the company transactions with related parties are incompliance with section 177 and 188 of the Act wherever applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

14. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

15. As observed by us and as per the information and explanations given by themanagement the company has not entered into any non-cash transactions with the directorsor persons connected with him during the period under review.

16. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For GMK Associates
Chartered Accountants
Firm Regd. No. 006945S
(M S PRAKASA RAO)
Place : Hyderabad Partner
Date : 30-05-2019 (M.No.027278)

ANNEXURE-B TO THE AUDITORS REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the act")

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the act")

We have audited the internal financial controls over financial reporting of RaasiRefractories Limited ("the company'') as of 31 March 2019 in conjunction with ouraudit of the standalone financial statements of the company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The company's management is responsible for establishing and maintaining internalfinancial controls based on the internal controls over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Control over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). 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 company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial controls over Financial Reporting("the Guidance Note") and the standards on Auditing issued by ICAI and deemedto be prescribed under section143 (10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the company's internal financial controls systemover financial reporting.

Meaning of Internal Financial controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transaction anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principle and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing weaknesses have been identified as at 31st March 2019:

• The company did not have an appropriate internal control system to verify thesales and purchases reported in the books of account and those being reported in themonthly returns filed in GST. There was vast variation in the input credit shown in thebooks of account and that which has been claimed in the GST returns filed.

In our opinion except for the possible effects of the material discrepancies reportedabove the company has maintained in all material respects adequate internal financialcontrols over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2019 based on the internal controlover financial reporting criteria established by the company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial reporting issued by the institute of Chartered Accountants ofIndia.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and the extent of the audit tests applied in our audit of the 31stMarch 2019 standalone financial statements of the company and these material weaknessesdo affect our opinion on the standalone financial statements of the Company.

For GMK Associates
Chartered Accountants
Firm Regd. No. 006945S
(M S PRAKASA RAO)
Place : Hyderabad Partner
Date : 30-05-2019 (M.No.027278)


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