RNIT Solutions & Services Unlisted Shares

Financial Report Summary

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Independent Auditor's Report

KRAY & ASSOCIATES, a firm of Chartered Accountants, issued an independent auditor's report to the Members of M/s. RNIT Solutions and Services Limited concerning the financial statements as of March 31, 2023.

Opinion

The audit firm has audited the financial statements of RNIT Solutions and Services Limited ("the Company"), including the Balance Sheet as of March 31, 2023, the Statement of Profit and Loss, and the Cash Flow Statement for the year then ended, along with related notes and explanatory information. In the auditor's opinion, the financial statements present a true and fair view, adhering to generally accepted accounting principles in India and complying with the requirements of the Companies Act. The financial statements accurately reflect the state of the Company's affairs as of March 31, 2023, its profit/loss, and its cash flows for the year ending on that date.

Basis for Opinion

The audit was conducted in accordance with Standards on Auditing (SAs) as specified under section 143(10) of the Act. KRAY & ASSOCIATES affirmed its independence from the Company, adhering to the 'Code of Ethics' issued by the Institute of Chartered Accountants of India, and believes the audit evidence obtained provides a sufficient and appropriate basis for the audit opinion.

Other Information

The Company's Board of Directors is responsible for the other information, comprising the management report and chairman's statement included in the Annual report but does not include the standalone financial statements and the auditor's report thereon. The auditor's opinion does not cover the other information, and no assurance is expressed regarding it. The auditor's responsibility is to read the other information and consider whether it is materially inconsistent with the financial statements or knowledge obtained during the audit.

Auditor's Responsibilities

The auditor's responsibilities include:

• Planning and performing the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error.
• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management.
• Concluding on the appropriateness of management's use of the going concern basis of accounting.
• Evaluating the overall presentation, structure, and content of the financial statements.
• Communicating with those charged with governance regarding the planned scope and timing of the audit, and significant audit findings.

Report on Other Legal and Regulatory Requirements

1. The auditor's report also includes statements on matters specified in paragraphs 3 and 4 of the Companies (Auditor's report) Order, 2016 ("the Order").

2. The auditor reports that:

   • All necessary information and explanations were obtained for the audit's purpose.
   • Proper books of account as required by law have been kept by the Company.
   • The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement are in agreement with the books of account.
   • The financial statements comply with the Accounting Standards specified under the Companies (Accounting Standards) Rules, 2006.
   • None of the directors are disqualified from being appointed as a director as of March 31, 2023, based on written representations.
   • The report does not include a report on internal financial controls, as it is not applicable to the Company based on an exemption under MCA notification no. G.S.R. 583(E) dated June 13, 2017.
   • The Company is in compliance with the provisions of section 197 read with Schedule V of the Act for the year ended March 31, 2023.
   • The Company does not have any pending litigations impacting its financial position.
   • The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
   • There were no amounts required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure 1 to the Independent Auditors' Report

This section includes the auditor's report on specific matters related to the Companies Act, 2013.

• The Company has maintained proper records of fixed assets, including quantitative details and situation. Fixed assets were physically verified by the management in the previous year with no material discrepancies noted. There are no immovable properties included in property, plant and equipment/ fixed assets of the company
• The Company's business does not involve inventories.
• The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
• There are no loans, guarantees, and securities granted in respect of which provisions of sections 185 and 186 of the Act are applicable.
• The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended).
• The Central Government has not specified the maintenance of cost records under Section 148(1) of the Companies Act, 2013, for the products/services of the Company.
• Undisputed statutory dues have been regularly deposited, with minor delays rectified with penal interest.
• The company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.
• Monies raised by the company by way of term loans were applied for the purpose for which they were raised.
• There was no fraud by or on the Company noticed or reported during the year.
• Transactions with the related parties are in compliance with section 188 of Companies Act, 2013.
• The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review
• The Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act 2013.
• The company has not incurred any cash losses in the financial year and in the immediately preceding financial year.
• There is no resignation of the statutory auditors during the year.

Financial Performance and Position (Year Ended March 31, 2023): All amounts in INR Lakhs except for share data or as otherwise stated

Statement of Profit and Loss:

• Income: Revenue from operations (Net): 1,222.00 (compared to 1,720.00 in the previous year); Total Income: 1,223.26 (compared to 1,721.64).
• Expenses: Total expenses amounted to 975.49 (compared to 1,478.09). Significant expense categories include operating expenses (86.09), employee benefits expense (510.49), depreciation and amortization (41.51), and other expenses (332.07).
• Profit: Profit before tax was 247.77 (compared to 243.54), and profit for the year was 174.77 (compared to 175.51).
• Earnings Per Equity Share: Basic and diluted earnings per share were both 7.91 (compared to 7.95).

Balance Sheet (as at March 31, 2023):

• Equity and Liabilities: Shareholders' Funds totaled 662.55, comprised of Share capital (400.83) and Reserves and surplus (261.72). Non-current Liabilities amounted to 284.46, including Long Term Borrowings (283.99) and Deferred tax liability (0.47). Current Liabilities totaled 375.23, with Trade Payables (113.34), Other current liabilities (215.92) and Short-term provisions (45.97).
• Assets: Non-Current Assets were 197.79, including Fixed Asset (Property, plant and equipment (50.09) and Intangible Asset (107.73)), Long term loans & advances (10.31) and Other non current assets (29.66). Current Assets totaled 1,124.45, including Trade receivables (436.81), Cash and cash equivalents (52.73), Short term loans & advances (589.67), and Other Current Asset (45.24). Total assets also equal to the total of equity and liabilities, 1,322.24

Cash Flow Statement (Year Ended March 31, 2023):

• Net cash flows from operating activities were negative at (408.65).
• Net cash used in investing activities was (72.15).
• Net cash used in financing activities was 408.00.
• The net increase in cash and cash equivalents was 27.20, resulting in cash and cash equivalents at the year-end of 52.73.

Significant Accounting Policies (Summary):

• Financial statements are prepared according to Indian GAAP and the Companies (Accounting Standards) Rules, 2006.
• Property, plant and equipment are stated at cost, net of accumulated depreciation and impairment losses, with depreciation calculated on a written-down value basis.
• Intangible assets are amortized on a straight-line basis over their estimated useful lives, generally not exceeding five years.
• Revenue is recognized when it is probable that economic benefits will flow to the Company and can be reliably measured.
• Tax expense includes both current and deferred tax components.
• Provisions are recognized when the Company has a present obligation as a result of a past event, and it is probable that an outflow of resources will be required to settle the obligation.

Key Ratios and Analysis:

• Current Ratio: 3.00 (Increase attributed to a rise in trade receivables)
• Debt-Equity Ratio: 0.43 (Increase from the previous year due to loan acquisitions)
• Return on Equity Ratio: 0.87 (Significant decrease as a result of a lower Net Profit)
• Net Profit Ratio: 14% (Increase from the previous year)
• Return on Capital Employed: 0.47 (Decrease from the previous year)