We have audited the accompanying financial statements of Rachana Infrastructure Limited (''the
Company''), which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss
for the year ended on 31 March, 2025, Cash Flow Statement and notes to the financial statements for
the year ended on March 31, 2025, including a summary of significant accounting policies and other
explanatory information.
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 ('Act') in the
manner so required and give a true and fair view in conformity with the Accounting Standards
prescribed under section 133 of the Act read with the Companies (Accounting Standards) Rules, 2021,
as amended, ("AS") and accounting principles generally accepted in India, of the state of affairs of the
Company as at March 31, 2025, its profit and its cash flows for the year ended on that date.
Basis for opinion
We conducted our audit in accordance with the Standards on Auditing (SAs), as specified under Sec
143(10) of the Act. Our responsibilities under those Standards are further described in the 'Auditor's
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 together with the ethical requirements that are relevant to our audit of the financial statements
under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAI's Code of Ethics.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for
our opinion on the Financial Statements.
Key Audit Matter
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 year. 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.
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Key Audit Matters
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Auditor's Response
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Revenue recognition - Work in Progress using the
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Principal Audit Procedures Performed included the
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percentage completion method for fixed priced
contracts
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following:
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Fixed price construction revenue is recognized using a
percentage of completion method when the pattern of
benefits from construction activity rendered to the
Departments/Customer and the Company's costs to
fulfil the contract is not evenly spread across the
period of contract because the construction contracts
are absolutely discrete in nature. Revenue from such
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Our audit procedures related to Work in Progress
included the following, among others:
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types of contracts is recognized based on percentage-
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• We tested the effectiveness of controls relating to
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of-completion method.
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(1) recording of costs incurred and estimation of
costs required to complete the remaining contract
performance obligations and (2) estimation for
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Use of the percentage-of-completion method requires
the Company to determine the actual costs expended
to date as a proportion of the estimated total costs to
be incurred for allotted contract. The estimation of
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expected profitability. • We selected a sample of
fixed price contract measured by using percentage-
of-completion method and performed the following:
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total costs involves significant judgement and is
assessed throughout the period of the contract to
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- Evaluated management's ability to reasonably
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reflect any changes based on the latest available
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estimate the progress towards satisfying the
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information including price escalation and extra work
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performance obligation by comparing actual Costs
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required as per customer.
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incurred for performance obligations that have been
fulfilled.
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We identified the estimate of total costs to complete
fixed price contracts measured using the percentage
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- Compared costs incurred with Company's
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completion method as a key audit matter as the
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estimate of costs incurred till date to identify
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estimation of total costs involves significant judgement
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significant variations and evaluate whether those
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and is assessed throughout the period of the contract
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variations have been considered appropriately in
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to reflect any changes based on the latest available
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estimating the remaining costs to complete the
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information. This estimate has an inherent uncertainty
and requires consideration of expected profitability,
Costs incurred till date and estimates of costs required
to complete the remaining contract performance
obligations over the term of the contracts. This
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contract.
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required a high degree of auditor judgment in
evaluating the audit evidence and a higher extent of
audit effort to evaluate the reasonableness of the total
estimated amount of revenue recognized on fixed-
price contracts.
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- Tested the estimates for consistency based on the
past years and inquired the possible delays in
achieving the completion which require changes in
estimated costs to complete the remaining
performance obligations.
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Refer Note 25 to the Financial Statements
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Company has to comply with the various contract
requirements including supply/fitting/usage of required
quality of material and peripherals as per
specifications. There is formal document for standard
operation procedures for selection of vendors and sub¬
contractors for ensuring requirement of contracts.
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Our audit procedures based on which we arrived at
the conclusion regarding reasonableness of
selection including the followings:
We understood and performed inquiry with the
management on the selection process of vendors
and sub-contractors and its effectiveness to ensure
that management's selection is in line with the
contract requirements.
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Company does not have a formalized and
Documented process i.e. SOP with scope of physical
verification in place for conducting periodic physical
verification of its fixed assets which are recorded in
the Fixed Asset Register (FAR). Further, there is no
evidence of physical verification presented before us.
Since the Company's operations, which involve
widespread deployment of movable and immovable
fixed assets across multiple project sites threats like
unidentified losses, theft, inefficient utilization,
misstatement of recording in the FAR etc are always
present.
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Our audit procedures based on which we arrived at
the conclusion regarding reasonableness of
maintenance of FAR including the followings:
We tested and inquired for the new additions during
the year in the fixed assets, physical position of the
said asset and recording in the FAR has been
verified to identify the risks associated with keeping
of FAR and based on our test check, no discrepancy
have been observed.
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Emphasis of matter:
Attention is invited to Note No. 11 to the financial statement regarding Rs. 9,50,00,000/- (Rupees Nine
Crore Fifty Lakhs only) advanced during the FY 2022-23 to an individual for the purpose of carrying
joint venture business of acquisition of land for construction and development of residential and
commercial properties on agreed terms. Subsequent to advancing the money there is no further
progress as regards the commencement of business operations. During the current financial year,
amount of Rs. 7,00,00,000/- has been recovered and as per the management representation,
continuous efforts are being made for the recovery of the pending amount along with the interest
thereon at the earliest.
Our opinion is not modified in this regard.
Information other than the financial statements and auditors' report thereon
The Company's board of directors are responsible for the other information. The other information
comprises the information included in the Company's annual report but does not include the Financial
Statements and our auditors' report thereon. The Other Information is expected to be made available
to us after the date of this auditor's report.
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 on the other information obtained prior to the date of this
auditor's report, 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 as the other information has not
been made available as at the date of the auditor's report.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
The Company's Board of Directors is responsible for the matters stated in Sec 134(5) of the Companies
Act, 2013 with respect to the preparation of these financial statements that give a true and fair view of
the financial position, financial performance including cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the Accounting Standards (AS) specified
under section 133 of the Act read with the Companies (Accounting Standards) Rules, 2021 as amended.
This responsibility also includes the maintenance of adequate accounting records in accordance with
the provisions of the Act for safeguarding of the assets of the company and preventing and detecting
the frauds and other irregularities, selection and application of appropriate accounting policies, making
judgements and estimates that are reasonable and prudent and design, implementation and
maintenance of internal financial control 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 Company's 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 Company's financial reporting process.
Auditor's 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 auditor's 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 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, 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 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 Company's ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor's 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 auditor's 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 financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor's 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 the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the
Central Government of India in terms of subsection (11) of Section 143 of the Companies Act,
2013, we give in the "Annexure-A", a statement on the matters specified in paragraphs 3
and 4 of the Order, to the extent applicable.
2. 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 purpose 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 the Statement of, the Cash
Flow Statement dealt with by this Report are in agreement with the books of account;
d. In our opinion, the aforesaid Financial Statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Companies (Accounting Standards) Rules,
2021, as amended to the extent applicable.
e. On the basis of the written representations received from the directors as on March 31,
2025, taken on record by the Board of Directors, none of the directors is disqualified as
on March 31, 2025, 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 B" to this report. Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Company's internal financial controls
over financial reporting.
g. With respect to the other matters to be included in the Auditor's Report in accordance
with the requirements of section 197(16) of the Act, as amended, in our opinion and to
the best of our information and according to the explanations given to us, the
remuneration paid by the Company to its directors during the year is in accordance with
the provisions of section 197 of the Act.
h. 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, as amended, in our
opinion and 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 financial position
in its financial statements.
2) The company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
3) There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
4) (i) The management has represented to us that, to the best of its knowledge and belief,
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;
(ii) The management has represented to us that, to the best of its knowledge and belief, 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
(iii) Based on the audit procedures conducted that have been considered reasonable and appropriate
in the circumstances, nothing has come to our attention that has caused us to believe that the
representation under sub clause (i) and (ii) of Rule 11 (e) as provided under paragraph (2) (h) (4) (i)
& (ii) above, contain any material misstatement.
5) The Company has not proposed/declared/paid any dividend during the year. Hence,
reporting of the compliance under Section 123 of the Act is not applicable.
6) Based on our examination which included test checks, the company has used an
accounting software for maintaining its books of account which has a feature of
recording audit trail (edit log) facility and the same has operated throughout the year
for all relevant transactions recorded in the software. Further, during the course of
our audit we did not come across any instance of audit trail feature being tampered
with.
Additionally, the audit trail has been preserved by the Company as per the statutory requirements for
record retention.
For, B J Patel & J L Shah
Chartered Accountants
FRN: 104148W
Place: Ahmedabad
Date: 29th May 2025
CA Darshan B Patel (Partner)
M.No.-108350
UDIN: 25108350BMJOZL1240
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