We have audited the accompanying Standalone Financial Statements
of RITES Limited (“the Company”), which comprise the Balance Sheet
as at March 31, 2026, the Statement of Profit and Loss including
Other Comprehensive Income, the Statement of Changes in Equity
and the Statement of Cash Flows for the year then ended, notes
to the Standalone Financial Statements including a summary of the
material accounting policies and other explanatory information which
includes thirteen (13) Joint Operations (hereinafter referred to as “the
Standalone Financial Statements”).
In our opinion and to the best of our information and according
to the explanations given to us and based on the consideration of
reports of other auditors on separate financial statements and on the
other information of the joint operations, the aforesaid Standalone
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, 2026,
the profit including other comprehensive income, statement of
changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone 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 Auditor's Responsibilities for the Audit of
the Standalone 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 Standalone 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 we have obtained
and by other auditors in terms of their report referred to in “Other
Matter” paragraph below, is sufficient and appropriate to provide a
basis for our audit opinion on the Standalone Financial Statements.
Emphasis of Matter
We draw attention to note no. 58(a) to the Standalone Financial
Statements wherein it is mentioned that the Financials Statements
of one of the Jointly controlled entity namely Indian Railway Stations
Development Corporation Limited (IRSDC) have been prepared on
liquidation basis and stating that the company does not perceive
any impairment at present in the value of investments held by the
company in IRSDC.
We draw your attention to note no. 58(p) to the Standalone Financial
Statements wherein it is mentioned that company has made
investment in one of the associate entity MMG- Metro Management
Group Ltd, incorporated in Israel, which was under dissolution and
the investment is fully provided for as of 31 March 2026. Subsequent
to the reporting date, the said entity has been struck off on 11 April
2026. This event does not have any financial impact on the financial
statements for the year ended 31 March 2026.
Our opinion is not modified in respect of above matter.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the Standalone
Financial Statements of the current period. These matters were
addressed in the context of our audit of the Standalone 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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Sr.
No.
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Key Audit Matter
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Auditor's Response
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1
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Accuracy of recognition, measurement, presentation and
disclosures of revenues and other related balances in respect
of Ind AS 115 “Revenue from Contracts with Customers"
(revenue accounting standard).
The application of the revenue accounting standard involves
certain key judgements relating to identification of distinct
performance obligations, determination of transaction price
of the identified performance obligations, the appropriateness
of the basis used to measure revenue recognized at a point in
time or over time.
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Our audit approach consisted testing of the design and operating
effectiveness of the internal controls and substantive testing as follows:
• Evaluated the design of internal controls relating to implementation
of the revenue accounting standard.
• Selected a sample of contracts, and tested the operating
effectiveness of the internal control, relating to identification of the
distinct performance obligations and determination of transaction
price. We carried out a combination of procedures involving enquiry
and observation and inspection of evidence in respect of operation
of these controls.
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Sr.
No.
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Key Audit Matter
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Auditor's Response
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Additionally, revenue accounting standard contains
disclosures which involves collation of information in
respect of disaggregated revenue and periods over which
the remaining performance obligations will be satisfied
subsequent to the balance sheet date.
Refer Notes 1.2.1 and Note 52 to the Standalone Financial
Statements.
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Selected a sample of contracts and performed the following procedures:
• Read, analysed and identified the distinct performance obligations
in these contracts.
• Compared these performance obligations with that identified and
recorded by the Company.
• Considered the terms of the contracts to determine the transaction
price including any variable consideration to verify the transaction
price used to compute revenue and to test the basis of estimation
of the variable consideration.
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Performed analytical procedures for reasonableness of revenues
disclosed by type and service offerings.
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2
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Assessment of Contingent Liabilities
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The Company is subject to a number of legal, regulatory,
arbitration and tax cases for which final outcome cannot be
easily predicted and which could potentially result in liabilities.
The assessment of whether a liability is recognised as a
provision or disclosed as a contingent liability in the financial
statements is inherently subjective and requires significant
management judgement in determination of the cash outflows
from the business, interpretation of applicable laws and
regulations, and careful examination of pending assessments
at various levels of regulatory authorities.
We identified this as a key audit matter because the estimates
on which these amounts are based involve a significant
degree of management judgement in interpreting the cases
and it may be subject to management estimate.
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We have adopted the following audit procedures:
• Understood and tested the design and operating effectiveness of
controls as established by the management for obtaining all relevant
information for pending litigation cases.
• Discussed with the management any material developments and
latest status of legal matters at the corporate office.
• Read various correspondences and related documents pertaining
to litigation cases and performed substantive procedures on
calculations supporting the disclosure of contingent liabilities
Assessed the adequacy and completeness of disclosures.
Based on the above procedure performed, the estimations and
disclosure of contingent liabilities are adequate and reasonable.
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(Refer Note no. 1.18 and Note no. 47 to the Standalone
Financial Statements).
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Information other than the Standalone Financial
Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the preparation
of the other information. The other information comprises the
information included in the Annual Report, but does not include the
Standalone Financial Statements and our auditor's report thereon.
The Annual Report is expected to be made available to us after the
date of our audit report.
Our opinion on the Standalone Financial Statements does not cover
the other information and we will not express any form of assurance
conclusion thereon.
In connection with our audit of the Standalone Financial Statements,
our responsibility is to read the other information identified above
when it becomes available and in doing so, consider whether the
other information is materially inconsistent with the Standalone
Financial Statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a
material misstatement therein, we are required to communicate the
matter to those charged with governance.
Responsibilities of Management and Those Charged
with Governance for the Standalone Financial
Statements
The Company's Board of Directors is responsible for the matters stated
in section 134(5) of the Companies Act, 2013 (“the Act”) with respect
to the preparation of these Standalone 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 accounting principles
generally accepted in India, including the accounting Standards
specified 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 of 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 Financial Statements
that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the Standalone Financial Statements, the Board of
Directors 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 the Board of Directors either intends to liquidate the Company
or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the
Company's financial reporting process.
Auditor’s Responsibilities for the Audit of the
Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the
Standalone 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 Standalone Financial Statements.
As part of an audit in accordance with SAs, we exercise professional
judgement and maintain professional skepticism throughout the
audit. We also:
• Identify and assess the risks of material misstatement of the
Standalone Financial Statements, whether due to fraud or error,
design and perform audit procedures responsive to those risk,
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 controls 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 with
reference to Standalone Financial Statements 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 Standalone 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
Standalone Financial Statements, including the disclosures, and
whether the Standalone Financial Statements represent the
underlying transactions and events in a manner that achieves
fair presentation.
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 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.
Other Matters
(i) The Standalone Financial Statements include company's share
of total assets of H 29.68 crores as at March 31, 2026 and
company's share of total revenue of H 90.02 crores and share
of net profit/(loss) after tax of H (0.05 crores) for the year ended
March 31, 2026, in respect of Thirteen (13) Joint Operations,
whose financial statements have not been audited by us. These
financial statements have been audited by other auditors whose
reports have been furnished to us by the management and our
opinion on the Standalone Financial Statements, in so far as it
relates to the amounts and disclosures included in respect of
these joint operations, are based solely on the reports of such
other auditors.
(ii) The Company has only Two Independent Directors on its
Board as on the date of this report, which is not in compliance
with the requirements of Section 149(4) read with Rule 4 of
the Companies (Appointment and Qualification of Directors)
Rules, 2014, which mandates that every listed public company
shall have at least one-third of the total number of directors as
independent directors.
(iii) The Company does not have a woman director on its Board,
which is not in compliance with the provisions of Section
149(1) of the Companies Act, 2013, read with Rule 3 of the
Companies (Appointment and Qualification of Directors) Rules,
2014, which mandates the appointment of at least one woman
director on the Board of every listed company.
(iv) The Standalone financial Statements for the year ended 31st
March, 2025 were audited by the predecessor statutory auditor
of the Company.
Our opinion on the Standalone Financial Statements is not modified
in respect of above matters with respect to our reliance on the work
done by and the reports of the other auditors and the financial
statements certified by the management.
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 sub-section (11) of section 143 of the Companies
Act, 2013, we give in the ''Annexure I” a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the
extent applicable.
2. In terms of sub section (5) of section 143 of the Act, we give
in the “Annexure II” a statement on the directions issued
under the aforesaid section by the Comptroller and Auditor
General of India.
3. 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 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, statement of
changes in Equity, and the Statement of Cash Flows
dealt with by this report are in agreement with the
books of account.
(d) In our opinion, the aforesaid Standalone Financial
Statements comply with the Indian Accounting Standards
(Ind AS) specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
(e) In view of exemption given vide notification no. G.S.R.
463(E) dated 5th June, 2015, issued by Ministry of
Corporate Affairs, provisions of Section 164(2) of the Act
regarding disqualifications of Directors, are not applicable
to the Company;
(f) With respect to the adequacy of the internal financial
controls with reference to the Standalone Financial
Statements of the Company and the operating
effectiveness of such controls, refer to our separate
Report in “Annexure III”;
(g) 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, 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 Standalone
Financial Statements - Refer Note 47(c)(i) to the
Standalone Financial Statements;
ii. The Company did not have any long-term contracts
including derivative contracts for which there were
any material foreseeable losses;
iii. There has been no delay in transferring the amount
required to be transferred to the Investor Education
and Protection Fund by the company as per Section
125(1) and Section 124 of the Companies Act, 2013
and rules made thereunder.
iv. (a) The management has represented that, to the
best of its knowledge and belief as disclosed
in Note no 58(m) to the Standalone Financial
Statements, 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 entity (“Intermediaries”), with the
understanding, whether recorded in writing
or otherwise, that the Intermediary shall,
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;
(b) The management has represented, that, to the
best of its knowledge and belief, as disclosed
in note no 58(n) to the Standalone Financial
Statements, 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,
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;
(c) Based on the audit procedures that have been
considered reasonable and appropriate in
the circumstances, nothing has come to our
notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of
Rule 11(e), as provided under (a) and (b) above,
contain any material misstatement.
v. As stated in notes no. 21 and 55(a) to the Standalone
Financial Statements
(a) The final dividend proposed in the previous
year, declared and paid by the Company
during the year is in accordance with Section
123 of the Act, as applicable.
(b) The interim dividends declared and paid by the
Company during the year and until the date of
this report are in accordance with Section 123
of the Act, as applicable.
(c) The Board of Directors of the Company has
proposed final dividend for the year which is
subject to the approval of the members at the
ensuing Annual General Meeting. The amount
of dividend proposed is in accordance with
section 123 of the Act, as applicable.
vi. In our opinion and to the best of our information and
according to the explanations given to us, provisions
of Section 197 of the Act are not applicable to
the Company with respect to the managerial
remuneration paid/provided during the year ended
March 31, 2026.
vii. Based on our examination, which included test
checks, the Company has used accounting software
systems for maintaining its books of account for the
financial year ended March 31, 2026 which have
the feature of recording audit trail (edit log) facility
and the same has operated throughout the year for
all relevant transactions recorded in the software
systems. Further, during the course of our audit we
did not come across any instance of the audit trail
feature being tampered with and the audit trail has
been preserved by the Company as per the statutory
requirements for record retention.
For S.R. Goyal & Co.,
Chartered Accountants
Firm Registration No.: 001537C
Ajay Kumar Atolia
Partner
Place : Gurugram M. No.: 077201
Date : 19th May, 2026 UDIN : 26077201OFEQFE6036
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