To the Members of
M/s. Niraj Cement Structurals Limited
CIN : L26940MH1998PLC114307 Niraj House Sunder Baug Deonar Chembur Mumbai 400088.
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of M/s. Niraj CementStructurals Limited (the Company) which comprise the balance sheet as at 31March 2016 the statement of profit and loss and the cash flow statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditors judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompanys preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Companys Directors as wellas evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our qualifiedaudit opinion on the standalone financial statements.
Basis for Qualified Opinion: a) The Company has overdue accumulated debts over theperiod amounting to Rs.5685.61 Lacs subject to reconciliation of interest payable securedby various assets of the company and of which Rs. 4463.69 Lacs is taken over by ASREC(India) Ltd and ARCIL under Securitisation and Reconstruction of Financial Assets andEnforcement of Security Interest Act 2002. Company has also defaulted in repayment of itsPublic Deposits and Inter Corporate Deposit on maturity and payment of Interest thereon.These conditions indicate the existence of a material uncertainty that may castapprehension about the Companys ability to function as a going concern.
However the financial statements of the Company have been prepared on a going concernbasis.
In our opinion and to the best of our information and according to the explanationsgiven to us and further to our comments in the Annexure-A we state thatexcept for possible effect of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2016 and its profit and its cash flows for theyear ended on that date
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure-A a statement on the matters specified inthe paragraph 3 and 4 of the Order to the extent applicable.
2. 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 audit of the aforesaidstandalone financial statements.
(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;
(d) 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 2014;
(e) The going concern matter described in sub-paragraph (a) under the Basis ofQualified Opinion paragraph above in our opinion may have an adverse effect on thefunctioning of the Company.
(f) on the basis of the written representations received from the directors as on 31March 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164 (2) of the Act; and
(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-B".
(h) with respect to the other matters to be included in the Auditors 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: i. TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements Refer Note No. C-2 C-3 and C-9 to the financial statements; ii. theCompany did not have any Long term contract including derivatives contract as such thequestion of commenting on any material foreseeable losses thereon does not arise. iii.Company has been required to transfer amount of Rs.5130/- to the Investor Education andProtection Fund on 21.07.2015. However this amount has not been transfer till the date ofaudit report.
For Ajay B Garg
Proprietor Mem No: 032538
Place of Signature: Mumbai
Dated : 30.05.2016
Annexure A to the Independent Auditors Report
Referred to in paragraph 1 under the heading Report on Other Legal &Regulatory Requirement of our report of even date to the standalone financialstatements of the Company for the year ended March 31 2016 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the company.
(ii) (a) As explained to us the inventories have been physically verified during theyear by the management. In our opinion having regard to the nature and location ofstocks the frequency of the physical verification is reasonable.
(b) In our opinion the discrepancies noticed on physical verification of the inventorywere not material in relation to the operations of the Company and the same have beenproperly dealt with in the books of account.
(iii) The Company has not granted loans any bodies corporate covered in the registermaintained under section 189 of the Companies Act 2013 (the Act).
(a) In our opinion the rate of interest and other terms and conditions on which theloans had been granted to the bodies corporate listed in the register maintained underSection 189 of the Act were not prima facie prejudicial to the interest of the Company(b) In the case of the loans granted to the bodies corporate listed in the registermaintained under section 189 of the Act the borrowers have been regular in the payment ofthe interest and repayment of principal on demand. The terms of arrangements do notstipulate any repayment schedule and the loans are repayable on demand.
(c) The terms of arrangements do not stipulate any repayment schedule and the loans arerepayable on demand. Accordingly paragraph 3(iii)(c) of the Order is not applicable tothe Company in respect of repayment of the overdue for more than 90days and hence notcommented upon.
(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Companies Act 2013in respect of loans investments guarantees and security.
(v) The Company has accepted deposits from the public. The Company has generallycomplied with the provisions of directives issued by Reserve Bank of India and theprovisions of Section 73 to 76 of the Companies Act 2013 and rules framed there underexcept filling of Return of Deposit with Registrar of Companies and default in payment ofInterest and principal repayment on maturity. As per the information and explanation givento us no order under the aforesaid sections have been passed by the Company Law BoardNational Company Law Tribunal or Reserve Bank of India or any Court or any othertribunal on the company.
(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the Companies (Cost records and audit) Rules 2014 and as prescribed by the CentralGovernment under section 148(1) of the Act and are of the opinion that prima-facie theprescribed accounts and cost records have been made and maintained by the Company. We havenot however made a detailed examination of the cost records with a view to determiningwhether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records Rs. of the Company amounts deducted/ accrued in the booksof account in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax duty of excise service tax duty of customs employees stateinsurance value added tax cess and other material statutory dues have been regularlydeposited with few delay in some cases during the year by the Company with the appropriateauthorities.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax wealth tax service tax dutyof excise duty of customs value added tax cess and other material statutory dues werein arrears as at 31 March 2016 for a period of more than six months from the date theybecame payable except following:
|Name statute ||Year /Particular ||Rs. (In Lakhs) |
|Income Tax Act 1961 ||AY. 2007-2008 ||137.70 |
|Income Tax Act 1961 ||AY. 2008-2009 ||232.58 |
|Income Tax Act 1961 ||AY. 2009-2010 ||189.86 |
|Income Tax Act 1961 ||FBT Dues ||7.67 |
|The Maharashtra Value Added Tax Act .2002 ||MVAT Dues ||20.66 |
|Income Tax Act 1961 ||Tax Deduction at source ||273.74 |
(c) According to the information and explanations given to us there are no materialdues of wealth tax duty of customs and cess which have not been deposited with theappropriate authorities on account of any dispute. However according to information andexplanations given to us the following dues of income tax sales tax service tax andvalue added tax have not been deposited by the Company on account of disputes:
|Name of the statute ||Nature of dues ||Amount (in Lakhs.) ||Period to which the Amount relates ||Forum where dispute is pending |
|Income Tax Act ||Income Tax ||431.74 ||AY.2011-12 ||CIT(A) (MUMBAI) |
|Income Tax Act ||Income Tax ||348.14 ||AY.2012-13 ||CIT(A) (MUMBAI) |
(viii) Based on our Audit procedures and according to information and explanation givento us the Company has paid dues to banks with certain delay. The Company has overdueoutstanding dues to financial institutions banks or debenture holders as at 31st March2016 as follows:
|Sr. No. ||Name of Lender ||Rs. In Lakhs ||Period |
|1 ||State Bank Of India (Asrec India Ltd) ||4044.00 ||April to March-16 |
|2 ||IDBI Bank Limited ( ARCIl Ltd) ||419.69 ||April to March-16 |
|3 ||Union Bank of India ||1326.75 ||April to March-16 |
(ix) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments. The term loans have been applied forthe purpose for which they were obtained.
(x) Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
(xi) Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act; (xii) In our opinion the Company is not a NidhiCompany. Therefore the provisions of clause 4 (xii) of the Order are not applicable tothe Company.
(xiii) In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.
(xiv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
(xv) Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
(xvi) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.
For Ajay B Garg
Mem No: 032538
Place : Mumbai
Dated : 30.05.2016
Annexure B to the Independent Auditors Report
[Referred to in paragraph 2(g) under the heading Report on Other Legal &Regulatory Requirement of our report of even date to the standalone financialstatements of the Company for the year ended March 31 2016.]
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 M/s. M/s.Niraj Cement Structurals Limited (the Company) as of 31 March 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance
Note on Audit of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India (ICAI).
These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit.
We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting (the "Guidance Note") and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects. Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors judgment including the assessment of therisks of material 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 Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the companys assets that could havea 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 control over financial reporting may become inadequate becauseof changes in conditions or that the degree of compliance policies or procedures maydeteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial financial reporting criteria established by the Company considering theessential
Note on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India. For Ajay B Garg Chartered Accountant
Mem No: 032538
Place : Mumbai
Dated : 30.05.2016