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Nila Infrastructures Ltd.

BSE: 530377 Sector: Infrastructure
NSE: NILAINFRA ISIN Code: INE937C01029
BSE 00:00 | 04 Dec 5.25 0.15
(2.94%)
OPEN

5.15

HIGH

5.30

LOW

5.00

NSE 00:00 | 04 Dec 5.25 0.15
(2.94%)
OPEN

5.20

HIGH

5.35

LOW

5.05

OPEN 5.15
PREVIOUS CLOSE 5.10
VOLUME 161768
52-Week high 6.06
52-Week low 2.19
P/E 105.00
Mkt Cap.(Rs cr) 207
Buy Price 5.25
Buy Qty 5.00
Sell Price 5.27
Sell Qty 250.00
OPEN 5.15
CLOSE 5.10
VOLUME 161768
52-Week high 6.06
52-Week low 2.19
P/E 105.00
Mkt Cap.(Rs cr) 207
Buy Price 5.25
Buy Qty 5.00
Sell Price 5.27
Sell Qty 250.00

Nila Infrastructures Ltd. (NILAINFRA) - Auditors Report

Company auditors report

To the Members of Nila Infrastructures Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Nila Infrastructures Limited("the Company") which comprise the standalone balance sheet as at 31 March2019 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

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 Companies Act 2013 ("Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 and profit and other comprehensiveincome changes in equity 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) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Recognition of contract revenue margins and related receivables:

The key audit matter How the matter was addressed in our audit
The Company enters into construction and development of infrastructure projects which are complex in nature and span over a number of reporting periods. Our procedures included the following:
• We selected a sample of contracts to test using a risk based criteria which included individual contracts with:
The accounting standard requires an entity to select measurement method for the relevant performance obligation that depicts the entity's performance in transferring goods or services or if a contract is onerous present obligations are recognized and measured as provisions. - significant revenue recognised during the year;
- significant unbilled work in progress (WIP) balances held at the year-end; or
- low profit margins.
The Company is recognizing contract revenue and margin for these contracts based on input method in accordance with the requirement of the standard which relies on management's estimates of the final outcome of each contract and involves the exercise of significant management judgment particularly in forecasting the cost to complete a contract in valuing contract variations claims and liquidated damages. • Obtained an understanding of management's process for reviewing long term contracts the risk associated with the contract and any key judgments.
We identified contract accounting as a key audit matter because the estimation of the total revenue and total cost to complete the contract prepared based on the prevailing circumstances is inherently subjective complex and require significant management judgment and forecast of contract revenue and/or contract cost may get subsequently changed due to change in prevailing circumstances assumptions contract variations or any other factor and could result in material variance in the revenue and profit or loss from contract for the reporting period. • Evaluating the design and implementation of key internal controls over the contract revenue and cost estimation process through the combination of procedures involving inquiry and observations re-performance and inspection of evidence in respect of operations of these controls.
• Verified underlying documents such as original contract and its amendments if any key contract terms and milestones etc. for verifying the estimation of contract revenue and costs and /or any change in such estimation.
Refer note 3 (h) to the standalone financial statements on accounting policy for revenue recognition. • Evaluating the outtum of previous estimates and agreeing the actual cost after the year end to the forecasted costs for the period.
• Evaluating the status of each of the material trade receivables past due as at year end the Company's on- going business relationship with customer and past payment history of the customers through discussion with management.
• Evaluating the adequacy of the standalone financial statement disclosures including disclosures of key assumptions and judgements.

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) 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 were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

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

• 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when 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

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

(A) 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.

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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

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

f) With respect to the adequacy of the internal financial controls with reference tostandalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(B) 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. The Company has disclosed the impact of pending litigations as at 31 March 2019 onits financial position in its standalone financial statements - Refer Note 35 to thestandalone financial statements;

ii. The company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

(iv) The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & Associates LLP
Chartered Accountants
Firm's Registration No: 116231W/W-100024
Jeyur Shah
Place: Ahmedabad Partner
Date: 20 May 2019 Membership No:045754

Annexure A

To the Independent Auditor's Report - 31 March 2019

(Referred to in our report of even date)

With reference to the "Annexure A" referred to in the Independent Auditor'sReport to the members of the Company on the standalone financial statements for the yearended 31 March 2019 we report the following:

(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 all fixed assets are verified annually. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets. In accordance with this programme fixed assets were physically verified by themanagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us including registered titled deeds we report that the title deeds comprising ofall of immovable properties of land and buildings which are freehold are held in the nameof the Company as at Balance sheet date.

(ii) Inventories have been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. The discrepancies noticedon verification between the physical stocks and the book records were not material andhave been properly dealt with in the books of account.

(iii) The company has granted unsecured loans to companies and limited liabilitypartnership firms covered in the register maintained under Section 189 of the CompaniesAct 2013 ('the Act'). The Company has not granted any loans secured or unsecured tofirms or parties covered in the register required to be maintained under Section 189 ofthe Act.

(a) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that rate of interest and other termsand conditions of aforesaid loans granted by the company are not prima facie prejudicialto the interest of Company.

(b) According to the information and explanations given to us and based on the auditprocedures conducted by us the aforesaid loans granted by the Company and interestpayable thereon are repayable as stipulated. The borrowers have been regular in payment ofprincipal and interest as stipulated.

(c) There are no overdue amounts of more than 90 days in respect of aforesaid loansgranted by the Company.

(iv) In our opinion and according to the information and explanations given to us andbased on the audit procedures conducted by us the Company has complied with theprovisions of Section 185 and Section 186 of the Act with respect to loans granted andinvestments made by the Company. The Company has not provided any guarantee or securityduring the year to the parties covered under section 185 and 186 of the Act. Accordinglycompliance under section 185 and 186 of the Act in respect of providing guarantees orsecurities is not applicable to the company

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit from public as per the directives issued by theReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder. Accordingly paragraph 3 (v) of theOrder is not applicable to the Company.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe rules prescribed by the Central Government for the maintenance of cost records underSection 148(1) of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. However we have not made a detailedexamination of the cost records with a view to determine whether they are accurate orcomplete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees' StateInsurance Income-tax Sales-tax Goods and service tax Duty of excise Value added taxCess and other material statutory dues have been generally regularly deposited during theyear by the Company with the appropriate authorities. Pending clarity on note the matteras explained in note 35(b) to the standalone financial statements the Company iscurrently unable to determine the extent of arrears of such provident fund due as at 31March 2019 outstanding for a period of more than six months from the date they becomepayable.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Income-tax Sales-taxGoods and service tax Duty of excise Value added tax Cess and other material statutorydues were in arrears as at 31 March 2019 for a period of more than six months from thedate they became payable.

(b) According to the information and explanations given to us there are no duesoflncome-tax Sales tax Goods and Service tax Duty of excise Value added tax and Cessas at 31 March 2019 which have not been deposited with the appropriate authorities onaccount of any dispute other than those mentioned below:

Name of statute Nature of dues Forum where dispute is pending Period to which the amount related Amount involved (Rs. in lakhs) Amount unpaid (Rs. in lakhs)
Income tax Act 1961 Income tax dues including interest Deputy commissioner of income tax (appeals) Assessment year 2011-12 75.94 75.94

(viii) In our opinion and according to the infonnation and explanations given to usthe Company has not defaulted in repayment of loans and borrowings to banks and financialinstitutions. The Company did not have any dues to government and debenture holders duringthe year.

(ix) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not raised any money by way ofinitial public offer or further pub) ic offer (including debt instruments) during the yearIn our opinion and according to the information and explanations given to us the termloans taken by the Company were applied for the purpose for which they were raised.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company as prescribed under Section 406 of the Act. Accordinglyparagraph 3 (xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the standalone financial statements asrequired by the applicable Indian Accounting Standards.

(xiv) 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. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3 (xv)of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Associates LLP
Chartered Accountants
Firm's Registration No: 116231W/W-100024
Jeyur Shah
Place: Ahmedabad Partner
Date: 20 May 2019 Membership No:045754

Annexure B

Independent Auditor's Report - 31 March 2019

(Referred to in our report of even date)

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

Opinion

We have audited the internal financial controls with reference to standalone financialstatements of Nila Infrastructures Limited ("the Company") as of 3l March 2019in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2019 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of india (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to standalone financialstatements criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India ("ICAI"). These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to the Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013 (hereinafter referred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to standalone financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to standalone financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tostandalone financial statements included obtaining an understanding of such internalfinancial controls assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the standalone financial statementswhether 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 withreference to standalone financial statements.

Meaning of Internal Financial controls with Reference to Standalone FinancialStatements

A company's internal financial controls with reference to standalone financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of standalone financial statements for externalpurposes in accordance with generally accepted accounting principles. A company's internalfinancial controls with reference tostandalone financial statements include those policiesand procedures that (l) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the standalone financial statements.

Inherent Limitations of Internal Financial controls with Reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference tostandalone financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For B S R & Associates LLP

Chartered Accountants Firm's Registration No: 116231W/W-100024

Jeyur Shah
Place: Ahmedabad Partner
Date: 20 May 2019 Membership No:045754

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