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Niraj Cement Structurals Ltd.

BSE: 532986 Sector: Infrastructure
NSE: NIRAJ ISIN Code: INE368I01016
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OPEN 48.40
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VOLUME 1822
52-Week high 61.50
52-Week low 12.80
P/E 45.31
Mkt Cap.(Rs cr) 163
Buy Price 50.20
Buy Qty 12.00
Sell Price 51.00
Sell Qty 415.00
OPEN 48.40
CLOSE 48.65
VOLUME 1822
52-Week high 61.50
52-Week low 12.80
P/E 45.31
Mkt Cap.(Rs cr) 163
Buy Price 50.20
Buy Qty 12.00
Sell Price 51.00
Sell Qty 415.00

Niraj Cement Structurals Ltd. (NIRAJ) - Auditors Report

Company auditors report

To the members of

NIRAJ CEMENT STRUCTURALS LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of Niraj CementStructurals Limited ("the Company") which comprise the Balance Sheet as atMarch 312019 the Statement of Profit and Loss (including other comprehensive income)theCash Flow Statement and the Statement of Changes in Equity for the year ended on thatdate and notes to the standalone Ind AS financial statements including a summary of thesignificant accounting policies and other explanatory information (herein after referredto as "the standalone Ind AS 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 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 312019 the profit (including othercomprehensive income) its cash flows and the statement of changes in equity for the yearended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone Ind AS financial statements.Emphasis of Matter

(1) We draw your attention to Part B of notes to account of the financialstatementNiraj Cement Structurals Ltd. has booked turnover and related cost of JointVenture entities and partners in its books of account. However the whole projects havebeen handled by Joint Venture Partners / Entities and related GST and TDS complied byJoint Venture Partners/ Entities. Also no TDS has been deducted on the provision made ofsub-contract charges of uncertified work.

(2) We draw your attention to Part B of notes to account of the financialstatementBalance of inventory appeared for a long time in Financial Statement includingwork-in-progress and raw materials. Based on the information and explanation given to usthe management has written off entire raw material inventory and some portion of work-in-progresss inventory as mentioned in the profit and loss statement. Due to absence ofany development in the project/ supporting audit evidence we are unable to comment on therecoverability of the work-in-progress.

(3) We draw your attention to Part B of notes to account of the financial statementthe Company does not have a program of verification to cover all the items of fixed assetsin a phased manner. Fixed assets were not physically verified by the management during theyear.

(4) We draw your attention to Part B of notes to account of the financial statement ;Asper Ind AS 109 "Financial Instrument" the company is required to consider"Provision for Expected Credit Loss" on all financial assets on the basis ofexpected probability of recoverability of such financial instrument.

During the year the company has provided Rs.91261721/- as Expected Credit Loss(ECL) and has written off in the financial statement. As per management explanation thereceivable and advance of Rs.211673409/- is in dispute and for balance receivable andadvances the management is following up with the parties and is hopeful for recovery. Butin the absence of adequate basis/ supporting documents we are unable to comment on themeasurement of carrying amount of all the financial assets appearing in the financialstatements as on 31.03.2019. Further the company is also required to amortize financialassets as per business model selected by the company but in the absence of proper termsand conditions amortization is not possible and financial assets appear at carryingamount on 31.03.2019.

Further in the absence of terms and condition of financial instruments we are unableto comment on the classification between current and non-current portion of financialinstruments.

(5) We draw your attention to Part B of notes to account of the financial statementbalance of Trade Payable Trade receivable advances received and advances given aresubject to confirmation and reconciliation. The management is hopeful for recovery oftrade receivables.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

The key audit matters How the matter was addressed in our audit
Adoption of Ind AS 115 - Revenue from Contracts with Customers
The company has adopted Ind AS 115 Revenue from Contracts with Customers (‘Ind AS 115') which is the new revenue accounting standard. The application and transition to this accounting standard is complex and is an area of focus in the audit. The revenue standard establishes a comprehensive framework for determining whether how much and when revenue is recognized. This involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of identified performance obligation the appropriateness of the basis used to measure revenue recognized over a period. Additionally the standard mandates robust disclosures in respect of revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. The company has booked turnover and related cost of Joint Venture entities and partners in its books of account. However the whole projects have been handled by Joint Venture Partners / Entities and related GST and TDS complied by Joint Venture Partners/ Entities. Also no TDS has been deducted on the provision made of sub-contract charges of uncertified work. Our audit procedures on adoption of Ind AS 115 Revenue from contracts with Customers (‘Ind AS 115') which is the new revenue accounting standard include -
• Evaluated the design and implementation of the processes and internal controls relating to implementation of the new revenue accounting standard;
• Evaluated the detailed analysis performed by management on revenue streams by selecting samples for the existing contracts with customers and considered revenue recognition policy in the current period in respect of those revenue streams;
• Evaluated the appropriateness of the disclosures provided under the new revenue standard and assessed the completeness and mathematical accuracy of the relevant disclosures

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

The Company's Management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theCompany's annual report but does not include the standalone Ind AS financial statementsand our auditor's report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and 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 during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin Section 134 (5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone Ind AS financial statements that give a true and fair viewof the state of affairs profit other comprehensive income cash flows and statement ofchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS financial statements management and Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so. The Board of Directorsis also responsible for overseeing the Company's financial reporting process.

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

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 standalone Ind ASfinancial 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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 Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of statements in the standalone financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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 Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order 2016 (‘the Order') issuedby 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 the Orderto 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 Balance Sheet the Statement of Profit and Loss (including Other ComprehensiveIncome) Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account;

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theInd AS specified under Section 133 of the Act except Ind AS 115 please refer to the KeyAudit Matters para and part (i) of Emphasis of Matter para.

e) On the basis of the written representations received from the directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 from being appointed as a director in terms of Section 164 (2) of theAct.

f) 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(B) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.

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

(C) With respect to the other matters to be included in the Auditor's Report inaccordance 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 explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

For CHATURVEDI SOHAN & Co.
Chartered Accountants
(Firm's Registration No. 118424W)
Noshir. B. Captain
Partner
(Membership No.009889) Date: 30st May 2019.
Place: Mumbai

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT -31st MARCH 2019

(Referred to our report of even date)

i. In respect of the Company's fixed assets:

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company does not have a program of verification to cover all the items of fixedassets in a phased manner which in our opinion is not reasonable having regard to thesize of the Company and the nature of its assets. Fixed assets were not physicallyverified by the management during the year.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds / registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are not held in the name of the Company as at the balancesheet date. In respect of immovable properties of land and building that have been takenon lease and disclosed as fixed assets in the standalone financial statements the leaseagreements are in the name of the Company.

ii. Balance of inventory appeared for a long time in Financial Statement includingwork-in-progress and raw materials. Based upon the information and explanation given tous management has written off entire raw material inventory and some portion ofwork-in-progress inventory. Due to absence of any development in the project/ supportingaudit evidence we are unable to comment on the recoverability of the work-in-progressinventory.

iii. The Company has granted loans and advances amounting to NCS Infrastructure andreceipts of company covered in the registered maintained under section 189 of the Act.

(a) There are no terms and conditions of the grant of such loan.

(b) There is no schedule of repayment of principal and payment of interest.

Since there is no repayment schedule clause 3(iii)(c) is not applicable.

Iv . The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 312019 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.

vi. The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013 for the business activities carried out bythe Company. Thus reporting under clause 3(vi) of the order is not applicable to theCompany.

vii. According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Customs Duty Cess and other materialstatutory dues in arrears as at March 31 2019 for a period of more than six months fromthe date they became payable. Except the following :

Name of the statute Nature of dues Amount (in lakhs) Period for which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income tax 474.06 2010-11 CIT (A) Mumbai
Income Tax Act 1961 Income tax 431.74 2011-12 CIT (A) Mumbai
Income Tax Act 1961 Income tax 348.14 2012-13 CIT (A) Mumbai

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloans or borrowings from financial institutions banks and government or has not issuedany debentures. Hence reporting under clause 3 (viii) of the Order is not applicable tothe Company.

ix. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable to the Company.

x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during the year.

xi. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

xiv. Based upon the information and explanation given by the management the Companyhas made preferential allotment of 3800000 shares during the year under review. Thecompany have been complied with the requirement of Section 42 of the Companies Act2013and the amount raised have been used for the purpose for which the fund was raised.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For CHATURVEDI SOHAN & Co.
Chartered Accountants
(Firm's Registration No. 118424W)
Noshir. B. Captain
Partner
(Membership No.009889) Date: 30st May 2019.
Place: Mumbai

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT -31st MARCH 2019

(Referred to in paragraph A(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia (The ‘Guidance Note').

Management's Responsibility for Internal Financial Controls

The Company's management and Board of Directors of the Company are responsible forestablishing and maintaining internal financial controls based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to respective company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls withreference to standalone Ind AS financial statements. 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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial 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 internal financial controls system overfinancial reporting of the Company.

Meaning of Internal Financial Controls with Reference to standalone Ind AS financialstatements

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

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 are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

For CHATURVEDI SOHAN & Co.
Chartered Accountants
(Firm's Registration No. 118424W)
Noshir. B. Captain
Partner
(Membership No.009889) Date: 30st May 2019.
Place: Mumbai

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