The Members of
NIKAJ ISPAT INDUSTRIES LIMITED Report on the lnd AS Financial Statements
We have audited the accompanying lnd AS financial statements of Niraj Ispat IndustriesLimited ("the Company") which comprises the Balance Sheet as at March 31. 2018.the Statement of Profit and Loss (including Other Comprehensive Income). Statement of CashPlow and the Statement of Changes in Equity for the year then ended and a summary olsignificant accounting policies and other explanatory information.
Management's Responsibility for the lnd AS 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 lnd AS financial statements that give a true and fair view ofthe financial position financial performance including other comprehensive income cashHows and changes in the equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (lnd AS) specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the lnd ASfinancial statements that give a true and fair view arid are free from materialmisstatement whether due to fraud or error.
Auditoi s Responsibility
Our responsibility is to express an opinion on these lnd As financial statements basedon our audit.
In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which arc required to be included in theaudit report under the provisions of the Act and the Rules made there under and the Orderunder section I43( 11) of the Act.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we compl> with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Companys Directors as well as evaluating theoverall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us. the aforesaid Ind AS financial statements gi\e the information required bythe Act in the manner so required and give a true and fair \ iew in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 and its profit total comprehensive income its cash Hows and changesin equity for the year ended on that date.
The comparative financial information of the Company for the year ended March 31 2017and the transition date opening balance sheet as at April I. 2016 prepared in accordance with Ind AS. included in these Ind AS financial statements have been audited by thepredecessor auditor w ho had audited the financial statements for the relevant periods.The report of the predecessor auditor on the comparative financial information and theopening balance sheet dated 28!m May 2018 expressed an unmodified opinion.
Report on Other Legal and Regulatory Requirements
I. As required by the Companies (Auditor's Report) Order. 2016 ("the Order")issued by the Central Government of India in terms of sub-section (II) of section 143 ofthe Act and on the basis of such checks of the books and record of the Company as weconsidered appropriate and according to the information and explanations given to us. wegive in Annexure A' a statement on the matters specified in paragraphs 3 and 4 ofthe Order.
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 purpose of our audit.
h. 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 l.oss including Other ComprehensiveIncome the statement of Cash f low and Statement of changes in Rquity dealt with by thisReport are in agreement with the books of account
d. In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under section 133 of the Act read w ith Rule 7 of theCompanies (Accounts) Rules 2014.
e. On the basis of written representations received from the directors as on March 31.2018. taken on record by the Board of Directors none of the Directors is disqualified ason 31s' March 2018. from being appointed as a Director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B" to this report.
g. With respect to the other matters to be included in the Auditors Report inaccordance with Rule II of the Companies (Audit and Auditors) Rules.2014. us amended inour opinion and to the best of our information and according to the explanations given tous:
(i) I he Company does not have any pending litigations which would impact its financialposition;
(ii) The Company did not have any long term contracts including derivatives contractsfor w hich they have any material foreseeable losses;
(iii) There were no amounts which required to be transferred by the company to theInvestor hducaiion and Protection Fund.
ANISIMIKK IF TO TI1F INDKPF.NDFNT A1 DITOKS' REPORT
(Referred to paragraph 2(1) under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
Report on the Internal Financial Control Over Financial Reporting under Clause (i) olSub-section 3 of Section 143 of the Companies act 2013 (the Act)
We have audited the internal financial controls over financial reporting of Niraj IspatIndustries Limited ("the Company") as on March 31. 2018 in conjunction with ouraudit of the Ind AS Financial statements of the company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalFinancial controls based on the internal controls over Financial reporting criteriaestablished by the company considering essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India (the Guidance Note') fhesesresponsibilities include the design implementation and maintenance of adequate internalFinancial controls that were operating cFfectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits asset the prevention and detection ol- frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of the reliableFinancial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal Financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note issued by the Institute of Chartered Accountants of India and theStandards on Auditing prescribed tinder Section 143(10) of the Act. to the extentapplicable to an audit of internal financial controls. Those standards and the GuidanceNote require that we comply with the ethical requirements and plan and perform the auditto obtain reasonable assurance about whether adequate internal financial controls overFinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control 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 judgment including the assessment of the risks ofmaterial misstatement of the Financial statements whether due to Fraud or error.
We believe that the audit ev idence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal Financial controls systemover 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 preparation of financial statements for external purposes in accordance withgenerall> accepted accounting principles. A companys internal financial controlover financial reporting includes those policies and procedures that (I) pertain to themaintenance ol records that in reasonable detail accurately and fairly re licet thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles ami that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company : and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations oflntcrnal 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 controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
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 2018. based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the Institute ofChartered Accountants of India.
For VIPIN KUMAR & COMPANY
annlxirl 4a* to i in: r auditors* kiport
(Referred to in paragraph I under Report on Other Legal and Requirement section
of our report of even date)
Report on Companies (Auditor's Report) Order 2016 ("the Order") issued bythe Central Government of India in terms of section 143(11) of the Companies Act 2013(the Act') of Niraj Ispat Industries Limited ("the Company"):
1. In respect of fixed assets of the Company:
a. The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification w hich in our opinion is reasonablehaving regard to the si/.e of the company and the nature of its assets. According to theinformation and explanations given to us. no material discrepancies were noticed on suchverification
c. According to the information and explanations given to us and the records examinedby us. we report that the company is not having freehold properties. In respect ofimmovable properties taken on lease and disclosed as fixed assets in the financialstatements the lease agreements are in the name of the company.
2. As explained to us. the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on suchverification.
3. According to the information and explanations given to us. the company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section IS1)of the Act.
4. in our opinion and according to the information and explanations given to us. thecompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
5. I'he company has not accepted any deposits w ithin the meaning of sections 73 to 76of the Act and the Companies (Acceptance of deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the order are not applicable to the Company.
6. Reporting under clause 3(\i) of the Order is not applicable as the Company'sbusiness activities arc not covered by the Companies (Cost Records and Audit) Rules. 2014.
7. 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. sales tax goods andserv ice tax. service tax. value added tax duty of customs duty of excise cess and anyother material statutory duos applicable to it with appropriate authorities.
b. There were no undisputed amounts payable in respect of provident fund employees'state insurance Income tax. sales tax goods and service tax. service tax value addedtax. duty of customs duty of excise cess and any other material statutory dues inarrears as at 3P: March 2018 for a period of more than six months from thedate they became payable.
8. In our opinion and according to the information and explanations given to us. thecompany has not defaulted in repayment of loans or borrowings to the banks. I he Companydoes not have any outstanding dues in respect of financial institutions and debentureholders during the year.
9. Based on the information and explanations given to us by the management term loanwas applied for the purpose the loan was raised. The Company has not raised any money byway of initial public offer or further public offer (including debt instrument).
10. According to the information and explanations given to us. no material fraud by thecompany or on the company by its officers or employees has been noticed or reported duringthe course of our audit.
11. According to the information and explanations given to us. the management has paidmanagerial remuneration in accordance with the provisions of section 197 read withSchedule V to the Companies Act 2013.
12. In our opinion the Company is not u nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable.
13. According to the information and explanations given to us. the transactions withthe related parties are in compliance with Section 177 and I XX of the Companies Act 2013where applicable and details have been disclosed in the notes to the financial statementsas required by the applicable accounting standards.
14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures hence reporting under clause3(xiv) of the order is not applicable to the Company.
15. According lo the information and explanations given to us. the company has notentered in to any non-cash transaction with the director or persons connected with him asreferred to in section 192 of the Companies Act. 2013.
16. According to the information and explanations given to us. the provisions Otsection 45-1A of the Reserve Bank of India Act. 1934 arc not applicable to the Company.
l or VIRUS Kl MAR & COMPANY
f irm Reg. No. Q02I23C