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Nirlon Ltd.

BSE: 500307 Sector: Infrastructure
NSE: NIRLON ISIN Code: INE910A01012
BSE 00:00 | 20 Sep 311.20 -3.70
(-1.17%)
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314.00

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NSE 05:30 | 01 Jan Nirlon Ltd
OPEN 314.00
PREVIOUS CLOSE 314.90
VOLUME 5794
52-Week high 321.00
52-Week low 225.25
P/E 23.09
Mkt Cap.(Rs cr) 2,805
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 314.00
CLOSE 314.90
VOLUME 5794
52-Week high 321.00
52-Week low 225.25
P/E 23.09
Mkt Cap.(Rs cr) 2,805
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Nirlon Ltd. (NIRLON) - Auditors Report

Company auditors report

To

The Members of Nirlon Limited

Report on the Audit of the Ind AS Financial Statements Opinion

We have audited the accompanying Ind AS Financial Statements of NirlonLimited (‘the Company') which comprise the

Balance Sheet as at March 31 2019 the Statement of Profit and Lossincluding Other Comprehensive Income the Cash Flow Statement and the Statement of Changesin Equity for the Year then ended and notes to the Ind AS Financial Statements includinga summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Ind AS Financial Statements give the informationrequired by the Companies Act 2013 as amended (‘the Act') in the mannerso required and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the

CompanyasatMarch312019itsprofit comprehensive income its Cash Flowsand the Changes in Equity for the Year ended on that date.

Basis for Opinion

We conducted our Audit of the Ind AS Financial Statements in accordancewith the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the‘Auditor's Responsibilities for the Audit of the Ind AS FinancialStatements' section of our Report. We are independent of the Company in accordancewith the ‘Code of Ethics' issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our Audit of the Ind ASFinancial Statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the Audit evidence we have obtained is sufficient andappropriate to provide a basis for our Audit opinion on the Ind AS Financial Statements.

Key Audit Matters

Key Audit matters are those matters that in our professionaljudgmentwereofmostsignificancein our Audit of the Ind AS

Financial Statements for the Financial Year ended March 31 2019. Thesematters were addressed in the context of our Audit of the Ind AS Financial Statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. For the matter below our description of how our Audit addressed the matteris provided in that context. We have determined the matter described below to be the keyAudit matter to be communicated in our Report. We have fulfilled the responsibilitiesdescribed in the Auditor's responsibilities for the Audit of the Ind AS FinancialStatements section of our

Report including in relation to this matter. Accordingly our Auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Ind AS Financial Statements. The results of our Auditprocedures including the procedures performed to address the matter below provide thebasis for our Audit opinion on the accompanying

Ind AS Financial Statements.

Key Audit Matter How our Audit addressed the key Audit Matter
Related party transactions with Nirlon Management Services Private Limited
As disclosed in Note 35 of the Ind AS Financial Statements the Company has entered into Our Audit procedures included considering the compliance with the various requirements for entering in to such related party transactions.
following transactions with Nirlon Management Services Private Limited (‘NMSPL') a related party: We performed test of controls over related party transactions through inspection of evidence of performance of these controls.
We performed the following tests of details:
property and lease Management services We have read the Reports obtained by Management from external experts.
project Management services
Determination of transaction price for such related party transactions is a key Audit matter considering the significance of the transaction value and the judgements involved in determining the transaction value. We have read the approvals obtained from Audit Committee Board of Directors and Shareholders for the transactions We have assessed disclosures in the Financial Statements for compliance with relevant accounting standards and other regulations.

Other Information

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the Ind AS Financial Statements and our Auditor's Reportthereon. Our opinion on the 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 Ind AS Financial Statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the Ind AS Financial Statements or ourknowledge obtained in the Audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to Report that fact. We have nothing to Report in thisregard.

Responsibilities of Management for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these Ind ASFinancial Statements that give a true and fair view of the financial position financialperformance including other comprehensive income Cash Flows and Changes in Equity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specifiedunder section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of 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 the 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 Ind AS FinancialStatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the Ind AS Financial Statements Management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless Management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company's financial reporting process.

Auditor's Responsibilities for the Audit of the Ind AS FinancialStatements

Our objectives are to obtain reasonable assurance about whether the IndAS Financial Statements as a whole are free from material misstatement whether due tofraud or error and to issue an Auditor's Report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an Auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influencetheeconomic decisions of users taken on the basis of these Ind AS Financial Statements.

As part of an Audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Ind ASFinancial Statements whether due to fraud or error design and perform Audit proceduresresponsive to those risks and obtain Audit evidence that is sufficientand 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 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 thereasonableness of accounting estimates and related disclosures made by Management.

Conclude on the appropriateness of Management's use of the goingconcern basis of accounting and based on the Audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our Auditor's Report to therelated disclosures in the Ind AS Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the Audit evidenceobtained up to the date of our Auditor's Report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the Ind ASFinancial Statements including the disclosures and whether the Ind AS FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the

Audit and significant Audit findings including any significantdeficiencies in internal control that we identify during our We also provide those chargedwith governance with a statement that we have complied with relevant ethical requirementsregarding independence and to communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence and where applicable relatedsafeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the Audit of the Ind ASFinancial Statements for the financial Year ended March 31 2019 and are therefore the keyAudit matters. We describe these matters in our Auditor's Report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our Report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Other Matter

The Ind AS Financial Statements of the Company for the Year ended March31 2018 included in these Ind AS Financial Statements have been audited by thepredecessor auditor who expressed an unmodified 14 2018.

We audited the adjustments as fully described in Note 41 to the Ind ASFinancial Statements which have been made to the comparative Ind AS Financial Statementspresented for the years prior to Year ended March 31 2018. In our opinion suchadjustments are appropriate and have been properly applied.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016(‘the Order') issued by the Central Government of India in terms ofsub-section (11) of section 143 of the Act we give in the ‘Annexure 1' astatement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we Report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit; (b) In our opinion proper books of account as required by law have been kept bythe Company so far as it appears from our examination of those books; (c) The BalanceSheet the Statement of Profit and Loss including the Statement of Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account; (d) In our opinion the aforesaid IndAS Financial Statements comply with the Accounting Standards specified under Section 133of the Act read with Companies (Indian Accounting Standards) Rules 2015 as amended; (e)On the basis of the written representations received from the Directors as on March 312019 taken on record by the Board of Directors none of the Directors is disqualified ason March 31 2019 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 with reference to these Ind AS Financial Statements and theoperating effectiveness of such controls refer to our separate Report in ‘Annexure2' to this Report;

(g) In our opinion the managerial remuneration for the Year endedMarch 31 2019 has been paid / provided by the Company to its Directors in accordance withthe provisions of section 197 read with Schedule V to the Act; (h) With respect to theother matters to be included in the Auditor's Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules 2014 as amended in our opinion and to the bestof our information and according to the explanations given to us: i. The Company hasdisclosed the impact of pending litigations on its financial position in its Ind ASFinancial Statements Refer Note 32 to the Ind AS Financial Statements; ii. The Company didnot have any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses; iii. There were no amounts which were required to betransferred to the Investor Education and Protection Fund by the Company.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
Abhishek Agarwal
Partner
Membership Number: 112773
UDIN: 19112773AAAABW2350
Mumbai May 13 2019

Annexure 1 to the Independent Auditor's Report referred to inparagraph 1 under the heading ‘Report on Other Legal and RegulatoryRequirements' of our Report of even date on the Ind AS Financial Statements of NirlonLimited

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) Fixed assets have been physically verified by the Management duringthe Year and no material discrepancies were identified on such verification.

(c) According to the information and explanations given by theManagement the title deeds of immovable properties included in investment property areheld in the name of the Company except for the following :

INR
(in Lakh)
Sr. Asset Category Carrying Value as at March 31 2019 Remarks
1. Land 19.00 The title deeds are in the erstwhile name of the
2. Building 43.50 Company

(ii) The Company's business does not involve inventories andaccordingly the requirements under paragraph 3(ii) of the Order are not applicable to theCompany.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. Accordingly the provisions of clause 3(iii) (a) (b) and(c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanationsgiven to us there are no loans investments guarantees and securities given in respectof which provisions of section 185 and 186 of the Companies Act 2013 are applicable andhence not commented upon.

(v) The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014 (as amended). Accordingly the provisions of clause 3(v) of the Order are notapplicable.

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Companies Act 2013 related to the leasing serviceand are of the opinion that prima facie the specified accounts and records have been madeand maintained. We have not however made a detailed examination of the same.

(vii) According to the information and explanations given to us inrespect of statutory dues:

(a) The Company is regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund income-tax duty of custom duty ofexcise goods and service tax cess and other statutory dues applicable to it. (b)According to the information and explanations given to us no undisputed amounts payablein respect of provident fund income-tax duty of custom duty of excise goods andservice tax cess and other statutory dues were outstanding at the Year end for a periodof more than six months from the date they became payable.

(c) According to the records of the Company the dues of excise dutyand service tax on account of any dispute are as follows:

Name of Statue Nature of the Dues INR (in lakh) Period to which the amount relates Forum where the dispute is pending
Central Excise Act 1944 Interest on Excise Duty 20.95 Financial Year 1999-00 and February 1995 to April 1999 High Court
Central Excise Act 1944 Excise Duty and Penalty thereon 88.70 April 1998 to June 1999 and May 2003 to August 2005 Customs Excise and Service Tax Appellate Tribunal
The Finance Act 1994 Service Tax 821.88 Financial years 2010-12 High Court

(viii) In our opinion and according to the information and explanationsgiven by the Management the Company has not defaulted in repayment of loans or borrowingto a financial institution. (ix) In our opinion and according to the information andexplanations given by the Management the Company has utilized the monies raised by way ofterm loans for the purposes for which they were raised. According to the information andexplanations given by the Management the Company has not raised any money by way ofinitial public offer debt instruments or further public offer.

(x) Based upon the Audit procedures performed for the purpose ofreporting the true and fair view of the Ind AS Financial Statements and according to theinformation and explanations given by the Management we Report that no fraud by theCompany or no material fraudontheCompanybytheofficersand employees of the Company has beennoticed or reported during the Year.

(xi) According to the information and explanations given by theManagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

(xii) In our opinion the Company is not a Nidhi company. Thereforethe provisions of clause 3(xii) of the Order are not applicable to the Company and hencenot commented upon.

(xiii) According to the information and explanations given by theManagement transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the Ind AS Financial Statements as required by the applicable accountingstandards.

(xiv) According to the information and explanations given to us and onan overall examination of the Balance Sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe Year under review and hence reporting requirements under clause 3(xiv) are notapplicable to the Company and not commented upon.

(xv) According to the information and explanations given by theManagement the Company has not entered into any non-cash transactions with Directors orpersons connected with him as referred to in section 192 of Companies Act 2013. (xvi)According to the information and explanations given to us the provisions of section 45-IAof the Reserve Bank of India Act 1934 are not applicable to the Company.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
Abhishek Agarwal
Partner
Membership Number: 112773
UDIN: 19112773AAAABW2350
Mumbai May 13 2019

Annexure 2 to the Independent Auditor's Report of even date on theInd AS Financial Statements of Nirlon Limited Report on the Internal Financial Controlsunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (‘theAct')

We have audited the internal financial controls over financialreporting of Nirlon Limited(‘ the Company') as of March 31 2019 inconjunction with our Audit of the Ind AS Financial Statements of the Company for the Yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting 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 ofChartered Accountants of India. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting with reference to these Ind ASFinancial Statements based on our audit. We conducted our Audit in accordance with theGuidance Note and the Standards on Auditing as specified under section 143(10) of the Actto the financial controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the Audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting with reference to these IndAS Financial Statements was established and maintained and if such controls operatedeffectively in all material respects.

Our Audit involves performing procedures to obtain Audit evidence aboutthe adequacy of the internal financial controls over financial reporting with reference tothese Ind AS Financial Statements and their operating effectiveness. Our Audit of internalfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting with reference to these Ind AS Financial Statements assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 andappropriate to provide a basis for our Audit opinion on the internal financial controlsover financial reporting with reference to these Ind AS Financial Statements.

Meaning of Internal Financial Controls Over Financial Reporting withReference to these Ind AS Financial Statements

A company's internal financial control over financial reportingwith reference to these Ind AS Financial Statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof Financial Statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financialreporting with reference to these Ind AS Financial Statements includes those policies andprocedures that (1) 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 materialeffect on the Financial Statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting With Reference to these Ind AS Financial Statements Because of the inherentlimitations of internal financial controls over financial reporting with reference tothese Ind AS 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 financialreporting with reference to these Ind AS Financial Statements to future periods aresubject to the risk that the internal financial control over financial reporting withreference to these Ind AS Financial Statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these Ind ASFinancial Statements and such internal financial controls over financial reporting withreference to these Ind AS Financial Statements were operating effectively as at March 312019 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote.

For S R B C & CO LLP
Chartered Accountants
ICAI Firm Registration Number: 324982E/E300003
Abhishek Agarwal
Partner
Membership Number: 112773
UDIN: 19112773AAAABW2350
Mumbai May 13 2019

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