To the Members of SHASHIJIT INFRAPROJECTS LIMITED
1. We have audited the accompanying financial statements of Shashijit InfraprojectsLimited which comprises the Balance sheet as at March 312019 the statement of profit& loss and statement of cash flows for the year ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2019 and its profit and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the SAs specified under section 143(10) ofthe Companies Act 2013. Our responsibilities under those Standards are further describedin the Auditor's Responsibilities for the Audit of the 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 together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of theCompanies Act 2013 and the Rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Key Audit Matters
2. 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. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter ||Auditor's Response |
|Revenue recognition presentation and disclosures in view of Accounting Standard 7- "Construction Contracts: ||Procedures performed by the Principal Auditor: |
|The application of Accounting Standard-7 involves certain key judgments relating to the recognition of revenue and expenses by reference to percentage of completion method such as verifying whether the contract revenue is measured reliably is it probable that the economic benefits associated with the contract will flow to the enterprise the contract costs and the stage of contract completion can be measured reliably and the contract costs attributable to the contract can be clearly identified. ||We assessed the Company's process/controls/methods for contract revenue recognized in the period under consideration the method used to determine it and the method used to determine the stage of completion of contracts in progress. |
|Management has relied upon the internal data provided by the respective Sites Project Managers for data relating to project i.e. Construction completed and as well recognized revenue and work in progress based upon data provided by Projects Managers. ||Besides obtaining an understanding of Management's processes and controls with regards to the above-mentioned aspects our procedure included the following: |
| ||a) We evaluated the design of Internal Controls relating to implementation of the Accounting standard-7. |
| ||b) Tested the relevant information/ methods/procedure conveyed internally to the management relating to the work completed of contracts which are certified by Project Managers (Engineers). |
| ||c) We have also analyzed the data provided by the Project Managers with the data certified by customers subsequently. |
Management's Responsibility for the Financial Statements
3. The Company's Board of Directors is responsible for matters stated in Section 134(5)of the Companies Act 2013 (the Act) with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards prescribed under Section133 of the Act as applicable. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing financial statements management is responsible for assessing thecompany's ability to continue as going concern disclosing as applicable matters relatedto going concern and using the going concern basis of accounting unless management eitherintends to liquidate the company or to cease operations or has no realistic alternativebut to do so. Those Board of Directors are also responsible for overseeing the company'sfinancial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
4. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SA'swill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
5. Identify and asses the risk of material misstatement of the financial statementwhether due to fraud or error design and perform audit procedure responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omission misrepresentations or the override of internal control.
6. Obtain an understanding of internal control relevant to the audit in order to designaudit procedure that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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.
7. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosure made by management.
8. Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 audit report to the related disclosures in thefinancial statements or if such disclosure is inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of auditor's report.However future events or conditions may cause the Company to cease to continue as a goingconcern.
9. Evaluate the overall presentation structure and content of the financial statementincluding the disclosure and whether the financial statements represent the underlyingtransactions and events in the manner that achieves fair presentation. We communicate withthose charged with governance regarding among other matters planned scope and timing ofthe audit and significant audit findings including any significant deficiency in theinternal control that we identify during our audit.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub- section (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure B" statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
As required by section 143(3) of the Act we report that:
We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.
a) 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.
b) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
c) In our opinion the aforesaid financial statements comply with the AccountingStandards prescribed under Section 133 of the Act as applicable.
d) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act.
e) 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 A. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
f) 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 in our opinionand to the best of our information and according to the explanations given to us:
i) The Company does not have any pending litigation which would impact its financialposition.
ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii) The company is not required to transfer any amounts to the Investor Education andProtection Fund.
For NPV & ASSOCIATES
Milan Chitalia Partner
M. NO: 112275
To the Independent Auditor's Report
(Referred to in paragraph 10(e) under Report on Other Legal and RegulatoryRequirements' of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of ShashijitInfraprojects Limited (the Company) as of March 312019 in conjunction withour audit of the 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 control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
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 on Audit of Internal Financial Controls Over Financial Reporting(the Guidance Note) issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material 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 judgment 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 and the audit evidence obtained bythe internal auditor in terms of his report is sufficient and appropriate to provide abasis for our audit opinion on the Company's internal financial controls system overfinancial reporting.
Meaning of Internal Financial Controls over Financial Reporting
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 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 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 changes in conditions or that the degree of compliance with the policies orprocedures 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 312019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note of Internal Financial ControlsOver Financial Reporting issued by the Institute of Chartered Accountants of India.
For NPV & ASSOCIATES
Milan Chitalia Partner
M. NO: 112275
To the Independent Auditor's Report
(Referred to in paragraph 10 under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) In our opinion physical verification of all the fixed assets are carried out atreasonable intervals by management however during the year no fixed asset verification wascarried out. According to the information and explanations given to us no materialdiscrepancies were noticed on such verification.
(c) With respect to immovable properties of acquired land and buildings that arefreehold according to the information and explanations given to us and the recordsexamined by us and based on the examination of the registered sale deed/transferdeed/conveyance deed/court orders approving schemes of arrangements/amalgamations providedto us we report that the title deeds of such immovable properties are held in the nameof the Company as at the balance sheet date. The company have not taken any land andbuildings on lease.
(ii) (a) Physical verification of inventory has been conducted at reasonable intervalsby the management;
(b) In our opinion and according to the information and explanation given to us theprocedures of physical verification of inventory followed by the management are reasonableand adequate in relation to the size of the company and the nature of its business.
(c) The company is maintaining proper records of inventory. As per information andexplanation given to us no material discrepancies were noticed on physical verification.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the Register maintained underSection 189 of the Companies Act 2013.
(iv) 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 Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.
(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year and accordingly the question of complying withSections 73 and 76 of the Companies Act 2013 does not arise. Further the company has nounclaimed deposits as on date of commencement of the Companies Act 2013 and henceprovisions of Sections 74 and 75 are not applicable. According to the information andexplanations given to us no Order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal on the Company.
(vi) The company is not required to maintain cost records as prescribed by the CentralGovernment under Section 148(1) of the Companies Act 2013 in respect of specifiedproducts of the Company.
(vii) According to the information and explanations given to us in respect ofstatutory dues and on the basis of our examination of the records of the Company amountdeducted/ collected/ accrued in the books of accounts in respect of undisputed statutorydues including Income Tax Goods and Service Tax etc. are regularly deposited by thecompany with the appropriate authorities.
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions banks and government and dues to debenture holders.
(ix) During the year the Company has not raised any money by way of initial publicoffer or further public offer. In our opinion and according to the information andexplanation given to us the Company has utilized whole of monies raised by way of theterm loans for the purpose for which they were raised.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees 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 CompaniesAct 2013. In respect of two wholetime directors and one managing director aggregateremuneration of Rs.4140000/- paid/provided during the year.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.
(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Sections 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 financial statements etc. as required by theapplicable accounting standards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.
(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 the person connected with them and hence provisions of Section 192 of theCompanies Act 2013 are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For NPV & ASSOCIATES
M. NO: 112275
NOTES - 1
1. Corporate Information:
M/S. Shashijit Infraprojects Limited is a Public limited company formerly known as"Shashijit Infraprojects Private Limited" & "Shashijit ConstructionPrivate Limited" having its registered address at Plot No. 209 Shop No. 23 2ndFloor Girnar Khushboo Plaza GIDC Vapi Gujarat 396195 CIN NO.: L45201GJ2007PLC052114and PAN No. AALCS3256J engaged in the business of contractors and undertake related/alliedactivities.
2. STATEMENT ON SIGNIFICANT ACCOUNTING POLICIES
(a) Accounting Assumptions:
The financial statements have been prepared under historical cost convention on anaccrual basis and in accordance with the generally accepted accounting principle and theapplicable accounting standards specified in the Companies (Accounting Standards) Rules2014 and referred to in the Companies Act 2013 unless otherwise specified.
(b) Use of Estimates:
The preparation of financial statement in conformity with generally accepted accountingprinciples requires the management to make estimates and assumptions that affects thereported balances of assets liabilities disclosure of contingent liabilities as on thereported date and expenses and incomes during the reported period. Management believesthat the estimates used in the preparation of the financial statements are prudent andreasonable. Any differences of estimated amount as compared to the actual amount getquantified in the period in which the same is settled.
(c) Costs and Benefits:
Unless otherwise specifically stated Costs are charged to revenue in the year in whichthe benefits accrue to the Company and /or in the year in which the resultant assets arecreated and put to effective use.
(d) Fixed Assets:
Fixed assets are stated at historical cost of acquisition or construction lessdepreciation. All cost relating to the acquisition and installation of fixed assets net ofCredit discounts and rebates etc. are capitalized when it is probable that futureeconomic benefits will flow and cost of items can be reliably measured in accordance withAccounting Standard10 on Property Plant & Equipment as specified in theCompanies (Accounting Standards) Rules 2014 and referred in the Companies Act 2013.
(e) Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date if there is anindication of impairment based on the internal and external factors. An asset is treatedas impaired when the carrying cost of the asset exceeds its recoverable amount. Animpairment loss if any is charges to the Profit and Loss Account in the year in whichthe asset is identified as impaired. Reversal of impairment loss recognized in prior yearsis recorded when there is an indication that impairment loss recognized for the assets nolonger exists or has been decreased.
Depreciation has been provided on the written down value method calculated on the basisof life prescribed in Schedule II to the Companies Act 2013.
(g) Revenue Recognition.
Revenue is recognized to the extent that it is probable that the economic benefits willflow to the company and revenue can be reliably measured. The following specificrecognition criteria must also be met before revenue is recognized:
i) Accounting for Revenue from Construction Activity:
Revenue/ Income from Fixed Price Long Term Construction Contract isrecognized as revenue in accordance with the requirement of accounting standard 7 (AS-7)on Construction Contracts issued by the Institute of Chartered Accountants ofIndia with reference to the stage of completion of the particular contract as at thereporting date.
Determination of Stage of Completion for Revenue Recognition inaccordance with AS-7: - Stage of Completion of a contract is determined on the basis ofthe proportion of contract cost incurred for work performed up to the reporting date bearto the estimated total contract cost.
Differential / Provisional Receivable on account of additional revenue recognized inaccordance with the above-mentioned policy is being separately disclosed as UnbilledRevenue under the head Other Current Assets.
Revenues earned are accounted net of liability on account of any related taxes orduties.
ii) Revenue from property development activity which are in substance similar todelivery of goods is recognized when all significant risks and rewards of ownership in theland and /or building are transferred to the customers and a reasonable expectation ofcollection of the sale consideration from customers exists.
Lease arrangement where the risks and rewards incident to ownership of an assetsubstantially vest with the lessor are recognized as operating leases.
(i) Valuation of Inventories:
Stock of Construction material at site is valued at cost or NRV whichever is lower.Cost of material includes the purchase cost (net of any taxes on which credits arereceived / receivable) and other incidental cost to bring such material to its presentlocation and condition.
(j) Provisions and contingencies:
A provision is recognized when the company has a present legal or consecutiveobligation as a result of past event and it is probable that and outflow of the resourceswill be required to settle the obligations in respect of which reliable estimate can bemade. Provisions are not discounted to its present value and are determined based on bestestimate required to settle the obligations at the Balance sheet date.
A disclosure for a contingent liability is made when there is a possible obligation ora present obligation that may but probably will not require on outflow of resources.Where there is possible obligation or a present obligation in respects of which thelikelihood of outflow or resources is remote no provisions or disclosure is made.
No provision has been made for liabilities which are contingent in nature but ifmaterial these are disclosed by way of note.
(k) Sundry Debtors Loans and Advances:
Sundry debtors loans and advances are not stated after making adequate provision fordoubtful balances. Doubtful Debts / advances are written off in the year in which theseare considered to be irrecoverable.
(l) Borrowing Cost:
Borrowing Costs that are attributable to tangible fixed assets are capitalized till thedate of substantial completion of the activities necessary to prepare the relevant assetsfor its intended use.
Provision for taxation is made in accordance with the income tax laws prevalent duringthe relevant assessment year after considering various admissible reliefs.
Deferred tax is recognized; subjects to the consideration of prudence on timingdifferences being the difference between taxable incomes and accounting income thatoriginate in one period and are capable of reversal in one or more subsequent periods.Deferred Tax assets is recognized and carried forward only to the extent that there isreasonable certainty that there will be sufficient future taxable income to realize suchassets.
(n) Employee Benefit:
(i) Short Term Employee Benefit like leave benefit are paid along with salary &wages on a month to month basis.
(ii) Liability on account of gratuity payable to employees on retirement benefits isaccounted on payment basis.
(iii) Employer Contributions to Employee Provident Fund are charged to Profit &Loss Account during the year.
(iv) Bonus to employees are charged to profit & loss account on the basis ofactual payment on year to year basis.
(o) Earnings Per Share:
Basic earnings per share is calculated by dividing the net profit or loss for the yearattributable to equity share holder by weighted average numbers of equity shareoutstanding during the year. The number of shares used in computing diluted earnings pershares comprises the weighted average number of shares considered for deriving basicearnings per share and also the weighted average no of equity share which may issue onthe conversion of all dilutive potential shares. Similarly previous year E.P.S have beenrestated accordingly.
Long Term Investments are valued at cost unless there is a permanent diminution in thevalue of Investments. And Short-term Investments are valued at cost or NRV whichever islower.