To The Members of
NIRAJ ISPAT INDUSTRIES LIMITED
Report on the Audit of the Ind AS Financial Statements
Opinion
We have audited the accompanying Ind AS financial statements of Niraj Ispat Industries
Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2022,
the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Cash
Flow and the Statement of Changes in Equity for the year then ended and Notes to the
Financial Statements including a summary of significant accounting policies and other
explanatory information (hereinafter referred to as the "financial statements").
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid Ind AS financial statements give the information required by
the Companies Act, 2013 ("the Act") in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India, of
the state of affairs of the Company as at March 31, 2022, its profit including other
comprehensive income, its cash flows and changes in equity for the year ended on that
date.
Basis for Opinion
We conducted our audit of the Ind AS financial statements in accordance with the
Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described in the ‘Auditors
Responsibilities for the Audit of the Ind AS Financial Statements section of our report.
We are independent of the Company in accordance with the ‘Code of Ethics issued by
the Institute of Chartered Accountants of India together with the ethical requirements
that are relevant to our audit of the financial statements under the provisions of the Act
and the Rules there under, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate 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 professional judgment, were of most
significance in our audit of the Ind AS financial statements for the financial year ended
March 31, 2022. These matters were addressed in the context of our audit of the Ind AS
financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. For each matter below, our description of how our
audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be
communicated in our report. We have fulfilled the responsibilities described in the
Auditors responsibilities for the audit of the Ind AS financial statements section of our
report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material
misstatement of the Ind AS financial statements. The results of our audit procedures,
including the procedures performed to address the matters below, provide the basis for our
audit opinion on the accompanying Ind AS financial statements.
1. Property, Plant & Equipment and Capital Work in progress
Valuation and existence of property, plant and equipment including assessment of useful
lives and residual value. Property, plant and equipment represents a significant
proportion of the Companys asset base. The estimates and assumptions made to determine
the carrying amounts, including whether and when to capitalize or expense certain costs,
and the determination of depreciation charges are material to the Companys financial
position and performance. The charges in respect of periodic depreciation are derived
after estimating an assets expected useful life and the expected residual value. Changes
to assets carrying amounts, expected useful lives or residual value could result in a
material impact on the financial statements an hence considered as key audit matter.
How our audit addressed the Key Audit Matter
Our audit procedures included the following:
Our audit approach consisted evaluation of design and implementation of controls, and
testing the operating effectiveness of the internal controls over valuation of property,
plant and equipment and review of useful lives; Periodic physical verification of
property, plant and equipment for adequacy and appropriateness of the accounting and
disclosure by the Management:
• We obtained an understanding of the Companys capitalization policy and assessed
for compliance with the relevant accounting standards;
• We carried out substantive tests on random sampling for all the major additions,
deletions to the assets by applying all the characteristics of capital expenditure, proper
classification of the same, with reference to the companys policy and accounting
standards;
• We obtained an understanding on management assessment relating to progress of
projects and their intention to bring the asset to its intended use.
• We obtained certificates relating to useful lives of assets where, required.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Annual report, but does not include
the Ind AS financial statements and our auditors report thereon.
Our opinion on the Ind AS financial statements does not cover the other information and
we do not express any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements, our responsibility is
to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information; we
are required to report that fact. We have nothing to report in this regard.
Responsibility of Management and Those Charged with Governance for the Ind AS Financial
Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these Ind AS financial statements that give a true and fair view of the financial
position, financial performance including other comprehensive Income, cash flows and
changes in the equity of the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting Standards (Ind AS) specified
under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules,
2015 as amended.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of
the accounting records, relevant to the preparation and presentation of the Ind AS
financialstatements that give a true and fair view and are free from materialmisstatement,
whether due to fraud or error.
In preparing the Ind AS financial statements, management is responsible for assessing
the Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors is also responsible for overseeing the Companys financial
reporting process. Auditors Responsibilities For The Audit of the Ind AS Financial
Statements
Our objectives are to obtain reasonable assurance about whether the Ind AS financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditors report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with SAs
will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the
basis of these Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the Ind AS financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances. Under section 143(3)(i)
of the Act, we are also responsible for expressing our opinion on whether the Company has
adequate internal financial controls system in place and the operating effectiveness of
such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors
report. However, future events or conditions may cause the Company to cease to continue as
a going concern.
• Evaluate the overall presentation, structure and content of the Ind AS financial
statements, including the disclosures, and whether the Ind AS financial statements
represent the underlying transactions and events in a manner that achieves fair
presentation.
We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied
with relevant ethical requirements regarding independence, and to communicate with them
all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the Ind AS financial statements for
the financial year ended March 31, 2022 and are therefore the key audit matters. We
describe these matters in our auditors report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2020 ("the Order")
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, and on the basis of such checks of the books and record of the Company as we
considered appropriate and according to the information and explanations given to us, we
give in ‘Annexure A a statement 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 explanations which to the best
of our knowledge and belief were necessary for the purpose of our audit.
b. In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books.
c. The Balance Sheet, The Statement of Profit and Loss including Other Comprehensive
Income, the statement of Cash Flow and Statement of Changes in Equity dealt with by this
Report are in agreement with the books of account.
d. In our opinion, the aforesaid Ind AS financial statements comply with the Indian
Accounting Standards specified under section 133 of the Act, read with Companies (Indian
Accounting Standards) Rules, 2015, as amended.
e. On the basis of written representations received from the directors as on March 31,
2022, taken on record by the Board of Directors, none of the Directors is disqualified as
on 31st March, 2022, 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 financial
reporting of the company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B" to this report.
g. With respect to the other matters to be included in the Auditors Report in
accordance 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 explanations given to us, the
remuneration paid by the Company to its directors during the year is in accordance with
the provisions of section 197 of the Act.;
h. With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules,2014, as amended, in
our opinion and to the best of our information and according to the explanations given to
us :
(i) The Company has disclosed the impact of pending litigations on its financial
position in its Ind AS financial statements.
(ii) The Company has made provision, as required under the applicable law or accounting
standards, for material foreseeable losses, if any, on long-term contracts including
derivative contracts.
(iii) There has been no delay in transferring amount, required to be transferred, to
the Investor Education and Protection Fund by the Company
(iv) (a) The Management has represented that, to the best of its knowledge and belief,
as disclosed in Note 34 to the financial statements, no funds have been advanced or loaned
or invested (either from borrowed funds or share premium or any other sources or kind of
funds) by the Company to or in any other person(s) or entity(ies), including foreign
entities ("Intermediaries"), with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Company
("Ultimate Beneficiaries") or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of its knowledge and belief, as
disclosedin Note 34 to the financial statements, no funds have been received by the
Company from any person(s) or entity(ies), including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the
Company shall, directly or indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and
appropriate in the circumstances, nothing has come to our notice that has caused us to
believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any material misstatement.
ANNEXURE ‘B TO THE INDEPENDENT AUDITORS REPORT
(Referred to paragraph 2(f) 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) of
Subsection 3 of Section 143 of the Companies act, 2013 (‘the Act)
We have audited the internal financial controls over financial reporting of Niraj Ispat
Industries Limited ("the Company") as on March 31, 2022 in conjunction with our
audit of the Ind AS financial statements of the company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal controls over financial reporting criteria
established by the company considering essential components of internal control stated in
the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued
by the Institute of Chartered Accountants of India (the ‘Guidance Note). These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to companys policies, the safeguarding of
its asset, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of the reliable
financial information, as required under the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting with reference to these financial statements based on
our audit. We conducted our audit in accordance with the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting (the "Guidance Note") and
the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013,
to the extent applicable to an audit of internal financial controls and, both issued by
the Institute of Chartered Accountants of India. Those Standards and the Guidance Note
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal financial controls over financial
reporting with reference to these financial statements was established and maintained and
if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial control system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting with reference to these
financial statements is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A companys
internal financial control over financial reporting with reference to these financial
statements includes those policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys 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 financial
reporting with reference to these financial statements, including the possibility of
collusion or improper management override of controls, material misstatements due to error
or fraud may occur and not be detected. Also, projections of any evaluation of the
internal financial controls over financial reporting with reference to these financial
statements to future periods are subject to the risk that the internal financial control
over financial reporting with reference to these financial statements may become
inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Opinion
In our opinion, to the best of our information and according to the explanations given
to us, the Company has, in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial
reporting were operating effectively as at March 31, 2021, based on the internal control
over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note issued by the Institute of
Chartered Accountants of India.
ANNEXURE ‘A TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under ‘Report on Other Legal and Requirement section
of our report of even date)
Report on Companies (Auditors Report) Order, 2020 ("the Order") issued by
the 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. (a) The company has maintained proper records showing full particulars, including
quantitative details and situation of property, plant & equipment, capital
work-in-progress.
(b) The Company has a regular programme for physical verification in phased periodic
manner, which, in our opinion is reasonable having regard to the size of the company and
the nature of its assets. According to the information and explanations given to us, no
material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and the record examined
by us and based on the examination of registered sales deed/ conveyance deed / transfer
deed provided to us, we report that the title deeds, comprising all the immovable property
of land and acquired building which are freehold, are held in the name of the Company as
at the balance sheet.
(d) The Company has not revalued any of its property, plant and equipment during the
year.
(e) No proceedings have been initiated during the year or are pending against the
Company as at March 31, 2022 for holding any benami property under the Benami Transactions
(Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.
2. (a) As explained to us, the inventories were physically verified during the year by
the Management at reasonable intervals except for inventories lying with third parties
where confirmations have been received by the management. In our opinion and based on
information and explanations given to us, the coverage and procedure of such verification
by the Management is appropriate having regard to the size of the Company and the nature
of its operations. No discrepancies of 10% or more in the aggregate for each class of
inventories were noticed on such physical verification of inventories / alternate
procedures performed as applicable, when compared with the books of account.
(b) The Company has been sanctioned working capital limits from banks and financial
institutionson the basis of security of current assets. In our opinion and according to
the information and explanations given to us, the quarterly returns or statements
comprising stock and book debt statements, filed by the Company with such banks are in
agreement with the unaudited books of account of the Company of the respective quarters.
3. According to the information and explanations given to us, the company has not made
any investment in, provided any guarantee or security or granted any loans or advance in
the nature of loans, secured or unsecured. to companies, firms, limited liability
partnerships or any other parties covered in the register maintained under section 189 of
the Act.
4. In our opinion and according to the information and explanations given to us, the
company has complied with the provisions of Sections 185 and 186 of the Act in respect of
grant of loans, making investments and providing guarantees and securities, as applicable.
5. The company has not accepted any deposits within the meaning of sections 73 to 76 of
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. As explained to us, the Central Government of India has not specified the
maintenance of cost records under sub section (1) of section 148 of the Act for any
products of the Company. Therefore the provisions of clause 3(vi) of the order are not
applicable.
7. According to the information and explanations given to us, in respect of statutory
dues:
(i) The Company has generally been regular in depositing undisputed statutory dues
including provident fund, employees state insurance, Income tax, sales tax, goods and
service tax, service tax, value added tax, duty of customs, duty of excise, cess and any
other material statutory dues applicable to it with appropriate authorities.
(ii) There are no undisputed amounts payable in respect of provident fund, employees
state insurance, Income tax, sales tax, goods and service tax, service tax, value added
tax, duty of customs, duty of excise, cess and any other material statutory dues in
arrears as at 31st March, 2022 for a period of more than six months from the date they
became payable.
8. There were no transactions relating to previously unrecorded income that were
surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961
(43 of 1961) during the year.
9. (a) In our opinion and according to the information and explanations given to us,
the company has not defaulted in repayment of loans or borrowings to the banks and
financial institutions.
(b) The Company has not been declared wilful defaulter by any bank or financial
institution or government or any government authority.
(c) To the best of our knowledge and belief, in our opinion, term loans availed by the
Company were, applied by the Company during the year for the purposes for which the loans
were obtained
(d) On an overall examination of the financial statements of the Company, funds raised
on short-term basis have, prima facie, not been used during the year for long-term
purposes by the Company.
(e) On an overall examination of the financial statements of the Company, the Company
has not taken any funds from any entity or person on account of or to meet the obligations
of its subsidiaries, an associate or a joint venture
(f) The Company has not raised loans during the year on the pledge of securities held
in its subsidiaries or joint ventures or associate companies.
10. (a) The Company has not raised money by way of initial public offer or further
public offer (including debt instruments) during the year and hence reporting under clause
3(x)(a) of the Order is not applicable
(b) The Company has not made private placement of shares during the year and hence
reporting under clause 3(x)(b) of the Order is not applicable.
11 (a) According to the information and explanations given to us, no material fraud by
the company or on the company by its officers or employees has been noticed or reported
during the course of our audit.
(b) To the best of our knowledge, no report under sub-section (12) of section 143 of
the Companies Act has been filed in Form ADT4 as prescribed under rule 13 of Companies
(Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the
date of this report.
(c) As Auditor, we did not receive any whistle-blower complaint during the year.
12. In our opinion, the Company is not a nidhi company. Therefore, the provisions of
clause 3(xii) of the order are not applicable
13. According to the information and explanations given to us, the transactions with
the related parties are in compliance with Section 177 and 188 of the Companies Act 2013
where applicable and details have been disclosed in the notes to the standalone financial
statements, as required by the applicable accounting standards.
14. (a) In our opinion the Company has an adequate internal audit system commensurate
with the size and the nature of its business
(b) We have considered, the internal audit reports issued to the Company during the
year and covering the period upto March 2022.
15. According the information and explanation given to us, the company has not entered
into any noncash transaction with the director or persons connected with his as referred
to in section 192 of the Companies Act, 2013.
16. (a) In our opinion, the Company is not required to be registered under section
45-IA of the Reserve Bank of India Act, 1934
(b) The Company has not conducted any Non-Banking Financial or Housing Finance
activities during the year
(c) The Company is not a Core Investment Company (CIC) as defined in the regulations
made by Reserve Bank of India
(d) As per the information and explanation received, the group does not have any CIC as
part of the group.
17. The Company has not incurred cash losses during the financial year covered by our
audit and the immediately preceding financial year
18. There has been no resignation of the statutory auditors of the Company during the
year.
19. On the basis of the financial ratios, ageing and expected dates of realization of
financial assets and payment of financial liabilities, other information accompanying the
financial statements and our knowledge of the Board of Directors and Management plans and
based on our examination of the evidence supporting the assumptions, nothing has come to
our attention, which causes us to believe that any material uncertainty exists as on the
date of the audit report indicating that Company is not capable of meeting its liabilities
existing at the date of balance sheet as and when they fall due within a period of one
year from the balance sheet date. We, however, state that this is not an assurance as to
the future viability of the Company. We further state that our reporting is based on the
facts up to the date of the audit report and we neither give any guarantee nor any
assurance that all liabilities falling due within a period of one year from the balance
sheet date, will get discharged by the Company as and when they fall due.
20. There is not liability of the company under the provision of section 135 of the
Companies Act, relating to Corporate Social Responsibility. Therefore the Provision of
Clause (xx) of paragraph 3 of the order are not applicable to the Company.
21. The Company has not made investments in subsidiary company. Therefore, the company
does not require to prepare consolidated financial statement. Therefore, the provisions of
Clause (xxi) of paragraph 3 of the order are not applicable to the Company.
|
For VIPIN KUMAR & COMPANY |
|
Chartered Accountants Firm Reg. No. 002123C |
|
(V. K. AGARWAL) |
|
FCA/Prop. |
| Place : SAHARANPUR |
M. No. 071279 |
| Date : 30th May 2022 |
UDIN 22071279AJWCWY1447 |
+91-9892691696
