TO THE MEMBERS OF B Nanji Enterprises Limited Report on the Financial Statements
Qualified Opinion
We have audited the accompanying financial statements of B Nanji Enterprises Limited
("the Company"), which comprise the Balance Sheet as at March 31,2021, and the
Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the
Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and
notes to the financial statements including a summary of the significant accounting
policies and other explanatory information (hereinafter referred to as "Financial
Statements").
In our opinion and to the best of our information and according to the explanations
given to us, except for the possible effects of the matters described in the Basis for
Qualified Opinion section of our report, the aforesaid Ind AS financial statements give
the information required by the Companies Act, 2013, as amended ("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, 2021, its loss including other comprehensive income, its cashflows and the changes in
equity for the year ended on that date.
Basis for Qualified Opinion
1. Regarding Closing Stock amounting to Rs. 7,973.63 Lacs, Company has adopted lower of
cost or NRV mechanism to value its closing stock. We were unable to verify the closing
stock as our appointment was made post year-end. No major substantive testing or control
procedures could be performed over the Closing Stock hence we are unable to comment on the
carried value of closing stock in the Financial Statements. Valuation of Closing Stock is
certified by the management and is subject to verification and reconciliation.
2. In respect of Trade Receivables of Rs. 778.82 Lacs, Trade Payables of Rs. 348.62
Lacs and Loans and Advances of Rs. 1,321.98 Lacs from members contribution and agreements
to sale, material balances are outstanding and carried forward as are non-moving since
earlier years. We were unable to get confirmation / substantive evidence in respect of
respective balances which were carried forward as opening balances. Based on the
Management representation, dues are due to length of the projects and nature of the
business as outstanding from long time, however the amounts are still recoverable/payable.
We are unable to comment on the amounts outstanding in the respective heads due to
unavailability of any substantive evidence due to nonmoving. These balances are subject to
reconciliation and confirmation from the respective parties.
3. Long term borrowings from Bank and NBFC amounting to Rs. 3,859.89 Lacs outstanding
and carried forward from earlier years, have been declared as NPA and hence no repayment
of any amount in the current year. Company is in process of settlement with lenders for
the same amount, however due to uncertainty about the repayment because of undergoing
settlement proceedings, we are unable to comment on the same.
4. We draw attention to the requirements of Ind AS 19 - Employee Benefits have not been
complied with and accordingly, Employee Benefits have not been provided in the financial
statements.
5. We draw attention to Note 25.5 of the financial statements, as regards the
managements evaluation of Covid- 19 impact on the operations and financial metrics of the
Company.
We conducted our audit of the 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 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 (ICAI) together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Act and the Rules thereunder, 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 qualified audit opinion on the Financial
Statements.
Other Information - 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 Directors report, but does not
include the Financial Statements and our Auditors Report thereon. Our opinion on the
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 Financial Statements, our responsibility is to read
the other information and, in doing so, consider whether such 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 for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section
134(5) of the Act with respect to the preparation of these Financial Statements that give
a true and fair view of the financial position, financial performance including other
comprehensive income, changes in equity and cash flows 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, including the Companies (Indian Accounting
Standards) Amendment Rules, 2019.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of the assets of the Company
and for preventing and detecting the 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 Financial Statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the 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.
Those Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Our objectives are to obtain reasonable assurance about whether the 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 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 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 with reference to financial statements 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 Financial
Statements, including the disclosures, and whether the 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
issued by the Central Government of
India in terms of Section 143(11) of the Act, we give in the "Annexure A", a
statement on the matters specified in paragraphs 3 and 4 of the 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 except for the
matter described in the "Basis for Qualified Opinion" which to the best of our
knowledge and belief were necessary for the purposes of our audit;
(b) Except for the matter described in the "Basis for Qualified Opinion", 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 Changes in Equity and the Cash Flow Statement dealt with by this
Report are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Accounting
Standards prescribed under Section 133 of the Act, read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended including the Companies (Indian Accounting
Standards) Amendment Rules, 2019;
(e) On the basis of the written representations received from the Directors as on March
31,2021 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31,2021 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 with reference to these financial statements and the operating
effectiveness of such controls, refer to our separate report in "Annexure B" to
this report.
(g) The provisions of section 197 read with Schedule V of the Act are not applicable to
the Company for the year ended March 31, 2021;
(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 did not have any pending litigations which have impact on its financial
position in its financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for
which there are any material foreseeable losses; and
iii. There has been no delay in transferring amounts, required to be transferred, to
the Investor Education and Protection Fund by the Company.
Annexure A referred to in Paragraph 1 on Report on Other Legal and Regulatory
Requirements of Our Report of even date of B Nanji Enterprises Limited for the year ended
March 31,2021
(i) In respect of its Property, Plant and Equipment:
(a) The Company has maintained proper records showing full particulars including
quantitative details and situation of property, plant and equipment.
(b) All property, plant and equipment have not been physically verified by the
management during the year but there is a regular programme of verification which, in our
opinion, is reasonable having regard to the size of the Company and the nature of its
assets. No material discrepancies were noticed on verification carried out during the year
in accordance with the aforesaid plan.
(c) As per the information and explanations provided to us and on the basis of our
examination of the records of the Company, there are no immovable properties on the name
of the company.
(ii) As explained to us, the inventories were physically verified by the management
during the year as well as at the year end and no material discrepancies were noticed on
such physical verification as certified by the Management. Company has given contract for
construction work including labour and material and hence no stock of materials is
required to be maintained. Regarding other materials the same is treated as directly
consumed as and when purchased. Hence the company is not required to maintain any stock
records and its question of its physical verification does not arise. Please refer Para
no. 1 of basis of qualification under the main audit report.
(iii) According to the information and explanations given to us, the Company has not
granted unsecured loans to the parties covered in the register maintained under section
189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013
in respect of loans to directors including entities in which they are interested and in
respect of grant of loans and advances, making investments and providing guarantees and
securities.
(v) According to the information and explanations given to us, the Company has not
accepted deposits within the meaning of sections 73 to 76 of the Act. The provision of
Clause (v) of paragraph 3 of the Order have not been applicable.
(vi) The Central Government of India has not prescribed the maintenance of Cost Records
under sub-section (1) of section 148 of the Act for any of the activities of the company
and accordingly paragraph 3 (vi) of the order is not applicable.
(vii) According to the information and explanation given to us, in respect of statutory
dues:
No undisputed amount payable in respect of Income Tax, Wealth Tax, Value Added Tax,
Excise Duty, Custom Duty, Service Tax, Sales Tax and other statutory dues applicable to
company were in arrears, as at 31/03/2021 for a period of more than six months from the
date become payable, except in case of Tax Deducted at source (TDS), GST and Maharashtra
Value Added Tax(MVAT).
Due to unavailability of adequate information regarding disputed amount to appropriate
authorities, we are unable to quantify the amount on the status of the demands and cannot
be commented upon. Due to which the amount recoverable and payable to the authorities
cannot be commented upon.
(viii) In our opinion, based on the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and according to the
information and explanations given by the management, the Company has not defaulted in
repayment of loans or borrowings to banks and financial institutions, however amount
payable to DHFL at the yearend is subject to reconciliation with confirmation yet to
receive from the lender. The Company did not have any loans or borrowings from Government
and debenture holders.
(ix) In our opinion and according to the information and explanations given to us by
the management, the Company has utilized monies raised by way of term loans for the
purposes for which they were raised. The Company has not raised any money by way of
initial public offer / further public offer / debt instruments during the year.
(x) Based on the audit procedures performed for the purpose of reporting the true and
fair view of the financial statements and according to the information and explanations
given by the management, we report that no fraud by the Company or no fraud on the Company
by the officers or employees of the Company has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us, the
Company has not paid/provided managerial remuneration, accordingly provisions of section
197 read with Schedule V to the Act is not applicable to the company.
(xii) The Company is not a Nidhi company and hence reporting under clause (xii) of
Paragraph 3 the Order is not applicable to the Company.
(xiii) According to the information and explanations given by the management,
transactions with the related parties are in compliance with Section 177 and 188 of
Companies Act, 2013, where applicable, and the details have been disclosed in notes to the
financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given by the management and on an
overall examination of the Balance Sheet, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year under review and hence, reporting requirements under clause (xiv) of Paragraph 3
of the Order is not applicable to the Company.
(xv) According to the information and explanations given by the management, the Company
has not entered into any non-cash transactions with directors or persons 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-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Annexure B referred to in Paragraph 2(f) on Report on Other Legal and Regulatory
Requirements of Our Report of even date of B Nanji Enterprises Limited for the year ended
March 31,2021
Report on the Internal Financial Controls under Section 143(3)(i) of the Companies Act.
2013 ("the Act")
We have audited the internal financial controls over financial reporting of B Nanji
Enterprises Limited (the Company) as of March 31,2021 in conjunction with our audit of
the 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 control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance note on Audit of Internal Financial Controls over Financial Reporting (the
"Guidance Note") issued by the Institute of Chartered Accountants of India.
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 assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records and the timely preparation of reliable
financial information, as required under the Companies Act, 2013.
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 and the Standards
on Auditing prescribed 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. The Guidance Note and those Standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether adequate internal financial Controls over financials 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 controls with reference to these financial statements and their
operative effectiveness. Our audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial controls over financial
reporting with reference to these financial statements, assessing the risk that material
weakness exists, and testing and evaluating the design and operating effectiveness of
internal controls 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 fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis of our audit opinion on the internal financial control system over
financial reporting with reference to these financial statements.
Meaning of Internal Financial Controls Over Financial Reporting
A Companys internal financial controls overfinancial 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 authorizations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Companys assets that could have
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 to 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 controls
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.
Qualified Opinion
We have observed internal control weakness with respect to timely reconciliation and
confirmation of Trade receivables. Trade Payables, Long-term Borrowings, Deposit
receivable /payables, and other loans and advances. Weaknesses in internal controls could
impact the financial statements.
In our opinion, to the best of our information except for the effects/possible effects
of the material weaknesses described aboveand according to the explanation given by the
management, the Company has, in all material respects, an adequate internal financial
control system overfinancial reporting with reference to these financial statements and
such internal financial controls over financial reporting with reference to these
financial statements were operating effectively as at March 31, 2021, based on the
internal controls over financials reporting criteria established by the Company
considering the essential components of internal controls stated in the Guidance Note on
Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India.
For SHAH KARIA AND ASSOCIATES
Chartered Accountants
ICAI Firm Registration No.: 131546W
Virag Shah
Partner
Membership No.: 186474
Place: Ahmedabad
Date: June 30, 2021
+91-9892691696
