Mar 31, 2023
Report on the Audit of the Standalone Ind AS Financial Statements Opinion
We have audited the accompanying standalone Ind AS financial statements of Nelco Limited ("the Company") which comprise the Balance sheet as at March 31 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and notes to the standalone Ind AS financial statements including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, 2023, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone 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 ''Auditor''s Responsibilities for the Audit of the Standalone 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 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 audit opinion on the standalone Ind AS financial statements.
Key audit matters are those matters that in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31,2023. These matters were addressed in the context of our audit of the standalone 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 Auditor''s responsibilities for the audit of the standalone 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 standalone 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 standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Assessment of contingent liabilities, provision for litigations (as described in Note 2.1(f) to the standalone Ind AS financial statements) As at March 31,2023, the Company held provisions of '' 165 lakhs and disclosed contingent liabilities (to the extent not provided for) of '' 2,237 lakhs in respect of certain tax and other litigations. |
Our audit procedures included the following: ⢠We obtained an understanding and evaluated processes and controls designed and implemented by the Management for assessment of litigations. ⢠We obtained the list of taxation and other litigation matters and communications with the authorities and vendors. We reviewed the supporting evidence and assessed Management''s evaluation through discussions and inquiries made on both the probability of outcome and the magnitude of potential outflow of economic resources; |
Key audit matters |
How our audit addressed the key audit matter |
The Company faces inquiries from tax authorities and regulatory authorities during tax assessment and legal proceedings during the normal course of business. There is a high level of Management judgement required in estimating the probable outflow of economic resources and the level of provisioning and the disclosures required. The Management''s assessment is supported by legal opinions from independent tax consultants and legal experts obtained by the Management. We considered this to be a key audit matter as the outcome of the litigations/ inquiries is uncertain, including ensuring compliances with the various regulations and the positions taken by the Management are based on the application of material judgement, advice from tax consultants and legal experts and interpretation of law. The ultimate outcome of the litigations/inquiries could be different from the conclusion reached by the Management and may significantly impact the Company''s financial position. The Company''s disclosures are included in Note 2.1(f) and Note 36 and 39 to the financial statements which outlines the accounting ;policy for contingent liabilities and details of pending direct and indirect tax litigation and other cases disclosed as contingent liabilities. |
⢠Where relevant, we read and relied upon the most recent legal opinion obtained by Management from independent tax consultants and external legal experts to assess development in all pending cases against the Company; ⢠We read recent orders received from the tax and regulatory authorities and the Company''s responses to such communications and assessed the current status of the litigations against the Company. For tax matters, we involved our tax specialists to assess Management''s application and interpretation of tax legislation affecting the Company and to consider the quantification of exposures and settlements arising from the disputes with the tax authorities in the various tax jurisdictions |
The Company''s Board of Directors is responsible for the other information. The other information comprises of the information included in the Annual Report but does not include the standalone Ind AS financial statements and our auditor''s report thereon.
Our opinion on the standalone 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 standalone Ind AS 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.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone 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 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 of 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 the 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, Management is responsible for assessing the Company''s 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 Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement whether due to fraud 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 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 standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone 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 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 Management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s 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 auditor''s 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 standalone Ind AS financial statements including the disclosures, and whether the standalone 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 standalone Ind AS financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s 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 (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the "Annexure 1" 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 purposes 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 the Statement of Other Comprehensive Income, the Cash Flow Statement 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 standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of 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 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2023 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 with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31,2023 has been paid by the Company to its directors in accordance with the provisions of Section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor''s 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 standalone Ind AS financial statements - Refer Note 36 and 39 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were 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, 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 persons or entity, including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 no funds have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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 such 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 (a) and (b) contain any material misstatement.
v. The dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with Section 123 of the Act. As stated in note 11 to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.
vi. As provision to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.
For S.R. Batliboi & Associates LLP
Chartered Accountants ICAI Firm Registration Number: 101049W/E300004
Membership Number: 117142 UDIN: 23117142BGYJAO2710
Mumbai April 24, 2023
Mar 31, 2022
Report on the Audit of the Standalone Ind AS Financial Statements Opinion
We have audited the accompanying standalone Ind AS financial statements of Nelco Limited ("the Company"), which comprise the Balance sheet as at March 31, 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone Ind AS financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone 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 ''Auditor''s Responsibilities for the Audit of the Standalone 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 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 audit opinion on the standalone Ind AS financial statements.
Note 47 to the standalone Ind AS financial statements regarding the Company''s claim to carry forward of input tax credit balances availed under the CENVAT/ Service Tax/ Sales Tax act, upon transition to The Goods and Services Tax Act (GST) and the Company''s claim to set-off such input tax credit availed against GST payable. The Company, based on external legal advice obtained, has filed a petition with courts in this regard.
Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31,2022. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the ''Emphasis of matter'' section, we have determined the matters described below to be the key audit matters to be communicated in our report. 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 Auditor''s responsibilities for the audit of the standalone 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 standalone 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 standalone Ind AS financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Assessment of Accounting pursuant to Scheme approval by NCLT and DOT (as described in Note 29 to the standalone Ind AS financial statements). Pursuant to provisions of Section 230-232 of the Companies Act, 2013, the Board of Directors of the Company on September 1, 2017 approved the scheme as follows: ⢠transfer by way of slump sale on a going concern basis, for a lump sum consideration to its wholly owned subsidiary, Nelco Network Products Ltd (NNPL) of the following: a) Integrated Security and Surveillance Solution (''ISSS'') business and b) Very Small Aperture Terminals ("VSAT") hardware business and allied services consisting of network management, project management, infrastructure services, turnkey solutions for satellite communication systems, and co-location services to customers other than Tatanet Services Ltd (TNSL); and ⢠the amalgamation of TNSL with the Company, through a composite scheme of Arrangement and Amalgamation (Proposed Scheme). The proposed scheme was approved by NCLT on November 2, 2018 and approved by Department of Telecommunications on June 9, 2021. During the year, the Scheme has been accounted for as follows: ⢠Accounting for transfer of discontinuing operations to NNPL in accordance with IND AS 105; and ⢠Accounting for merger of TNSL with the Company as business combination of entities under common control in accordance with Appendix C of IND AS 103 "Business Combination" and accordingly all the comparative periods presented in the financial statements have been restated to include the effect of this merger. The Scheme has a significant impact on the standalone financial statements of the Company including revenue, profit, tax, reserve and comparative figures basis which the same is considered as a key audit matter for the year. The Company''s disclosures are included in Note 29 to the standalone financial statements, which outlines the scheme accounting. |
Our audit procedures included the following: ⢠We obtained and read the documents filed by the Company with the Registrar of Companies, including the NCLT order/DOT Order with respect to the merger of TNSL with Nelco and transfer of discontinued operations to NNPL, based on which the Scheme became effective; ⢠Tested the underlying workings prepared by management for merger of TNSL with Nelco including the workings prepared for restatement of comparative figures for Previous year as required by Appendix C to Ind AS 103; ⢠Tested the underlying workings prepared by management for transfer of assets and liabilities pertaining to discontinued operations as per the Scheme; ⢠Assessed accounting in accordance with Scheme and as per applicable accounting standards; ⢠Tested the underlying workings for revised tax computations, read independent opinion obtained by the management on taxation matters relating to the revised tax computations and involved tax specialist for review of independent opinion ⢠Assessed the disclosures in the standalone Ind AS financial statements for compliance with disclosure requirements |
Key audit matters |
How our audit addressed the key audit matter |
Assessment of contingent liabilities, provision for litigations (as described in Note 2.1(f) to the standalone Ind AS financial statements) As at March 31, 2022, the Company held provisions of ''117 lakhs and disclosed contingent liabilities (to the extent not provided for) of ''1,608 lakhs in respect of certain tax and other litigations. The Company faces inquiries from tax authorities and regulatory authorities during tax assessment and legal proceedings, during the normal course of business. There is a high level of management judgement required in estimating the probable outflow of economic resources and the level of provisioning and the disclosures required. The management''s assessment is supported by legal opinions from independent tax consultants and legal experts obtained by the management. We considered this to be a key audit matter as the outcome of the litigations/ inquiries is uncertain, including ensuring compliances with the various regulations and the positions taken by the management are based on the application of material judgement, advice from tax consultants and legal experts, and interpretation of law. The ultimate outcome of the litigations/inquiries could be different from the conclusion reached by the management and may significantly impact the Company''s financial position. The Company''s disclosures are included in Note 2.1(f) and Note 37 and 40 to the financial statements, which outlines the accounting policy for contingent liabilities and details of pending direct and indirect tax litigation disclosed as contingent liabilities. |
Our audit procedures included the following: ⢠We obtained an understanding and evaluated processes and controls designed and implemented by the management for assessment of litigations. ⢠We obtained the list of taxation and other litigation matters, communications with the authorities and vendors, inspecting the supporting evidence and critically assessing management''s evaluation through discussions and inquiries made with the management on both the probability of outcome and the magnitude of potential outflow of economic resources; ⢠Where relevant, we read and relied upon the most recent legal opinion obtained by management from independent tax consultants and external legal experts to assess development in all pending cases against the Company; ⢠We read recent orders received from the tax and regulatory authorities and the Company''s responses to such communications and assessed the current status of the litigations against the Company. ⢠We obtained direct confirmations from tax consultants, where considered relevant; For tax matters, we involved our tax specialists to assess management''s application and interpretation of tax legislation affecting the Company, and to consider the quantification of exposures and settlements arising from the disputes with the tax authorities in the various tax jurisdictions. |
The Company''s Board of Directors is responsible for the other information. The other information comprises the Performance Highlights, Report on Corporate Governance, Directors'' Report, Management Discussion and Analysis Report and Business Responsibility Report, but does not include the standalone Ind AS financial statements and our auditor''s report thereon. The Performance Highlights, Report on Corporate Governance, Directors'' Report, Management Discussion and Analysis Report and Business Responsibility Report is expected to be made available to us after that date of this auditor''s report.
Our opinion on the standalone Ind AS financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information identified above when it becomes available 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.
Responsibilities of Management for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone 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 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 by the Companies (Indian Accounting Standards) Second 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 frauds and other irregularities; selection and application of appropriate accounting policies;
making judgments and estimates that are reasonable and prudent; and the 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company''s 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 Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud 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 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 standalone 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 standalone 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 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 management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s 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 auditor''s 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 standalone Ind AS financial statements, including the disclosures, and whether the standalone 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 standalone 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 auditor''s 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 (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure 1" 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 purposes 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 the Statement of Other Comprehensive Income, the Cash Flow Statement 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 standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended by the Companies (Indian Accounting Standards) Second Amendment Rules, 2019;
(e) On the basis of the 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 March 31,2022 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 with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2" to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31,2022 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditor''s 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 standalone Ind AS financial statements - Refer Note 40 to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were 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, 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, whether, 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, 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, whether,
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; and
(c) Based on such audit procedures that were 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 (a) and (b) contain any material misstatement.
v. The dividend paid during the year by the Company is in compliance with section 123 of the Act. As stated in note 11(iii) to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
Partner
Membership Number: 212230
UDIN: 2212230AHUJPW5341
Place of Signature: Mumbai
Date: April 26, 2022
Mar 31, 2019
INDEPENDENT AUDITOR''S REPORT
To the Members of Nelco Limited Report on the audit of the Standalone financial statements Opinion
1. We have audited the accompanying standalone financial statements of Nelco Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, 2019, and total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.
Basis for opinion
3. We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s 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 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 opinion.
Emphasis of matter
4. We draw your attention to note 27 to the standalone financial statements regarding composite scheme of arrangement between the Company, Tatanet Services Limited (TNSL) and Nelco Network Products Limited which was approved by the National Company Law Tribunal ("NCLT") vide its order dated November 2, 2018 (the "Scheme"). As per the NCLT Order, the Company intimated the Registrar of the Companies ("RoC") about the approval of the Scheme by NCLT, stating that Department of Telecommunications ("DoT") approval was not yet obtained. The RoC records were, however, updated to reflect the Scheme as effective and TNSL as "amalgamated" with the Company. Based on legal advice, the Company has approached NCLT to direct the RoC to amend their records to reinstate TNSL to its earlier status and cancel the effect of the Scheme with immediate effect. The decision of NCLT is awaited. The Scheme will be given effect to in the financial statements on receipt of all necessary approvals. Our opinion is not modified in respect of this matter.
Key audit matters
5. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter |
How our audit addressed the key audit matter |
||
Revenue recognition related to multiple element Our audit procedures in relation to revenue recognition |
|||
arrangements |
included: |
||
(Refer notes 1.14 and 2.1(a) to the Standalone Financial |
- Understanding and evaluating the design and testing |
||
Statements) In respect of the Network Systems segment, the contracts |
the operating effectiveness of key controls over revenue recognition; |
||
with customers include multiple elements including |
- Testing of contracts with customers on a sample |
||
sale of products and ancillary services like installation, |
basis to assess the contractual terms impacting |
||
commissioning, annual maintenance etc. and rental |
identification of performance obligations, allocation |
||
income for equipment given on lease. In certain cases, |
of consideration to these performance obligations |
||
the contracts also involve multiple entities in the Group. |
based on determination of standalone selling prices |
||
The identification of performance obligations under the |
and determination of the timing of recognition for |
||
contracts with customers, allocation of consideration to the performance obligations identified and determination |
each of these revenue components; |
||
of the timing of revenue recognition in accordance |
- Testing the timing of fulfillment of performance |
||
with Ind AS 115 requires exercise of judgment by the |
obligations and recognition of revenue; |
||
Company''s management. |
- Evaluating the impact of first time adoption of Ind |
||
We considered this to be a Key Audit Matter in view of |
AS 115 on revenue in respect of contracts with |
||
the customer contracts being large, complex and non- |
customers for Network Systems segment; |
||
standard. |
- Performing tests related to non-standard manual journal entries related to revenue. Based on the above procedures performed, we did not note any significant exceptions regarding the management''s assessment of the performance obligations, allocation of consideration to the identified performance obligations and revenue recognition. |
||
- |
Understanding the current status of the tax assessments; |
||
Together with auditors'' tax experts, evaluating the management assessment of estimated potential tax exposures considering the applicable provisions of direct and indirect tax laws. |
|||
- |
We did not identify any material exceptions as a result of above procedures. |
||
Other Information
6. The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Director''s Report including Annexure to Director''s report, Management Discussion and Analysis and Report on Corporate Governance but does not include the financial statements and our auditor''s 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 standalone 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.
Responsibilities of management and those charged with governance for the standalone financial statements
7. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act. 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 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.
8. In preparing the standalone financial statements, management is responsible for assessing the Company''s 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 Company''s financial reporting process.
Auditor''s responsibilities for the audit of the standalone financial statements
9. 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 auditor''s 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.
10. 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 management''s 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 Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s 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 auditor''s 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.
11. 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.
12. 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.
13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s 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
14. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
15. 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 purposes 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 Changes in Equity and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act;
e) On the basis of the written representations received from the directors as on March 31, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 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 A";
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 financial statements
- Refer Note 40 to the standalone financial statements;
ii. The Company has long-term contracts including derivative contracts as at March 31, 2019 for which there were no material foreseeable losses ;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2019
Annexure A to Independent Auditors'' Report
Referred to in paragraph 15(f) of the Independent Auditors'' Report of even date to the members of Nelco Limited on the standalone financial statements for the year ended March 31, 2019
Report on the Internal Financial Controls with reference to standalone financial statements under Clause (i) of Subsection 3 of Section 143 of the Act
1. We have audited the internal financial controls with reference to standalone financial statements of Nelco Limited ("the Company") as of March 31, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
2. The Company''s 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 issued by the Institute of Chartered Accountants of India (ICAI). 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 company''s 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 Act.
Auditors'' Responsibility
3. Our responsibility is to express an opinion on the Company''s internal financial controls with reference to 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 deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. 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 with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, 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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system with reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
6. A company''s internal financial controls with reference to 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 company''s internal financial controls with reference to 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 company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to standalone financial statements
7. Because of the inherent limitations of internal financial controls with reference to standalone 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 with reference to financial statements to future periods are subject to the risk that the internal financial control controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2019, 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 issued by the Institute of Chartered Accountants of India.
Annexure B to Independent Auditors'' Report
Referred to in paragraph 14 of the Independent Auditors'' Report of even date to the members of Nelco Limited on the standalone financial statements for the year ended March 31, 2019.
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets of the Company, other than equipment on lease, installed at the customer premises have been physically verified by the Management, during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable. The existence of equipment on lease lying at customer premises is verified by management on the basis of ''active customer status''.
(c) The title deeds of immovable properties, as disclosed in Note 3 on property, plant and equipment to the financial statements, are held in the name of the Company.
ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
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 the loans and investments made, and guarantees and security provided by it.
v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in
our opinion, except for dues in respect of income tax, the Company is regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax and other material statutory dues, as applicable, with the appropriate authorities. The extent of the arrears of statutory dues outstanding as at March 31, 2019, for a period of more than six months from the date they became payable are as follows:
Name of the statute |
Nature of dues |
Amount (Rs, in lakhs) |
Period to which the amount relates |
Due date |
Date of Payment |
Income Tax Act, 1961 |
Tax deducted at source |
16 |
April 1, 2017 to March 31, 2018 |
July 7, 2017, October 7, 2017, January 7, 2018 and April 30, 2018 |
Not Paid |
Also refer note 36(b) to the standalone financial statements regarding management''s assessment on certain matters relating to provident fund
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of duty of customs, duty of excise, goods and service tax which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax and value added tax as at March 31, 2019 which have not been deposited on account of a dispute, are as follows:
Name of the statute |
Nature of dues |
Amount ('' In lakhs)* |
Period to which the amount relates |
Forum where the dispute is pending |
The Central Sales Tax Act, 1958 |
Sales Tax including Interest |
70 |
2008-09, 2010-2011, 2012-2013 |
Appellate authority up to Commissioner Level |
The Central Sales Tax Act, 1958 |
Sales tax |
22 |
2014-15 |
Assessing Officer |
The Maharashtra Value Added Tax Act, 2002 |
Value Added tax including interest |
56 |
2009-10 |
Appellate authority up to Commissioner Level |
The Income Tax Act, 1961 |
Income Tax |
631 |
2010-11 |
Appellate authority up to Commissioner Level |
The Finance Act, 1994 |
Service Tax including Interest and Penalty |
180 |
2000-01 to 2004-05 |
CESTAT |
* Net of amounts paid under protest or otherwise.
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in re
repayment of loans or borrowings to any financial institution or bank or Government. Further, the Company has not issued any debentures as at the balance sheet date.
ix. In our opinion, and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments).
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse
Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Sharmila A. Karve
Mumbai Partner
April 27, 2019 Membership Number: 43229
Mar 31, 2018
Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of Nelco Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018 the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. 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 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report.
5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorsâ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by 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, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
Other Matter
9. The standalone Ind AS financial statements of the Company for the year ended March 31, 2017, were audited by another firm of chartered accountants under the Companies Act, 2013 who, vide their report dated May 9, 2017, expressed an unmodified opinion on those financial statements. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.
11. 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 purposes 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 Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.
(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:
(i) The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its standalone Ind AS financial statements - Refer Note 40 to the standalone Ind AS financial statements;
(ii) The Company has long-term contracts including derivative contracts as at March 31, 2018 for which there were no material foreseeable losses;
(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018;
(iv) The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.
Annexure A to Independent Auditorsâ Report
Referred to in paragraph 11 (f) of the Independent Auditorsâ Report of even date to the members of Nelco Limited on the standalone Ind AS financial statements for the year ended March 31, 2018
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act
1. We have audited the internal financial controls over financial reporting of Nelco Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs 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 issued by the Institute of Chartered Accountants of India (ICAI). 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 companyâs 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 Act.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. 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 was established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls 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 auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
6. A companyâs internal financial control over financial reporting 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 companyâs internal financial control over financial reporting 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 companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financial reporting, 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 to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, 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, 2018, 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 issued by the Institute of Chartered Accountants of India.
Annexure B to Independent Auditorsâ Report
Referred to in paragraph 10 of the Independent Auditorsâ Report of even date to the members of Nelco Limited on the standalone Ind AS financial statements for the year ended March 31, 2018
i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.
(b) The fixed assets of the Company, other than equipment on lease, installed at the customer premises have been physically verified by the Management, during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable. The existence of equipment on lease lying at customer premises is verified by management on the basis of âactive customer statusâ.
(c) The title deeds of immovable properties, as disclosed in Note 3 on fixed assets to the financial statements, are held in the name of the Company.
ii. The physical verification of inventory have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material.
iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.
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 the loans and investments made, and guarantees and security provided by it.
v. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73, 74, 75 and 76 or any other relevant provisions of the Act and the Rules framed thereunder to the extent notified, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.
vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of duty of customs, duty of excise, goods and service tax which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax and value added tax, as at March 31, 2018 which have not been deposited on account of a dispute, are as follows:
Name of the statute |
Nature of dues |
Amount (Rs. In lakhs)* |
Period to which the amount relates |
Forum where the dispute is pending |
The Central Sales Tax Act, 1958 |
Sales Tax including Interest |
70 |
2008-09, 2010-2011, 2012-2013 |
Appellate authority upto Commissioner Level |
The Central Sales Tax Act, 1958 |
Sales tax |
11 |
2013-14 |
Assessing Officer |
The Maharashtra Value Added Tax Act, 2002 |
Value Added tax including interest |
56 |
2009-10 |
Appellate authority upto Commissioner Level |
The Income Tax Act, 1961 |
Income Tax |
631 |
2010-11 |
Appellate authority upto Commissioner Level |
The Finance Act, 1994 |
Service Tax including Interest and Penalty |
180 |
2000-01 to 2004-05 |
CESTAT |
* Net of amounts paid under protest or otherwise.
viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government. Further, the Company has not issued any debentures as at the balance sheet date.
ix. In our opinion, and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments).
x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.
xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.
xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Sharmila A. Karve
Mumbai Partner
April 27, 2018 Membership Number: 43229
Mar 31, 2016
INDEPENDENT AUDITOR''S REPORT TO THE MEMBERS OF NELCO LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of NELCO LIMITED (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the eighteen months period then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 of the Act, as applicable.
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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s Responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order under section 143 (11) of the Act.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by 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 31st March, 2016, and its loss and its cash flows for the eighteen months period ended on that date.
Emphasis of Matter
We draw attention to Note 27 to the standalone financial statements which states that the Company has accumulated losses as at 31st March 2016 and its net worth has been substantially eroded and the Company has incurred a net loss during the current eighteen months period. However, the standalone financial statements of the Company have been prepared on a going concern in view of the Company''s business plan and the support letter from the Parent Company.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015 (âthe Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure 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 purposes 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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 of the Act, as applicable.
e) The going concern matter described under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f) On the basis of the written representations received from the directors as on 31stMarch, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31stMarch, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.
g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 standalone 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)
1. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.
2. In respect of its inventories:
(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.
3. In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.
4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services and during the course of our audit we have not observed any continuing failure to correct major weaknesses in such internal control system.
5. According to the information and explanations given to us, the Company has not accepted any deposit during the year. Accordingly, paragraph (v) of the Order is not applicable to the Company.
6. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014,prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
7. According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.
(c) Details of dues which have not been deposited as on March 31, 2016 on account of disputes are given below:
Name of the statute |
Nature of the dues |
Forum where the dispute is pending |
Financial Year relates to which the matter pertains |
Amount (Rs. in Lakhs) |
Income - Tax Laws |
Income -Tax |
Appellate Authority -Commissioner Level |
2010-11 |
631.33 |
Sales - Tax Laws |
Sales-Tax |
Appellate Authority -High Court Level |
1989-90 and 199091 |
17.43 |
Appellate Authority -Commissioner Level |
1985-86 to 199091, 1992-93,199697,2003-04, 2012-13 |
33.99 |
||
Appellate Authority -Joint Commissioner Level |
2005-06, 2008-09 to 2009-10 |
158.07 |
||
Customs Duty Laws |
Customs Duty |
Appellate Authority - Assessing Officer Level |
1991 to 1993 |
9.40 |
Excise Duty Laws |
Excise Duty |
Appellate Authority -Commissioner Level |
1983-84 to1985-86 |
56.43 |
Service Tax Laws |
Service Tax |
Appellate Authority -up to Commissioner Level |
2003-04, 200506,2006-07 |
217.69 |
(d) There are no amounts that are due to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under.
8. The accumulated losses of the Company at the end of the financial year are not less than fifty percent of its net worth and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.
9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions and banks. The Company has not issued any debentures.
10. In our opinion and according to the information and explanations given to us, the Company has given guarantees for loans taken by subsidiary company from banks which are prima facie not prejudicial to the interest of the Company.
11. In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained.
12. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm''s Registration No. 117366W /W-100018)
Gurvinder Singh
(Partner)
(Membership No. 110128)
Place: Mumbai
Date: 4th May, 2016
Sep 30, 2014
We have audited the accompanying financial statements of NELCO LIMITED
("the Company"), which comprise the Balance Sheet as at 30th September,
2014, the Statement of Profit and Loss and the Cash Flow Statement for
the year then ended, and a summary of the significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards specified under the Companies
Act, 1956 ("the Act")(which continue to be applicable in respect of
Section 133 of the Companies Act, 2013 in terms of General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate
Affairs) and in accordance with the accounting principles generally
accepted in India. This responsibility includes the design,
implementation and maintenance of internal control 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of
the Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government in terms of Section 227(4A) of
the Act, we give in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes 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, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Act (which is deemed to be applicable as per Section
133 of the Companies Act, 2013, read with Rule 7 of the Companies
(Accounts) Rules, 2014).
(e) Since the provisions of Section 274(l)(g) of the Act are not in
effect from April 1,2014, the reporting requirement under Section
227(3)(f) is not applicable as of the balance sheet date.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT TO THE MEMBERS OF NELCO
LIMITED (Referred to in paragraph 1 under ''Report on Other Legal and
Regulatory Requirements'' section of our report of even date)
Having regard to the nature of the Company''s business/activities,
clauses (xii) (xiii) (xiv) (xviii) (xix) and (xx) of paragraph 4 of the
Order are not applicable.
(i) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) The fixed assets were physically verified by the Management in
accordance with a regular programme of verification which, in our
opinion, provides for physical verification of all the fixed assets at
reasonable intervals. According to the information and explanation
given to us, no material discrepancies were noticed on such
verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company.
(ii) In respect of its inventories:
(a) As explained to us, the inventory of the company has been
physically verified by the management during the year and at the year
end. In respect of stock lying with third parties, a substantial
portion has been confirmed by third parties during the year or at the
year end. In our opinion the frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management were reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and no material discrepancies were noticed on physical
verification.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956,
during the period the said Section was applicable.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available for obtaining comparable quotations, there is an
adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(v) To the best of our knowledge and belief and according to the
information and explanations given to us, there are no contracts or
arrangements that needed to be entered in the Register maintained in
pursuance of Section 301 of the Companies Act, 1956, for the period the
said Section was applicable.
(vi) According to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year.
In respect of unclaimed deposits, the Company has complied with the
provisions of Sections 58A, 58AA or any other relevant provisions of
the Companies Act, I956,during the period the said Section was
applicable.
(vii) In our opinion, the Company has an adequate internal audit system
commensurate with the size and the nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(I)(d) of the
Companies Act, 1956 (for the period the said Section was applicable)
and are of the opinion that, prima facie, the prescribed cost records
have been maintained. We have, however, not made a detailed examination
of the cost records with a view to determine whether they are accurate
or complete.
(ix) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
statutory dues, including Provident Fund, Investor Education and
Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax,
Wealth Tax, Service Tax,Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it with the appropriate
authorities.
(b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Employees'' State
Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax,Customs Duty,
Excise Duty, Cess and other material statutory dues in arrears as at
30th September, 2014 for a period of more than six months from the date
they became payable.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty and Cess which have not been deposited as on
30th September, 2014 on account of disputes are given below:
Name of the Nature of the Financial Year relates to
statute dues which the matter pertains
Income - Tax Laws Income -Tax 2010-11
Sales - Tax Laws Sales-Tax 1989-90 and 1990-91
1985-86 to 1990-91,
1992-93, 1996-97, 2003-04
2006-07
2009-10
Customs Duty Laws Customs Duty 1991 to 1993
Excise Duty Laws Excise Duty 1983-84 to 1985-86
2006-07
Service Tax Laws Service Tax 2003-04, 2005-06, 2006-07
Name of the Forum where the dispute Amount
statute is pending (Rs. in Lakhs)
Income - Tax Laws Appellate Authority -
Commisioner Level 631.33
Sales - Tax Laws Appellate Authority -
High Court Level 17.43
Appellate Authority -
Commissioner Level 31.51
Tribunal 179.98
Appellate Authority -
Joint Commissioner Level 112.32
Customs Duty Laws Appellate Authority -
Assessing Officer Level 24.26
Excise Duty Laws Appellate Authority -
Commissioner Level 56.43
Appellate Authority -
Assistant Director Level 1.07
Service Tax Laws Appellate Authority -
up to Commissioner Level 217.69
(x) The accumulated losses of the Company at the end of the financial
year are more than fifty per cent of its net worth and the Company has
not incurred cash losses in the current financial but has incurred cash
losses in the immediately preceding financial year
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
financial institutions and banks. The Company has not issued any
debentures.
(xii) In our opinion and according to the information and explanations
given to us, the Company has given guarantees for loans taken by
subsidiary companies from banks or financial institutions which are
prima facie not prejudicial to the interest of the Company.
(xiii) In our opinion and according to the information and explanations
given to us, the term loans have been applied by the Company during the
year for the purposes for which they were obtained.
(xiv) In our opinion and according to the information and explanations
given to us and on an overall examination of the balance sheet of the
Company, we report that funds raised on short-term basis have been
applied for fixed assets, non-current investments and loans and
advances of amounts aggregating to Rs.3,434.92 lakhs.
(xv) To the best of our knowledge and according to the information and
explanations given to us, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm''s Registration No. II7366W/W-I000I8)
Rupen K. Bhatt
Partner
Mumbai, 27th November, 2014 (Membership No. 046930)
Sep 30, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of NELCO LIMITED
("the Company"), which comprise the Balance Sheet as at 30th
September, 20I3, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparation of these
financial statements that give a true and fair view of the financial
position, financial performance and cash flows of the Company in
accordance with the Accounting Standards notified under the Companies
Act, I956 ("the Act")(which continue to be applicable in respect of
Section I33 of the Companies Act, 20I3 in terms of General Circular
I5/20I3 dated I3th September 2013 of the Ministry of Corporate Affairs)
and in accordance with the accounting principles generally accepted in
India. This responsibility includes the design, implementation and
maintenance of internal control 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company''s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company''s internal control. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 30th September, 20I3;
(b) in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003("the
Order") issued by the Central Government in terms of Section 227(4A)
of the Act, we give in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes 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, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
(d) In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with the Accounting Standards
notified under the Act (which continue to be applicable in respect of
Section I33 of the Companies Act, 20I3 in terms of General Circular
I5/20I3 dated I3th September 20I3 of the Ministry of Corporate
Affairs).
(e) On the basis of the written representations received from the
directors as on 30th September, 20I3 taken on record by the Board of
Directors, none of the directors is disqualified as on 30th September,
20I3 from being appointed as a director in terms of Section 274(I)
(g) of the Act.
For Deloitte Haskins & Sells LLP Chartered Accountants ICAI Firm
Registration No II7366W/W-I000I8
R.A. Banga
Partner
Mumbai, 2Ist November, 20I3 Membership No. 379I5
(Referred to in paragraph 1 under ''Report on Other Legal and
Regulatory Requirements'' section of our report of even date)
(i) (a) The company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Physical verification of Fixed assets was carried out during the
year in accordance with the company''s policy of verifying the fixed
assets overa period ofthree years. In ouropinion, the frequency
ofverification offixed assets is at reasonable intervals. No material
discrepancies between book records and the physical inventories offixed
assets were noticed.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(ii) (a) The inventory of the Company has been physically verified by
the management during the year and at the year end. In respect of
stocks lying with third parties, a substantial portion was physically
verified or has been confirmed by third parties during the year or at
the year end. In our opinion the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management were found reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the Company has maintained proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and the book records were not material in relation to the
operations of the Company.
(iii) According to the information and explanations given to us, the
Company has neither granted nor taken any loans, secured or unsecured,
to / from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. As the Company
has not granted / taken any loans, secured or unsecured, to / from
parties listed in the register maintained under Section 301 of the
Companies Act, 1956 paragraphs4 (iii) (b), (c), (d), (f)and (g)ofthe
Orderare notapplicable.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items are of
a special nature and their prices cannot be compared with alternative
quotations, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination and the information
and explanations given to us, we have neither come across nor have we
been informed of any instance of major weakness in the aforesaid
internal control system.
(v) According to the information and explanations given to us, we are
of the opinion that there are no contracts or arrangements that need to
be entered into the register maintained under Section 301 of the
Companies Act, 1956 and accordingly paragraph (v)(b) of the Order is
not applicable.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the year and has complied with the provisions of Section 58A,
58AA and any other relevant provisions of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975. We have been
informed that no order has been passed by Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any other court or any
other Tribunal on the Company.
(vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) (a) According to the information and explanations given to us, and
according to the books and records as produced and examined by us, in
our opinion, the undisputed statutory dues including provident fund,
investor education and protection fund, income-tax, sales-tax, wealth
tax, service tax, ESIC, value added tax, custom duty, excise duty, cess
and other material statutory dues as applicable, have generally been
regularly deposited by the company during the year with the appropriate
authorities. According to the information and explanations given to us,
there are no arrears of undisputed statutory dues as mentioned above as
at 30th September, 2013 for a period of more than six months from the
date they became payable.
(b) As at 30th September, 2013 according to the records of the company
and the information and explanations given to us, the following are the
particulars of dues on account of income-tax, sales-tax, custom duty,
excise duty and service tax matters that have not been deposited on
account of any dispute.
Name of the Nature of Financial Year
relates to which Forum where the
dispute is pending Amount
statute the dues the matter
pertains (Rs. in
Lakhs)
Sales-Tax
Laws Sales-Tax 1989-90and
1990-91 Appellate Authority-
High Court Level 17.43
1985-86 to
1990-91,
1992-93 , Appellate Authority-
CommissionerLevel 31.51
1996-97,
2003-04
Customs
Duty Laws Customs Duty 1991to 1993 Appellate Authority-
Assessing Officer
Level 24.26
Excise
Duty Laws Excise Duty 1983-84 to
1985-86 Appellate Authority-
Commissioner Level 56.43
2006-07 Appellate Authority-
Assistant Director
Level 1.07
Service
Tax Laws Service Tax 2003-04,
2005-06,2006-07 Appellate Authority-
up to Commissioner
Level 217.69
(x) The accumulated losses of the Company at the end of the financial
year are more than fifty per cent of its net worth and the Company has
incurred cash losses in the currentfinancial but has not incurred cash
losses in the immediately preceding financial year
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to any
financial institution, bank or debenture holders during the year.
(xii) According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
(xiii) The provisions of any special statute as specified under Clause
(xiii) of the Order are not applicable to the Company.
(xiv) In ouropinion and according to the information and explanations
given to us, the Company is not a dealerortrader in securities.
(xv) According to the information and explanations given to us, the
company has given guarantees for loans taken by subsidiary company from
banks or financial institutions, the terms and conditions, whereof, are
prima facie not prejudicial to the interest of the company.
(xvi) In ouropinion and according to the information and explanations
given to us, the term loans were applied forthe purpose for which the
loans were obtained.
(xvii) Based on the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we report that
funds raised on short-term basis aggregating to Rs. 3,876.23 lakhs have
been used for operating losses, purchase offixed assets and long term
loans and advances.
(xviii)According to the information and explanations given to us, the
Company has not made any preferential allotments of shares to parties
and companies covered in the registermaintained under section 301 ofthe
Companies Act, 1956.
(xix) According to the information and explanations given to us, as the
company has not issued any debentures during the year, paragraph (xix)
of the Order is not applicable to the Company.
(xx) The Company has not raised any money by public issue during the
year.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year nor
have we been informed of such case by the management.
For Deloitte Haskins & Sells LLP
Chartered Accountants
ICAI Firm Registration No II7366W/W-I000I8
R.A. Banga
Partner
Mumbai, 2Ist November, 20I3 Membership No. 379I5
Sep 30, 2010
1. We have audited the attached balance sheet of Nelco Limited as at
30th September, 2010, the profit and loss account and also the cash
flow statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India.Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) in our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
(iii) the balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:-
(a) in the case of the balance sheet, of the state of affairs of the
company as at 30th September, 2010;
(b) in the case of the profit and loss account of the profit for the
year ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
5. On the basis of written representations received from the
directors, as on 30th September, 2010, and taken on record by the Board
of Directors, we report that none of the directors is disqualified as
on 30th September, 2010 from being appointed as a director in terms of
clause (g) of sub-section (1) of Section 274 of the Companies Act,
1956.
ANNEXURE TO THE AUDITORS REPORT TO THE MEMBERS OF NELCO LIMITED
( Referred to in paragraph (3) thereof)
(i) Having regard to the nature of the Companys business/activities,
clauses (xiii) and (xiv) of CARO are not applicable.
(ii) (a) The company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Physical verification of fixed assets was carried out during the
year in accordance with the companys policy of verifying the fixed
assets over a period of three years. In our opinion, the frequency of
verification of fixed assets is at reasonable intervals. No material
discrepancies between book records and the physical inventories of
fixed assets were noticed.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) (a) The inventory of the company has been physically verified by
the management during the year and at the year end. In respect of
stocks lying with third parties, a substantial portion was physically
verified or has been confirmed by third parties during the year or at
the year end. In our opinion the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management were found reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the company has maintained proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and the book records were not material in relation to the
operations of the company.
(iv) According to the information and explanations given to us, the
company has neither granted nor taken any loans, secured or unsecured,
to / from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. As the company
has not granted / taken any loans, secured or unsecured, to / from
parties listed in the register maintained under Section 301 of the
Companies Act, 1956 and accordingly paragraphs 4 (iii) (b), (c), (d),
(f) and (g) of the Companies (Auditors Report) Order, 2003, are not
applicable.
(v) In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items are of
a special nature and their prices cannot be compared with alternative
quotations, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination and the information
and explanations given to us, we have neither come across nor have we
been informed of any instance of major weakness in the aforesaid
internal control system.
(vi) According to the information and explanations given to us, we are
of the opinion that there are no contracts or arrangements that need to
be entered into the register maintained under Section 301 of the
Companies Act, 1956 and accordingly paragraph (v)(b) of the Order is
not applicable.
(vii) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
during the year and has complied with the provisions of Section 58A,
58AA and any other relevant provisions of the Companies, Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975. We have been
informed that no order has been passed by Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any other court or any
other Tribunal on the company.
(viii) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
(ix) We have broadly reviewed the books of accounts and records
maintained by the company relating to the manufacture of Electronic
Products, pursuant to the rule made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been maintained and are being made up. We
have, however, not made a detailed examination of the records with a
view to determining whether they are accurate or complete. To the best
of our knowledge and according to the information given to us, the
Central Government has not prescribed the maintenance of cost records
under Section 209 (1) (d) of the Companies Act, 1956, for any other
products of the company.
(x) (a) According to the information and explanations given to us, and
according to the books and records as produced and examined by us, in
our opinion, the undisputed statutory dues including provident fund,
investor education and protection fund, income-tax, sales-tax, wealth
tax, service tax, value added tax, custom duty, excise duty, cess and
other material statutory dues as applicable, have generally been
regularly deposited by the company during the year with the appropriate
authorities. According to the information and explanations given to us,
there are no arrears of outstanding statutory dues as mentioned above
as at 30th September, 2010 for a period of more than six months from
the date they became payable.
(b) As at 30th September, 2010 according to the records of the company
and the information and explanations given to us, the following are the
particulars of dues on account of income-tax, sales-tax, custom duty,
excise duty and service tax matters that have not been deposited on
account of any dispute.
Name of
the Nature of the Financial
Year to Forum where
the Amount
statute dues which the
matter dispute is (Rs. in
lakhs)
pertains pending
Sales -
Tax Laws Sales-Tax 1989-90 and Appellate
Authority 17.43
1990-91 High Court
Level
1985-86 to
1988-89,
1992-93, Appellate
Authority 121.87
1996-97,
2001-02, -Commissioner
2003-04,
2009-10 Level
Customs Duty Customs 1991 to 1993 Appellate Authority 30.04 Laws Duty -
Assessing Officer Level Excise Duty Excise Duty 1983-84 to 1993-94
Appellate Authority 2,064.05 Laws - Commissioner Level 1.07
2006-07 Appellate Authority
- Assistant Director Level
Service Tax Laws Service Tax 2003-04, 2005-06, Appellate Authority
271.52 2006-07 - up to Commissioner Level
(xi) The company does not have accumulated losses as at 30th September,
2010 and has not incurred cash losses during the financial year ended
on that date and in the immediately preceding financial year.
(xii) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to any
financial institution, bank or debenture holders during the year.
(xiii) In our opinion and according to the information and explanations
given to us, the company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
(xiv) According to the information and explanations given to us, the
company has not given any guarantees for loans taken by others from
banks or financial institutions, the terms and conditions, whereof, in
our opinion, are prejudicial to the interest of the company.
(xv) In our opinion and according to the information and explanations
given to us, the term loans were applied for the purpose for which the
loans were obtained.
(xvi) Based on the information and explanations given to us and on an
overall examination of the balance sheet of the company, in our
opinion, funds raised on a short term basis have not been used for long
term investments.
(xvii) The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Companies Act, 1956, during the year.
(xviii) The company has not issued any debentures during the year.
(xix) The company has not raised any money by public issue during the
year.
(xx) During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
significant fraud on or by the company, noticed or reported during the
year nor have we been informed of such case by the management.
For Deloitte Haskins & Sells
Chartered Accountants
(Registration No 117366W)
R.A.Banga
(Partner)
Place: Mumbai Membership No. 37915
Date: 22nd November, 2010
Sep 30, 2009
1. We have audited the attached balance sheet of Nelco Limited as at
30th September, 2009, the profit and loss account and also the cash
flow statement for the eighteen month period ended on that date annexed
thereto. These financial statements are the responsibility of the
companys management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India.Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) in our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
those books;
(iii) the balance sheet, profit and loss account and cash flow
statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the balance sheet, profit and loss account and
cash flow statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) in our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:-
(a) in the case of the balance sheet, of the state of affairs of the
company as at 30th September, 2009;
(b) in the case of the profit and loss account of the profit for the
eighteen month period ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
eighteen month period ended on that date.
5. On the basis of written representations received from the
directors, as on 30,th September, 2009, and taken on record by the
Board of Directors, we report that none of the directors is
disqualified as on 30th September, 2009 from being appointed as a
director in terms of clause (g) of sub-section (1) of Section 274 of
the Companies Act, 1956.
ANNEXURE TO THE AUDITORS REPORT TO THE MEMBERS OF NELCO LIMITED
(Referred to in paragraph (3) thereof)
(i) (a) The company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) Physical verification of fixed assets was carried out during the
year in accordance with the companys policy of verifying the fixed
assets over a period of three years. In our opinion, the frequency of
verification of fixed assets is at reasonable intervals. No material
discrepancies between book records and the physical inventories of
fixed assets were noticed.
(c) During the year, in our opinion, a substantial part of fixed assets
has not been disposed off by the company.
(ii) (a) The inventory of the company has been physically verified by
the management during the year and at the year end. In respect of
stocks lying with third parties, a substantial portion was physically
verified or has been confirmed by third parties during the year or at
the year end. In our opinion the frequency of verification is
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management were found reasonable and adequate in
relation to the size of the company and the nature of its business.
(c) On the basis of our examination of records of inventory, in our
opinion, the company has maintained proper records of inventory and the
discrepancies noticed on physical verification between the physical
stocks and the book records were not material in relation to the
operations of the company.
(iii) According to the information and explanations given to us, the
company has neither granted nor taken any loans, secured or unsecured,
to / from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, 1956. As the company
has not granted / taken any loans, secured or unsecured, to / from
parties listed in the register maintained under Section 301 of the
Companies Act, 1956 and accordingly paragraphs 4 (iii) (b), (c), (d),
(f) and (g) of the Companies (Auditors Report) Order, 2003, are not
applicable.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanation that certain items are of
a special nature and their prices cannot be compared with alternative
quotations, there is an adequate internal control system commensurate
with the size of the company and the nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. Further, on the basis of our examination and the information
and explanations given to us, we have neither come across nor have we
been informed of any instance of major weakness in the aforesaid
internal control system.
(v) According to the information and explanations given to us, we are
of the opinion that there are no contracts or arrangements that need to
be entered into the register maintained under Section 301 of the
Companies Act, 1956 and accordingly paragraph (v)(b) of the Order is
not applicable.
(vi) In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits from the public
during the year and has complied with the provisions of Section 58A,
58AA and any other relevant provisions of the Companies Act, 1956 and
the Companies (Acceptance of Deposits) Rules, 1975. We have been
informed that no order has been passed by Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any other court or any
other Tribunal on the company.
(vii) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of accounts and records
maintained by the company relating to the manufacture of Electronic
Products, pursuant to the rule made by the Central Government for the
maintenance of cost records under Section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie the prescribed
accounts and records have been maintained and are being made up. We
have, however, not made a detailed examination of the records with a
view to determining whether they are accurate or complete.To the best
of our knowledge and according to the information given to us, the
Central Government has not prescribed the maintenance of cost records
under Section 209 (1) (d) of the Companies Act, 1956, for any other
products of the company.
(ix) (a) According to the information and explanations given to us, and
according to the books and records as produced and examined by us, in
our opinion, the undisputed statutory dues including provident fund,
investor education and protection fund, income-tax, sales-tax, wealth
tax, service tax, value added tax, customs duty, excise duty, cess and
other material statutory dues as applicable, have generally been
regularly deposited by the company during the year with the appropriate
authorities. According to the information and explanations given to us,
there are no arrears of outstanding Statutory dues as mentioned above
as at 30th September, 2009 for a period of more than six months from
the date they became payable.
(b) As at 30th September, 2009 according to the records of the company
and the information and explanations given to us, the following are the
particulars of dues on account of income-tax, sales-tax, customs duty,
excise duty and service tax matters that have not been deposited on
account of any dispute.
Name of the Nature of the Financial Year to
statute dues which the
matter pertains
Income-Tax Laws Income-Tax 2002-03
Sales - Tax Laws Sales-Tax 1989-90 and
1990-91
1985-86 to 1988-89,
1992-93, 1996-97,
2001-02 and 2003-04
Customs Duty Laws Customs Duty 1991 to 1993
Excise Duty Laws Excise Duty 1983-84 to1993-94
2006-07
Service Tax Laws Service Tax 2003-04, 2005-06,
2006-07
Name of the Statue Forum where the Amount
dispute is (Rs. in lakhs)
pending
Income-Tax Laws Appellate Authority 8.51
- up to Commissioner
Level
Sales - Tax Laws Appellate Authority - 17.43
High Court Level
Appellate Authority -
Commissioner Level 32.29
Customs Duty Laws Appellate Authority - 30.04
Assessing Officer Level
Excise Duty Laws Appellate Authority - 2,064.05
Commissioner Level
Appellate Authority - 1.07
Assistant Director Level
Service Tax Laws Appellate Authority - 140.03
up to Commissioner Level
(x) The company does not have accumulated losses as at 30th September,
2009 and has not incurred cash losses during the financial year ended
on that date and in the immediately preceding financial year.
(xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to any
financial institution, bank or debenture holders during the year.
(xii) In our opinion and according to the information and explanations
given to us, the company has not granted any loans and advances on the
basis of security by way of pledge of shares, debentures and other
securities.
(xiii) The provisions of any special statute as specified under
paragraph 4 (xiii) of the Order are not applicable to the company.
(xiv) In our opinion and according to the information and explanations
given to us, the company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of paragraph 4(xiv) of the Order are not applicable to the
company.
(xv) According to the information and explanations given to us, the
company has not given any guarantees for loan taken by others from
banks or financial institutions, the terms and conditions, whereof, in
our opinion, are prejudicial to the interest of the company.
(xvi) In our opinion and according to the information and explanations
given to us, the term loans were applied for the purpose for which the
loans were obtained.
(xvii) Based on the information and explanations given to us and on an
overall examination of the balance sheet of the company, in our
opinion, funds raised on a short term basis have not been used for long
term investments.
(xviii) The company has not made any preferential allotment of shares
to parties and companies covered in the register maintained under
Section 301 of the Companies Act, 1956, during the year.
(xix) The company has not issued any debentures during the year.
(xx) The company has not raised any money by public issue during the
year.
(xxi) During the course of our examination of the books and records of
the company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
significant fraud on or by the company, noticed or reported during the
year nor have we been informed of such case by the management.
For Deloitte Haskins & Sells
Chartered Accountants
R.A.Banga
Partner
Place: Mumbai Membership No. 37915
Date: 27th November, 2009.