Mar 31, 2023
National Aluminium Company Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the Standalone Financial Statements of National Aluminium Company Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2023, 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 (hereinafter referred to as the âStandalone Financial Statementsâ).
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 (âthe Actâ) in the manner so required and give a true and fair view, in conformity with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and accounting principles generally accepted in India, of the State of Affairs of the Company as at 31st March, 2023, and its Profit, Other Comprehensive Income, Changes in Equity and its Cash Flows for the year ended on that date.
Basis for Opinion
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 Auditorâs 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 Standalone 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 on the Standalone Financial Statements.
Emphasis of Matter
i. We draw attention to Note No. 7.3 regarding capitalisation of Coal Mines, starting of mining operations from 09.11.2022 and declaration of start of production from 01.04.2023; and
ii. We draw attention to Note No. 14.1 regarding non accounting of capital assets/ expenditure in absence of finalisation of issues arising out of Rehabilitation and Resettlement Policy and option yet to be given by the Project Displaced Families.
Our opinion is not modified in respect of above matters.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters that we have identified in the current year are as follows:
Key Audit Matter |
How the matter was addressed in our audit |
1. Carrying value of Property, Plant and Equipment, Intangible assets (including Capital work-in-progress and Intangible Assets under Development) |
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Property, plant and equipment, capital work-in-progress (CWIP), intangible assets and Intangible assets under development represent significant balances recorded in the statement of financial position. The evaluation of the recoverable amount of these assets requires significant judgement in determining the key assumptions supporting the expected future cash flows of the business and the utilisation of the relevant assets including impairment provisions related to the assets. There are a number of areas where management judgement impacts the carrying value of property, plant and equipment, intangible assets and their respective depreciation profiles. These include the decision to capitalise or expense costs; the asset life review including the impact of changes in the Companyâs strategy; and the timeliness of capitalisation, determination or the measurement and recognition criteria for assets retired from active use. |
Our audit procedures relating to the carrying value of property, plant and equipment including intangible assets and capital work-in-progress included the following: ⢠We evaluated the assumptions made by management in the determination of carrying values and useful lives to ensure that these are consistent with the principles of Indian Accounting Standards (Ind AS) 16 Property, Plant and Equipment and Ind AS 38 Intangible Assets. ⢠We assessed whether the carrying values and the useful lives were reasonable by challenging managementâs judgements through comparing the useful lives prescribed in Schedule II to the Companies Act, 2013 and the useful lives of certain assets as per the technical assessment of the management. ⢠We compared the useful lives of each class of asset in the current year to the previous year to determine whether there were any significant changes in the useful lives of assets, and considered the reasonableness of changes based on our knowledge of the business and the industry. ⢠We assessed whether indicators of impairment existed as at 31st March 2023 based on our knowledge of the business and the industry and wherever required the provision of impairment of assets/CWIP were reviewed. ⢠We tested the controls in place over the property, plant and equipment and intangible assets, evaluated the appropriateness of capitalisation policies, performed tests of details on costs capitalised and assessed the timeliness of capitalisation including decapitalisation of assets retired from active use and the application of the asset life. ⢠In performing these substantive procedures, we assessed the judgements made by management including the nature of underlying costs capitalised; the appropriateness of asset lives applied in the calculation of depreciation and amortisation; and in assessing the need for accelerated depreciation/amortisation, if required, in the context of impairment. |
Key Audit Matter |
How the matter was addressed in our audit |
2.Valuation of employeesâ defined benefit obligations and other long-term benefits |
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The Company has recognised long-term employee benefit liabilities and defined benefit obligations (net of plan asset against funded gratuity obligation). The valuation of employee benefit obligations is dependent on market conditions and assumptions made. The key audit matter specifically relates to the following key assumptions like discount rate, inflation expectations and life expectancy assumptions. The setting of these assumptions is complex and requires the exercise of significant Management judgement with the support of third party actuary. |
Our audit procedures relating to the valuation of employees, defined benefit obligations and other long-term benefits included the following: ⢠In testing the valuation, we have examined the reports of external actuarial specialists to review the key actuarial assumptions used, both financial and demographic, and considered the methodology utilised to derive these assumptions. ⢠We evaluated the assumptions made by management and the actuary to ensure that these are consistent with the principles of Ind AS 19 Employee Benefits. ⢠Furthermore, we have examined the sensitivity analysis on the key assumptions in valuing the defined benefit obligations. |
3. Ascertainment, disclosure and provisioning in respect of contingent liabilities |
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The Company disclosed contingent liabilities in the Financial Statements. The Company has material uncertain tax matters, both direct and indirect, under dispute involving material aggregate demand which require significant judgement to determine the possible outcome of these disputes. Additionally, the Company has other on-going legal matters relating to various claims by the Government of Odisha or other agencies constituted by the State Government and by contractors/suppliers which require application of Management judgement in order to determine the likely outcome. |
Our audit procedures relating to the ascertainment, disclosure and provisioning in respect of contingent liabilities included the following: We obtained a detailed understanding and evaluated the design and implementation of controls that the Company has established in relation to disclosure and provisioning of contingent liabilities in accordance to Ind AS 37 Provisions, Contingent Liability and Co n ti ngen t Assets. Regarding direct and indirect tax contingent liabilities, we undertook following principal audit procedures: ⢠Assessment of the process and relevant controls implemented to identify tax litigations and pending administrative proceedings. ⢠Assessment of assumptions used in the evaluation of potential tax risks performed by the tax department of the Company considering the legal precedence and other rulings in similar cases. ⢠Discussion with the management regarding the status of the most significant disputes and inspection of the key relevant documentation. ⢠Analysis of opinion received from tax experts where available. ⢠Review of the adequacy of the disclosures in the notes to the financial statements. In assessing the potential exposures of the Company in respect of other contingent liabilities, we have: ⢠assessed the design and implementation of controls in relation to the monitoring of known exposures; ⢠referred Board and other meeting minutes to identify areas subject to Companyâs consideration; ⢠consulted with the Companyâs internal legal advisors in understanding on-going and potential legal matters impacting the Company; ⢠reviewed available legal opinions from experts; and ⢠reviewed the proposed accounting and disclosure of actual and potential legal liabilities. |
4. Advances and deposits in respect of tax matters under litigation continuing as assets |
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The Financial Statements disclose other assets, which includes material recoverable claims of direct and indirect tax deposits (net of provision) including VAT and Cenvat credits which are pending adjustment/ adjudication. Significant judgement is required in assessing the nature of these exposures and their accounting and disclosure requirements. |
Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following: ⢠We obtained from management the details of completed tax assessments and demands and appeal orders of the appellate authority. ⢠We involved our internal experts to challenge the managementâs underlying assumptions in estimating the tax liability and the possible outcome of the disputes. ⢠Our internal experts also considered legal precedence and other rulings in evaluating managementâs position on these uncertain tax positions. ⢠Additionally, we have considered opinions of legal and tax experts, wherever available, to review the nature of the amounts recoverable, the sustainability and the likelihood of recoverability upon final resolution. |
Key Audit Matter |
How the matter was addressed in our audit |
5. Valuation of deferred tax assets and liabilities |
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The Company has disclosed deferred tax assets/ liabilities in the Financial Statements. The Company operates in activities which involves application of various provisions in income tax. The assessment of the valuation of deferred tax assets/liability, resulting from temporary differences, and provisions for uncertain tax positions is significant to our audit as the calculations are complex and depend on sensitive and judgemental assumptions. These include, amongst others, long-term future profitability and local fiscal regulations and developments. |
Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following: ⢠Ascertained the completeness and accuracy of the deferred tax assets/liabilities and recognizing uncertain tax positions. ⢠We challenged and tested the Managementâs assessment of the recoverability of the deferred tax assets, and the probability of future cash outflows in respect deferred tax liabilities identified by the Company. ⢠We also assessed the applicable local fiscal regulations and developments, in particular those related to changes in the statutory income tax rate and of the statutes of limitation, as these are key assumptions underlying the valuation of the deferred tax assets/liabilities. ⢠We analysed the tax positions and evaluated the assumptions and methodologies used by the Company. ⢠In addition, we also focused on the adequacy of the Companyâs disclosures as per Ind AS 12 Income Taxes on deferred tax assets/liabilities and assumptions used. |
6. Extraction of Coal through Mine Developer and Operator (MDO) |
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The Company has capitalised the Coal Blocks Utkal D & Utkal E under Mining Right with effect from 25.03.2021 and 20.01.2023 respectively. For extraction of coal, these coal mines have been given to the Mines Developer and Operator (MDO) vide agreement dated 8th March, 2022. As per the terms of the contract, the MDO has the responsibility of executing certain capital works including payment for Mine Closure Liability and revenue works including removal of overburden and extraction of coal including its stacking at the Mines at designated places and transportation of coal to Railway Siding or site of the Captive Power Plant of the Company. On transportation and receipt of coal at the site of the Company, liability with amount at agreed price per tonne, is to be provided. The expenses of overburden, day to day expenditure by the MDO for production of coal and declaration of stock of production thereof at site are required to be done by the MDO and accounting to be done by the Company. The price of coal is dependent on calculation based on wholesale price index relevant on period of despatch. Considering judgements involved in estimating various elements of expenditure, income, assets and liabilities balances and appropriate time at which these are to be accounted, we have determined this to be a key audit matter. |
Our audit procedures included the following: ⢠Obtained an understanding of the Companyâs process and tested internal controls associated with the estimation and accounting of inventory of coal, liability of trade payable to MDO and Mine Closure Liability, cost of coal and other expenses and income. ⢠Discussed with the management to understand their assessment on each qualitative and quantitative factor and reviewed consistency of the Managementâs explanation with the underlying documentation, rules, and regulations. ⢠Obtained certificate from Management on availability of Inventory at the Mines. ⢠Assessed disclosures made by the Company in accordance with the requirements of Ind AS. ⢠Obtained necessary management representation. |
7. Procedure adopted for awarding Contracts for expansion |
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The Company has planned to setup the expansion of Alumina Refinery plant of 1 MTPA. For execution of the above volume, multiple contracts for Works, Purchases & Services are required which include high inherent risk (i.e. complex calculations, significant estimation uncertainty, etc.) and control risk (i.e. possibility of human errors, circumvention by collusion, inappropriate management override). The process of award requires multiple stage of appropriate evaluation of bidders which includes their, technical expertise, experience of similar execution, financial stability, human resources mobilisation, etc. Assessment of appropriate evaluation includes managementâs judgement to ascertain the competencies through large volume of documents submitted by prospective bidders on technical parameters, responding to the queries of bidders, setting the time line for acceptance, execution, completion etc. with the support of appointed Engineering, Procurement, Construction, Management (EPCM). The above also includes assessment of financial parameters, matching the bid value with the estimation, evaluation of requirement of financial guarantee for any uncertainties, multiple level of management concurrences, classification of expenditure into capital or revenue and award of contracts. Further, post award contracts activities like monitoring of progress of contracts, addressing any critical issues that come in between, resolution of local conflicts involve judgement and decision making by the Company. Considering the complex technical & financial assessment and calculation for selection of appropriate bidder(s), we have determined this to be a key audit matter. |
Our audit approach was a combination of test of few contracts for assessment of internal controls and substantive procedures which included the following: ⢠Obtained the Expansion budget allocation for various stages of sequential activities ⢠Evaluated the design of contract assessment procedures for technical & financial parameters and the estimation of efforts required to complete the NIT (notice inviting tenders); ⢠Tested the evaluated documents, views of EPCM, complex calculation, allocation of budgets estimation, application of index, application of statutory levies etc. to arrive at documents preparation ⢠Selected a sample of contracts and through the audit efforts, analytical skills and visit to the site of constructions, wherever necessary, to identify significant variations with any subsequent changes in NIT, estimations, terms, etc.; ⢠Discussed with the management, EPCMs on the above significant variations to obtain their judgement or justification that has bearing on possible delays in achieving the milestones as well as cost and time overrun; ⢠Tested few progress report of EPCM to identify the bottlenecks in execution, their suggestions, applying the corrections, milestones achieved, plan for the subsequent periods, etc. ⢠Reviewed the Board/Committee notes for any specific or significant changes in estimates of scope or vendors. ⢠Performed analytical procedures and tested the reasonableness of progress of the contracts that have exceeded the cost or time significantly or requires improvement in control measures. |
Information Other than the Standalone Financial Statements and Auditorâs Report Thereon
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information contained in the Companyâs Annual Report but does not include the Standalone Financial Statements and our report thereon. These reports are expected to be made available to us after the date of this auditorsâ report.
Our opinion on the Standalone 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 mentioned and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action, if required.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) 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 implementation and maintenance of 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 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 Financial Statements, Management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs 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 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 Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls;
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management;
⢠Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the Standalone 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 auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern; and
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions 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 Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs 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 (Auditorâs Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act, we give in the Annexure âAâ to this report a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. In compliance to directions of the Comptroller and Auditor General of India under Section 143(5) of the Act, we give in Annexure âBâ to this report a statement on the matters specified therein.
3. 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), Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) Section 164(2) of the Act regarding disqualification of directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Government of India;
(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 âCâ;
(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with the requirements of Section 197(16) of the Act, as amended:
The provision of Section 197 read with Schedule V of the Act, relating to managerial remuneration is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of India; and
(h) With respect to the other matters to be included in the Auditorâs 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 pending litigations, the liabilities in respect of which is either provided for or disclosed as contingent liabilities - Refer Note 27 to the Standalone Financial Statements;
ii. The Company has made provision, as required under the applicable law or Indian Accounting Standards, for material foreseeable losses, if any, in respect of long term contracts. As explained to us, there are no derivative contracts entered into by the Company;
iii. There has been no delay in transferring amounts, 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 (which are material either individually or in the
aggregate) 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 or entity, including foreign entity (âIntermediariesâ), 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 (âUltimate Beneficiariesâ) 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 (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement;
v. As stated in Para 19.3 to the Standalone Financial Statements:
a. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the
Act, as applicable; and
b. The interim dividends declared and paid by the Company during the year and until the date of this report is in compliance with Section 123 of the Act; and
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of accounts using accounting software which has a feature of recording audit trail (edit log) facility is applicable for the Company only w.e.f. 1st April, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.
For GNS & Associates For A. K. Sabat & Co.
Chartered Accountants Chartered Accountants
FRN: 318171E FRN: 321012E
Sd/- Sd/-
(CA Rajesh K. Pahadi) (CA B. R. Mohanty)
Partner Partner
Membership No. : 058221 Membership No. : 057266
UDIN: 23058221BGXMBD1808 UDIN: 23057266BGSMTW7954
Place: Bhubaneswar Date: 24th May, 2023
Mar 31, 2022
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the Standalone Financial Statements of National Aluminium Company Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2022, 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 (hereinafter referred to as the âStandalone Financial Statementsâ).
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 (âthe Actâ) in the manner so required and give a true and fair view, in conformity with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and accounting principles generally accepted in India, of the State of Affairs of the Company as at 31st March, 2022, and its Profit, Other Comprehensive Income, Changes in Equity and its Cash Flows for the year ended on that date.
Basis for Opinion
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 Auditorâs 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 Standalone 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 on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 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. The key audit matters that we have identified in the current year are as follows:
Key Audit Matter |
How the matter was addressed in our audit |
1. Carrying value of Property, Plant and Equipment, Intangible assets (including Capital work-in-progress and Intangible Assets under Development) |
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Property, plant and equipment, capital work-in-progress (CWIP), intangible assets and Intangible assets under development represent significant balances recorded in the statement of financial position in the Standalone Financial Statements. The evaluation of the recoverable amount of these assets requires significant judgement in determining the key assumptions supporting the expected future cash flows of the business and the utilisation of the relevant assets including impairment provisions related to the assets. There are a number of areas where management judgement impacts the carrying value of property, plant and equipment, intangible assets and their respective depreciation profiles. These include the decision to capitalise or expense costs; the asset life review including the impact of changes in the Companyâs strategy; and the timeliness of capitalisation, determination or the measurement and recognition criteria for assets retired from active use. |
Our audit procedures relating to the carrying value of property, plant and equipment, intangible assets (including and capital work-in-progress and intangible assets under development) included the following: ⢠We evaluated the assumptions made by management in the determination of carrying values and useful lives to ensure that these are consistent with the principles of Indian Accounting Standards (Ind AS) 16 Property, Plant and Equipment and Ind AS 38 Intangible Assets. ⢠We assessed whether the carrying values and the useful lives were reasonable by challenging managementâs judgements through comparing the useful lives prescribed in Schedule II to the Companies Act, 2013 and the useful lives of certain assets as per the technical assessment of the management. ⢠We compared the useful lives of each class of asset in the current year to the previous year to determine whether there were any significant changes in the useful lives of assets, and considered the reasonableness of changes based on our knowledge of the business and the industry. ⢠We assessed whether indicators of impairment existed as at 31st March, 2022 based on our knowledge of the business and the industry and wherever required the provision of impairment of assets/ CWIP were reviewed. ⢠We tested the controls in place over the property, plant and equipment and intangible assets, evaluated the appropriateness of capitalisation policies, performed tests of details on costs capitalised and assessed the timeliness of capitalisation including decapitalisation of assets retired from active use and the application of the asset life. ⢠In performing these substantive procedures, we assessed the judgements made by management including the nature of underlying costs capitalised; the appropriateness of asset lives applied in the calculation of depreciation and amortisation; and in assessing the need for accelerated depreciation/amortisation, if required, in the context of impairment. Based on the above procedures, we found managementâs assessment in determining the carrying value of the property, plant and equipment and intangible assets are to be reasonable. |
Key Audit Matter |
How the matter was addressed in our audit |
2.Valuation of employeesâ defined benefit obligations and other long-term benefits |
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The Company has recognised long-term employee benefit liabilities and defined benefit obligations (net of plan asset against funded gratuity obligation) in the Standalone Financial Statements. The valuation of employee benefit obligations is dependent on market conditions and assumptions made. The key audit matter specifically relates to the following key assumptions like discount rate, inflation expectations and life expectancy assumptions. The setting of these assumptions is complex and requires the exercise of significant Management judgement with the support of third party actuary. |
Our audit procedures relating to the valuation of employees, defined benefit obligations and other long-term benefits included the following: ⢠In testing the valuation, we have examined the reports of external actuarial specialists to review the key actuarial assumptions used, both financial and demographic, and considered the methodology utilised to derive these assumptions. ⢠We evaluated the assumptions made by management and the actuary to ensure that these are consistent with the principles of Ind AS 19. ⢠Furthermore, we have examined the sensitivity analysis on the key assumptions in valuing the defined benefit obligations. Based on the above procedures, we are satisfied that the methodology and assumptions applied in relation to determining the liabilities are acceptable. |
3. Ascertainment, disclosure and provisioning in respect of contingent liabilities |
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The Company disclosed contingent liabilities in the Standalone Financial Statements. The Company has material uncertain tax matters, both direct and indirect, under dispute involving material aggregate demand which require significant judgement to determine the possible outcome of these disputes. Additionally, the Company has other on-going legal matters relating to various claims by the Government or other agencies constituted by the Government and by contractors/suppliers which require application of Management judgement in order to determine the likely outcome. |
Our audit procedures relating to the ascertainment, disclosure and provisioning in respect of contingent liabilities included the following: We obtained a detailed understanding and evaluated the design and implementation of controls that the Company has established in relation to disclosure and provisioning of contingent liabilities in accordance to Ind AS 37 Provisions, Contingent Liability and Co n ti ngen t Assets. Regarding direct and indirect tax contingent liabilities, we undertook following principal audit procedures: ⢠Assessment of the process and relevant controls implemented to identify tax litigations and pending administrative proceedings. ⢠Assessment of assumptions used in the evaluation of potential tax risks performed by the tax department of the Company considering the legal precedence and other rulings in similar cases. ⢠Discussion with the management regarding the status of the most significant disputes and inspection of the key relevant documentation. ⢠Analysis of opinion received from tax experts where available. ⢠Review of the adequacy of the disclosures in the notes to the financial statements. In assessing the potential exposures of the Company in respect of other contingent liabilities, we have: ⢠assessed the design and implementation of controls in relation to the monitoring of known exposures; ⢠referred Board and other meeting minutes to identify areas subject to Company consideration; ⢠consulted with the Companyâs internal legal advisors in understanding on-going and potential legal matters impacting the Company; ⢠reviewed available legal opinions from experts; and ⢠reviewed the proposed accounting and disclosure of actual and potential legal liabilities. Based on the above procedures performed, we opined as a whole that the accounting and disclosures in relation to the on-going legal matters are appropriate. |
4. Advances and deposits in respect of tax matters under litigation continuing as assets |
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The Standalone Financial Statements has disclosed other assets, which includes material recoverable claims of direct and indirect tax deposits (net of provision) including VAT and Cenvat credits which are pending adjustment/ adjudication. Significant judgement is required in assessing the nature of these exposures and their accounting and disclosure requirements. |
Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following: ⢠We obtained from management details of completed tax assessments and demands and appeal orders of the appellate authority. ⢠We involved our internal experts to challenge the managementâs underlying assumptions in estimating the tax liability and the possible outcome of the disputes. ⢠Our internal experts also considered legal precedence and other rulings in evaluating managementâs position on these uncertain tax positions. ⢠Additionally, we have considered opinions of legal and tax experts, wherever available, to review the nature of the amounts recoverable, the sustainability and the likelihood of recoverability upon final resolution. Based on the above procedures performed, we are in agreement with the managementâs determination of the claim amount considered recoverable. |
Key Audit Matter |
How the matter was addressed in our audit |
5. Valuation of deferred tax assets and liabilities |
|
The Company has disclosed deferred tax assets/ liabilities in the Standalone Financial Statements. The Company operates in activities which involves application of various provisions in income tax. The assessment of the valuation of deferred tax assets/liability, resulting from timing differences, and provisions for uncertain tax positions is significant to our audit as the calculations are complex and depend on sensitive and judgemental assumptions. These include, amongst others, long-term future profitability and local fiscal regulations and developments. |
Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following: ⢠Ascertained the completeness and accuracy of the deferred tax assets/liabilities and recognizing uncertain tax positions. ⢠We challenged and tested the Managementâs assessment of the recoverability of the deferred tax assets, and the probability of future cash outflows in respect deferred tax liabilities identified by the Company. ⢠We also assessed the applicable local fiscal regulations and developments, in particular those related to changes in the statutory income tax rate and of the statutes of limitation, as these are key assumptions underlying the valuation of the deferred tax assets/liabilities. ⢠We analysed the tax positions and evaluated the assumptions and methodologies used by the Company. ⢠In addition, we also focused on the adequacy of the Companyâs disclosures as per Ind AS 12 Income Taxes on deferred tax assets/liabilities and assumptions used. Based on the above procedures performed, we are satisfied that the methodology and assumptions applied in relation to determining the deferred tax assets and liabilities are acceptable. |
Other Information
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information contained in the Companyâs Annual Report but does not include the Standalone Financial Statements and our report thereon. These reports are expected to be made available to us after the date of this auditorsâ report.
Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information mentioned and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action, if required.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Act with respect to the preparation and presentation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) 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 implementation and maintenance of 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 statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, Management is responsible for assessing the Companyâs 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 Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
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 auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls;
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management;
⢠Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern; and
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions 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 financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs 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 (Auditorâs Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure âAâ to this report a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. In compliance to directions of the Comptroller and Auditor General of India u/s. 143(5) of the Act, we give in Annexure âBâ to this report a statement on the matters specified therein.
3. 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), Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) Section 164(2) of the Act regarding disqualification of directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Government of India;
(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 âCâ;
(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with the requirements of Section 197(16) of the Act, as amended:
The provision of Section 197 read with Schedule V of the Act, relating to managerial remuneration is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of India; and
(h) With respect to the other matters to be included in the Auditorâs 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 pending litigations, the liabilities in respect of which is either provided for or disclosed as contingent liabilities - Refer Note 26 to the Standalone Financial Statements;
ii. The Company has made provision, as required under the applicable law or Indian Accounting Standards, for material foreseeable losses, if any, in respect of long term contracts. As explained to us, there are no derivative contracts entered into by the Company;
iii. There has been no delay in transferring amounts, 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 (which are material either individually or in the
aggregate) 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 or entity, including foreign entity (âIntermediariesâ), 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 (âUltimate Beneficiariesâ) 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 (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), 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 (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement; and
iv. As stated in Para 18.3 to the Standalone Financial Statements:
a. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable; and
b. The interim dividends declared and paid by the Company during the year and until the date of this report is in compliance with Section 123 of the Act.
For GNS & Associates For A. K. Sabat & Co.
Chartered Accountants Chartered Accountants
FRN: 318171E FRN: 321012E
Sd/- Sd/-
(CA Narad P. Sahu) (CA A. K. Sabat)
Partner Partner
Membership No.: 055224 Membership No.: 030310
UDIN: 22055224AJ OYEN2606 UDIN: 22030310AJOYDX2384
Place: Bhubaneswar Date: 25th May, 2022
Mar 31, 2021
National Aluminium Company LimitedReport on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of National Aluminium Company Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2021, 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 (hereinafter referred to as the âfinancial statementsâ).
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 Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view, in conformity with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 as amended and accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2021, and its profit, and other comprehensive income, changes in equity and its cash flows for the year ended on that date.
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 Auditorâs 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 on the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 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. The key audit matters that we have identified in the current year are as follows:
Key Audit Matter |
How the matter was addressed in our audit |
1. Carrying value of property, plant and equipment including intangible assets and capital work-in-progress |
|
Property, plant and equipment totalling ? 7317.28 crore (201920 : ? 7174.54 crore) as disclosed in Note 5A, capital work-inprogress (Note 6) ? 1431.06 crore (2019-20 : ? 1177.16 crore) and intangible assets (Note 7) totalling ? 343.18 crore (2019-20 : ? 310.23 crore) represent significant balances recorded in the statement of financial position. The Company describes the significant accounting policies in respect of property, plant and equipment, capital work-inprogress and intangible assets in Note 3.4, 3.5 & 3.6. The evaluation of the recoverable amount of these assets requires significant judgement in determining the key assumptions supporting the expected future cash flows of the business and the utilisation of the relevant assets. There are a number of areas where management judgement impacts the carrying value of property, plant and equipment, intangible assets and their respective depreciation profiles. These include the decision to capitalise or expense costs; the asset life review including the impact of changes in the Companyâs strategy; and the timeliness of capitalisation, determination or the measurement and recognition criteria for assets retired from active use. |
Our audit procedures relating to the carrying value of property, plant and equipment including intangible assets and capital work-in-progress included the following: ⢠We evaluated the assumptions made by management in the determination of carrying values and useful lives to ensure that these are consistent with the principles of Indian Accounting Standards (Ind AS) 16 Property, Plant and Equipment and Ind AS 38 Intangible Assets. ⢠We assessed whether the carrying values and the useful lives were reasonable by challenging managementâs judgements through comparing the useful lives prescribed in Schedule II to the Companies Act 2013 and the useful lives of certain assets as per the technical assessment of the management. ⢠We compared the useful lives of each class of asset in the current year to the prior year to determine whether there were any significant changes in the useful lives of assets, and considered the reasonableness of changes based on our knowledge of the business and the industry. ⢠We assessed whether indicators of impairment existed as at 31st March, 2021 based on our knowledge of the business and the industry. ⢠We tested the controls in place over the property, plant and equipment and intangible assets, evaluated the appropriateness of capitalisation policies, performed tests of details on costs capitalised and assessed the timeliness of capitalisation including decapitalisation of assets retired from active use and the application of the asset life. ⢠In performing these substantive procedures, we assessed the judgements made by management including the nature of underlying costs capitalised; the appropriateness of asset lives applied in the calculation of depreciation and amortisation; and in assessing the need for accelerated depreciation/amortisation, if required, in the context of impairment. Based on the above procedures, we found managementâs assessment in determining the carrying value of the property, plant and equipment and intangible assets are to be reasonable. |
Key Audit Matter |
How the matter was addressed in our audit |
2.Valuation of employeesâ defined benefit obligations and other long-term benefits |
|
The Company has recognised long-term employee benefit liabilities of ? 475-38 crore (2019-20 : ? 471.20 crore) and defined benefit obligations (net of plan asset against funded gratuity obligation) of ? 207-81 crore (2019-20 : ? 239-76 crore) and described them in Note 3-16 (Significant Accounting Policies) and Notes 22 and 31 (long-term and post-employment benefits). The valuation of employee benefit obligations is dependent on market conditions and assumptions made. The key audit matter specifically relates to the following key assumptions like discount rate, inflation expectations and life expectancy assumptions- The setting of these assumptions is complex and requires the exercise of significant management judgement with the support of third party actuary- |
Our audit procedures relating to the valuation of employees, defined benefit obligations and other long-term benefits included the following: ⢠In testing the valuation, we have examined the reports of external actuarial specialists to review the key actuarial assumptions used, both financial and demographic, and considered the methodology utilised to derive these assumptions- ⢠We evaluated the assumptions made by management and the actuary to ensure that these are consistent with the principles of Ind AS 19- ⢠Furthermore, we have examined the sensitivity analysis on the key assumptions in valuing the defined benefit obligations- Based on the above procedures, we are satisfied that the methodology and assumptions applied in relation to determining the liabilities are acceptable- |
3. Ascertainment, disclosure and provisioning in respect of contingent liabilities |
|
As described in Note 4-2-5 (Provisions and Contingent Liabilities) the Company disclosed in Note 25 contingent liabilities of ? 2153-49 crore (2019-20 : ? 2561-82 crore)- The Company has material uncertain tax matters, both direct and indirect, under dispute involving aggregate demand of ? 1220-94 crore (2019-20 : ? 1602-70 crore) which require significant judgment to determine the possible outcome of these disputes- Additionally, the Company has other on-going legal matters relating to various claims by the Government of Odisha or other agencies constituted by the State Government and by contractors/suppliers involving an aggregate demand of ? 932-55 crore (2019-20: ? 959-13 crore) which require application of management judgement in order to determine the likely outcome- |
Our audit procedures relating to the ascertainment, disclosure and provisioning in respect of contingent liabilities included the following: We obtained a detailed understanding and evaluated the design and implementation of controls that the Company has established in relation to disclosure and provisioning of contingent liabilities in accordance to Ind AS 37 Provisions, Contingent Liability and Contingent Assets- Regarding direct and indirect tax contingent liabilities, we undertook following principal audit procedures: ⢠Assessment of the process and relevant controls implemented to identify tax litigations and pending administrative proceedings- ⢠Assessment of assumptions used in the evaluation of potential tax risks performed by the tax department of the Company considering the legal precedence and other rulings in similar cases- ⢠Discussion with the management regarding the status of the most significant disputes and inspection of the key relevant documentation- ⢠Analysis of opinion received from tax experts where available- ⢠Review of the adequacy of the disclosures in the notes to the financial statements- In assessing the potential exposures of the Company in respect of other contingent liabilities, we have: ⢠assessed the design and implementation of controls in relation to the monitoring of known exposures; ⢠referred Board and other meeting minutes to identify areas subject to Company consideration; ⢠consulted with the Companyâs internal legal advisors in understanding on-going and potential legal matters impacting the Company; ⢠reviewed available legal opinions from experts; and ⢠reviewed the proposed accounting and disclosure of actual and potential legal liabilities- Based on the above procedures performed, we opined as a whole that the accounting and disclosures in relation to the on-going legal matters are appropriate- |
4. Advances and deposits in respect of tax matters under litigation continuing as assets |
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As at 31st March, 2021, other assets (Note 14) includes recoverable claims of direct and indirect tax deposits (net of provision) including VAT and Cenvat credits amounting to ? 573-47 crore (2019-20 : ? 570-28 crore) which are pending adjustment/adjudication- Significant judgement is required in assessing the nature of these exposures and their accounting and disclosure requirements- |
Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following: ⢠We obtained from management details of completed tax assessments and demands and appeal orders of the appellate authority- ⢠We involved our internal experts to challenge the managementâs underlying assumptions in estimating the tax liability and the possible outcome of the disputes- ⢠Our internal experts also considered legal precedence and other rulings in evaluating managementâs position on these uncertain tax positions- ⢠Additionally, we have considered opinions of legal and tax experts, wherever available, to review the nature of the amounts recoverable, the sustainability and the likelihood of recoverability upon final resolution- Based on the above procedures performed, we are in agreement with the managementâs determination of the claim amount considered recoverable- |
Key Audit Matter |
How the matter was addressed in our audit |
5. Valuation of deferred tax assets and liabilities |
|
The Company has disclosed in Note 23 deferred tax liability (net of deferred tax asset) as on 31st March, 2021 ? 893-72 crore (2019-20 : ? 1060.61 crore). The Company operates in activities which involves application of multiple income tax provisions. The assessment of the valuation of deferred tax assets/liability, resulting from timing differences, and provisions for uncertain tax positions is significant to our audit as the calculations are complex and depend on sensitive and judgmental assumptions. These include, amongst others, long-term future profitability and local fiscal regulations and developments. |
Our audit procedures relating to the advance and deposits in respect of tax matters under litigation continuing as assets included the following: ⢠Ascertained the completeness and accuracy of the deferred tax assets/liabilities and recognizing uncertain tax positions. ⢠We challenged and tested the Managementâs assessment of the recoverability of the deferred tax assets, and the probability of future cash outflows in respect deferred tax liabilities identified by the Company. ⢠We also assessed the applicable local fiscal regulations and developments, in particular those related to changes in the statutory income tax rate and of the statutes of limitation, as these are key assumptions underlying the valuation of the deferred tax assets/liabilities. ⢠We analysed the tax positions and evaluated the assumptions and methodologies used by the Company. ⢠In addition, we also focused on the adequacy of the Companyâs disclosures as per Ind AS 12 Income Taxes on deferred tax assets/liabilities and assumptions used. Based on the above procedures performed, we are satisfied that the methodology and assumptions applied in relation to determining the deferred tax assets and liabilities are acceptable. |
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information contained in the Companyâs Annual Report but does not include the financial statements and our report thereon. These reports are expected to be made available to us after the date of this auditorsâ report.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information mentioned and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the other information, if we conclude that there is material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action, if required.
Managementâs Responsibility for the Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) 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 implementation and maintenance of 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 statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Companyâs 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 Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Financial Statements
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 auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs 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 auditorâs 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 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 financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs 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 (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure âAâ to this report a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. In compliance to directions of the Comptroller and Auditor General of India u/s. 143(5) of the Act, we give in Annexure âBâ to this report a statement on the matters specified therein.
3. 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), Statement of changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
(e) Section 164(2) of the Act regarding disqualification of directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Government of India.
(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 âCâ.
(g) With respect to the other matters to be included in the Auditorsâ Report in accordance with the requirements of section 197(16) of the Act, as amended:
The provision of section 197 read with Schedule V of the Act, relating to managerial remuneration is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of India.
(h) With respect to the other matters to be included in the Auditorâs 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 pending litigations, the liabilities in respect of which is either provided for or disclosed as contingent liabilities - Refer Note 25 to the financial statements.
ii. The Company has made provision, as required under the applicable law or Indian accounting standards, for material foreseeable losses, if any, long term contracts including derivative contracts.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
For Patro & Co. For GNS & Associates
Chartered Accountants Chartered Accountants
FRN: 310100E FRN: 318171E
(CA Ambika Prasad Mohanty) (CA Gokul Chandra Das)
Partner Partner
Membership No.: 057820 Membership No.: 086157
UDIN: 21057820AAAAFE5944 UDIN: 21086157AAAACF3773
Place: Bhubaneswar Date: 28th June, 2021
Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of National Aluminium Company Limited (âthe Companyâ), which comprises the Balance Sheet as at 31st March 2018, and 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 significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
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 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) prescribed under Section 133 of the Act read with relevant rules issued thereunder.
This responsibility also includes the 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.
Auditorsâ Responsibility
Our responsibility is to express an opinion on these 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.
We conducted our audit of the 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 auditorâs 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 companyâs preparation of 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 accounting policies used and the reasonableness of the accounting estimates made by companyâs 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 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, 2018, and its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in Annexure âAâ to this report, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. In compliance to directions of the Comptroller and Auditor General of India u/s.143(5) of the Act, we give in Annexure âBâ to this report a statement on the matters specified therein.
3. As required by Section 143(3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss, 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 financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act read with relevant rules made thereunder.
e. Section 164(2) of the Act regarding disqualification of directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of India.
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 âCâ.
g. With respect to the other matters to be included in the Auditorâs 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 pending litigations in its financial statements - Refer Note 25 to the standalone financial statements, the impact of which on its financial position is not ascertainable as the matters are sub-judice;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any 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.
(Referred to in paragraph 1 under the heading of âReport on Other Legal and Regulatory Requirementsâ of our Report of even date)
i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of its property, plant and equipment including intangible assets.
(b) All movable assets of the Company are physically verified by the management every year. The frequency of verification, in our opinion, is reasonable. No material discrepancies were noticed on such verification conducted during the year; Non-movable assets have been physically verified by the management at an interval of three years, which, in our opinion, is reasonable having regard to the size and nature of assets of the Company;
No material discrepancies between book records and physical assets have been noticed;
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company the title deeds of immovable properties are held in the name of the Company. Out of 8022.63 acres of freehold land and 9878.52 acres of leasehold land held by the Company, title/lease deeds are not yet executed in respect of 66.92 acres of freehold and 2244.55 acres of leasehold land respectively. However, the Company has been permitted by the concerned authorities to carry on its operation on the said land. Registration formalities in respect of office space for 6459 sft. in Kolkata is also not completed.
ii) Inventories, except stocks relating to expansion project, stocks lying with third parties and stocks-in-transit, have been physically verified during the year by firms of Chartered Accountants appointed by the management for this purpose. The frequency of verification is reasonable. The discrepancies noticed on physical verification between physical stocks and book records in case of shortages have been properly dealt with in the books of accounts while excesses have been ignored;
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 Companies Act, 2013. Consequently, clauses (iii) (a), (b) & (c) of paragraph 3 of the Order are not applicable;
iv) Section 185 ofthe Act regarding loans to directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of India. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 186 of the Act with respect to the loans and investments made.
v) The Company has not accepted any deposits from the public.
vi) We have broadly reviewed the books and records maintained by the Company as specified by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013 in respect of manufacturing activities and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and complete.
vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in our opinion, the Company is generally regular in depositing 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, electricity duty and other material statutory dues with the appropriate authorities and there are no undisputed statutory dues as at 31st March, 2018 outstanding for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, following statutory dues have not been deposited by the Company on account of disputes:
(Rs. in crore)
Name of the Statute |
Nature of Dues |
Amount disputed |
Amount deposited |
Forum where disputes are pending |
Sales Tax |
Sales Tax |
122.80 |
24.20 |
Commissioner |
162.23 |
55.52 |
Tribunal |
||
81.13 |
4.02 |
High Court |
||
366.16 |
83.75 |
Entry Tax |
Entry Tax |
36.05 |
8.17 |
Commissioner |
|
|
133.02 |
55.55 |
Tribunal |
||
|
60.55 |
9.38 |
High Court |
||
|
229.62 |
73.11 |
|||
Central Excise Act, 1944 |
Excise Duty |
2.96 |
0.11 |
Commissioner |
|
|
96.94 |
0.57 |
Tribunal |
||
|
0.79 |
0.59 |
High Court |
||
|
100.69 |
1.27 |
|||
Service Tax |
Service tax |
2.91 |
1.84 |
Commissioner |
|
|
15.17 |
1.13 |
Tribunal |
||
|
18.08 |
2.97 |
|||
Customs Act, 1962 |
Custom Duty |
1.44 |
0.18 |
Commissioner |
|
|
101.33 |
1.66 |
Tribunal |
||
|
102.77 |
1.84 |
|||
Income Tax Act, 1961 |
Income Tax |
81.70 |
229.39 |
Commissioner |
|
|
592.78 |
315.61 |
Tribunal |
||
|
31.92 |
52.14 |
High Court |
||
|
706.40 |
597.14 |
|||
Odisha Stamps Act |
Stamp duty |
204.53 |
0.00 |
High Court |
|
Road Tax |
Road Tax |
2.65 |
0.00 |
Commissioner |
|
|
2.65 |
0.00 |
|||
Total: |
1,730.89 |
760.08 |
|||
viii) Except bill discounting arrangement with banks, the Company does not have any loans or borrowings from any financial institution, banks, government or debenture holders. The Company has not defaulted in repayment of the loans obtained under the bill discounting facility.
ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year.
x) According to the information and explanations given to us, no fraud by the Company or any material fraud on the Company by its officers or employees has been noticed or reported during the year.
xi) Section 197 of the Act regarding managerial remuneration is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated
05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of India.
xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company.
xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Companies Act, 2013 where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations given to us and based on our examination of the records, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv) According to the information and explanations given to us and based on our examination of the records, the Company has not entered into any non-cash transactions with any director or persons connected with him.
xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Guha Nandi & Co. For Patro & Co.
Chartered Accountants Chartered Accountants
FRN: 302039E FRN: 310100E
(CA B. K. Sarawagi) (CA Rajendra Patro)
Partner Partner
Membership No.054894 Membership No. 019423
Place : Bhubaneswar
Date : 26.05.2018
Mar 31, 2017
INDEPENDENT AUDITORS'' REPORT
TO THE MEMBERS OF NATIONAL ALUMINIUM COMPANY LIMITED Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of National Aluminums Company Limited (âthe Companyâ), which comprises the Balance Sheet as at 31st March 2017, and 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 significant accounting policies and other explanatory information.
Management''s Responsibility 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 Companies Act 2013 (âthe Actâ) 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) prescribed under section 133 of the Act read with relevant rules issued there under.
This responsibility also includes the 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 standalone Ind AS 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 standalone Ind AS 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 there under.
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. Those Standards 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.
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 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 accounting policies used and the reasonableness of the accounting estimates made by 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 Ind AS financial statements.
Opinion
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 including Ind AS, of the financial position of the Company as at 31st March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matter
The comparative financial information of the Company for the year ended 31st March 2016 and the transition date opening balance sheet as at 1st April 2015 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements for the year ended 31st March 2016 and 31n March 2015 respectively, prepared in accordance with the Companies (Accounting Standards) Rules, 2006 and auditors expressing unmodified opinion thereon in their audit reports dated 28th May 2016 and 30th May 2015 respectively.
Those standalone financial statements have been adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
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, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Act, we give in Annexure âAâ to this report, a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. In compliance to directions of the Comptroller and Auditor General of India u/s.l43(5) of the Act, we give in Annexure âBâ to this report a statement on the matters specified therein.
3. As required by section 143(3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss, 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 Indian Accounting Standards prescribed under section 133 of the Act read with relevant rules made thereunder.
e. Section 164(2) of the Act regarding disqualification of directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of corporate Affairs, Govt. of India.
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 âCâ.
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 Ind AS financial statements
- Refer Note 26 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 has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company; and
iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 - Refer Note 28 to the standalone Ind AS financial statements. However, as stated in the said note and as represented to us by the Management, amounts aggregating to Rs.81,000/- and Rs.9,000/- respectively have been received and utilized in respect transactions which are not permitted.
âReport on Other Legal and Regulatory Requirementsâ of our Report of even date)
i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of its property, plant and equipment including intangible assets.
(b) All movable assets of the Company are physically verified by the management every year. The frequency of verification, in our opinion, is reasonable. No material discrepancies were noticed on such verification conducted during the year; Non-movable assets have been physically verified by the management at an interval of three years, which, in our opinion, is reasonable having regard to the size and nature of assets of the Company;
No material discrepancies between book records and physical assets have been noticed;
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company the title deeds of immovable properties are held in the name of the Company. Out of 8022.63 acres of freehold land and 9162.65 acres of leasehold land held by the Company, title/lease deeds are not yet executed in respect of 66.92 acres of freehold and 1744.63 acres of leasehold land respectively. However, the Company has been permitted by the concerned authorities to carry on its operation on the said land. Registration formalities in respect of office space for 6459 sft. in Kolkata is also not completed.
ii) Inventories, except stocks relating to expansion project, stocks lying with third parties and stocks-in-transit, have been physically verified during the year by firms of Chartered Accountants appointed by the management for this purpose. The frequency of verification is reasonable. The discrepancies noticed on physical verification between physical stocks and book records in case of shortages have been properly dealt with in the books of accounts while excesses have been ignored;
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 Companies Act, 2013. Consequently, clauses (iii) (a), (b) & (c) of paragraph 3 of the Order are not applicable;
iv) Section 185 of the Act regarding loans to directors is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of corporate Affairs, Govt. of India. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 186 of the Act with respect to the loans and investments made.
v) The Company has not accepted any deposits from the public.
vi) We have broadly reviewed the books and records maintained by the Company as specified by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013 in respect of manufacturing activities and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and complete.
vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company,
in our opinion, the Company is generally regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, electricity duty and other material statutory dues with the appropriate authorities and there are no undisputed statutory dues as at 31st March, 2017 outstanding for a period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, following statutory dues have not been deposited by the Company on account of disputes:
Name of the Statute |
Nature of Dues |
Amount disputed (Rs,in crore) |
Amount deposited (Rs,in Crore) |
Forum where disputes are pending |
Sales Tax |
Sales Tax |
254.13 |
52.47 |
Commissioner |
72.33 |
31.78 |
Tribunal |
||
101.36 |
4.67 |
High Court |
||
427.82 |
88.92 |
|||
Entry Tax |
Entry Tax |
134.80 |
40.50 |
Commissioner |
73.89 |
37.01 |
Tribunal |
||
82.64 |
22.48 |
High Court |
||
291.33 |
99.99 |
Name of the Statute |
Nature of Dues |
Amount disputed |
Amount deposited |
Forum where disputes are pending |
(Rs,in crore) |
Rs,in Crore) |
|||
Central Excise Act,l944 |
Excise Duty |
2.57 |
0.06 |
Commissioner |
99.75 |
2.91 |
Tribunal |
||
0.10 |
0.03 |
High Court |
||
102.42 |
3.00 |
|||
Service Tax |
Service tax |
2.28 |
0.00 |
Commissioner |
0.04 |
0.00 |
Tribunal |
||
2.32 |
0.00 |
|||
Customs Act, 1962 |
Custom Duty |
5.04 |
0.00 |
Commissioner |
46.96 |
0.13 |
Tribunal |
||
52.00 |
0.13 |
|||
Income Tax Act, 1961 |
Income Tax |
390.46 |
196.16 |
Commissioner |
375.56 |
446.74 |
Tribunal |
||
31.92 |
52.14 |
High Court |
||
797.94 |
695.04 |
|||
Odisha Stamps Act |
Stamp duty |
204.53 |
0.00 |
High Court |
Road Tax |
Road Tax |
0.21 |
0.00 |
Commissioner |
2.44 |
0.00 |
High Court |
||
2.65 |
0.00 |
|||
Total: |
1881.01 |
887.08 |
viii) Except bill discounting arrangement with banks, the Company does not have any loans or borrowings from any financial institution, banks, government or debenture holders. The Company has not defaulted in repayment of the loans obtained under the bill discounting facility.
ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year.
x) According to the information and explanations given to us, no fraud by the Company or any material fraud on the Company by its officers or employees has been noticed or reported during the year.
xi) Section 197 of the Act regarding managerial remuneration is not applicable to the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by the Ministry of corporate Affairs, Govt. of India.
xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company.
xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Companies Act, 2013 where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.
xiv) According to the information and explanations given to us and based on our examination of the records, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
xv) According to the information and explanations given to us and based on our examination of the records, the Company has not entered into any non-cash transactions with any director or persons connected with him.
xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
We have audited the internal financial controls over financial reporting of NATIONAL ALUMINIUM COMPANY LIMITED (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Company''s management is responsible for establishing and maintaining 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 Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s 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 issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, 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 Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls 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 auditor''s judgment, including the assessment of the risks of material misstatement of financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Finial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles. A company''s 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 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 Over Financial Reporting
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
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, 2017, 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.
For ABP & Associates For Guha Nandi & Co.
Chartered Accountants Chartered Accountants
FRN - 3I5I04E FRN - 302039E
(CA Lalit K. Patangia) (CA Dr. B. S. Kundu)
Partner Partner
Membership No.05397l Membership No.05l22l
Place : Bhubaneswar Dated : 27th May, 20l7
Mar 31, 2016
We have audited the accompanying standalone financial statements of
National Aluminium Company Limited ("the Company"), which comprises
Balance Sheet as at 31st March 2016, the Statement of Profit & Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s board of directors is responsible for the matters stated
in section 134(5) of the Companies Act 2013 ("the Act") with respect to
the preparation of these 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
specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. 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 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 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.
We conducted our audit 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 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 accounting policies used and the reasonableness of
the accounting estimates made by 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 profit and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we, on the basis of
information and explanations given to us, give in the Annexure "A" to
this report, a statement on the matters specified in paragraphs 3 and 4
of the Order to the extent applicable.
2. In compliance to directions of the Comptroller and Auditor General
of India u/s.143(5) of the Act, we give in Annexure "B" to this report
a statement on the matters specified therein.
3. As required by section 143(3) of the Act we report, to the extent
applicable, that:
a. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit.
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
c. The Balance Sheet, 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 specified under section 133 of the
Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e. Section 164(2) of the Act regarding disqualification of directors
is not applicable to the Company by virtue of Notification No. G.S.R.
463(E) dated 05.06.2015 issued by the Ministry of Corporate Affairs,
Govt. of India.
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 "C".
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 20 to the
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 that required to be transferred to the
Investor Education and Protection Fund by the Company. Refer Note 17 to
the financial statements.
Annexure to the Independent Auditors'' Report of even date on Standalone
Financial Statements of National Aluminium Company Limited
(Referred to in paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements" 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) All movable assets of the Company are physically verified by the
management every year. The frequency of verification, in our opinion,
is reasonable. No material discrepancies were noticed on such
verification conducted during the year;
Non-movable assets have been physically verified by the management at
an interval of three years, which, in our opinion, is reasonable having
regard to the size and nature of assets of the Company. As informed to
us, no material discrepancies between book records and physical assets
have been noticed;
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company the title
deeds of immovable properties are held in the name of the Company. Out
of 7972.31 acres of freehold land and 8945.98 acres of leasehold land
held by the Company, title/lease deeds are not yet executed in respect
of 66.92 acres of freehold and 1576.10 acres of leasehold land
respectively. However, the Company has been permitted by the concerned
authorities to carry on its operation on the said land. Registration
formalities in respect of office space for 6459 sft. in Kolkata is also
not completed.
ii) As explained to us, all inventories, except stocks relating to
expansion project, stocks lying with third parties and
stocks-in-transit have been physically verified during the year by
firms of Chartered Accountants appointed by the management. The
frequency of verification is reasonable. The discrepancies noticed on
physical verification between physical stocks and book records relating
to shortage have been dealt in the books of accounts while excess have
been ignored;
iii) According to the information and explanations given to us, 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 Companies Act, 2013.
Consequently, clauses (iii) (a), (b) & (c) of paragraph 3 of the Order
are not applicable;
iv) Section 185 of the Act regarding loans to directors is not
applicable to the Company by virtue of Notification No. G.S.R. 463(E)
dated 05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of
India. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of section
186 of the Act with respect to the loans and investments made.
v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public.
vi) We have broadly reviewed the books and records maintained by the
Company as specified by the Central Government for the maintenance of
cost records under section 148(1) of the Companies Act, 2013 in respect
of manufacturing activities and are of the opinion that prima facie,
the prescribed accounts and records have been made and maintained. We
have, however, not made a detailed examination of the records with a
view to determine whether they are accurate and complete.
vii) (a) According to the information and explanations given to us and
on the basis of our examination of the records of the Company, in our
opinion the Company is generally regular in depositing undisputed
statutory dues including provident fund, employees'' state insurance,
income tax, sales tax, service tax, duty of customs, duty of excise,
value added tax, cess, electricity duty and other material statutory
dues with the appropriate authorities and there are no undisputed
statutory dues as at 31st March, 2016 outstanding for a period of more
than six months from the date they became payable.
(b) According to the information and explanations given to us,
following statutory dues have not been deposited by the Company on
account of disputes:
Name of the
Statute Nature of
Dues Amount Amount Forum where disputes
disputed deposited are pending
(Rs. in
crore) (Rs.in
crore)
Sales Tax Sales Tax 147.44 31.25 Commissioner
181.60 53.38 Tribunal
80.95 3.56 High Court
409.99 88.29
Entry Tax Entry Tax 158.63 40.94 Commissioner
71.64 35.10 Tribunal
58.40 22.68 High Court
288.67 98.72
Central
Excise
Act,1944 Excise Duty 18.08 1.17 Commissioner
7.79 0.14 Tribunal
26.75 0.00 High Court
52.62 1.31
Service Tax Service tax 2.25 0.00 Commissioner
0.10 0.02 Tribunal
2.35 0.02
Customs
Act, 1962 Custom Duty 5.25 0.00 Commissioner
Income Tax
Act, 1961 Income Tax 569.80 569.80 Commissioner
86.64 60.40 Tribunal
31.92 31.92 High Court
688.36 662.12
Odisha
Stamps Act Stamp duty 204.53 0.00 High Court
Total: 1,651.77 850.46
viii) The Company does not have any loans or borrowings from any
financial institution, banks, government or debenture holders during
the year.
ix) The Company did not raise any money by way of initial public offer
or further public offer (including debt instruments) and term loans
during the year.
x) According to the information and explanations given to us, no fraud
by the Company or any fraud on the Company by its officers or employees
has been noticed or reported during the year.
xi) Section 197 of the Act regarding managerial remuneration is not
applicable to the Company by virtue of Notification No. G.S.R. 463(E)
dated 05.06.2015 issued by the Ministry of Corporate Affairs, Govt. of
India.
xii) In our opinion and according to the information and explanations
given to us, the Company is not a nidhi company.
xiii) According to the information and explanations given to us and
based on our examination of the records of the Company, transactions
with the related parties are in compliance with sections 177 and 188 of
the Companies Act, 2013 wherever applicable and details of such
transactions have been disclosed in the financial statements as
required by the applicable accounting standards.
xiv) According to the information and explanations given to us and
based on our examination of the records, the Company has not made any
preferential allotment or private placement of shares or fully or
partly convertible debentures during the year.
xv) According to the information and explanations given to us and based
on our examination of the records, the Company has not entered into any
non-cash transactions with any director or persons connected with him.
xvi) The Company is not required to be registered under section 45-IA
of the Reserve Bank of India Act 1934.
Annexure to the Independent Auditor''s Report of even date on the
Standalone Financial Statements of National Aluminium Company Limited
(Referred to in paragraph 2 under the heading of "Report on Other Legal
and Regulatory Requirements" of our Report of even date)
Report on the directions under section 143(5) of the Companies Act,
2013 by the Comptroller & Auditor General of India
1. According to the information and explanations given to us by the
management and on the basis of our examination of books and records,
the Company has clear title/lease deeds for freehold and leasehold land
respectively wherever the title/lease deeds are executed. There are
66.92 acres of freehold and 1576.10 acres of lease hold land out of
7972.31 acres of freehold and 8945.98 acres of lease hold land in
respect of which the title/lease deeds are not yet executed. However
the Company has been permitted by the concerned authorities to carry on
its operation on the said land.
2. As informed to us by the management and based on our examination of
books and records of the Company, there are 35 cases of write-off of
advances, debtors, claims and capital work-in-progress amounting to
Rs.89.21 lacs as detailed below. The reason of write-off, as explained
to us, is that these are old balances lying unadjusted / unrealized for
a long time, have become time-barred and chances of recovery /
adjustments are remote.
Types of write off / waiver No of cases Amount in Rs. Lacs
Advances 22 21.08
Debtors 5 0.08
Claims 7 58.05
Capital Work-in-Progress 1 10.00
Total 35 89.21
3. (a) On the basis of our examination of books and records of the
Company, we state that proper records are maintained for inventories
lying with third parties.
(b) According to the information and explanations given to us and based
on our examination of books and records, the Company has not received
any asset as gift/grant(s) from Government or other authorities during
the year.
For ABP & Associates For Guha Nandi & Co.
Chartered Accountants Chartered Accountants
FRN - 315104E FRN - 302039E
(CA Niranjan Agrawalla) (Dr. B. S. Kundu)
Partner Partner
Membership No. 087939 Membership No.051221
Place : Bhubaneswar
Dated : 28th May, 2016
Mar 31, 2015
We have audited the accompanying fnancial statements of National
Aluminium Company Limited, ("the Company"), which comprise the Balance
Sheet as at 31st March, 2015, the Statement of Profit & Loss and the
Cash Flow Statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these fnancial statements that give a true and
fair view of the fnancial position, fnancial performance and cash fows
of the Company in accordance with the accounting principles generally
accepted in India, including the Accounting Standards specified under
Section 133 of the Act, read with Rule 7 of the Companies (Accounts)
Rules, 2014. 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 fnancial controls, that were operating effectively
for ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the fnancial 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 fnancial
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 there under.
We conducted our audit 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 fnancial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the fnancial statements. The
procedures selected depend on the auditor''s judgment, including the
assessment of the risks of material misstatement of the fnancial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal fnancial control relevant
to the Company''s preparation of the fnancial 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
fnancial controls system over fnancial 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 fnancial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the fnancial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid fnancial 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, 2015, and its profit/loss and its cash fows for the year
ended on that date. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015 ("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-I a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required by the Companies Act''2013 under Section 143(5), we give
in theAnnexure-II a statement on the matters directed by C&AG.
3. As required by Section 143 (3) of the Act, we report, to the extent
applicable, 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 fnancial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
management, none of the directors is disqualified as on 31st March,
2015 from being appointed as a director in terms of Section 164 (2) of
the Act.
(f) 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
fnancial position in its fnancial statements  Refer Note 20 to the
fnancial statements;
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any 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.
ANNEXURE - I TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements" of our Report of even date)
i) In respect of Fixed Assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fxed assets:
(b) All the movable assets have been physically verified by a Firm of
Chartered Accountants during the year. No material discrepancies were
noticed on such verification;
Non-movable assets have been physically verified by the Management at
an interval of three years, which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets; As
informed to us, no material discrepancies between book records and
physical assets have been noticed; ii) In respect of Inventories:
(a) As explained to us, all inventories, except stocks relating to
expansion project, stocks lying with third parties and stocks
in-transit have been physically verified by a Firm of Chartered
Accountants at reasonable intervals during the year;
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed are 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 inventory.
The discrepancies noticed on physical verification between physical
stocks and book records relating to shortage have been dealt in the
books of Accounts while excess have been ignored;
iii) According to the information and explanations given to us, the
Company has not granted any loans, secured or unsecured, to Companies,
frms or other parties listed in the register maintained under Section
189 of the Companies Act, 2013. Consequently, clauses (iii) (a) & (b)
of paragraph 3 of the Order are not applicable; iv) 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,
fxed assets and for the sale of goods and services. During the course
of our audit, we have not observed any continuing failure to correct
major weaknesses in internal control system; v) In our opinion and
according to the information and explanations given to us, the Company
has not accepted any deposits
from the public. vi) We have broadly reviewed the books of account
maintained by the Company, as specified by the Central Government for
the maintenance of cost records under Section 148 (1) of the Companies
Act, 2013 in respect of manufacturing activities and are of the opinion
that prima facie, the prescribed accounts and records have been made
and maintained. We have, however, not made a detailed examination of
the records with a view to determine whether they are accurate and
complete; vii) (a) According to the information and explanations given
to us and on the basis of our examination of the records in our
opinion, the Company is generally regular in depositing undisputed
statutory dues including Provident Fund, Employees'' State Insurance,
Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise
Duty, VAT, Cess, Electricity Duty and any other material statutory dues
with the appropriate authorities;
According to the information and explanations given to us, no
undisputed amounts are payable in respect of Provident Fund, Employees''
State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, VAT, Cess, Electricity Duty and any other
material statutory dues as at 31st March, 2015 for a period of more
than six months from the date they became payable;
(b) According to the information and explanations given to us, disputed
statutory dues which have not been deposited as on 31st March'' 2015 are
as under:
Name of the Statute Nature of Dues Amount disputed
(Rs. in crore)
Sales Tax Sales Tax 148.28
181.40
115.42
445.10
Entry Tax Entry Tax 161.49
29.18
23.57
214.24
Central Excise Act,1944 Excise Duty 2.11
23.52
26.78
52.41
Service Tax Service tax 2.19
0.07
2.26
Customs Act, 1962 Custom Duty 4.85
4.85
Income Tax Act, 1961 Income Tax 772.98
198.74
107.65
1079.37
Odisha stamps Act Stamp duty 211.64
211.64
Total: 2009.87
Name of Status Amount deposited Forum where disputes
(Rs. in Crore) are pending
Sales Tax 30.29 Commissioner
52.97 Tribunal
3.56 High Court
86.82
Entry Tax 48.35 Commissioner
20.94 Tribunal
9.16 High Court
78.45
Central Excise Act,1944 2.50 Commissioner
0.83 Tribunal
0.00 High Court
3.33
Service Tax 0.02 Commissioner
0.00 Tribunal
0.02
Customs Act, 1962 0.00 Commissioner
0.00
Income Tax Act, 1961 540.94 Commissioner
22.99 Tribunal
89.55 High court
653.48
Odisha stamps Act 0.00 High court
0.00
822.10
(c) According to the information and explanations given to us, the
amounts which were required to be transferred to the Investor Education
and Protection Fund in accordance with the relevant provisions of the
Companies Act and rules there under has been transferred to such fund
within time;
viii) The Company does not have accumulated losses at the end of the
fnancial year. The Company has not incurred cash losses during the
fnancial year and in the immediately preceding fnancial year;
ix) The company does not have any outstanding dues to any Financial
Institution, banks or debenture holders during the year;
x) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or fnancial institutions;
xi) According to the information and explanations given to us, the
Company has not raised any term loan during the year;
xii) As intimated by the management there was no noticeable fraud on or
by the Company has been reported during the year.
ANNEXURE - II TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 2 under the heading of "Report on Other Legal
and Regulatory
Requirements" of our Report of even date)
1. If the Company has been selected for disinvestment, a complete
status report in terms of valuation of Assets (including intangible
assets and land) and Liabilities (including Committed & General
Reserve) may be examined including the mode and present stage of
disinvestment process.
As informed to us, the Company has received a letter from Department of
Disinvestment dated 25.02.2015 addressed to the legal frm M/s. Crawford
Bayley & Co. about their appointment as Legal Advisor for disinvestment
of 10% paid up equity of Nalco. However, the Company does not have any
further information regarding valuation, mode and the timeline of such
disinvestment process.
2. Please report whether there are any cases of waiver/write off of
debts/loan/interest etc., if yes, the reason there for and the amount
involved.
As informed by the management and based on records examined, there are
ten (10) cases of write off of Trade Receivables total amounting to Rs.
1.84 Crores.These are old cases of debtors against sale of Aluminium
metal outstanding prior to 1993-94. Even though the company has got
the decrees from the courts/ award by arbitrators, execution of the
decree could not be materialized due to non existence of said debtors.
The Board in 278th meeting held on 12.11.2014 has approved the proposal
for write off of these bad debts.
3. Whether proper records are maintained for inventories lying with
third parties & assets received as gift from Government or other
authorities.
As informed by the management and based on records examined, proper
records are maintained for the inventories lying with third parties.
As informed by the management and based on records examined, the
Company has not received any gift from Govt. or Other authorities.
4. A report on age wise analysis of pending legal/ arbitration cases
including the reason of pendency and existence/ effectiveness of a
monitoring mechanism for expenditure on all legal cases (foreign &
local) may be given .
As informed by the management and based on records examined, the
company has 86 nos of pending legal/arbitration cases against the
Company pending in various courts/ arbitration (except disputes related
to Govt. demands and statutory dues) amounting to Rs. 154.58 Crore. Out
of these, there are 23 cases above Rs. 50.00 lakhs amounting to Rs. 146.72
crore. (A statement of major legal/ arbitration cases above Rs. 50.00
lakhs against the Company with age wise analysis and pending in various
courts/ arbitration is provided at Appendix-A)
These cases pending with courts/ arbitration have arisen in the
ordinary course of business. Based on our examination and as reported
by Company''s management, it is reasonably estimated that these legal
actions when ultimately concluded and determined will not have material
adverse effect on the company''s results of operation or fnancial
condition.
In the matter of existence/effectiveness of a monitoring mechanism for
expenditure on all legal cases (foreign and local) in the company, as
informed by the management and on the basis of record examined by us
the legal department headed by Executive Director-Company Secretary is
regularly monitoring all those pending cases. In general the company
fxes rate contracts with advocates for appearance and flling of regular
cases. Wherever there is no rate contract, expenditure is incurred with
approval of the competent authority on case to case basis. During the
year the company has spent Rs. 3.72 crore on various legal matters
including tax and allied appearance.
For Agasti & Associates For ABP & Associates
Chartered Accountants Chartered Accountants
Firm Registration No. 313043E Firm Registration No. 315104E
CA. Raj Kumar Agasti CA. Bimal K. Chanduka
Partner Partner
Membership No. 304920 Membership No. 053714
Place : New Delhi
Dated : 30th May, 2015
Mar 31, 2014
We have audited the accompanying financial statements of
National Aluminium Company Limited, ("the Company"), which comprise the
Balance Sheet as at 31st March, 2014, the Statement of Profit & Loss
and the Cash Flow Statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management''s ResponsibilityfortheFinancial Statements
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 referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act") read with general circular
15/2013 dated 13 September, 2013 issued by the Ministry of Corporate
Affairs, in respect of section 133 of the Companies Act, 2013. 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 disclosures in the financial statements. The procedures
selected depend on the auditor''s judgement, 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 entity''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by 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 financial statements give the information
required by theAct 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 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.
Report on Other Lega land Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of Sub-
section (4A) of Section 227 of theAct, we give in theAnnexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of theAct, 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 purpose of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books;
c. the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with theAccounting Standards referred to in
Sub-section (3C) of Section 211 of the CompaniesAct, 1956 read with
general circular 15/2013 dated 13 September, 2013 issued by the
Ministry of CorporateAffairs in respect of section 133 of the
CompaniesAct, 2013; and
e. In terms of Government of India, Ministry of Finance, Department of
Company Affairs, Notification No.GSR 829 (E) dated 21st October, 2003,
Government Companies are exempt from the applicability of provisions of
Section 274 (1)(g) of the Companies Act, 1956;
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph
1 under the heading of "Report on Other Legal and Regulatory
Requirements" of our Report of even date)
i) In respect of FixedAssets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets:
(b) All the movable assets have been physically verified by a Firm of
Chartered Accountants during the year. No material discrepancy were
noticed on such verification;
Non-movable assets have been physically verified by the Management at
an interval of three years, which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets;
As informed to us, no material discrepancies between book records and
physical assets have been noticed;
(c) In our opinion and according to the information and explanations
given to us, the Company has not disposed off a substantial part of
fixed assets during the year and the going concern status of the
Company has not been affected;
ii) In respect of Inventories:
(a) As explained to us, all inventories, except stocks relating to
expansion project, stocks lying with third parties and stocks in-
transit have been physically verified by a Firm of CharteredAccountants
at reasonable intervals during the year;
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed are 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 inventory.
The discrepancies noticed on physical verification between physical
stocks and book records relating to shortage havebeen dealt in thebooks
ofAccounts whileexcess have been ignored;
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 listed in the register
maintained under Section 301 of the Companies Act, 1956. Consequently,
clauses (iii) (a) to (g) of paragraph 4 of the Order are not
applicable;
iv) 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, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system;
v) According to the information and explanations given to us, the
Company has not entered into any contract or arrangement which requires
to be entered in the register maintained under Section 301 of the
Companies Act, 1956. Hence clause (v) (b) of paragraph 4 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
within the meaning of sections 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the Rules framed thereunder;
vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business;
viii) We have broadly reviewed the books of account maintained by the
Company, pursuant to the Companies (Cost Accounting Records) Rule, 2011
prescribed by the Central Government for the maintenance of cost
records under Section 209 (1) (d) of the Companies Act, 1956 in respect
of manufacturing activities and are of the opinion that prima facie,
the prescribed accounts and records have been made and maintained. We
have, however, not made a detailed examination of the records with a
view to determine whether they are accurate and complete;
ix) (a) According to the information and explanations given to us and
on the basis of our examination of the records in our opinion, the
Company is generally 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 Electricity Duty with the
appropriate authorities;
According to the information and explanations given to us, no
undisputed amounts are payable in respect of Provident Fund, Investor
Education and Protection Fund, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Cess and any other material
statutory dues as at 31st March, 2014 for a period of more than six
months from the date they became payable;
(b) According to the information and explanations given to us, disputed
statutory dues which have not been deposited as on 31st March, 2014
areas under:
Name of
the Statute Nature of Dues Amount
disputed Amount
deposited Forum where
disputes are
(Rs.in
crore) (Rs.in crore) pending
Sales Tax Sales Tax 139.85 28.29 Commissioner
179.73 52.72 Tribunal
116.88 5.86 High Court
436.46 86.87
Entry Tax Entry Tax 145.93 33.51 Commissioner
29.18 20.94 Tribunal
7.63 5.04 High Court
182.74 59.49
Central Excise
Act,1944 Excise Duty 9.65 2.71 Commissioner
25.19 0.59 Tribunal
44.26 0.03 High Court
79.10 3.33
Service Tax 1.55 0 Commissioner
0.07 0 Tribunal
1.62 0.00
Customs
Act, 1962 Customs Duty 7.47 0.06 Commissioner
7.47 0.06
Income Tax
Act, 1961 Income Tax 709.90 524.52 Commissioner
107.65 61.65 High Court
817.55 586.17
Total: 1524.94 735.92
x) The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year and in the immediately preceding financial year;
xi) The company does not have any outstanding dues to any Financial
Institution, banks or debenture holders during the year;
xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities;
xiii) In our opinion and according to the information and explanations
given to us, the Company is not a chit fund/nidhi/mutual benefit
fund/society.Therefore, the provisions of clause (xiii) of paragraph 4
of the Order is not applicable to the Company;
xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore the provisions of clause 4
(xiv) of the Order is not applicable to the Company;
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions;
xvi) According to the information and explanations given to us, the
Company has not raised any term loan during the year;
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long term
investment;
xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the register maintained under Section 301 of
the CompaniesAct, 1956;
xix) According to the information and explanations given to us, the
Company has not issued any debentures during the year;
xx) According to the information and explanations given to us, the
Company has not raised any money by way of public issues during the
year;
xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
For Agasti & Associates For ABP & Associates
Chartered Accountants Chartered Accountants
Firm Registration No. - 313043E Firm Registration No. - 315104E
(CA. B. Agasti) (CA. Prabhat K. Panda)
Partner
Membership No.:051026 Partner
Membership No.057140
Place : New Delhi
Dated : 28th May, 2014
Mar 31, 2013
Report on the Financial Statement
We have audited the accompanying financial statements of National
Aluminium Company Limited, ("the Company"), which comprise the
Balance Sheet as at 31st March, 2013, the Statement of Profit & Loss
and Cash Flow Statement for the year then ended and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
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 referred to in sub-section (3C) of Section 211
of the Companies Act, 1956 ("the Act"). 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 the
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 judgement, 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 the 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. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by 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 according to the
explanations given to us, the 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, 2013;
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 of India in terms of Sub-
section (4A) of Section 227 ofthe 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 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
referred to in Sub-section (3C) of Section 211 of the Companies Act,
1956; and
e. In terms of Government of India, Ministry of Finance, Department of
Company Affairs, Notification No.GSR 829 (E) dated 21st October, 2003,
Government Companies are exempt from the applicability of provisions of
Section 274 (1 )(g) of the Companies Act, 1956;
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under the heading of "Report on Other
Legal and Regulatory Requirements" of our Report of even date)
i) In respect of Fixed Assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets:
(b) All the movable assets have been physically verified by a Firm of
Chartered Accountants during the year:
Non-movable assets have been physically verified by the Management at
an interval of three years, which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets;
As informed to us, no material discrepancies between book records and
physical assets have been noticed;
(c) In our opinion and according to the information and explanations
given to us, the Company has not disposed off a substantial part of
fixed assets during the year and the going concern status of the
Company has not been affected;
ii) In respect of Inventories:
(a) As explained to us, all inventories, except stocks relating to
expansion project, stocks lying with third parties and stocks in-
transit have been physically verified by a Firm of Chartered
Accountants at reasonable intervals during the year;
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed are 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 inventory.
The discrepancies noticed on physical verification between physical
stocks and book records were not material;
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 listed in the register
maintained under Section 301 of the Companies Act, 1956. Consequently,
clauses (iii) (a) to (g) of paragraph 4 of the Order are not
applicable;
iv) 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, fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system;
v) According to the information and explanations given to us, the
Company has not entered into any contract or arrangement which requires
to be entered in the register maintained under Section 301 of the
Companies Act, 1956. Hence clause (v) (b) of paragraph 4 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 deposits from the public
within the meaning of sections 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the Rules framed thereunder;
vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business;
viii) We have broadly reviewed the books of account maintained by the
Company, pursuant to the Companies (Cost Accounting Records) Rule, 2011
prescribed by the Central Government for the maintenance of cost
records under Section 209 (1) (d) of the Companies Act, 1956 in respect
of manufacturing activities and are of the opinion that prima facie,
the prescribed accounts and records have been made and maintained. We
have, however, not made a detailed examination of the records with a
view to determine whether they are accurate and complete;
ix) (a) According to the information and explanations given to us and
on the basis of our examination of the books of account, in our
opinion, the Company is generally 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
Electricity Duty with the appropriate authorities;
According to the information and explanations given to us, no
undisputed amounts are payable in respect of Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other
material statutory dues as at 31st March, 2013 for a period of more
than six months from the date they became payable;
(b) According to the information and explanations given to us, disputed
statutory dues which have not been deposited as on 31st March'' 2013 are
as under:
Name of the
Statute Nature of
Dues Amount
disputed Amount
deposited Forum where disputes
are
(Rs. in
crore) (Rs. in
crore) pending
Sales Tax Sales Tax 187.37 31.11 Commissioner
183.64 53.73 Tribunal
162.77 30.29 High Court
533.78 115.13
Entry Tax Entry Tax 107.78 31.83 Commissioner
29.18 20.94 Tribunal
7.84 3.51 High Court
144.80 56.28
Central
Excise
Act,1944 Excise Duty 12.38 2.51 Commissioner
26.51 0.62 Tribunal
59.26 0.00 High Court
98.15 3.13
Customs
Act, 1962 Customs Duty 0.76 0.01 Commissioner
0.16 0.00 Tribunal
0.92 0.01
Income Tax
Act, 1961 Income Tax 378.54 316.93 Commissioner
107.65 104.83 High Court
486.19 421.76
Total 1,263.84 596.31
x) The Company does not have accumulated losses at the end of the
financial year. The Company has not incurred cash losses during the
financial year and in the immediately preceding financial year;
xi) According to the information and explanations given to us, the
Company has not defaulted in repayment of dues to financial
institutions or banks or debenture holders;
xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities;
xiii) In our opinion and according to information and explanations
given to us, the Company is not a chit fund/nidhi/mutual benefit
fund/society. Therefore, the provisions of clause (xiii) of paragraph 4
of the Order is not applicable to the Company;
xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore the provisions of clause 4
(xiv) of the Order is not applicable to the Company;
xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions;
xvi) According to the information and explanations given to us, the
Company has not raised any term loan during the year;
xvii) According to the information and explanations given to us and on
an overall examination of the Balance Sheet of the Company, we report
that no funds raised on short-term basis have been used for long term
investment;
xviii) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
Companies covered in the register maintained under Section 301 of the
Companies Act, 1956;
xix) According to the information and explanations given to us, the
Company has not issued any debentures during the year;
xx) According to the information and explanations given to us, the
Company has not raised any money by way of public issues during the
year;
xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
year.
For Agasti & Associates For C.K. Prusty & Associates
Chartered Accountants Chartered Accountants
Firm Registration No. 313043E Firm Registration No. 323220E
CA. M. Bandyopadhyay CA. G.V. Jayabal
Partner Partner
Membership No.050968 Membership No.015616
Place: New Delhi
Dated 27th May'' 2013
Mar 31, 2012
1. We have audited the attached Balance Shed of NATIONAL ALUMINIUM
COMPANY LIMITED, as at 31st March. 2012. the Profit and Loss Statement
and the Cash Flow Statement of the Company for Una year ended on trial
date, both annexed hereto. These financial statements ere the
responsibility of the Company's Management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with 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 teat basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
examining, the accounting principle used and the significant estimates
made by the Management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
i. As required by the Companies (Auditor's Report} Order. 2003 as
amended by the Companies (Auditor's Report) (Amendment) Orders, 2004,
Issued by the Central Government in terms of Section 227 (4A) of the
Companies Act 1956, we give 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:
a. We have obtained all the information and explanations which to the
best of our knowledge end 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 me Company so for as appears from our examination of those
books;
c. The Balance Sheet, Profit and Loss Statement and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Profit and Loss Statement end
Cash Flow Statement dealt with by this, report comply with the
Accounting Standards referred to in Section 211 (3c) of the Companies
Act, 1956;
e. In terms of Government of India, Ministry of Finance, Department of
Company Affairs, Notification No. GSR 829 (E) dated 21st October, 2003,
Government Companies are exempt from the applicability of provisions of
Section 274 (1) (g) of the Companies Act, 1956;
f. In our opinion and to best of our information and according to the
explanations given to us, the said accounts read with significant
accounting policies 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:
I. In the case of the Balance Sheet, of the state of affairs, of the
Company as at 31st March, 2012;
II. In the case of the Profit & Loss Statement of the profit of the
Company for the year ended on that date; and
III. In the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT (REFERRED TO IN PARAGRAPH (3) OF OUR
REPORT OF EVEN DATE)
i) (a) The Company has maintained proper records showing full
particulars. Including quantitative details and situation of fixed
assets:
(b) Non-movable assets have been physically verified by the Management
at an interval of three years, which in our opinion is reasonable
having regard to the see of the Company and the nature of its assets.
All the movable assets have been physically verified by a Firm of
Chartered Accountants during the year.
As informed to us, no material discrepancies between book records and
physical asset have been noticed:
(c) In our opinion and according to the information and explanations
given to us, the Company has not disposed off a substantial part of
fixed assets during the year end the going concern assumption of the
Company has not been affected.
ii) (a) In respect of its inventory, as explained to us, all
inventories except stocks relating to expansion project, stocks lying
with third parties and stocks in-transit, have been physically verified
by a Firm of Chartered Accountants at reasonable intervals during the
year.
(b) In our opinion and according to the information end explanations
given to us, the procedures of physical verification of Inventory
followed by the management ere 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 inventory.
The discrepancies noticed on physical verification and book records
relating to shortage have been dealt with in the books of account,
while excess have been ignored.
iii) (a) According to 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
301 of the Companies Act 1956. Consequently, clauses (III) (b) to (d)
of paragraph 4 of the Order are not applicable;
(v) 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 end for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness in the Internal control system;
v) According to Information and explanations given to us, the Company
has not entered into any contract or arrangement which requires to be
entered in register maintained under section 301 of the Companies Act,
1956;
vi) In our opinion and as per the information and explanations given to
us, the Company has not accepted deposits from the public during the
year within the meaning of sections 58A, 58AA or any other relevant
provisions of the Companies Act, 1956 and the Rules fanned thereunder;
vii) In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business;
viii) We have broadly reviewed the books of account maintained by the
Company, pursuant to the rules made by the Central Government for the
maintenance of cost records under Section 209(1)(d) of the Companies
Act 1956 in respect of manufacturing activities end are of the opinion
that prima facie, the prescribed accounts and records have been made
and maintained. We have, however, not made a detailed examination of
the records with a view to determining whether they are accurate and
complete:
ix) (a) According to information and explanations given to us and on
the basis of our examination of the books of account, the Company is
generally 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, Custom
Duty, Excise Duty Cess and Electricity Duty with the appropriate
authorities;
According to the information and explanations given to us. no
undisputed amounts are payable in respect of Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duly, Excise Duty, Cess and any other
material statutory dues as at 31st March, 2012 for a period of more
than six months from the date they became payable;
(b) According to the information and explanations given to us, there
are disputed statutory dues which have not been deposited era given
below:
Statute Nature of Amount Amount Forum where
Dues disputed deposited disputes are
Rs. in Rs. in pending
Crore Crore
Sales Tax Sales Tax 44.09 4.62 Commissioner
215.02 61.75 Tribunal
210.24 33.56 High Court
469.35 99.93
Entry Tax Entry Tax 59.71 7.93 Commissioner
45.09 23.98 Tribunal
5.29 0.00 High Court
110.09 31.91
Central Excise Duty 10.8O 2.50 Commissioner
Excise 17.98 0.59 Tribunal
Act, 1944 59.26 0.00 High Court
88.04 3.09
Customs Customs Duty 0.77 0.05 Commissioner
Act, 1962 0.08 0.00 Tribunal
0.85 0.05 High Court
Income Tax Income Tax 234.91 178.77 Commissioner
Act, 1961 118.65 104.84 Tribunal
8.05 0.00 High Court
361.61 283.61
TOTAL 1029.94 418.59
x) The Company does not have accumulated losses at the end of the
financial year. The Company has no: Incurred cash losses during the
financial year 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 Institutions or banks or debenture holders;
xii) Based on our examination of the records and 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 end other securities;
xiii) In our opinion the Company is note chit fund/nidhi/mutual benefit
fund.'society. Therefore, the provisions of clause (xiii) of paragraph
4 of the Order are not applicable to the Company;
xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore the provisions of Clause
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 guarantee for loans taken by others from
banks or financial institutions.
xvi) Based on our examination of records and the information and
explanations given to us, the Company has not raised any term loan
during the year under audit;
xvii) According to the information and explanations and on an overall
examination of the Balance Sheet of the Company, we report that no
funds raised on short-term basis have been used for long-term
investment;
xviii) According to the information and explanations given to us 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.
xix) Based on our examination of the records and the information and
explanations given to us, the Company has not issued any debentures
during the year
xx) The Company has not raised any money by way of public Issues during
the year;
xxi) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the year.
For Agasti & Associates For C.K Prusty & Associates
Chartered Accountants Chartered Accountants
FRN -313043E FRN 323220E
(CA. M. Bandyopadhyay) (CA. C.K. Prusty)
Partner (M .No.050968) Partner (M.No.05738)
Place : Maw Delhi
Dated: 21st May' 2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of NATIONAL ALUMINIUM
COMPANY LIMITED, as at 31st March, 2011, the Profit and Loss Account and
the Cash Flow Statement of the Company for the year ended on that date,
both annexed thereto. These financial statements are the responsibility
of the Company's Management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with 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 misstatements. 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 the significant estimates
made by the 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 (Auditor's Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4 A) of the
Companies Act, 1956, we give 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:
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 Profit and Loss Account 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 Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3c) of the
Companies Act, 1956/
e. In terms of Government of India, Ministry of Finance, Department of
Company Affairs, Notification No.GSR 829 (E) dated 21st October,2003,
Government Companies are exempt from the applicability of provisions of
Section 274 (1) (g) of the Companies Act,1956,
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with significant
accounting policies and notes on accounts appearing in Schedule Y and
Schedule Z respectively 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:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011.
ii. in the case of the Profit & Loss Account, of the profit of the
Company for the year ended on that date and iii. In the case of the
Cash Flow Statement, of the cash flows of the Company for the year
ended on that date.
ANNEXURE TO THE AUDITORS'REPORT
(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE)
1. (a) The company has maintained records showing full particulars
including quantitative details and situation of fixed assets.
(b) The company has a programme of conducting physical verification of
non-movable assets at an interval of three years, which in our opinion
is reasonable having regard to the size of the company and nature of
its assets. All the movable assets were physically verified during the
year. As informed to us, no material discrepancies were noticed on such
verification wherever reconciliations have been carried out and the
same has been adjusted in the books.
(c) In our opinion and according to the information and explanations,
the Company has not disposed off substantial part of fixed assets
during the year.
2. (a) In respect of its inventories as explained to us, all
inventories except stocks relating to expansion project, stocks lying
with third parties and stocks in-transit, have been physically verified
by the management at reasonable intervals during the year.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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. The discrepancies noticed on physical stock and book
records relating to shortages have been dealt with in the books of
account, while excesses have been ignored.
3. (a) According to 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 listed in the Register
maintained under section 301 of the Companies Act, 1956. Consequently,
clauses (iii)(a) to (g) of paragraph 4 of the order are not applicable.
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 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 the internal control system.
5. According to information and explanations given to us, the Company
has not entered into any contracts or arrangements which require to be
recorded in register maintained under section 301 of the Companies Act,
1956.
6. The Company has not accepted any deposits from the public during
the year.
7. In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
Company, pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the Companies
Act., 1956 in respect of manufacturing activities and are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained. We have, however, not made a detailed examination
of the records with a view to determining whether they are accurate and
complete.
9. According to the information and explanations given to us and on
the basis of our examination of the books of accounts, the Company is
generally regular in depositing undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and
Electricity Duty with the appropriate authority.
According to the information and explanations given to us, no
undisputed amounts are payable in respect of Income Tax, Sales Tax,
Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess and other
material statutory dues in arrears as at 31st March, 2011 for a period
of more than six months from the date on which they become payable.
According to the information and explanations given to us, there are
disputed statutory dues which have not been deposited are given herein
below:
Statute Nature of Dues Amount Amount Forum where
disputed deposited disputes are
Rs. in
Crore Rs. in
Crore pending
Sales Tax Sales Tax 141.11 17.02 Commissionrate
309.46 73.76 Tribunal
5.04 4.21 High Court
455.61 94.99
Entry Tax Entry Tax 36.14 13.47 Commissionrate
30.48 21.55 Tribunal
8.46 4.1 High court
75.08 39.13
Central Excise
Act,1944 Excise Duty 63.31 2.54 Commissionrate
36.42 0.59 Tribunal
99.73 3.13
Customs Act,
1962 Customs Duty 0.06 0.06 Commissionrate
0.06 0.06
Income Tax
Act,1961 Income Tax 193.68 201.83 Commissionrate
82.82 82.33 Tribunal
276.50 284.16
906.98 421.47
10. The Company does not have accumulated losses at the end of the
financial year. The company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institutions, banks and debenture holders.
12. Based on our examination of the records and the information and
explanations given to us , the Company has not granted any loans
advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. In our opinion the Company is not a chit fund/nidhi/mutual benefit
fund/ society. Therefore, the provisions of clause (xiii) of paragraph
4 of the order are not applicable to the company.
14. The Company is not dealing or trading in shares , securities,
debentures and other investments. Therefore the provisions of clause
4(xiv) of the order are not applicable to the company.
15. According to the informationand explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. Based on our examinations of the records and the information and
explanations given to us, the Company has not raised any term loan
during the year under audit.
17. According to the information and explanations and on an overall
examination of the Balance Sheet of the Company, we report that no
funds raised on short-term basis have been used for long- term
investment of the company.
18. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to Companies,
firm or other parties covered in the register maintained under section
301 of the Companies Act, 1956.
19. Based on our examination of the records and the information and
explanations given to us, the Company has not issued debenture during
the year.
20. TheCompVnThas not raised any money by way of public issue during
the year.
21. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For P.A. & Associates For C.K.Prusty & Associates
Chartered Accountants Chartered Accountants
FRN 313085E FRN 323220E
(CAS.S.Poddar) (CA C.K. Prusty)
Partner Partner
Membership No.51113 Membership No.57318
Place: New Delhi
Date : 30th May,2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of NATIONAL ALUMINIUM
COMPANY LIMITED, as at 31 st March, 2010, the Profit and Loss Account
and the Cash Flow Statement of the Company for the year ended on that
date, both 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 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 misstatements. An audi.
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 the significant estimates
made by the 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 (CARO)
issued by the Central Government in terms of Section 227(4 A) of the
Companies Act, 1 956, we give 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:
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 Profit and Loss Account 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 Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 21 1 (3c) of the
Companies Act, 1 956,
e. In terms of Government of India, Ministry of Finance, Department of
Company Affairs, Notification No.GSR 829 (E) dated 21st October, 2003,
Government Companies are exempt from the applicability of provisions of
Section 274 (1) (g) of the Companies Act, 1956,
f. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read with significant
accounting policies and notes on accounts appearing in Schedule X and
Schedule Y respectively 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
I.The the crof the Balance Sheet, of the state of affairs of the
Company as at 31 st March, 201 0;
ii. in the case of the Profit & Loss Account, of the profit of the
Company for the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE)
1. (a) The Company has maintained records showing full particulars
including quantitative details and situation of fixed assets.
(c) In our opinion and according to the information and explanations,
the Company has not disposed off substantial part of fixed assets
6. The Company has not accepted any deposits from the public during
the year.
7. In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
According to the inflation and explanations giver! to us there are
disputed statutory dues which have not been deposited are given
Statute Nature of Dues Amount Disputed
Rs.in Crore
Sales Tax Sales Tax 226.64
219.78
16.41
462.83
Entry Tax Entry Tax 26.8
32.35
8.46
67.61
Central Excise
Act, 1944 Excise Duty 63.88
35.58
99.46
Customs Act, 1942 Customs Duty 0.13
3.1
3.23
Income Tax
Act,1961 Income Tax 151.24
79.23
230.47
863.60
Stutute Amount Deposited Forum where disputes
Rs in Croce are pending
Sales Tax 29.67 Commlsonrate
60.4 Tribunal
4.76 High court
Entry Tax 10.73 Commissionrate
23.09 Tribunal
4.1 High Court
Central Excise Act, 1944 2.5 Commissionrate
0.59 Tribunal
3.09
Customs Act,1942 0.06 Commissionrate
Nil Tribunal
0.06
Income Tax Act, 1961 94.9 Commissionrate
128.66 Tribunal
223.56
359.40
10. The Company does not have accumulated losses at the end of the
financial year . The Company has not incurred cash losses during the
financial year covered by the audit and in the immediately preceding
financial year.
11. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
financial institutions, banks and debenture holders.
12. Based on our examination of the records and 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.
13. In our opinion the Company is not a chit fund/nidhi/mutual
benefit fund/ society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. Therefore the provisions of clause
4(xiv) of the Order are not applicable to the Company.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. Based on our examination of the records and the information and
explanations given to us, the Company has not raised any term loan
during the year under audit.
17. According to the information and explanations and on an overall
examination of the Balance Sheet of the Company, we report that no
funds raised on short-term basis have been used for long-term
investment of the company.
18. According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to Companies,
firms or other parties covered in the register maintained under section
301 of the Companies Act, 1 956.
19. Based on our examination of the records and the information and
explanations given to us, the Company has not issued debenture during
the year.
20. The Company has not raised any money by way of public issue during
the year.
21. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit.
For P.A . & Associates For C.K.Prusty & Associates
Chartered Accountants Chartered Accountants
FRN 313085E FRN 323220E
(CAS.S.Poddar) (CA C.K. Prusty)
Partner Partner
Membership No.51113 Membership No.5731 8
Place: New Delhi
Date :06th August, 2010