Mar 31, 2023
Report on the Audit of the Standalone Financial Statements
We have audited the Separate financial statements (also known as Standalone Financial Statements) of NITCO Limited ("the Companyâ), which comprise the Balance Sheet as at 31st March 2023, 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 a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the 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 Companies (Indian Accounting Standards) Rules, 2015, as amended and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at 31st March 2023, and its losses (financial performance including Other Comprehensive Income), the Changes in Equity and its Cash Flows for the year ended on that date.
2. Basis for Qualified Opinion
Material Uncertainty Related to Going Concern
The Company continues to incur losses resulting in an erosion of its net worth and its current liabilities exceeds current assets as of 31st March 2023.
We draw your attention to Note 38 (b)(iv) to the financial statements as regards to revocation of the restructuring of existing facilities (excluding the NCD and RPS facility) by JM Financial Asset Restructuring Company Limited (acting in its capacity as trustee ofJMFARC-LVB Ceramics September 2014 - Trust). - (Financial Creditor), vide letter dated 19th September 2022, whereby dues amounting to Rs. 2,42,762.93 Lakhs has been restated (the amount appearing in books as on 31st March 2023 is Rs. 66,082.26 Lakhs).
On 15 th November 2022, the Financial Creditor has made an Application under Section 7 of Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with National Company Law Tribunal (NCLT) to initiate corporate insolvency resolution process. We are informed that the Company is seeking appropriate legal advice and will take all appropriate steps to protect its interest in the aforesaid matter. Accordingly, no adjustments have been made to the carrying values of the liabilities and their presentation and classifications in the financial statements and are accounted on going concern basis.
Based on our audit conducted, we have concluded that a material uncertainty exists relating to events or conditions that may cast significant doubt on the entity''s ability to continue as a going concern and to that extent, the audit report is qualified.
We conducted our audit of the Standalone Financial Statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the independence 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 ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion on the Standalone Financial Statements.
i. We draw attention to Note no. 38 (b)(v) to the Standalone Financial Statement which states that the company has not provided for interest on the outstanding loan of LIC of Rs. 1,887.26 lakhs (Principal outstanding), as they are hopeful of its restructuring same in line ofJMFARC.
ii. We draw attention to Note no. 38 (b)(ii) to the Standalone Financial Statement which states that Additional Director General Foreign Trade (ADGFT) had levied penalty of Rs. 17,000.00 lakhs which is confirmed by the Appellate bench of DGFT, New Delhi. No provision for the demand is made in the books. Management has received legal opinion that the order is bad in law.
iii. We draw attention to Note no. 38 (b)(iii) to the Standalone Financial Statement which states that Revenue Department has raised a demand of Rs 5,105.88 lakhs. No provision for the demand is made in the books as company has received interim relief against the order from Bombay High Court.
iv. We draw attention to Note no. 7 to the Standalone Financial Statement which states that Management has not made provision for impairment of Rs. 995.99 lakhs with respect to capital advance given to Saumya Buildcon Pvt Ltd.
v. We draw attention to Note no. 5 and Note 12 to the Standalone Financial Statement which states that Management has not done provision for impairment of Rs. 6,579.69 lakhs with respect to money advanced to Nitco Realties Private Limited by way of investments and loans.
Our opinion is not modified in respect of these 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.
Key audit matter |
Our Response |
|
1) |
Assessment of impairment in valuation of Our audit procedures included, among others the following: investments and loan given to subsidiaries and Property, Plant and Equipment at Alibaug and Silvasa |
|
⢠|
The carrying values of the company''s Investments ⢠|
We have evaluated the key judgements / assumptions underlying |
in subsidiaries and Property, Plant and Equipment |
management''s assessment of potential indicators of impairment; |
|
are assessed annually by management for potential ⢠|
We have studied available financial information including |
|
indicators of impairment. |
considerations of the economic conditions of the plant at Alibaug |
|
⢠|
For the above impairment testing, management |
and audited financial statements of the subsidiaries; |
has determined the value in use and the fair value ⢠|
We have evaluated the current approximate market price of the |
|
less cost to sell as applicable. |
land, real estate properties at Alibaug and Silvasa and also where |
|
⢠|
We have identified the assessment of potential |
the subsidiaries have invested for computing the recoverable |
impairment of investments and loans given to |
amount; |
|
subsidiaries and Property, Plant and Equipment at ⢠|
We have checked the Valuation report of underlying assets done by |
|
Alibaug and Silvasa location as a key audit matter. |
Independent Valuer; |
|
⢠|
Impairment assessment involves significant degree ⢠|
We evaluated the independence, competence of the independent |
of management judgement in determining the key |
valuer; |
|
assumptions and expected future cash flows. ⢠|
We read and assessed the relevant disclosures made within the |
|
⢠|
Valuation of underlying assets especially land with subsidiaries were done from Independent Valuer. |
standalone Ind AS financial statements. |
2) |
Litigation, Claims and Contingent Liabilities |
|
⢠|
Company is exposed to variety of different ⢠|
We understood the processes, evaluated the design and |
laws, regulations and interpretations thereof. |
implementation of controls and tested the operating effectiveness |
|
Consequently, in the normal course of business, |
of the Company''s controls over the recording and re-assessment of |
|
Provisions and Contingent Liabilities may arise |
uncertain legal positions, claims and contingent liabilities. |
|
from legal proceedings, constructive obligations ⢠|
We held discussions with senior management including the person |
|
and commercial claims. |
responsible for legal and compliance to obtain an understanding |
|
⢠|
Management applies significant judgement when |
of the factors considered by management in classification of the |
considering whether and how much to provide for |
matter as ''probable'', ''possible'' and ''remote''. |
|
the potential exposure of each matter. ⢠|
Examined the Company''s legal expenses on sample basis and read |
|
⢠|
These estimates could change substantially over |
the minutes of the board meetings in order to ensure completeness. |
time as new facts emerge as each legal case or ⢠|
With respect to tax matters (direct and indirect), discussed with the |
|
matters progresses. |
Company''s tax officers and obtained their views and strategies on |
|
⢠|
Given the different views possible, basis the |
significant cases, as well as the related technical grounds relating to |
interpretations, complexity and the magnitude of |
their conclusions based on applicable tax laws. |
|
potential exposures and the judgement necessary ⢠|
Assessing the decisions and rationale for provisions held or for |
|
to estimate the amount of provision required or |
decisions not to record provisions or make disclosures. |
|
determine required disclosures. ⢠|
For those matters where management concluded that no provisions should be recorded, considering the adequacy and completeness of the Company''s disclosures. |
5. Information Other than the Standalone Financial Statements and Auditorâs Report thereon
The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Board''s Report including Annexures to Board''s Report, Management Discussion and Analysis, Report on Corporate Governance, but does not include the Standalone Financial Statements and our auditor''s report thereon. 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 and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
6. Managementâs Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance, Changes in Equity and Cash Flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone 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 Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is responsible for overseeing the Company''s financial reporting process.
7. Auditorâs Responsibility 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 auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional scepticism 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 financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor''s report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The standalone financial statements for the year ended 31st March 2022 have been audited by erstwhile auditor who have expressed an unmodified opinion on those statements based on their audit for the year ended 31st March 2022.
9. Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
As required by Section 143(3) of the Act, based on our audit, we report that:
a) We have sought and obtained all the information and explanations, except for the physical verification of inventory at Alibaug factory, which to the best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and 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 Ind AS prescribed under section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors are disqualified as on 31st March, 2023 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to financial statements.
g) As required by section 197(16) of the Act, based on our audit, we report that the Company has paid and provided for remuneration to its directors during the year in accordance with the provisions of and limits laid down under section 197 read with Schedule V to the Act.
h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer Note 38 (b) to the Standalone Financial Statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were no material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv. (a) As represented to us by the management and to the best of its knowledge and belief, no funds have been advanced or lend or invested during the year (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (Intermediariesâ), with the understanding whether recorded in writing or otherwise that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(b) As represented to us by the management and to the best of its knowledge and belief, no funds have been received by the Company during the year from any person(s) or entity(ies), including foreign entities ("Funding 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 ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
(c) Based on such audit procedures, we have considered reasonable and appropriate in the circumstances, nothing has come to our notice that causes us to believe that the above representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and (b) above, contain any material misstatement.
v. The Company has not declared or paid any dividend during the year as per Section 123 of the Companies Act, 2013 and hence clause (f) of Rule 11 of the Companies ( Audit & Auditors) Rules, 2014 is not applicable.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023
Chartered Accountants
Firm Reg.No.107122W / W100672
Partner
Membership No.036490
UDIN: 23036490BGXRZB1197
Place: Mumbai
Date: 30th May, 2023
Mar 31, 2018
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of NITCO Limited ("the Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity, and the Statement of Cash Flows for the year ended, and summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone Ind AS financial statementsâ).
Managementâs 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 ("the Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, financial performance (including Other Comprehensive Income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed 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 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. In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Auditorâs 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 thereunder.
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 standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Board of Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 of the state of affairs of the Company as at 31 March 2018, its financial performance (including Other Comprehensive Income), its changes in equity and its cash flows for the year ended on that date.
Other Matter
We refer to Note 45A of the financial results which describe the debt restructuring scheme entered into by the Company with JM Financial Assets Reconstruction Company Limited (JMFARC) and the resultant impact has been disclosed as an exceptional item. Our opinion is not modified in respect of this matter.
The comparative financial information of the Company for the year ended 31 March 2017 and the transition date opening Balance Sheet as at 1 April 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended 31 March 2017 and 31 March 2016 prepared in accordance with the Companies(Accounting Standards) Rules, 2006 (as amended)which were audited by the predecessor auditor reports dated 30 May 2017 and May 30, 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us. Our opinion on the standalone Ind AS financial statements is not modified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Orderâ) issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act, based on our audit 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 (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows 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 the Companies (Indian Accounting Standards) Rules, 2015 as amended.
e) On the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Bâ
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:
3. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 40(c) to the standalone Ind AS financial statements;
4. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts
5. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
6. The disclosures regarding details of specified bank notes are not applicable to the Company for the year ended 31 March 2018.
Annexure A to the Independent Auditorâs Report
Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date to in the Independent Auditor''s Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March 2018, we report the following:
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets ;
(b) The Company has a regular programme of physical verification of its fixed assets, by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets were physically verified during the year and no material discrepancies were noticed on such verification.
(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 included in fixed assets are held in the name of the Company except for one immoveable property which amounts to gross block of Rs. 145.66 Lakh and net block of Rs.133.63 Lakh whose title deed is not held in the name of the Company. In respect of immovable properties been taken on lease and disclosed as property, plant and equipment in the standalone Ind AS financial statements.
ii. The inventory (excluding stock with third parties) has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. In respect with the inventory lying with third parties, these have been substantially confirmed by them. The Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not material.
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 Act. Therefore the provisions of clause 3(iii),(iii)(a), (iii)(b) and (iii)(c) of the said order are not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities as applicable.
v. The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.
vi. Pursuant to rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete
vii. According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees'' State Insurance, Income-tax, Sales tax, Service tax, Goods and Services tax, duty of Customs, duty of Excise, Value added tax, Cess and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities.
viii. According to the information and explanations given to us, there are no dues of Income-tax or Sales tax or Service tax or Goods and Services tax or duty of Customs or duty of Excise or Value added taxes which have not been deposited by the Company on account of disputes, except for the following:
Name of the Statute |
Nature of the Dues |
Amount (Rs. in Lakh) |
Period |
Forum where dispute is pending |
The Income-tax Act, 1961 |
Income Tax |
30.64 |
From Assessment Year 1987 to Assessment Year 1997. |
High Court Mumbai |
The Income-tax Act, 1961 |
Income Tax |
33.73 |
From Assessment Year 1987 to Assessment Year 1997(Penalty) |
Commissioner of Income-tax |
ix. According to the explanations and information given to us, the Company has defaulted in repayment of dues to a financial institutions and bank, the amount of default to LIC of India was Rs.1,911.66 Lakh (period of default- 37 months) and DBS Bank was Rs.244.60 Lakh (Period of default - 9 months).
With reference to the Debt Restructuring plan refer note 45A to the standalone financial statements, wherein, the Company''s lenders (approx. 98%) assigned their debts to an asset reconstruction Company. Pursuant to the same the restructuring was implemented as per which loans have been converted into term loans, debentures and preference shares. Post successful restructuring, there would be write-off of part of the loans. Further, the Company is negotiating a similar settlement agreement with the other lender(s). Pending negotiations no further adjustments have been made.
x. In our opinion and according to the information and explanations given to us, 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. Accordingly, paragraph 3(ix) of the Order is not applicable to the Company.
xi. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management
xii. In our opinion and according to the information and explanations given to us and based on examination of the records of the Company, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
xiii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company is a Private limited and accordingly, the provisions of clause 3(xi) of the order are not applicable.
xiv. According to the information and explanations given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable, and the details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act..
xv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has made preferential allotment or private placement of shares or fully or partly convertible debentures and shares during the year. The requirements of Section 42 of the Companies Act have been complied with and the amount raised has been used for the purposes for which the funds were raised.
xvi. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, provisions of section 192 of the Act are not applicable to the Company.
xvii. According to the information and explanation given to us, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act.
Annexure B to the Independent Auditorâs Report
Referred to paragraph 2 (g) under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date to in the Independent Auditor''s Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March 2018, we report the following:
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Nitco Limited ("the Companyâ) as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
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 ("ICAIâ). 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 the 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.
Auditorâs 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 "Guidance Noteâ) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial control system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the standalone Ind AS 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 Financial 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 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 authorisations of management and directors of the Company; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the 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 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.
For Nayak & Rane
Chartered Accountants
F.R.No:117249W
Kishore K. Rane
Partner
M No:100788
Place : Mumbai
Date : 29 May 2018
Mar 31, 2015
1. We have audited the accompanying financial statements of NITCO
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 201 5, the Statement of Profit and Loss and Cash Flow Statement for
year ended 31st March 201 5 and a summary of significant accounting
policies and other explanatory information
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
2. 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 are free from material
misstatement, whether due to fraud or error
AUDITORS' RESPONSIBILITY
3. Our responsibility is to express an opinion on these financial
statements based on our audit
4. 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
5. We conducted our audit in accordance with the Standards on Auditing
specified under Section 14-3(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 misstatements
6. 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 the Company's directors, as well as
evaluating the overall presentation of the financial statements
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
standalone financial statements
QUALIFIED OPINION
8. In our opinion and to the best of our information and according to the
explanations given to us, except for the matters illustrated and
described in the Basis for Qualified Opinion herein below, 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
in the case of the balance sheet, of the state of affairs of the
Company as at 31st March 201 5 ii. in the case of the statement of
profit and loss, of the Loss for the year ended on that date; and iii.
in the case of the cash flow statement, of the cash flows for the year
ended on that date
BASIS FOR QUALIFIED OPINION
9. The Company on the basis of the registration of reference filed u/s
15(1) of the Sick Industrial Companies (Special Provision] Act 1985,
before the Hon'ble Board for Industrial & Financial Reconstructions,
has not provided for interest on financing
r facilities amount to Rs. 107,39.55 Lacs for the year ended March 31,
2015. Had the same been provided, the loss for the year ended March 31,
2015 would have increased byRs. 107,39.55 Lacs and corresponding
liabilities would have increased by Rs. 107,39.55 Lacs as at March 31,
2015.
EMPHASIS OF MATTER
10. Without qualifying, attention is drawn as under:
a) Financial Statements has been prepared on a going concern basis. The
Company has incurred a net loss of Rs. 12,722.21 Lacs during the year
ended March 31, 201 5 and the Company's net worth has been fully eroded
as at the balance sheet date. The appropriateness of the going concern
basis is inter alia dependent on the Company's ability to turnaround
the operations of the Company and ability of infusing requisite funds
for meeting its obligations and rescheduling of debts
b) Note no. 38 to the financial statements relating to Corporate Debt
Restructuring (CDR) package approved by the CDR Empowered Group
c) The dues to banks / lenders are subject to reconciliation
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
11. (1) As required by the Companies (Auditor's Report) Order, 201 5
("the Order"), issued by the Central Government of India in terms of
sub-section (11) of Section 14-3 of the Act, based on the comments in
the auditors' reports of the Holding company and subsidiary companies,
incorporated in India, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable
11. (2) As required by Section 14-3(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 Profit and Loss Statement, and the Cash Flow
Statement dealt with by this Report are in agreement with the books of
account
d) In our opinion, except for the effect of the matter described in the
Basis of Qualified Opinion above the aforesaid standalone financial
statements comply with the Accounting Standards specified under Sect
ion 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
directors as on March 31, 2015, taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 201 5,
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
financial position in its financial statements as referred to in Note
37 to the financial statements
(ii) Except for the effect of the matter described in the Basis of
Qualified Opinion,(point no.9 above), the Company has made provision,
as required under the applicable law or accounting standards, for
material foreseeable losses, if any, and as required on long-term
contracts including derivative contracts wherever applicable
[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 "Report on other Legal
and Regulatory Requirements" of our report of even date i) In respect
of its fixed assets
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information
b) The fixed assets are physically verified by the management,
according to a phased programme to cover all items over a period of
three years, which in our opinion is reasonable, having regard to the
size of the Company and nature of its assets. Pursuant to this
programme, a portion of the fixed assets has been physically verified
by the management during the year and no material discrepancies were
noticed on such physical verification
ii) In respect of its inventories
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is reasonable
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business
c) The Company has maintained proper records of inventories and
discrepancies noticed on physical verification conducted by the
management of inventories as compared to book records were not material
[iii] a) According to the information and explanation given to us, the
Company has not granted any loan to Companies, firms or other parties
covered under section 189 of the Companies Act 2013 except interest
free loans and advances to it's subsidiaries company. The maximum
amount outstanding at any time during the year is Rs. 17,127.80 lacs and
the balance as on the Balance Sheet date is also the same
b) In our opinion since the advance has given to its subsidiaries, it
is not prejudicial to the interest of the Company
c) There is no repayment schedule and loans and advances are repayable
on demand
d) In respect of the loans granted by the Company, the same are
repayable on demand and therefore the question of overdue amount does
not arise
[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
purchases of inventory and fixed assets and for the sale of goods and
services. During the course of our audit, we have not observed any
major weakness or continuing failure to correct major weaknesses in
internal control system of the Company in respect of these areas
[v] According to the information and explanations given to us, the
Company has not accepted any deposit from the public Therefore, the
provisions sections 73 to 76 or any other relevant provisions of the
Companies Act and the rules framed there under are not applicable to
the Company
[vi] We have broadly reviewed the cost records maintained by the
Company prescribed by the Central Government under Section 14-8 (1) of
the Companies Act, 2013 and are of the opinion that prima facie the
prescribed cost records have been maintained We have, however, not made
a detailed examination of the cost records with a view to determine
whether they are accurate or complete
[vii) In respect of statutory dues
a) According to the records of the Company, undisputed statutory dues
including provident fund, employees' state insurance income-tax,
sales-tax, wealth tax, service tax, duty of customs, duty of excise,
value added tax, cess and any other statutory dues have generally been
regularly deposited with the appropriate authorities. According to the
information and explanations given to us, no undisputed amounts payable
in respect of the aforesaid dues were outstanding as at March 31, 201 5
for a period of more than six months from the date of becoming payable
b) The disputed statutory dues that have not been deposited on account
of disputed matters pending before appropriate authorities are as
under:
[Rs. in lacs]
Name of Statute Nature of the
dues Forum
Central Excise Commissioner
Central Excise &
Customs
Excise Duty Customs,Excise
&Service Tax
Act, IV44
Appellate Tribunal,
(CESTAT),
Mumbai
Commissioner
Central Excise &
Customs.
Custom Act, 1962 Customs Duty Customs, Excise &
Service Tax
Appellate
Tribunal, (CESTAT)
Mumbai
Sales Tax/VAT VAT Jt Commissioner
of Sales Tax
Tribunal
Revision Board
Dy. Commiss
ioner of Sales tax
Asst. Commissioner
Appeal
Income Tax Act, Income Tax High Court
1961 Commissioner of
Income Tax
(Appeal)
Name of Statute Amount Year to which amount relates
Centeral Excise
252.82
Act, 1944
1,671.54
FY 2007 to 2012
Customs Act 1962 1,570.29
4.04 FY 2004-05 to 2013-14
Sales Tax VAT 1,108.23 FY 1997-98 to 2011
6.74 FY 2009-10
92.56 FY 2007-2011
37.98 FY 2006-2009
71.71 FY 2011-2015
Income Tax Act 9.63 Block 1987-1997
1961 28.83 Penalty for block 1987- 1997
c) According to the records of the Company, the amount required to be
transferred to investor education and protection fund in accordance
with the relevant provisions of the Companies Act, 1956 (1 of 1956) and
rules made hereunder has been transferred to such fund within time
[xiii] The Company has accumulated losses as at the Balance Sheet date.
Further the Company has incurred cash losses during the financial year
covered by our audit and also during the immediately preceding
financial years. The Company's accumulated losses as on the date of the
Balance Sheet has exceeded its net worth
[ix] In our opinion, on the basis of audit procedures and according to
the explanation and information given to us, the Company has defaulted
in repayment of dues to banks and financial institutions. Estimated
unpaid over dues in respect of principal outstanding amount to Rs.
30,937.66 lacs and overdue interest amounts to Rs. 11,552.65 lacs subject
to the reconciliation with the banks / financial institutions. The
period of default ranges around 6-1 2 months
[x] According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from
banks and financial institutions
[xi] In our opinion, the term loans were applied for the purpose for
which they were obtained
[xii] In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year
For A. Husein Noumanali & Co.
Chartered Accountants
Firm Registration No. 107173W
(A. Husein Noumanali] Proprietor
M. No. U757
Mumbai, 29th May 2015
Mar 31, 2014
We have audited the accompanying financial statements of NITCO Limited
("the Company"), which comprise the Balance Sheet as at March 31, 2014,
the Statement of Profit and 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 principles generally accepted in India including
Accounting Standards referred to in Section 211(3C) 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
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
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 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 and 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:
i. in the case of the balance sheet, of the state of affairs of the
Company as at 31 March 2014;
ii. in the case of the statement of profit and loss, of the Loss for
the year ended on that date; and
iii. in the case of the cash flow statement, of the cash flows for the
year ended on that date.
Emphasis of matter
Without qualifying, attention is drawn as under:
a) Basis of preparation of financial Statements regarding the
preparation of the same on a going concern basis. The Company has
incurred a net loss of Rs.21,123.37 Lacs during the year ended March
31, 2014 while, the Company''s net worth remains positive as at the
balance sheet date. Since the company have incurred significant cash
losses during the last two financial years resulting in substantial
erosion of its net worth and will make a reference to BIFR as more than
50% of its peak net worth stands eroded, the Company has already made a
request to banks for rework the approved CDR package, non core assets
also identified for sale, and several steps taken by the Company In
view of proposed plan to restructure the Company''s debt profile to
convert their short term loan to long term loan ,these financial
statements have been prepared on a going concern basis and no
adjustment has been made to the carrying value of the assets and
liabilities.
b) Note no. 36 to the financial statements relating to Corporate Debt
Restructuring (CDR) package approved by the CDR Empowered Group.
c) The balances of funded interest on Term Loan from banks aggregating
to Rs.15035.19 Lacs are subject to reconciliation.
d) The balances of Working Capital Term Loan from banks aggregating to
Rs.59258.88 Lacs are subject to reconciliation.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order"), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by Section 227(3) of the Act, we report that:
i. 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;
ii. in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books and proper returns adequate for the purposes of our audit have
been received from branched not visited by us;
iii. 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 and with the returns received from branches not visited by us;
iv. in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956; and
v. on the basis of written representations received from the directors
as on 31 March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
Section 274 of the Companies Act, 1956.
ANNEXURE TO INDEPENDENT AUDITOR''S REPORT
Referred to in Paragraph 1 under the heading of "Report on other Legal
and Regulatory Requirements" of our report of even date
1. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b) As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
physical verification.
c) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company has maintained proper records of inventories and
discrepancies noticed on physical verification conducted by the
management of inventories as compared to book records were not
material.
3. a) According to the information and explanation given to
us, the Company has granted Interest free Loans and Advances to a
wholly owned subsidiary company which is also covered u/s 301 the
Companies Act 1956. The maximum amount outstanding at any time during
the year is Rs.15285.93 Lacs and the year end balance is also the same.
b) In our opinion since this advance is to hundred percent owned
subsidiary, it is not prejudicial to the interest of the Company.
c) There is no repayment schedule and loans and advances are payable on
demand.
d) In respect of the loans granted by the Company, the same are
repayable on demand and therefore the question of overdue amount does
not arise.
e) According to the information and explanation given to us, the
Company has taken interest free unsecured loan from one party covered
in the register maintained under section 301 of the Companies Act 1956.
The maximum amount involved during the year was Rs. 7.90 crores and the
same was repaid during the year
f) In our opinion, the rate of interest and other terms and conditions
of such loan are not prima facie prejudicial to the interest of the
company. Since the aforesaid amount is repaid during the year
therefore, provisions of clause 4(iii)(g) of the Companies (Audit
Report) Order, 2003 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 for the
purchases of inventory and 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.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts /
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in
respect of each party during the year have been made at prices which
appear reasonable as per information available with the Company.
6. According to the information and explanations given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of Clause (vi) of paragraph 4 of the Order are not
applicable to the Company.
7. In our opinion, the internal audit functions carried out during the
year by firms of Chartered Accountants appointed by the management have
been commensurate with the size of the company and nature of its
business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
9. In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-Tax/TDS, Sales Tax, Wealth Tax,
Service Tax, Customs Duty, Excise Duty, Cess, and other statutory dues
have been generally regularly deposited with the appropriate
authorities. According to the information and explanations given to us,
no undisputed amounts payable in respect of the aforesaid dues were
outstanding as at March 31, 2014 for a period of more than six months
from the date of becoming payable.
b) The disputed statutory dues that have not been deposited on account
of disputed matters pending before appropriate authorities are as
under:
Rs. in Lacs
Name of Statute Nature of the Forum
dues
Central Excise Excise Duty Commissioner Central Excise &
Act, 1944 Customs.
Customs, Excise &Service Tax
Appellate Tribunal, (CESTAT),
Mumbai
Customs Act, 1962 Customs Duty Commissioner Central Excise &
Customs.
Customs, Excise &Service Tax
Appellate Tribunal, (CESTAT),
Mumbai
Sales Tax/ VAT VAT Jt Commissioner of Sales Tax
Rs. in Lacs
Name of Statute Amount Period to which
amount relates
Central Excise 249.15 FY 2007 to 2012
Act, 1944
1,649.96
Customs Act, 1962 1574.33 FY 2004-05
4.04 to 2013-14
Sales Tax/ VAT 472.86 FY 2006 to 2010
10. The Company''s accumulated losses at the end of financial year were
more than fifty percent of its net worth. Further the Company has
incurred cash losses during the financial year covered by our audit and
the immediately preceding financial year.
11. In our opinion, on the basis of audit procedures and according to
the explanation and information given to us, the Company has not
defaulted in repayment of dues to banks/financial
institutions/debenture holders in view of the debt restructuring
approved under CDR mechanism. However, there have been delays in
interest payment of Rs. 1,444.53 lacs as on 31st March 2014.
12. In our opinions and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company 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. In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order,
2003 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 and financial institutions.
16. In our opinion, the term loans are being applied for the purpose
for which they were obtained.
17. According to the information and explanations given to us and on an
overall examination of Cash Flow Statement and other records of the
company we report that no funds raised on short-term basis has been
used during the year for long- term investment and no long term funds
have been used to finance short term assets except the loans which has
been reclassified under the implementation of CDR package
18. Pursuant to the scheme of CDR the Company has made preferential
allotment of shares to a party covered in the register maintained under
section 301 of the Companies Act, 1956. In our opinion and according to
the information and explanations given to us, the price at which shares
have been issued is not prejudicial to the interest of the Company.
19. The Company has not issued any secured debentures during the year.
Hence, provisions of Clause 4 (xix) of the Companies (Auditor''s Report)
Order, 2003 are not applicable to the Company.
20. The company has not raised any money by public issue during the
year.
21. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year.
For A. Husein Noumanali & Co.
Chartered Accountants
Firm Registration No. 107173W
(A. Husein Noumanali)
Place: Mumbai Proprietor
Date: May 30, 2014 M. No. 14757
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of NITCO Limited
("the Company"), which comprise the Balance Sheet as at March 31, 2013,
the Statement of Profit and 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 principles generally accepted in India including
Accounting Standards referred to in Section 21 I (3C) 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
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatements.
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 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 and 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 March 3 1, 201 3;
b. In the case of the Statement of Profit and Loss, of the loss 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.
Emphasis of Matter
Without qualifying, attention is drawn as under:
a) Note no. 37 to the financial statements relating to Corporate Debt
Restructuring (CDR) package approved by the CDR Empowered Group.
b) The balances of Funded interest on Term Loan from banks aggregating
to Rs. 9,004.67 Lacs are subject to reconciliation.
c) The balances of Working Capital Term Loan from banks aggregating to
Rs. 59,070.12 Lacs are subject to reconciliation.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") as amended, issued by the Central Government of India in terms
of Sub Section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the Order
2. As required by Section 227(3) of the Act, we report that:
i. 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;
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
iii. The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
iv 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 21 I of the Companies Act,
1956;
v. On the basis of the written representations received from the
directors as on March 3 1,2013, taken on record by the Board of
Directors, none of the directors is disqualified as on March 3 1, 201
3, from being appointed as a director in terms of clause (g) of
Sub-Section (I) of section 274 of the Companies Act, 1956.
1. In respect of its fixed assets:
a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
basis of available information.
b) As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner; which in our
opinion is reasonable, having regard to the size of the Company and
nature of its assets. No material discrepancies were noticed on such
physical verification.
c) In our opinion, the Company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories:
a) The inventories have been physically verified during the year by the
management. In our opinion, the frequency of verification is
reasonable.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
c) The Company is maintaining proper records of inventories. The
discrepancies noticed on verification between the physical stocks and
the book records have been appropriately dealt in the books of
accounts.
3. a) According to the information and explanation given to us, the
Company has taken interest free unsecured loan from one party covered
in the register maintained under section 301 of the Companies Act
l956.The maximum amount involved during the year was Rs. 7.90 crores
and year end balance of loan taken from such party is Rs. 7.90 crore.
The Company has granted Interest free Loans and Advances to subsidiary
companies.The details have been provided in the Notes 32 "Disclosure in
respect of related parties pursuant to Accounting Standard 18".
b) In our opinion, the other terms of conditions on which loans
mentioned above have been taken are not prima facie prejudicial to the
interest of the company. Further; since the advances have been given to
subsidiary companies, in our opinion, it is not prejudicial to the
interest of the Company.
c) In the absence of stipulations in respect of the terms of payment of
principal amount and interest for the loans taken/ granted, it is not
possible to comment whether principal or interest payments are regular
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchases of inventory and 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.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements that need to be entered in the register maintained under
Section 301 of the Companies Act, 1956 have been so entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts /
arrangements entered in the Register maintained under section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in
respect of each party during the year have been made at prices which
appear reasonable as per information available with the Company.
6. According to the information and explanations given to us, the
Company has not accepted any deposit from the public. Therefore, the
provisions of Clause (vi) of paragraph 4 of the Order are not
applicable to the Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 201 I
prescribed by the Central Government under Section 209(l)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however; not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
9. In respect of statutory dues:
a) According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income-Tax /TDS, Sales Tax, Wealth Tax,
Service Tax, Customs Duty Excise Duty, Cess, and other statutory dues
have been generally regularly deposited with the appropriate
authorities. According to the information and explanations given to us,
no undisputed amounts payable in respect of the aforesaid dues were
outstanding as at March 3 1,20 I 3 for a period of more than six months
from the date of becoming payable.
10.The Company has accumulated losses at the end of financial year
which are less than fifty percent of its net worth. Further the Company
has incurred cash losses during the financial year covered by our audit
and the immediately preceding financial year
I I. There have been defaults in repayment of dues to the banks, and
financial institutions during the yean which have been subsequently
either rescheduled by way of Corporate Debt Restructuring package (CDR)
or repaid upto the date of our report.
12. In our opinions and according to the explanations given to us and
based on the information available, no loans and advances have been
granted by the Company 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 In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order;
2003 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 and financial institutions.
16. In our opinion, the term loans are being applied for the purpose
for which they were obtained.
17. According to the information and explanations given to us and on
overall examination of balance sheet of the company we report that no
funds raised on short-term basis has been used during the year for
long-term investment and no long term funds have been used to finance
short term assets except the loans which has been reclassified under
the implementation of CDR package.
18. 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.
19. The Company has not issued any secured debentures during the year
Hence, provisions of Clause 4 (xix) of the Companies (Auditor''s Report)
Order; 2003 are not applicable to the Company.
20. The company has not raised any money by public issue during the
year
21. In our opinion and according to the information and explanations
given to us, no material fraud on or by the Company has been noticed or
reported during the year
For A. Husein Noumanali & Co.
Chartered Accountants
Firm Registration No. I07I73W
(A. Husein Noumanali)
Place: Mumbai Proprietor
Date: May 30, 2013 M.No. 14757
Mar 31, 2012
We have audited the attached Balance Sheet of M/s NITCO LIMITED as on
31 March, 2012 and also the Profit & Loss Account of the Company for
the year ended on that date, annexed thereto and the Cash Flow
Statement for the year ended on that date. 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.
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 test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors' Report) Order 2003 issued by
the Central Government of India in terms of sub-section (4A) of section
227 of the Companies Act, 1956, we enclose in the Annexure, a statement
on the matters specified in paragraph 4 and 5 of the said Order
Further to our comments in the Annexure referred to above, we report
that:
1) 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;
2) In our opinion proper books of accounts as required by law have been
kept by the Company, so far as appears from our examination of the
books;
3) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
4) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statements dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 to the extent applicable.
5) On the basis of written representations received from the directors
of the Company, as on 31 March, 2012, and taken on record by the Board
of Directors, we report that none of the directors are disqualified as
on 31 March, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956.
6) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts, read together with the
notes to accounts and in particular note no. 27 give the information as
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India :
a) In the case of the Balance Sheet, of the state of affair of the
Company as at 31 March, 2012 and
b) In the case of Profit & Loss account, of the Loss for the year ended
on that date and
c) In the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
1 (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets;
(b) As per the information and explanations given to us, physical
verification of fixed assets has been carried out in terms of the
phased programme of verification of its fixed assets adopted by the
Company and no material discrepancies were noticed on such
verification. In our opinion, the frequency of verification is
reasonable, having regard to the size of the Company and nature of its
business.
(c) During the year, the Company has not disposed of any substantial /
major part of fixed assets.
2 (a) The inventory has been physically verified at reasonable
intervals during the year by the Management/ internal Auditors.
(b) In our opinion and according to the information and explanations
given to us, procedures of physical verification of inventory followed
by the management/ Internal Auditors are reasonable and adequate in
relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventories in so far
as such records were examined by us and no material discrepancies were
noticed on physical verification However based on the verification of
inventory the management has identified obsolete, slow moving and
defective inventory of Rs. 3447.47 lacs and the same has been written
off as exceptional items.
3 (a) The Company has granted unsecured loans to wholly owned
subsidiary company. The maximum amount outstanding at any time during
the year is Rs 15160.59 lacs and the year end balance is same.
(b) The rate of interest on aforesaid loans and advances granted is
reasonable. In our opinion rates of interest and other terms and
condition of loans are not prejudicial to the interest of company There
is no repayment schedule and loans and advances are repayable on
demand, therefore clause 4 (iii) (c) & (d) of the Companies (Audit
Report) Order,2003 are not applicable.
(e) As informed, the Company has not taken any loans, secured or
unsecured from companies, firms or other parties covered in the
register maintained under section 301 of the Companies
Act,1956.Therefore, provisions of clause 4(iii)(f) and (g) of the
Companies (Audit Report) Order,2003 are not applicable.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory and fixed assets and for
the sale of goods. During the course of our audit, no major weakness
has been noticed in the internal controls.
5 (a) In our opinion and according to the information and explanations
given to us, transactions that need to be entered into the Register in
pursuance of Section 301 of the Companies Act, 1956 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions exceeding Rupees Five Lakhs in respect of
each party made in pursuance of contracts or arrangements entered in
the register maintained under Section 301 of the Companies Act, 1956
have been made at prices, which are reasonable having regard to
prevailing market prices at the relevant time.
6. The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A and 58AA of
the Companies Act, 1956 and rules made there under. Hence; the Clause
(vi) of the order is not applicable.
7. In our opinion, the internal audit functions carried out during the
year by firms of Chartered Accountants appointed by the management have
been commensurate with the size of the company and the nature of its
business.
8. According to the information and explanations furnished to us, the
Central Government has not prescribed maintenance of cost records u/s
209(1)(d) of the Companies Act, 1956 to this company.
9 (a) According to the records of the Company the Company is regular in
depositing undisputed statutory dues including Employees' State
Insurance, Income tax, Sales tax, Wealth-tax, Customs Duty, Excise Duty
Cess and other statutory dues with appropriate authorities. According
to the information and explanations given to us, there are no
undisputed amounts payable in respect of such statutory dues which have
remained outstanding at 3 1 March, 2012 for a period more than six
months from the date they became payable.
(b) According to the records of the Company, the dues of sales tax,
income-tax, customs, wealth-tax, excise duty cess which have not been
deposited on account of disputes and the forum where the dispute is
pending are as under:-
Name of Nature of Amount Forum
Statute the dues (Rs./lakhs)
Central Duty demand/ 25.10 Customs, Excise &
Excise Act penalty Service Tax Appellate
Tribunal, Mumbai
Central Duty demand/ 658.87 Commissioner Central
Excise Act penalty Excise (Appeals)
Customs Duty demand/ 390.00 Customs, Excise &
Act penalty Service Tax Appellate
Tribunal, Mumbai
10. The Company has no accumulated losses as per books of accounts at
the end of the financial year It has incurred cash losses in the
financial year under report and no cash losses in the immediately
preceding financial year
11. In our opinion and according to the information and explanation
provided to us, there has been delay in repayment of loan which is
outstanding as on March 31, 2012 due to a lender amounting to Rs.
1792.98 lacs which has not been paid till date.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
13. The provisions of any Special Statute applicable to Chit Fund,
Nidhi or Mutual benefit Fund / Societies are not applicable to the
Company
14. In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly the
provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order,
2003 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 and financial institutions.
16.. According to the information and explanations given to us, the
term loans raised during the year have been applied for the purpose for
which they were raised.
17. According to the information given to us and on an overall
examination of balance sheet of the company we report that no funds
raised on short term basis have been used for long term Investment.
18. 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.
19 The Company has not issued any secured debentures during the year
Hence, provisions of Clause 4 (xix) of the Companies (Auditor's Report)
Order, 2003 are not applicable to the Company.
20 The company has not raised any money by public issue during the year
21 During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
principles in India, and according to the information and explanation
given to us, we have neither come across any instances of fraud on or
by the company, noticed or reported during the year, nor have been
informed of such case by the management.
For A. Husein Noumanali & Co.
Chartered Accountants
Firm Registration No. 107173W
A. Husein Noumanali
Place: Mumbai Proprietor
Date: May 3, 2012 Membership No.: 14757
Mar 31, 2011
We have audited the attached Balance Sheet of M/s NITCO LIMITED as on
March 31, 2011 and also the Profit and Loss Account of the Company for
the year ended on that date, annexed thereto and the Cash Flow
Statement for the year ended on that date. 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.
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 test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors' Report) Order, 2003 issued by
the Central Government of India in terms of sub-section (4A) of Section
227 of the Companies Act, 1956, we enclose in the Annexure, a statement
on the matters specified in paragraph 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we
report that:
1) 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;
2) In our opinion proper books of accounts as required by law have been
kept by the Company, so far as appears from our examination of the
books;
3) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
4) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statements dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 to the extent applicable.
5) On the basis of written representations received from the Directors
of the Company, as on March 31, 2011, and taken on record by the Board
of Directors, we report that none of the Directors are disqualified as
on March 31, 2011 from being appointed as a Director in terms of Clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956.
6) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts, read together with the
notes to accounts give the information as required by the Companies
Act, 1956 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
a) In the case of the Balance Sheet, of the state of affair of the
Company as at March 31, 2011 and
b) In the case of Profit and Loss account, of the profit for the year
ended on that date and
c) In the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
1 (a) The Company has maintained proper records showing
full particulars including quantitative details and situation of fixed
assets;
(b) As per the information and explanations given to us, physical
verification of fixed assets has been carried out in terms of the
phased programme of verification of its fixed assets adopted by the
Company and no material discrepancies were noticed on such
verification. In our opinion, the frequency of verification is
reasonable, having regard to the size of the Company and nature of its
business.
(c) During the year, the Company has not disposed of any
substantial/major part of fixed assets.
2 (a) Physical verification of inventory has been conducted during the
year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, procedures of physical verification of inventory followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The Company has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3 (a) The Company has not granted or taken any loans
to/from companies, firms or other parties covered in the Register,
maintained under Section 301 of the Companies Act, 1956. Accordingly
sub clauses b, c & d in relation to rate of interest and terms and
conditions, regularity in repayment and overdue amounts are not
applicable.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory and fixed assets and for
the sale of goods. During the course of our audit, no major weakness
has been noticed in the internal controls.
5 (a) In our opinion and according to the information and explanations
given to us, transactions that need to be entered into the Register in
pursuance of Section 301 of the Companies Act, 1956 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions exceeding Rupees five lakhs in respect of
each party made in pursuance of contracts or arrangements entered in
the register maintained under Section 301 of the Companies Act, 1956
have been made at prices, which are reasonable having regard to
prevailing market prices at the relevant time.
6. The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A and 58AA of
the Companies Act, 1956 and rules made thereunder. Hence, the Clause
(vi) of the order is not applicable.
7. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business.
8. Paragraph 4 (viii) is not applicable as the Company is not required
to maintain cost records u/s 209(1)(d) of the Companies Act, 1956.
9 (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including Employees' State
Insurance, Income tax, sales tax, wealth tax, customs duty, excise
duty, cess and other statutory dues with appropriate authorities.
According to the information and explanations given to us, there are no
undisputed amounts payable in respect of such statutory dues which have
remained outstanding as at March 31, 2011 for a period more than six
months from the date they became payable.
(b) According to the records of the Company, the dues of sales tax,
income-tax, customs, wealth tax, excise duty, cess which have not been
deposited on account of disputes and the forum where the dispute is
pending are as under:
Name of Nature of Amount Forum
Statute the dues (Rs./lakhs)
Central Duty demand/ 19.10 Customs, Excise &
Excise Act penalty Service Ta x Appellate
Tribunal, Mumbai
Central Duty demand/ 8.27 Commissioner Central
Excise Act penalty Excise (Appeals)
Customs Duty demand/ 742 Customs, Excise &
Act penalty Service Tax
Appellate
Tribunal, Mumbai
10. The Company has no accumulated losses as per books of accounts at
the end of the financial year and it has not incurred cash losses in
the financial year under report and the immediately preceding financial
year.
11. The Company has not defaulted in repayment of its dues to
financial institutions and banks.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
13. The provisions of any Special Statute applicable to Chit Fund,
Nidhi or Mutual benefit Fund/Societies are not applicable to the
Company.
14. In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of Clause 4 (xiv) of the Companies (Auditor's Report) Order,
2003 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 and financial institutions.
16. According to the information and explanations given to us, the
term loans raised during the year have been applied for the purpose for
which they were raised.
17. 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.
18. 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.
19. The Company has not issued any secured debentures during the year.
Hence, provisions of Clause 4 (xix) of the Companies (Auditor's Report)
Order, 2003 are not applicable to the Company.
20 The Company has not raised any money by public issue during the
year.
21 During the course of our examination of the books and records of the
Company, carried out in accordance with the generally accepted auditing
principles in India, and according to the information and explanation
given to us, we have neither come across any instances of fraud on or
by the Company, noticed or reported during the year, nor have been
informed of such case by the management.
For A. Husein Noumanali & Co.
Chartered Accountants
Firm Registration No. 107173W
A. Husein Noumanali
Place: Mumbai Proprietor
Date: August 12, 2011 Membership No.: 14757
Mar 31, 2010
We have audited the attached Balance Sheet of M/s NITCO LIMITED as on
31st March 2010 and also the Profit & Loss Account of the Company for
the year ended on that date, annexed thereto and the Cash Flow
Statement for the year ended on that date. 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.
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 test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors Report) Order, 2003 issued by
the Central Government of India in terms of sub- section (4A) of
section 227 of the Companies Act, 1956, we enclose in the Annexure, a
statement on the matters specified in paragraph 4 and 5 of the said
Order.
Further to our comments in the Annexure referred to above, we report
that:
1) 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;
2) In our opinion proper books of accounts as required by law have been
kept by the Company, so far as appears from our examination of the
books;
3) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of accounts;
4) In our opinion, the Balance Sheet, Profit & Loss Account and Cash
Flow Statements dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956 to the extent applicable.
5) On the basis of written representations received from the directors
of the Company, as on 31st March 2010, and taken on record by the Board
of Directors, we report that none of the directors are disqualified as
on 31st March 2010 from being appointed as a director in terms of
clause (g) of sub-section (1) of section 274 of the Companies Act,
1956.
6) In our opinion and to the best of our information and according to
the explanation given to us, the said accounts, read together with the
notes to accounts and in particular note no. 8 and 9, give the
information as required by the Companies Act, 1956 in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India :
a) In the case of the Balance Sheet, of the state of affair of the
Company as at 31st March 2010 and
b) In the case of Profit & Loss account, of the Loss for the year ended
on that date and
c) In the case of the Cash Flow Statement, of the cash flow for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
1 (a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets;
(b) As per the information and explanations given to us, physical
verification of fixed assets has been carried out in terms of the
phased programme of verification of its fixed assets adopted by the
Company and no material discrepancies were noticed on such
verification. In our opinion, the frequency of verification is
reasonable, having regard to the size of the Company and nature of its
business.
(c) During the year, the Company has not disposed of any substantial /
major part of fixed assets.
2 (a) Physical verification of inventory has been
conducted during the year by the management at reasonable intervals.
(b) In our opinion and according to the information and explanations
given to us, procedures of physical verification of inventory followed
by the management are reasonable and adequate in relation to the size
of the Company and the nature of its business.
(c) The Company has maintained proper records of inventories and
discrepancies noticed on physical verification of inventories as
compared to book records were not material.
3 (a) The Company has not granted or taken any loans
to/from companies, firms or other parties covered in the Register,
maintained under Section 301 of the Companies Act, 1956. Accordingly
sub clauses b, c & d in relation to rate of interest & terms &
conditions, regularity in repayment & overdue amounts are not
applicable.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory and fixed assets and for
the sale of goods. During the course of our audit, no major weakness
has been noticed in the internal controls.
5 (a) In our opinion and according to the information and explanations
given to us, transactions that need to be entered into the Register in
pursuance of Section 301 of the Companies Act, 1956 have been so
entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions exceeding Rupees Five Lakhs in respect of
each party made in pursuance of contracts or arrangements entered in
the register maintained under Section 301 of the Companies Act, 1956
have been made at prices, which are reasonable having regard to
prevailing market prices at the relevant time.
6. The Company has not accepted any deposits during the year from the
public within the meaning of the provisions of Section 58A and 58AA of
the Companies Act, 1956 and rules made thereunder. Hence, the Clause
(vi) of the order is not applicable.
7. In our opinion, the Company has an internal audit system
commensurate with the size of the Company and the nature of its
business.
8. Paragraph 4(viii) is not applicable as the Company is not required
to maintain cost records u/s 209(1)(d) of the Companies Act, 1956.
9 (a) According to the records of the Company, the Company is regular
in depositing undisputed statutory dues including Employees State
Insurance, Income tax, Sales tax, Wealth-tax, Customs Duty, Excise
Duty, Cess and other statutory dues with appropriate authorities.
According to the information and explanations given to us, there are no
undisputed amounts payable in respect of such statutory dues which have
remained outstanding as at 31st March 2010 for a period more than six
months from the date they became payable.
(b) According to the records of the Company, the dues of Sales tax,
Income-tax, Custom Duty, Wealth-tax, Excise Duty, cess which have not
been deposited on account of disputes and the forum where the dispute
is pending are as under:-
Name of Nature of Amount Forum
Statute the dues (Rs./lakhs)
Central Duty demand/ 17.77 Customs, Excise &
Excise penalty Service Tax Appellate
Act Tribunal, Mumbai
Central Duty demand/ 8.27 Commissioner Central
Excise Act penalty
Excise (Appeals)
Customs Duty demand/ 1,589.52 Customs, Excise &
Act penalty Service Tax Appellate
Tribunal, Mumbai
10. The Company has no accumulated losses as per books of accounts at
the end of the financial year and it has not incurred cash losses in
the financial year under report and the immediately preceding financial
year.
11. The Company has not defaulted in repayment of its dues to
financial institutions and banks.
12. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures or other securities.
13. The provisions of any Special Statute applicable to Chit Fund,
Nidhi or Mutual benefit Fund / Societies are not applicable to the
Company.
14. In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditors Report) Order,
2003 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 and financial institutions.
16. According to the information and explanations given to us, the
term loans raised during the year have been applied for the purpose for
which they were raised.
17. 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.
18. 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.
19. The Company has not issued any secured debentures during the year.
Hence, provisions of Clause 4 (xix) of the Companies (Auditors Report)
Order, 2003 are not applicable to the Company.
20. The Company has not raised any money by public issue during the
year.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing principles in India, and according to the information and
explanation given to us, we have neither come across any instances of
fraud on or by the Company, noticed or reported during the year, nor
have been informed of such case by the management.
For A. Husein Noumanali & Co.
Chartered Accountants
Firm Registration No. 107173
A. Husein Noumanali
Place: Mumbai Proprietor
Date : 3rd August 2010 Membership No.: 14757