FUTURE NCC Auditors Report

To The Members of NCC Limited


Report on the Standalone Ind AS Financial Statements


We have audited the accompanying standalone Ind AS financial statements of NCC Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''''s branches located at Oman, Nepal and Sri Lanka and twenty six (26) Joint Operations.


Management''''s Responsibility for the Standalone Ind AS Financial Statements


The Company''''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) 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.


Auditors'''' Responsibility


Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.


In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.


We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.


An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the 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 Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.


We believe that the audit evidence obtained by us and the audit evidence obtained by the branch auditors and other auditors in terms of their reports referred to in the Other Matters paragraph below, 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, and based on the consideration of reports of the branch auditors and other auditors on separate financial statements of the branches and joint operations referred to in the Other Matters paragraph below, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.


Other Matters


a) We did not audit the financial statements of three (3) branches and one (1) joint operations included in the standalone Ind AS financial statements of the Company whose financial statements reflect total assets of ''''1373.94 million as at March 31, 2017 and total revenues of ''''2100.91 million for the year ended on that date, as considered in the standalone Ind AS financial statements. The financial statements of these branches and joint operations have been audited by the branch auditors and other auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and joint operations and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid branches and joint operations, is based solely on the report of such branch auditors and other auditors.


b) We did not audit the financial statements of seventeen (17) joint operations included in the standalone financial statements of the companies included in the Company whose financial statements reflect total assets of ''''541.59 million as at March 31, 2017 and total revenues of ''''145.26 million for the year ended on that date, as considered in the respective standalone financial statements of the companies included in the Company. The financial statements of these joint operations have not been audited by us. These financial statements are unaudited and have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial statements. In our opinion and according to the information and explanations given to us by the Management, these financial statements are not material to the Company.


Of these two (2) branches are located outside India whose financial statements and other financial information have been prepared in accordance with accounting principles generally accepted in their respective countries and which have been audited by other auditors under generally accepted auditing standards applicable in their respective countries. The Company''''s management has converted the financial statements of such branches located outside India from accounting principles generally accepted in their respective countries to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Company''''s management. Our opinion in so far as it relates to the balances and affairs of such branches located outside India is based on the report of other auditors and the conversion adjustments prepared by the management of the Company and audited by us.


c) The comparative financial information for the year ended March 31, 2016 and the transition date opening balance sheet as at April 01, 2015:


(i) in respect of one (1) branch included in this Standalone Ind AS financial statements prepared in accordance with the Ind AS are audited by the other auditors.


(ii) in respect of one (1) joint operations included in this Standalone Ind AS financial statements prepared in accordance with the Ind AS are audited by the other auditors.


(iii) in respect of two (2) branches included in this Standalone Ind AS financial statements are prepared in accordance with accounting principles generally accepted in their respective countries (Local GAAP) and audited by the branch auditors as per their Local GAAP. The Company''''s management has converted the financial statements of such branches and joint operations from Local GAAP to accounting principles generally accepted in India. We have audited these conversion adjustments made by the Company''''s management. Our opinion in so far as it relates to the balances and affairs of such branches located outside India is based on the report of the other auditors and the conversion adjustments prepared by the management of the Company and audited by us.


(iv) in respect of seventeen (17) joint operations included in this Standalone Ind AS financial statements prepared in accordance with the Ind AS are not been audited by us. These financial statements are unaudited and have been furnished to us by the Management and our opinion on such Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these joint operations, is based solely on such unaudited financial statements.


Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of these matters.


Report on Other Legal and Regulatory Requirements


1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the reports of the branch auditors and other auditors on the separate financial statements of the branches and joint operations, referred to in the Other Matters paragraph above 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 and the reports of the other auditors and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.


c) The reports on the accounts of the branches of the Company audited under Section 143(8) of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.


d) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account and with the returns received from the branches not visited by us.


e) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.


f) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act.


g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''''s internal financial controls over financial reporting.


h) With respect to the other matters to be included in the Auditor''''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:


i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements;


ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts.


iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.


iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us. However, as stated in Note 11.8 to the financial statements and as represented to us by the Management during the aforesaid period ''''10.49 million has been utilized for other than permitted transactions and '''' 3.96 million has been received from other than permitted transactions.


2. As required by the Companies (Auditor''''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.


Report on the Internal Financial Controls Over Financial Meaning of Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of Reporting


the Companies Act, 2013 ("the Act")


We have audited the internal financial controls over financial reporting of NCC Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.


Management''''s Responsibility for Internal Financial Controls


The Company''''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 respective 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.


Auditor''''s 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 Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''''s internal financial controls system 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''''s assets that could have a material effect on the financial statements.


Inherent Limitations of Internal Financial Controls Over Financial Reporting


Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


Opinion


In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.


(i) (a)The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.


(b) A major portion of the fixed assets have been physically verified during the year by the Management in accordance with a programme of verification, which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of its assets. According to the information and explanations given to us, the discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.


(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date. Immovable properties of land and buildings whose title deeds have been mortgaged as security for loans are held in the name of the Company based on the confirmations received. There are no immovable properties of land and buildings that have been taken on lease and disclosed as fixed assets in the standalone financial statements.


(ii) As explained to us, inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.


(iii) According to the information and explanations given to us, the Company has granted loans, unsecured, to companies covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans and having regard to the rollover stipulations for loans to certain parties:


(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company''''s interest.


(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations.


(c) There is no overdue amount remaining outstanding as at the balance sheet date.


(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provision of sections 185 and 186 of the Companies Act, 2013.


(v) According to the information and explanations given to us, the Company has not accepted any deposits to which the directions issued by the Reserve Bank of India and the provisions of Section 73 to Section 76 or any other relevant provisions of the Companies Act, 2013 and the Rules framed there under, where applicable, during the year.


(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.


(vii) According to the information and explanations given to us, in respect of statutory dues:


(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees'''' State Insurance, Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax (VAT), Cess and any other statutory dues applicable to it, to the appropriate authorities.


(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'''' State Insurance, Sales Tax, Income-tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.


(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and Cess which have not been deposited as on March 31, 2017 on account of disputes are given below:












































































































































































Statute



Nature of dues



Forum where dispute is pending



Period to which the amount relates



Amount involved (Rs, in millions)



Central Excise Act, 1944



Excise Duty



CESTAT, Bangalore



2007 - 2008



3.55



Finance Act, 1994



Service Tax



CESTAT, Bangalore



2005 - 2011



742.30



Service Tax



CESTAT ,Hyderabad



2010 - 2015



73.88



Service Tax



Commissioner Appeals, (MESCOM)



2005 - 2007



2.96



Service Tax



High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh



2007 - 2009



130.21



Sales tax and VAT laws



VAT



High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh



2005 - 2006



14.52



VAT



CTO, Jubilee Hills, Hyderbad



2006 - 2007



17.96



VAT



Addl. Commissioner (CT ), Andhra Pradesh



2012 - 2013



74.51



VAT



Addl. Commissioner (CT ), West Bengal



2010-2011



203.20



VAT



Sr.Joint Commissioner, Commercial Tax, West Bengal



2013 - 2014



90.71



VAT



Department of Trade & Taxes, New Delhi



2009 - 2013



239.39



VAT



Appellate Deputy Commissioner, KERALA



2008 - 2009



2.64



VAT



Assessing Officer Commercial Tax Dept, Kerala



2013 - 2014



13.14



VAT



Commissioner of Commercial Taxes, Ranchi, Jharkhand



2011 - 2013



46.49



VAT



Deputy Commissioner of Sales tax (Appeals), Assam



2005 - 2007



184.10



VAT



Hon''''ble High Court of Madras



2006 - 2007



4.36



VAT



Sr.Joint Commissioner (Appeals), WEST BENGAL



2008 - 2013



342.84



VAT



Joint Commissioner (Appeals), Maharashtra



2010 - 201 1



29.33



Sales tax



Sales Tax Appellate Tribunal, ANDHRA PRADESH



1999 - 2007



57.10



Sales tax



Additional Commissioner, Grade-2 (Appeals), Commercial Tax, Range-5 Lucknow



2006 - 2007



13.96



Sales Tax



High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh



1994 - 1995



1.67



CST



Appellate Authority, Bhopal



2011 - 2015



3.23



CST



Odisha High Court



2007 - 2012



51.53



CST



Joint Commissioner (Appeals), Maharashtra



2010 - 2011



86.26



Entry Tax



High Court of Judicature at Hyderabad for the State of Telangana and the State of Andhra Pradesh, Commercial Tax Department Andhra Pradesh



2012 - 2013



4.95



Entry Tax



Odisha High Court



2007 - 2012



22.07



(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks. The Company has not issued any debentures.


(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were raised.


(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.


(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.


(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable.


(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.


(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.


(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.


(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.


For M. Bhaskara Rao & Co For Deloitte Haskins & Sells


Chartered Accountants Chartered Accountants


(Firm''''s Registration No.000459S) (Firm''''s Registration No.008072S)


M. Bhaskara Rao Ganesh Balakrishnan


Partner Partner


Membership No. 5176 Membership No. 201193


Hyderabad,


May 23, 2017

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
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Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

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