NELCAST Auditors Report

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF NELCAST LIMITED REPORT ON THE FINANCIAL STATEMENTS


We have audited the accompanying standalone financial statements of NELCAST LIMITED (“the Company”), which comprise the Balance Sheet as at 31st March 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.


MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS


The Company’s 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 and presentation 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.


AUDITOR’S RESPONSIBILITY


Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.


An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.


We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.


OPINION


In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2017, and its profit and its cash flows for the year ended on that date.


REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS


1. As required by the Companies (Auditor’s Report) Order, 2017 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order, to the extent applicable.


2. As required by section 143(3) of the Act, we report that:


a) we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;


b) in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;


c) the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this report are in agreement with the books of account;


d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014;


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


f) 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 31st March 2017, based on the internal financial controls over financial reporting criteria established by the Company.


g) in our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:


i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements.


ii) The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise.


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 its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November 2016 to 30th December 2016 and the said disclosures are in accordance with the books of accounts maintained by the Company.


THE ANNEXURE REFERRED TO IN OUR INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF THE COMPANY ON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2017, WE REPORT THAT:


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


(b) The Company has a policy of physically verifying its Fixed assets once in a year which in our opinion reasonable having regard to the size of the Company and the nature of its business. During the year Fixed Assets have been verified by the management at the year end and no discrepancies were noticed on such verification.


(c) The title deeds of immovable properties are held in the name of the Company.


ii. According to information and explanations given to us, the management has conducted physical verification of inventory at reasonable intervals and no material discrepancies were noticed on physical verification during the year.


iii. The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.


iv. According to information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees and security.


v. The Company has not accepted any deposits during the year.


vi. We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government under Section 148(1) of the Act and are opinion that prima facie the prescribed accounts and cost records have been made and maintained.


vii. (a) According to the information and explanations given to us and on the basis of examination of the


records of the Company, the Company is regular in depositing undisputed statutory dues, including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues, as applicable, with the appropriate authorities and no dues were in arrears as at 31st March 2017 for a period of more than six months from the date they became payable.


(b) According to the records of the Company and on the basis of information and explanations given to us, there are no dues of income-tax, service tax, duty of customs and which have not been deposited on account of any disputes. However, according to information and explanations given to us, the following dues of sales-tax, value added tax, and duty of excise have not been deposited by the Company on account of disputes:
































































































































































Name of Statue



Nature of Dues



Amount Involved (Rs, in Lakhs)



Period to which the Amount Relates



Forum where Dispute is pending



Central Excise Act, 1944



CENVAT-INPUTS



51.23



2013-14



Commissioner, Appeals, Guntur



Central Excise Act, 1944



CENVAT-INPUT SERVICES



56.91



2013-14



CESTAT



Central Excise Act, 1944



CENVAT-INPUT SERVICES



223.11



2009-10 to 2012-13



CESTAT



Central Excise Act, 1944



CENVAT-INPUTS



0.42



2013-14



Commissioner, Appeals, Guntur



Central Sales Tax



CST



23.90



2009-10



Assistant Commissioner, (CT)



Value Added Tax



VAT



2.40



2009-10



Assistant Commissioner, (CT)



Value Added Tax



VAT



1.76



2016-17



Commissioner, (Appeals) (CT)



Central Excise Act, 1944



CENVAT-INPUTS



6.48



2014-15



Commissioner, Appeals, Guntur



Central Excise Act, 1944



CENVAT-INPUTS



0.27



2013-14



Commissioner, Appeals, Guntur



Central Excise Act, 1944



CENVAT-INPUTS



0.51



2014-15



Commissioner, Appeals, Guntur



Central Excise Act, 1944



CENVAT-INPUT SERVICES



9.97



2014-15



CESTAT



Central Excise Act, 1944



CENVAT-INPUTS



4.58



2014-15



Commissioner, Appeals, Guntur



Central Excise Act, 1944



CENVAT-INPUT SERVICES



13.44



2014-15



Commissioner, Appeals, Guntur



Central Excise Act, 1944



CENVAT-INPUTS



9.47



2014-15 & 2015-16



Commissioner, Appeals, Guntur



Central Excise Act, 1944



CENVAT-INPUT SERVICES



33.53



2014-15 & 2015-16



Commissioner, Appeals, Guntur



Central Excise Act, 1944



CENVAT-INPUTS



1.39



2014-15 & 2015-16



Commissioner, Appeals, Guntur



Central Excise Act, 1944



CENVAT-INPUT SERVICES



58.44



2012-13 & 2013-14



CESTAT



Central Excise Act, 1944



CENVAT-INPUT SERVICES



20.48



2013-14



CESTAT



Central Excise Act, 1944



CENVAT-INPUT SERVICES



2.00



Oct 13 to Aug 14



Commissioner, Appeals, Chennai



Central Excise Act, 1944



CENVAT-INPUT SERVICES



28.57



Apr 10 to Jun 13



CESTAT



Central Excise Act, 1944



CENVAT-INPUT SERVICES



2.27



Sep 14 to Jul 15



Commissioner, Appeals, Chennai



viii. The Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, government or dues to debenture holders.


xi. The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and term loans during the year. The moneys’ raised in earlier years by way of public offer and term loans were applied for the purpose for which those were raised.


x. We have not noticed or reported any fraud by the Company or any fraud on the Company by its officers/ employees during the year.


xi. The managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act, 2013.


xii. Clause xii of the Order is not applicable as the Company is not a Nidhi Company.


xiii. According to information and explanations given to us, all transactions with the related parties are in compliance with the provisions of sections 177 and 188 of the Companies Act, 2013 where ever applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.


xiv. According to information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures as per the provisions of Section 42 of the Companies Act, 2013, during the year under review.


xv. According to information and explanations given to us, the Company has not entered in to any non-cash transactions with directors or persons connected with him and the provisions of section 192 of the Companies Act, 2013 have been complied with.


xvi. Clause xvi of the Order is not applicable as the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.


ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF NELCAST LIMITED REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT, 2013 (“THE ACT”)


We have audited the internal financial controls over financial reporting of Nelcast Limited (“the Company”) as of 31st March 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.


MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS


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 Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.


AUDITORS’ RESPONSIBILITY


Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by the ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.


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


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 authorizations of management and directors of the Company; and


3. Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.


INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING


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


OPINION


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


For REDDY A V & CO


Chartered Accountants


A.V. REDDY


Partner


Membership No. 23983 Firm Regn. No. 003256S


Place : Chennai


Date : 24th May 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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