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Namtech Electronic Devices Ltd.

BSE: 517269 Sector: Engineering
NSE: NAMTECHELE ISIN Code: INE607C01010
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Namtech Electronic Devices Ltd. (NAMTECHELE) - Auditors Report

Company auditors report

To

The Members of

NAMTECH ELECTRONIC DEVICES LIMITED

Report on the Financial Statements

We have audited the accompanyingfinancial statements of M/s Namtech ElectronicDevices Limited ("the company") which comprise the Balance Sheet as at 31March 2017 the Statement of Profit and Lossand theCash Flow Statementfor the year thenended and a summary of significant accounting policies and other explanatory informationfor the year then ended.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthesefinancial statements that give a true and fair view of the financial positionfinancial performance and cash flow of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards andmatters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances but not for the purpose of expressing an opinion onwhether the Company has in place an adequate internal financial control system overfinancial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by Company's Directors as well as evaluating the overallpresentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India;

a) in the case of Balance Sheet of the state of affairs of the Company as at March 312017;

b) in the case of the Statement of Profit and Loss of the loss for the year ended onthat date;

c) in case of Cash Flow Statement the cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the 'Annexure A' a statement on the matters specified in the paragraph3 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 bestof 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 theCompany so far as appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account maintained for the purposeof preparation of these financial statements.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards 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 31 March2017 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2017 from being appointed as a director in terms of Section 164(2) of theAct.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in 'Annexure B'.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements

ii. The Company has made provision as required under the applicable law or accountingst. ndards for material foreseeable losses if any on long-term contracts includingderivative contract.

iii. Following are the instances of delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company or there were noamounts which were required to be transferred to the Investor Education and ProtectionFund by the Company.

1. Unpaid Dividend-Rs.234180/-

2. Un refunded Share Application Money - Rs.1229813/-

iv. The Company has provided requisite disclosures in the standalone financialstatements asregards its holding and dealings in Specified Bank Notes as defined in theNotification S.O. 3407(E) dated November 8 2016 of the Ministry of Finance during theperiod from November 8 2016 to December 30 2016. Based on audit procedures performed andthe representations provided to us by the management we report that the disclosures are inaccordance with the books of account maintained by the Company and as produced to us bythe Management.

For CHANDRAN & RAMAN

Chartered Accountants

Firm's Registration No.000571S

H.M. Mukundachar

Partner

Membership No.: 213074

Dated: 26th July 2017

Place: Bangalore

ANNEXURE 'A' TO THE INDEPENDENT AUDITORS REPORT

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure a statement on the matters specified in the paragraph 3and 4 of the Order to the extent applicable.

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

(b) There are no fixed assets availablefor verification and hence this clause of theCompanies (Auditor's Report) Order 2016 is not applicable to the company.

(c) The Company does not hold any Immovable property accordingly the provisions ofClause 3 (i)(c) of the Companies (Auditor's Report) Order 2016 is not applicable to thecompany.

ii. The company does not hold any stock of inventory accordingly the reporting underClause 3 (ii) of the Companies (Auditor's Report) Order 2016does not arise.

iii. As informed to us the Company has made an interest free advance to its subsidiarycompany covered in the register maintained under section 189 of the Companies Act 2013.

a) In our opinion the terms and conditions on which the loan had been granted to thebody corporate listed in the register maintained under section 189 of the Act were notprima facie prejudicial to the interest of the company.

b) As the loans granted to body corporate listed in the register maintained undersection 189 of the Act are demand loans the payment of the principal and interest arealso payable on demand.

c) There are no overdue amounts in respect of the loan granted to a body corporatelisted in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the grant of Loans Making Investments and providing guarantees and Securities asapplicable.

v. During the year the company has not accepted any depositsfrom the public andaccordingly the provisions of Clause 3 (v) of the Companies (Auditor's Report) Order 2016is not applicable to the Company.

vi. The Central Government has not prescribed maintenance of Cost Records under section148 (1) of the Companies Act 2013 for any of the Services Rendered by the company.

vii. (a) According to information and explanations given to us and on the basis of ourexamination of the books of account and records The Company has been regular indepositing undisputed statutory dues including Provident Fund Investor Education andProtection Fund Employees' State Insurance Income-tax Sales-tax Wealth Tax CustomDuty Excise Duty cess and any other material statutory dues with the appropriateauthorities during the period except the following in respect of:

1. Income Tax Rs.177.73 lacs (excluding interest if any).

2. Investor Education and Protection Fund Rs. 14.64 lacs were outstanding for a periodof more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no disputeddues outstanding in respect dues of sales tax/ income tax/ customs duty/service tax/wealth tax/ excise duty/cess.

viii. The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable.

ix. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.

x. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanations given to us and based on ourexamination of the records of the company has not paid/provided for any managerialremuneration. Accordingly the provisions of clause 3 (xi) of Companies (Auditor's Report)Order 2016 is not applicable to the Company.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company . the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into noncashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

xvi. In our opinion the company is not required to be registered under section 451A ofthe Reserve Bank'of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.

For CHANDRAN & RAMAN

Chartered Accountants

Firm's Registration No.000571S

H.M. Mukundachar

Partner

Membership No.213074

Dated: 26th July 2017

Place: Bangalore

ANNEXURE 'B' TO THE INDEPENDENT AUDITORS' REPORT

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ('the Act').

We have audited the internal financial controls over financial reporting of M/s NamtechElectronic Devices Limited ('the Company') as of March 31 2017 in conjunction with ouraudit of the financial statements of the Company for the year ended and as on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (the 'Guidance Note'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to Company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Standards on Auditing prescribed under Section 143(10) of the Act and theGuidance Note to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with the ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors' judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in conditions or thatthe 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 givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2017 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note.

For CHANDRAN & RAMAN

Chartered Accountants

Firm Registration No.000571S

H.M. Mukundachar

Partner

Membership No.213074

Dated: 26th July 2017

Place: Bangalore.