TO THE MEMBERS OF NATIONAL FITTINGS LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of M/s. NATIONAL FITTINGS LIMITED("the company") which comprise the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under
Section 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.
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 and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
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. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe 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.
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 give a true and fair view in conformity with the accounting principles generallyaccepted in India; a) in the case of the Balance Sheet of the state of affairs of theCompany as at March 31 2017; b) in the case of the Statement of Profit and Loss of theprofit for the year ended on that date; and c) in the case of the Cash Flow Statement ofthe 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 paragraph 3 and 4 of the order.
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. d) In our opinion the aforesaidfinancial statements comply with the Accounting under Section 133 of the Act read withRule 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 controlsover financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and g) with respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 2.23(i)(a) and Note 2.23(ii)(a) to thefinancial statements;
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management Refer Note [2.31];
Annexure A to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31 March 2017 we report that:
On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that: i)(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial noticed on such verification. In our opinion this periodicity of physicalverification is reasonable having regard to the size of the Company and the nature of itsassets.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
ii) (a) As explained to us inventories have been physically verified during the yearby the management at reasonable intervals.
(b) On the basis of our examination of the inventory records in our opinion theCompany is maintaining proper records of inventory. The discrepancies noticed on physicalverification of inventory as compared to book records were not material which have beenproperly dealt with in the books of account.
iii) According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms LLPs or other parties covered in the register maintainedunder Section 189 of the Companies Act 2013. Consequently the provisions of clauses iii(a) iii (b) and iii (c) of the order are not applicable to the Company.
iv) The Company has not granted any loans made investments issued guarantees orprovided any security to any Director or any other person as specified in the Act andhence this clause is not applicable to the Company for this year.
v) The Company has not accepted any deposits from the public covered under section 73to 76 of the Companies Act 2013.
vi) As per information and explanation given by the management The Central Governmenthas not prescribed the maintenance of cost records under Section 148(1) of the Act.
vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax wealth tax Excise duty service tax duty of customsvalue added tax cess and other material statutory dues have been regularly depositedduring the year by the Company with the appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax sales taxwealth tax Excise duty service tax duty of customs value added tax cess and othermaterial statutory dues were in arrears as at 31 March 2017 for a period of more than sixmonths from the date they became payable. b) According to the information and explanationsgiven to us and also based on the Management representation the disputed statutory duesthat have not been deposited on account of matters pending before Appropriate authoritiesare as under.
|Name of the Statute ||Nature of Dues ||Amount (Rs In Lacs) ||Forum where dispute is Pending |
|Central Excise Act 1944 ||Excise Duty ||2.84 ||High Court |
viii) According to the information and explanations given to us the Company has notdefaulted in repayment dues to financial institutions banks or debenture holders duringthe year.
ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loan raised during the year have beenapplied for the purpose for which those are raised.
x) According to the information and explanations given to us no fraud by the Companyor on the
Company by its officersor employees has been noticed or reported during the course ofour audit.
xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
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 give 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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure - B to the Independent Auditor's Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of NATIONALFITTINGS LIMITED ("the Company") as of March 31 2017 in conjunction with ouraudit of the 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 internalfinancial based on the internal control over financial reporting criteria established bythe Company essential components of internal control stated in the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
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 Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial
Controls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand 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 financialreportingassessing 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 auditor's judgement 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
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 financialreporting and the preparationthereliability of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial those policiesand procedures that (1) pertain to the maintenance controloverfinancial of records thatin reasonable detail accurately and fairly reflect the transactions and dispositions ofthe assets of the company; (2) provide reasonable assurance that transactions are recordedas necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the
Company considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
| ||For and on behalf of |
| ||KRISHAAN & CO. |
| ||Firm Regn. No. 001453S |
| ||Chartered Accountants |
| ||Sd/- s rathinaMoorthy |
|Place : COIMBATORE ||Partner |
|Date : 27.05.2017 ||Membership No. 233449 |