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National Standard (India) Ltd.

BSE: 504882 Sector: Infrastructure
NSE: N.A. ISIN Code: INE166R01015
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National Standard (India) Ltd. (NATIONALSTANDAR) - Auditors Report

Company auditors report

TO THE MEMBERS OF M/s. NATIONAL STANDARD (INDIA) LIMITED

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying standalone financial statements of M/s. NATIONALSTANDARD (INDIA) LIMITED (‘the Company’) which comprise the Balance Sheetas at 31st March 2016 the Statement of Profit and Loss and the Statement ofCash Flow for the year then ended and notes to the Financial Statements including asummary of 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 Section134(5) of the Companies Act 2013 (‘the Act’) with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

AUDITORS’ RESPONSIBILITY:

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

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 thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

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

OPINION:

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 and its profit and its cash flows for the year ended onthat date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by the Companies (Auditor’s Report) Order 2016 (‘theOrder’) issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act on the basis of such checks of the books and records of theCompany as we considered appropriate and according to the information and explanationsgiven to us we give in the ‘Annexure A’ a statement on the matters specifiedin the paragraphs 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 it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e. On the basis of the written representations received from the Directors as on 31stMarch 2016 and taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2016 from being appointed as a Director interms of Section 164 (2) of the Act;

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’; and

g. With respect to the other matters to be included in the Auditors’ 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 information and explanations givento us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Clause 1 to 3 of Note 23 to thefinancial statements.

ii. The Company does not have any Long-term contracts including derivative contractsfor which there were any material foreseeable losses.

iii. No amounts were required to be transferred to the Investor Education andProtection Fund by the Company.

FOR SHANKER AND KAPANI
Chartered Accountants
FIRM REGISTRATION NO.: 117761W
S. SANKAR
PLACE:- MUMBAI PARTNER
DATE:- 16 - May - 2016 MEMBERSHIP NO: - 40476

ANNEXURE ‘A’ TO INDEPENDENT AUDITORS’ REPORT (Referred to in Paragraph(1) of our report of even date)

The Annexure referred to in Independent Auditors’ Report to the members of theCompany on the standalone financial statements for the year ended on 31stMarch 2016 and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us wereport that: (i) (a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

(b) As informed to us all fixed assets have been physically verified by the managementat reasonable intervals.

No material discrepancies were noticed on such physical verification.

(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) The inventory has been physically verified by the management. In our opinion thefrequency of verification is reasonable. Discrepancies noticed on verification have beenproperly dealt with in the books of account. (iii) As the Company has not granted anyloans or advances in the nature of loans to parties covered in the register maintainedunder Section 189 of the Act the provisions of Clause 3 (iii) of the Order are notapplicable to the Company.

(iv) In our Opinion and according to the information and explanations given to us asthe Company has not granted any loans or provided any guarantees or security in connectionwith any loan to any party covered under Section 185 of the Act and has not made anyinvestment during the year and on the basis of expert opinion obtained by the Company thatprovisions of Section 186 are not applicable to the Company in respect of Loans madeGuarantee given or security provided by it the provisions of Clause 3 (iv) of the Orderare not applicable to the Company.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the Rules made by the Central Government for maintenance of cost records undersub-section (1) of Section 148 of the Act in respect of real estate operations and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company is generally regular indepositing the undisputed statutory dues including provident fund employees’ stateinsurance income-tax sales tax service tax duty of customs duty of excise valueadded tax cess and any other statutory dues with the appropriate authorities.

According to the information and explanations given to us no undisputed amounts inrespect of the aforesaid statutory dues were outstanding as at the last day of thefinancial year for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Service Tax Duty of Customs Duty of Excise and Value Added Taxwhich have not been deposited by the Company on account of disputes except for following:

Name of thestatute Nature of dues Amount in (Rs.) Lakhs) Period to which the amount relates Forum where the dispute is pending
The Central Excise Act 1944 Excise Duty 11.22 April 1995 to March 1996 CESTAT Mumbai
The Income Tax Act 1961 Tax and Interest 38.90 April 1994 to March 1995 High Court Kolkata
The Income Tax Act 1961 Tax and Interest 23.95 April 2010 to March 2011 Income Tax Appellate Tribunal (ITAT)
The Income Tax Act 1961 Penalty 4843.29 April 2010 to March 2011 Commissioner of Income Tax (Appeals)
The Income Tax Act 1961 Penalty 622.65 April 2011 to March 2012 Commissioner of Income Tax (Appeals)
The Income Tax Act 1961 Tax and Interest 378.47 April 2012 to March 2013 Commissioner of Income Tax (Appeals)

(viii) In our opinion and according to the information and explanations given to usthe Company is regular in repayment of loans to the Financial Institutions. As the Companyhas not issued any debenture nor borrowed any money from Banks or Governments thequestion of dues payable to debenture holders or Banks or Governments does not arise.

(ix) In our opinion and according to the information and explanations given to us theterm loans from the Financial Institutions have been applied for the purpose for whichthose were obtained other than temporary deployment. However the Company has neitherraised any moneys by way of Initial Public Offer or Further Public Offer (including debtinstruments).

(x) Based upon the audit procedures performed and information and explanations given bythe management we report that neither fraud on the Company by its officers or employeesnor any fraud by the Company has been noticed or reported during the course of our audit.

(xi) As the Company has not paid or provided any managerial remuneration as definedunder Section 197 of the Act during the year the provisions of Clause 3(xi) of the Orderare not applicable to the Company.

(xii) As the Company is not a nidhi Company the provisions of Clause 3(xii) of theOrder are not applicable to the Company. (xiii) According to the information andexplanation given to us and based on our examination of the records of the Companytransactions with related parties are in compliance with section 177 and 188 of the Actwherever applicable and details have been disclosed in the Financial Statements (referClause 8 of Note 23) as required by the applicable accounting standards.

(xiv) As the Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year the provisions of Clause3(xiv) of the Order are not applicable to the Company.

(xv) As the Company has not entered into any non-cash transactions covered underSection 192 of the Act with the directors or persons connected with him the provisions ofClause 3(xv) of the Order are not applicable to the Company.

(xvi) As the Company is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934 the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

FOR SHANKER AND KAPANI
Chartered Accountants
FIRM REGISTRATION NO.: 117761W
S. SANKAR
PLACE:- MUMBAI PARTNER
DATE:- 16 - May - 2016 MEMBERSHIP NO: - 40476

ANNEXURE ‘B’ TO THE AUDITORS’ REPORT

Referred to in paragraph 2 (f) of the Independent Auditors’ Report of even date tothe members of

National Standard (India) Limited on the standalone financial statements for the yearended 31st March 2016. Report on the Internal Financial Controls under Clause(i) of sub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of M/s.NATIONAL STANDARD (INDIA) LIMITED (‘the Company’) as of 31stMarch 2016 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing down and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (‘ICAI’).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the Company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information 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 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 Act to the extent applicable to an auditof internal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wereestablished and maintained and if such controls operated effectively in all materialrespects.

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 controlssystem over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofthe management and directors of the Company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition use or dispositionof the company’s assets that could have a material effect on the financialstatements.

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.

Opinion

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 31st March 2016based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by ICAI.

FOR SHANKER AND KAPANI
Chartered Accountants
FIRM REGISTRATION NO.: 117761W
S. SANKAR
PLACE:- MUMBAI PARTNER
DATE:- 16 - May - 2016 MEMBERSHIP NO: - 40476