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National Aluminium Company Ltd.

BSE: 532234 Sector: Metals & Mining
NSE: NATIONALUM ISIN Code: INE139A01034
BSE LIVE 15:54 | 17 Nov 81.75 0.55
(0.68%)
OPEN

83.40

HIGH

84.60

LOW

81.00

NSE 15:55 | 17 Nov 81.70 0.55
(0.68%)
OPEN

82.90

HIGH

84.60

LOW

81.00

OPEN 83.40
PREVIOUS CLOSE 81.20
VOLUME 832013
52-Week high 97.65
52-Week low 48.35
P/E 19.94
Mkt Cap.(Rs cr) 15,802
Buy Price 0.00
Buy Qty 0.00
Sell Price 81.75
Sell Qty 497.00
OPEN 83.40
CLOSE 81.20
VOLUME 832013
52-Week high 97.65
52-Week low 48.35
P/E 19.94
Mkt Cap.(Rs cr) 15,802
Buy Price 0.00
Buy Qty 0.00
Sell Price 81.75
Sell Qty 497.00

National Aluminium Company Ltd. (NATIONALUM) - Auditors Report

Company auditors report

TO THE MEMBERS OF NATIONAL ALUMINIUM COMPANY LIMITED Report on the Standalone FinancialStatements

We have audited the accompanying standalone financial statements of NationalAluminium Company Limited ("the Company") which comprises Balance Sheet asat 31st March 2016 the Statement of Profit & Loss and Cash Flow Statement for theyear then ended and a summary of significant accounting policies and other explanatoryinformation.

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 ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified 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 inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and free from material misstatement whether dueto fraud or error.

Auditors’ 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 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. 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 theauditor’s 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 but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the operating effectiveness of such controls.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by Company’s directors as well asevaluating the overall 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 the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2016 and its profit and its cash flows for theyear ended on that 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 we on the basis of information and explanations given to us givein the Annexure "A" to this report a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. In compliance to directions of the Comptroller and Auditor General of Indiau/s.143(5) of the Act we give in Annexure "B" to this report a statement on thematters specified therein.

3. As required by section 143(3) of the Act we report to the extent applicable that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose 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 Statement of Profit and Loss and the Cash Flow Statement dealtwith 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. Section 164(2) of the Act regarding disqualification of directors is not applicableto the Company by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by theMinistry of Corporate Affairs Govt. of India.

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 "C".

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 - Refer Note 20 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts that required to be transferred to the Investor Educationand Protection Fund by the Company. Refer Note 17 to the financial statements.

For ABP & Associates For Guha Nandi & Co.
Chartered Accountants Chartered Accountants
FRN - 315104E FRN - 302039E
(CA Niranjan Agrawalla) (Dr. B. S. Kundu)
Partner Partner
Membership No. 087939 Membership No.051221
Place : Bhubaneswar
Dated : 28th May 2016

Annexure to the Independent Auditors’ Report of even date on Standalone FinancialStatements of National Aluminium Company Limited

(Referred to in paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our Report of even date)

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

(b) All movable assets of the Company are physically verified by the management everyyear. The frequency of verification in our opinion is reasonable. No materialdiscrepancies were noticed on such verification conducted during the year;

Non-movable assets have been physically verified by the management at an interval ofthree years which in our opinion is reasonable having regard to the size and nature ofassets of the Company. As informed to us no material discrepancies between book recordsand physical assets have been noticed;

(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 are heldin the name of the Company. Out of 7972.31 acres of freehold land and 8945.98 acres ofleasehold land held by the Company title/lease deeds are not yet executed in respect of66.92 acres of freehold and 1576.10 acres of leasehold land respectively. However theCompany has been permitted by the concerned authorities to carry on its operation on thesaid land. Registration formalities in respect of office space for 6459 sft. in Kolkata isalso not completed.

ii) As explained to us all inventories except stocks relating to expansion projectstocks lying with third parties and stocks-in-transit have been physically verified duringthe year by firms of Chartered Accountants appointed by the management. The frequency ofverification is reasonable. The discrepancies noticed on physical verification betweenphysical stocks and book records relating to shortage have been dealt in the books ofaccounts while excess have been ignored;

iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Consequently clauses (iii) (a) (b) & (c) of paragraph 3 of theOrder are not applicable;

iv) Section 185 of the Act regarding loans to directors is not applicable to theCompany by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by theMinistry of Corporate Affairs Govt. of India. In our opinion and according to theinformation and explanations given to us the Company has complied with the provisions ofsection 186 of the Act with respect to the loans and investments made.

v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public.

vi) We have broadly reviewed the books and records maintained by the Company asspecified by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 in respect of manufacturing activities and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have however not made a detailed examination of the records with a viewto determine whether they are accurate and complete.

vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company in our opinion the Company is generallyregular in depositing undisputed statutory dues including provident fund employees’state insurance income tax sales tax service tax duty of customs duty of excisevalue added tax cess electricity duty and other material statutory dues with theappropriate authorities and there are no undisputed statutory dues as at 31st March 2016outstanding for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us following statutory dueshave not been deposited by the Company on account of disputes:

Name of the Statute Nature of Dues Amount disputed (' in crore) Amount deposited (' in crore) Forum where disputes are pending
Sales Tax Sales Tax 147.44 31.25 Commissioner
181.60 53.38 Tribunal
80.95 3.56 High Court
409.99 88.29
Entry Tax Entry Tax 158.63 40.94 Commissioner
71.64 35.10 Tribunal
58.40 22.68 High Court
288.67 98.72
Central Excise Act1944 Excise Duty 18.08 1.17 Commissioner
7.79 0.14 Tribunal
26.75 0.00 High Court
52.62 1.31
Service Tax Service tax 2.25 0.00 Commissioner
0.10 0.02 Tribunal
2.35 0.02
Customs Act 1962 Custom Duty 5.25 0.00 Commissioner
Income Tax Act 1961 Income Tax 569.80 569.80 Commissioner
86.64 60.40 Tribunal
31.92 31.92 High Court
688.36 662.12
Odisha Stamps Act Stamp duty 204.53 0.00 High Court
Total: 1651.77 850.46

viii) The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year.

ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year.

x) According to the information and explanations given to us no fraud by the Companyor any fraud on the Company by its officers or employees has been noticed or reportedduring the year.

xi) Section 197 of the Act regarding managerial remuneration is not applicable to theCompany by virtue of Notification No. G.S.R. 463(E) dated 05.06.2015 issued by theMinistry of Corporate Affairs Govt. of India.

xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company.

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 Companies Act 2013 wherever applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.

xiv) According to the information and explanations given to us and based on ourexamination of the records the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.

xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into any non-cash transactionswith any director or persons connected with him.

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

For ABP & Associates For Guha Nandi & Co.
Chartered Accountants Chartered Accountants
FRN - 315104E FRN - 302039E
(CA Niranjan Agrawalla) (Dr. B. S. Kundu)
Partner Partner
Membership No. 087939 Membership No.051221
Place : Bhubaneswar Dated : 28th May 2016

Annexure to the Independent Auditor’s Report of even date on the StandaloneFinancial Statements of National Aluminium Company Limited

(Referred to in paragraph 2 under the heading of "Report on Other Legal andRegulatory Requirements" of our Report of even date)

Report on the directions under section 143(5) of the Companies Act 2013 by theComptroller & Auditor General of India

1. According to the information and explanations given to us by the management and onthe basis of our examination of books and records the Company has clear title/lease deedsfor freehold and leasehold land respectively wherever the title/lease deeds are executed.There are 66.92 acres of freehold and 1576.10 acres of lease hold land out of 7972.31acres of freehold and 8945.98 acres of lease hold land in respect of which the title/leasedeeds are not yet executed. However the Company has been permitted by the concernedauthorities to carry on its operation on the said land.

2. As informed to us by the management and based on our examination of books andrecords of the Company there are 35 cases of write-off of advances debtors claims andcapital work-in-progress amounting to Rs.89.21 lacs as detailed below. The reason ofwrite-off as explained to us is that these are old balances lying unadjusted /unrealized for a long time have become time-barred and chances of recovery / adjustmentsare remote.

Types of write off / waiver No of cases Amount in Rs. Lacs
Advances 22 21.08
Debtors 5 0.08
Claims 7 58.05
Capital Work-in-Progress 1 10.00
Total 35 89.21

3. (a) On the basis of our examination of books and records of the Company we statethat proper records are maintained for inventories lying with third parties.

(b) According to the information and explanations given to us and based on ourexamination of books and records the Company has not received any asset as gift/grant(s)from Government or other authorities during the year.

For ABP & Associates For Guha Nandi & Co.
Chartered Accountants Chartered Accountants
FRN - 315104E FRN - 302039E
(CA Niranjan Agrawalla) (Dr. B. S. Kundu)
Partner Partner
Membership No. 087939 Membership No.051221
Place : Bhubaneswar
Dated : 28th May 2016

Annexure to the Independent Auditor’s Report of even date on the StandaloneFinancial Statements of National Aluminium Company Limited

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 financial reporting of NATIONALALUMINIUM COMPANY LIMITED ("the Company") as of March 31 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear ended 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company’s policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

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 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 ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 auditor’s 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 with generally accepted accounting principles. A company’s internalfinancial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company’s assets that could have a material effect on thefinancial 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.

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 March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For ABP & Associates For Guha Nandi & Co.
Chartered Accountants Chartered Accountants
FRN - 315104E FRN - 302039E
(CA Niranjan Agrawalla) (Dr. B. S. Kundu)
Partner Partner
Membership No. 087939 Membership No.051221
Place : Bhubaneswar
Dated : 28th May 2016