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NELCO Ltd.

BSE: 504112 Sector: Telecom
NSE: NELCO ISIN Code: INE045B01015
BSE LIVE 15:40 | 17 Nov 107.80 -0.20
(-0.19%)
OPEN

107.05

HIGH

110.95

LOW

107.00

NSE 15:56 | 17 Nov 108.70 0.90
(0.83%)
OPEN

110.95

HIGH

110.95

LOW

107.10

OPEN 107.05
PREVIOUS CLOSE 108.00
VOLUME 15905
52-Week high 145.80
52-Week low 68.40
P/E 29.94
Mkt Cap.(Rs cr) 246
Buy Price 109.40
Buy Qty 50.00
Sell Price 0.00
Sell Qty 0.00
OPEN 107.05
CLOSE 108.00
VOLUME 15905
52-Week high 145.80
52-Week low 68.40
P/E 29.94
Mkt Cap.(Rs cr) 246
Buy Price 109.40
Buy Qty 50.00
Sell Price 0.00
Sell Qty 0.00

NELCO Ltd. (NELCO) - Auditors Report

Company auditors report

TO THE MEMBERS OF NELCO LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of NELCO LIMITED("the Company") which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss and the Cash Flow Statement for the eighteen monthsperiod then ended and a summary of the significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone 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 Standardsprescribed under section 133 of the Act as applicable.

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 ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's 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 and the Order under section 143 (11)of the Act.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards 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 theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the 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 theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 and its loss and its cash flows for the eighteen months periodended on that date.

Emphasis of Matter

We draw attention to Note 27 to the standalone financial statements which states thatthe Company has accumulated losses as at 31st March 2016 and its net worth has beensubstantially eroded and the Company has incurred a net loss during the current eighteenmonths period.However the standalone financial statements of the Company have beenprepared on a going concern in view of the Company's business plan and the support letterfrom the Parent Company.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2015 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in theAnnexure a statement on the matters specified in 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 prescribed under section 133 of the Act as applicable.

e) The going concern matter described under the Emphasis of Matters paragraph above inour opinion may have an adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors as on31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31stMarch 2016 from being appointed as a director in terms of Section164 (2) of the Act.

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 standalone financial statements;

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W /W-100018)
Gurvinder Singh
(Partner)
(Membership No. 110128)
Place: Mumbai
Date: 4th May 2016

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

1. In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

2. In respect of its inventories:

(a) As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) In our opinion and according to the information and explanations given to us theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.

3. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms or otherparties covered in the Register maintained under Section 189 of the Companies Act 2013.

4. In our opinion and according to the information and explanations given to us thereis an adequate internal control system commensurate with the size of the Company and thenature of its business for the purchase of inventory and fixed assets and for the sale ofgoods and services and during the course of our audit we have not observed any continuingfailure to correct major weaknesses in such internal control system.

5. According to the information and explanations given to us the Company has notaccepted any deposit during the year. Accordingly paragraph (v) of the Order is notapplicable to the Company.

6. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Records and Audit) Rules 2014prescribed by the Central Government undersub-section (1) of Section 148 of the Companies Act 2013 and are of the opinion that primafacie the prescribed cost records have been made and maintained. We have howevernot made a detailed examination of the cost records with a view to determine whether theyare accurate or complete.

7. According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales Tax Wealth TaxService TaxCustoms Duty Excise Duty Value Added Tax Cess and other material statutorydues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Sales Tax Wealth Tax Service TaxCustoms Duty Excise DutyValue Added Tax Cess and other material statutory dues in arrears as at March 312016 fora period of more than six months from the date they became payable.

(c) Details of dues which have not been deposited as on March 31 2016 on account ofdisputes are given below:

Name of the statute Nature of the dues Forum where the dispute is pending Financial Year relates to which the matter pertains Amount (Rs. in Lakhs)
Income - Tax Laws Income -Tax Appellate Authority - Commissioner Level 2010-11 631.33
Sales - Tax Laws Sales-Tax Appellate Authority - High Court Level 1989-90 and 199091 17.43
Appellate Authority - Commissioner Level 1985-86 to 199091 1992-931996972003-04 2012-13 33.99
Appellate Authority -Joint Commissioner Level 2005-06 2008-09 to 2009-10 158.07
Customs Duty Laws Customs Duty Appellate Authority - Assessing Officer Level 1991 to 1993 9.40
Excise Duty Laws Excise Duty Appellate Authority - Commissioner Level 1983-84 to1985-86 56.43
Service Tax Laws Service Tax Appellate Authority - up to Commissioner Level 2003-04 2005062006-07 217.69

(d) There are no amounts that are due to be transferred to the Investor Education andProtection Fund in accordance with the relevant provisions of the Companies Act 1956 (1of 1956) and Rules made thereunder.

8. The accumulated losses of the Company at the end of the financial year are not lessthan fifty percent of its net worth and the Company has not incurred cash losses duringthe financial year covered by our audit and in the immediately preceding financial year.

9. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to financial institutions and banks.The Company has not issued any debentures.

10. In our opinion and according to the information and explanations given to us theCompany has given guarantees for loans taken by subsidiary company from banks which are primafacie not prejudicial to the interest of the Company.

11. In our opinion and according to the information and explanations given to us theterm loans have been applied by the Company during the year for the purposes for whichthey were obtained.

12. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.

For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W /W-100018)
Gurvinder Singh
(Partner)
(Membership No. 110128)
Place: Mumbai
Date: 4th May 2016