TO THE MEMBERS OF NILACHAL REFRACTORIES LIMITED
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying financial statements of Nilachal RefractoriesLimited (the Company") which comprise the Balance Sheet as at 31 March2015 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
MANAGEMENTS RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
The Companys Board of Directors is responsible for the preparation andpresentation of these 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 Indiaincluding 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 recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
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 performingprocedures to obtain audit evidence about the amounts and the disclosures in the financialstatements. The procedures selected depend on the auditors judgment including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error. In making those risk assessments the auditor considers internalfinancial control relevant to the Companys preparation of the financial statementsthat give a true and fair view in order to design audit procedures that are appropriate inthe circumstances but not for the purpose of expressing an opinion on whether the Companyhas in place an adequate internal financial controls system over financial reporting andthe operating effectiveness of such controls. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Companys 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 qualified audit opinion on the financial statements
BASIS FOR QUALIFIED OPINION
The Company has not provided for depreciation as required under sub section (2) ofsection 123 which constitutes a departure from the Accounting Standards referred to inSection 133 of the Act. However in absence of necessary information being made availableto us impact of the same on the loss for the year of the company and corresponding effecton Fixed assets cannot be ascertained and quantified.
The company has made provision for gratuity and leave encashment liability as per theprovisions of the relevant act and not as per actuarial valuation which constitutes adeparture from the Accounting Standards referred to in Section 133 of the Act. However inabsence of necessary information being made available to us impact of the same on theloss for the year of the company and corresponding effect on liability cannot beascertained and quantified.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis for QualifiedOpinion paragraph the financial statements give the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
In the case of the Balance Sheet of the state of affairs of the Company as at31 March 2015
In the case of Statement of Profit and Loss of the Loss for the year ended onthat date; and
In the case of the Cash Flow Statement of the cash flows for the year ended onthat date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditors Report) Order 2015 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act and 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 statement on the matters specified in the paragraph3 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 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 financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of theCompanies(Accounts) Rules 2014 except for the effects of the matters described in theBasis for Qualified Opinion paragraph.
(e) On the basis of the written representations received from the Directors as on 31March 2015 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2015 from being appointed as a director in terms of Section164 (2) of the Act; and
(f) 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 explanations given to us:
i. The Company has filed a writ petition in Honorable High Court of Kolkata againstSEBI Circular no. CIR/MRD/DSA/31/2013 dated September 302013 pursuance to arbitraryactions taken for reasons beyond the control of Company.
ii. The Company has made no provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts as there are no such contracts prevailing ; and
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
| ||For P Mukhopadhyay & Co |
| ||Chartered Accountants |
| ||Firms registration number: 302085E |
| ||Subhas Mukhopadhyay |
|Place: Kolkata ||Partner |
|Date: 31st May 2015 ||Membership number: 050384 |
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT OF NILACHAL REFRACTORIES LTD.
The Annexure referred to in our Independent Auditors Report to the members of theCompany on the financial statements for the year ended 31 March 2015 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets
(b) All the fixed assets have been physically verified by the management at reasonableintervals and no material discrepancies were noticed on such verification.
(ii) (a) The inventories have been physically verified at reasonable intervals by themanagement.
(b) In our opinion and according to the information and explanations given to us theprocedure of physical verification of inventories followed by the management arereasonable 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 is maintaining proper records of its inventories and no material discrepancieshave been noticed on physical verification of stocks as compared to book records.
(iii) (a) The Company has not granted any loans secured or unsecured to companiesfirms or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the sub-clauses (a) and (b) are not applicable to thecompany.
(iv) In our opinion and according to the information and explanations given to usthere is an adequate internal control system commensurate with the size of the Company andthe nature of its business with regard to purchase of inventory fixed assets and for thesale of goods and services. During the course of our audit we have not observed anycontinuing failure to correct major weakness in internal control system.
(v) According to the information and explanation given to us the Company has notaccepted any deposits in terms of directives issued by the Reserve Bank of India and theprovisions of section 73 to 76 or any other relevant provisions of the Act and the rulesframed there under.
(vi) We are informed that the Central Government has not prescribed the maintenance ofcost records under section 148(1) of the Act for any of the products dealt in by theCompany.
(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 income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities but there have been few instances of delayed deposit but weare informed that there are no arrears of outstanding statutory dues as at the last day ofthe financial year under audit for a period of more than six months from the date theybecame payable.
(b) According to the information and explanations given to us there are no materialdues of wealth tax duty of customs and cess which have not been deposited with theappropriate authorities on account of any dispute. However according to information andexplanations given to us the following dues of income tax sales tax service tax andvalue added tax have not been deposited by the Company on account of disputes:
|Financial Year to which the matter pertains ||Forum where matter is pending ||Amount in Lacs |
|1999-00 to 2001-02 ||Additional Commissioner of Sales TaxCentral Zone OrissaCuttack (Sales Tax) ||72.18 |
|2001-02 ||Additional Commissioner of Commercial Taxes Range-II Orissa Cuttack (Entry Tax) ||3.38 |
|2002-03 ||Joint Commissioner of Commercial Tax Angul Range AngulOrissa (Entry Tax) ||0.79 |
|2002-03 ||Joint Commissioner of Commercial Taxes Angul Range Angul Orissa(sales Tax) ||24.10 |
(c) According to the information and explanations given to us there were no amountswhich were required to be transferred to the investor education and protection fund inaccordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and rulesmade there under.
(viii) The Company have accumulated losses at the end of the financial year but whichare less than fifty percent of its net-worth and has incurred cash losses in the financialyear under review and also in the immediately preceding financial year.
(ix) According to the information and explanations given to us the Company has notdefaulted in repayment of dues to financial institutions or banks.
(x) In our opinion and according to the information and the explanations given to usthe Company has not given any guarantee for loans taken by others from banks or financialinstitutions.
(xi) According to the information and explanations given to us the term loans obtainedin earlier years have been applied for the purpose for which the loan were obtained.
(xii) According to the information and explanations given to us no material fraud onor by the Company has been noticed or reported during the course of our audit.
| ||For P Mukhopadhyay & Co. |
| ||Chartered Accountants |
| ||Firms registration number 302085E |
| ||Subhas Mukhopadhyay |
|Place: Kolkata ||Partner |
|Date; 31st May 2015 ||Membership number: 050384 |