The Members of M/s Nath Industries Ltd.
1. Report on the Financial Statements
We have audited the accompanying financial statements of M/s Nath Industries Ltd whichcomprise the Balance Sheet as at March 31 2022 and the Statement of Profit and Loss forthe year then ended and a summary of significant accounting policies and otherexplanatory information including the statement of Other Comprehensive Income Cash Flowstatement and Statement of changes in Equity for the year ended and Notes to the Ind ASFinancial Statement including a summary of significant accounting policies and otherexplanatory information.
In our opinion & to the best of our information and according to the explanationgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013as amended ('the act') in the manner so required and give a true& fair view in conformity with the accounting principles generally accepted in Indiaof the state of affairs of the company as at March 31 2022 its profit including othercomprehensive income and its cash Flow and the changes in equity for the year ended onthat date.
2. Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position financial performance in accordance with theAccounting Standards referred to in section 129(1) of the Companies Act 2013 read withthe General Circular 15/2013 dated 13th September 2013 of the Ministry of CorporateAffairs in respect of Section 133 & Section 134(5) of the Companies Act 2013 and inaccordance with the accounting principles generally accepted in India. This responsibilityincludes the design implementation and maintenance of internal control 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.
3. Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted the audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on judgmentincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments we haveconsidered internal control relevant to the Company's preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on the effectiveness ofthe Company's internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made bymanagement as well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidences obtained are sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of information and according to the explanations givento us the financial statements give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India;
(a) in the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2022;
(b) in the case of the Statement of Profit and Loss of the profit for the year &its cash Flow ended on that date
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of subsection (11) of section 143 of the Companies Act 2013and on the basis of such checks of the books and records of the company as we considerappropriate and according to the information and explanations given to us we give in theAnnexure 'A' statement on the matters specified in paragraphs 3 and 4 of the Order.
8. As required by section 143(3) of the Act we report that:
(i) We have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of audit;
(ii) In our opinion proper books of accounts as required by law have been kept by theCompany so far as appears from examination of those books;
(iii) The Balance Sheet Statement of Profit and Loss and cash Flow statement dealtwith by this Report are in agreement with the books of accounts;
(iv) In our opinion the aforesaid Ind AS financial statements including the BalanceSheet Statement of Profit and Loss comply with the Accounting Standards notified underthe Act read with Rule 7 of the Company's (Accounts) Rules 2014 & read with theGeneral Circular 15/2013 dated 13 th September 2013 of the Ministry of Corporate Affairsin respect of Section 133 of the Companies Act 2013.
(v) On the basis of written representations received from the directors as on March 312022 and taken on record by the Board of Directors We report that none of the directoris disqualified as on March 31 2022 from being appointed as a director in terms ofsub-section (2) of section 164 of the Companies Act 2013.
(vi) In our opinion & to the best of our information and according to explanationgiven to us we report with respect to other matters to be included in Auditors Report inaccordance with Rule 11 of the companies (Audit & Auditors) Rule 2014 as under.
i. The company does not have any pending litigation which would impact its financialposition except Service Tax liability and excise duty as per para (vii) (b) of theAnnexure 'A' of this report.
ii. The company did not have any long term contracts including derivative contracts assuch the question of commenting any material foreseeable losses there on does not arise
iii. There has been no delay in transferring amounts required to be transferred to TheInvestors Education & Protection Fund by the company.
The Annexure 'A' referred to in paragraph 7 of our Report of even date to the membersof M/s Nath Industries Ltd. on the accounts of the company for the year ended 31stMarch 2022
i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its Property Plant & Equipment.
b) As informed to us the fixed assets have been physically verified by the managementduring the year at reasonable intervals and we were informed that no materialdiscrepancies have been noticed on such verification.
Title deeds of all immovable properties are held in the name of the company exceptimmovable properties belonging to two merged companies as under:'
1. Nath Pulp and Paper Mills Limited:- Freehold land Situate at Wahegaon Gut no 319 to324 50/2 to 50/6 37/3 At Issarwadi Gut no 54/1 to 54/5 At Pimpalwadi 26/1 Gut No 124( S No 54) Village Mudalwadi All above lands parcels are situated at Taluka PaithanDist Aurangabad Maharashtra - 431 148 Gross Value Rs. 5136.63 lakhs Net Rs. 5136.63 lakhsTotal Area 493676 sq meter Held in the name of transferor company Nath Pulp and PaperMills Limited since date of merger order dated 22nd August 2019 Reason -Transfer/Registration is under process
2. Nath Industrial Chemicals Limited:-
Lease hold land situated at Plot no 294- 295 Phase 2 Industrial Estate GIDC Vapi-Gujarat - 396 195.
Gross Value Rs. 4682.40 lakhs Net Rs. 4375.36 lakhs Area 39020 sq meters Held in thename of the transferor company Nath Industrial Chemicals Limited since date of mergerorder dated 22nd August 2019 Reason - Transfer/Registration is under process Revaluation& holding Benami Property - Not applicable for the year ended on 31/3/2022.
ii) a) Physical verification of the inventory has been conducted at reasonableintervals by the management.
Procedures of physical verification of inventory followed by the management areappropriate reasonable and adequate in relation to the size of the company and nature ofits business. No material discrepancies were noticed on physical verification
b) The company has been sanctioned working capital limits in excess of 5 crores inaggregate from banks on the basis of security of current assets. Quarterly returns orstatement filed by the company with such banks are in agreement with books of accounts.
iii) a) Company has made investments in shares provided guarantee & grantedunsecured loans & advances in the nature of loans to companies firms or limitedliability Partnerships.
Aggregate amount advanced given to parties other than subsidiaries joint ventures& associates is Rs. 21329363 & Balance outstanding at the balance sheet date isRs. 3819060/- which consist of Rs. 3720000/- being advance given for CSR Expense.
Aggregate amount of Corporate Guarantee and collateral security provided is for Rs.60000000 (Rupees Six Crores Only) to Tapovan International Trading Pvt Ltd for the loanavailed by them from Malkapur Urban Coop Bank Ltd.
b) Investments made guarantee provided & terms & conditions of all the loans& advances in the nature of loans & guarantees provided are not prejudial to thecompany's interest.
c) In respect of loans & advances in the nature of loans schedule of repayment ofprincipal & interest is not stipulated Receipt of the principal amount are regular.However receipt of interest is not regular.
d) There is no overdue amount as on 31st March 2022.
e) No loans & advances in the nature of loans has fallen due during the year.Hence question of renew or extension or granting of fresh loan do not arise.
f) Company has granted loans & advances in the nature of loans either repayable ondemand without specifying any terms or period of repayment aggregating Rs. 3720000/-being advance for CSR Expenses. Percentage to total loans granted is 97.40%.
Aggregate amounts of loans are granted to related parties as defined in section 2 (76)of the companies act 2013 Rs. 3720000/-
iv) In respect of loans investments guarantees provisions of section 185 and 186 ofthe Companies Act 2013 have been complied with.
v) The company has not accepted deposits hence question of compliance with thedirectives issued by the Reserve Bank of India and the provisions of sections 73 to 76companies Act 2013 or any other relevant provisions of the companies Act 2013 and therules framed there under are not applicable to the company
vi) a) Maintenance of cost records has been specified by CG u/s 148(1) of the CompaniesAct 2013 b) Such cost accounts & records are being made & maintained by thecompany.
vii) a) As per the records of the company and according to the information andexplanations given to us the company is regular in depositing with appropriateauthorities undisputed statutory dues including Goods & Service Tax Provident FundEmployees State Insurance income tax sales tax Service tax custom duty Excise dutycess value added tax and other statutory dues to the extent applicable to it.
b) Company has not deposited disputed Service tax & disputed Excise Duty Inrespect of Vapi Plant & Aurangabad Plant respectively as under. Appeal by the companyare pending before Appellate Authorities.
|Name of statue ||Forum where the dispute is pending ||Amount Rs ||Period to which the Amount Relates |
|Service Tax ||Unit -Rama Paper- Customs Excise & Service Tax Appellate Tribunal Ahmadabad. ||25956040 ||16.05.2008 to 31.03.2010 |
|Excise Duty ||Unit- Nath Paper - Commissioner of appeal Nasik has remanded back dispute to assessing officer ||7436435 ||2010-2011 to 2014-2015 |
|Excise Duty ||Unit- Nath Chemicals Customs Excise & Service Tax Appellate Tribunal Ahmadabad for reversal of Modvat ||884386 ||F.Y. 2004 to 2006 |
viii) There is no unrecorded transaction or income in the books of the company which issurrendered or disclosed as income during the year.
ix) a) The company has not defaulted in repayment of loans from Financial institutionor bank or debenture holders.
b) Company is not declared as willful defaulter by any bank or financial institution orany lender.
c) Company has taken term loans from Bank and term loans were applied for the purposefor which they were obtained.
d) Funds raised on short term basis have not been utilized for long term purposes.
e) Company has not taken any funds from any entity or person on account of or to meetthe obligation of its subsidiary associates or joint venture.
f) Company has not raised any loans during the year on pledge of any securities held inits subsidiary associates or joint venture.
x) The company has not raised any funds during the year by way of any public issue. orpreferential allotment or private placement or debentures
xi) a) According to the information and explanations given to us there is no fraud bythe company or on the company during the year.
b) Auditors have not filed any report under section 143 (12)of the Companies Act 2013with Central Government
c) Their no whistle-blower complaint received during the year by the company
xii) In our opinion & according to the information & explanation given to usthe company is not a nidhi company. Accordingly clause (xii) of the order is notapplicable.
xiii) Transactions with related parties are in compliance with section 177 and 188 ofthe Companies Act 2013 where ever applicable & the details have been disclosed infinancial statements as required by the applicable accounting standards.
xiv) a) In our opinion & according to information & explanation given to uscompany has internal audit system commensurate with the size of the company and thenature of its business.
b) Reports by the internal auditors has been considered by the statutory auditors.
xv) Company has not entered in to non cash transactions with Directors or personsconnected with him as referred in section 192 of the Companies Act 2013.
xvi) a) Company is not required to be registered under u/s 45-IA of the Reserve Bank ofIndia Act 1934.
b) Company has not conducted any non-banking financial or housing finance activities.
c) Company is not a Core Investment Company.
d) Group do not have any Core Investment Company.
xvii) There are no accumulated losses at the end of the financial year of the companyand neither any cash losses are incurred in such financial year or in the immediatelypreceding financial year.
xviii) There is resignation by the statutory auditors during the year.
xix) In our opinion & according to information & explanation given to us thereis no material uncertainty exists on the date of audit report. Company is capable ofmeeting its liabilities existing at the date of balance sheet and when they fall duewithin a period of one year from the balance sheet date.
xx) There is no unspent amount as per provisions of section 135 of the Companies Act2013
xxi) In our opinion & according to information & explanation given to us thereare no qualifications or adverse remarks by respective auditors in the CARO reports ofgroup companies
Annexure B to the Auditors' Report
Report on the Internal Financial control 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 M/s NathIndustries Ltd as of 31st March 2022 in conjunction with our audit of the Ind AS financialstatements of the Company for the year ended on that date.
Management 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 Control over Financial Reportingissued 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 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 deemed to beprescribed under section 143(10) of the Company Act 2013 to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls 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 were 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 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 controls systemover financial reporting.
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 the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable details accurately and fairly reflect the transactions anddispositions of the assets of the Company (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparing of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations of themanagement and directors of the Company and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisitions use or disposition of thecompany's assets that could have a material 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 31st March 2022 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 VIDYA & CO |
| ||Chartered Accountants |
| ||Firm Registration No.: Firm Reg. No. 308022E |
| ||Amit Nagar |
| ||Partner |
|Place: Mumbai ||Membership No: .056156 |
|Date: 30th May 2022 ||UDIN:- 22056156AKGCRT6561 |