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National Fittings Ltd.

BSE: 531289 Sector: Engineering
NSE: N.A. ISIN Code: INE643C01015
BSE 00:00 | 05 Mar 37.45 -1.60
(-4.10%)
OPEN

39.00

HIGH

39.00

LOW

36.75

NSE 05:30 | 01 Jan National Fittings Ltd
OPEN 39.00
PREVIOUS CLOSE 39.05
VOLUME 1663
52-Week high 43.45
52-Week low 19.45
P/E 30.45
Mkt Cap.(Rs cr) 34
Buy Price 36.80
Buy Qty 50.00
Sell Price 37.45
Sell Qty 337.00
OPEN 39.00
CLOSE 39.05
VOLUME 1663
52-Week high 43.45
52-Week low 19.45
P/E 30.45
Mkt Cap.(Rs cr) 34
Buy Price 36.80
Buy Qty 50.00
Sell Price 37.45
Sell Qty 337.00

National Fittings Ltd. (NATIONALFITTING) - Auditors Report

Company auditors report

TO THE MEMBERS OF NATIONAL FITTINGS LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the standalone financial statements of National Fittings Limited("the Company") which comprise the Balance sheet as at 31st March 2019 and thestatement of Profit and Loss the statement of changes in equity and statement of cashflows for the year then ended and notes to the financial statements including a summaryof significant accounting policies and other explanatory information (hereinafter referredto as "the standalone Ind AS financial statements").

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 March 31 2019 and profit (including other comprehensive income) its changes inequity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

The Key Audit matters Principal Audit Procedure
Evaluation of uncertain tax positions The Company has material uncertain tax positions including matters under dispute which involve significant management judgment to determine the possible outcome of these uncertain tax positions. Refer Note 2.26 to the Financial statement. We obtained understanding of key uncertain tax positions from the Management. Analyzed select key correspondences consultations by management for key uncertain tax positions & assessed management's estimate of the possible outcome of the disputed cases.
The Company's Property Plant & Equipment consists of certain immovable properties whose title has not been changed from the erstwhile Transferor company's name. Refer Note 2.21 to the Financial statement. Consequent to Merger order by the Hon'b NCLT the title deeds of certain immovable properties were yet to be transferred to the company's name from erstwhile Transferor company. The company is in the process of changing the name.

Other Information

The company's management and Board of Directors are responsible for the otherinformation. The Other information comprises the information included in the Company'sAnnual report but does not include the standalone financial statements and our auditorsreport thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusions thereon.

Responsibilities of Management 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 changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind-AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process. Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other Legal and Regulatory Requirements

1 As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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 Standalone Balance Sheet the Statement of Profit and Loss (Including OtherComprehensive Income) Changes in Equity and the Cash Flow Statement dealt with by thisReport 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 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (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".

(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 2.26 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 has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

3. With respect to the matter to be included in the Auditor's Report under Section197(16) of the Act;

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act.

For V Krish & Associates
Chartered Accountants
Firm's Registration No. 01452 S
Sd/- B. SATHISHKUMAR
Place : COIMBATORE Partner
Date : 30.05.2019 Membership No. 218445

Annexure - A to the Independent Auditors' Report

With reference to the Annexure A referred to in the Independent Auditor's Report to themembers of the Company on the standalone Ind AS financial statements for the year ended 31March 2019 we report the following:

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

(b) The Company has a regular programme of physical verification of its fixed assetsby which all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified during the year and no material discrepancies were noticedon such 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 propertiesincluded in fixed assets are held in the name of the Company except in respect of certainimmovable property the name is yet to be changed from the erstwhile Transferor company'sname consequent to Merger order by Honbl'NCLT.

In respect of immovable properties been taken on lease and disclosed as property plantand equipment in the standalone Ind AS financial statements the lease agreements are inthe name of the Company.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. The Company has maintainedproper records of inventory. The discrepancies noticed on verification between thephysical stock and the book records were not material.

(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 theAct. Accordingly the provisions of clause 3(iii) (a) (b) and (c) of the Order are notapplicable to the Company.

(iv) The Company has not granted any loans made investments issued guarantees orprovided any security to any Director or any other person as specified in the Act andhence this clause is not applicable to the Company for this year.

(v) The Company has not accepted any deposits from the public within the meaning of thedirectives issued by the Reserve Bank of India provisions of Section 73 to 76 of the Actany other relevant provisions of the Act and the relevant rules framed thereunder.

(vi) As per information and explanation given by the management The Central Governmenthas not prescribed the maintenance of cost records under Section 148(1) of the Act.

(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 Employees' StateInsurance Income-tax Sales tax Service tax Goods and Services tax duty of Customsduty of Excise Value added tax Cess and other material statutory dues have generallybeen regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Income-tax Sales taxService tax Goods and Services tax duty of Customs duty of Excise Value added taxCess and other material statutory dues were in arrears as at 31 March 2019 for a periodof more than six months from the date they became payable.

(b) According to the information and explanations given to us and based on Managementrepresentation there are no dues of Income-tax or Sales tax or Service tax or Goods andServices tax or duty of Customs or duty of Excise or Value added taxes which have not beendeposited by the Company on account of disputes except for the below:

Name of the Statute Nature of Dues Amount (Rs. Lacs) Forum where the dispute is pending
Central Excise Act 1944 Excise Duty 0.12 High Court
Central Excise Act 1944 Excise Duty 75.74 CESTAT
Employees State Insurance Act 1948 Insurance Premium 1.53 (Against 6.80 demanded 5.27 has been paid) The Honourable Employees State Insurance Court

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks.

(ix) In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) and term loans during the year. Accordingly paragraph 3(ix)of the Order is not applicable to the Company.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no material fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the course of our audit.

(xi) In our opinion and according to the information and explanations given to us andbased on examination of the records of the Company the Company has paid/providedmanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us in our opinion theCompany is not a Nidhi Company as prescribed under Section 406 of the Act.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone Ind AS 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 of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.

(xvi) According to the information and explanation given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

(xvi) According to the information and explanation given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For V Krish & Associates
Chartered Accountants
Firm's Registration No. 01452 S
Sd/- B. SATHISHKUMAR
Place : COIMBATORE Partner
Date : 30.05.2019 Membership No. 218445

Annexure - B to the Independent Auditor's Report

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 NationalFittings Limited ("the Company") as of March 31 2019 in conjunction withour audit of the Standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India .Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over the financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorities of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of the 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 the changes in conditions orthat the 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 31 March 2019 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 V Krish & Associates
Chartered Accountants
Firm's Registration No. 01452 S
Sd/- B. SATHISHKUMAR
Place : COIMBATORE Partner
Date : 30.05.2019 Membership No. 218445

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