TO THE MEMBERS OF NATIONAL OXYGEN LIMITED
Report on the Audit of the Financial Statements
1. We have audited the accompanying financial statements of NATIONAL OXYGEN
LIMITED ("the Company") which comprise the Balance Sheet as at March312022 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and notesto the financial statements including a summary of significant accounting policies andother explanatory information. In our opinion and to the best of our information andaccording to the explanations given to us the aforesaid financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and otheraccounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022its Profit(including other comprehensive income) its cash flows and the changes in equityfor the year ended on that date.
Basis for Opinion
2. We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the "Codeof Ethics" issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the financial statements.
Key Audit Matters
3. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended March31 2022. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. For each matter below our description of how our auditaddressed the matter is provided in that context. We have determined the matters describedbelow to be the key audit matters to be communicated in our report. We have fulfilled theresponsibilities described in the
Auditor's responsibilities for the audit of the financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the financial statements. The results of our audit procedures includingthe procedures performed to address the matters below provide the basis for our auditopinion on the accompanying financial statements.
|S.No. Key Audit Matter ||Auditor's Response |
|1 Valuation of trade receivables ||How our audit addressed the key audit matter: |
|As disclosed in Note 8 to the financial statements ||We obtained an understanding of the Company's credit policy for trade receivables and evaluated the processes for identifying impairment indicators. We have reviewed and tested the ageing of trade receivables. We have reviewed management's assessment on the credit worthiness of selected customers for trade receivables. We further discussed with the key management on the adequacy of the allowance for impairment recorded by the Company and reviewed the supporting documents provided by management in relation to their assessment. We have also reviewed the adequacy and appropriateness of the impairment charge based on the available information. |
|. The Company assesses periodically and at each financial year end the expected credit loss associated with its receivables. When there is expected credit loss impairment the amount and timing of future cash flows are estimated based on historical current and forward-looking loss experience for assets with similar credit risk characteristics. We focused on this area because of its significance and the degree of judgement required to estimate the expected credit loss and determining the carrying amount of trade Receivables. ||Our Observation: |
| ||Based on our audit procedures performed we found management's assessment of the recoverability of trade receivables to be reasonable and the disclosures to be appropriate. |
Information Other than the Financial Statements and Auditor's Report Thereon
4. The Company's Board of Directors is responsible for the other information. The otherinformation comprises of the Board's Report including its Annexures and other reportplaced by the management before the members. The Board's Report is expected to be madeavailable to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other inform
ation we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the FinancialStatements
5. The Company's management and Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance(including other comprehensive income) changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended. 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 theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
6. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
7. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
8.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.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditor's Report) Order 2020 issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Act (hereinafterreferred to as the "Order") we give in "Annexure A" a statement onthe matters specified in paragraphs 3 and 4 of the Order.
10. 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 (including Other ComprehensiveIncome) Statement of Changes in Equity and Statement of Cash Flow dealt with by thisReport are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;
e) On the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on March 312022 from being appointed as a director in terms of Section 164 (2) of the Act;
f) With respect to the adequacy of internal financial controls over financial reportingof the company and the operating effectiveness of such controls refer to our separateReport in Annexure B to this report.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
h) 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 No. 41(A) to the financialstatements;
(ii).The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses; and
(iii).There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company. Therehas been no delays in transferringamounts to the Investor Education and Protection Fund by theCompany.
(iv).a) The management has represented that to the best of it's knowledge and beliefother than as disclosed in the notes to the accounts if any no funds have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other persons or entities including foreignentities ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediaries shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;
b) The management has represented that to the best of it's knowledge and beliefother than as disclosed in the notes to the accounts if any no funds have been receivedby the Company from any persons or entities including foreign entities ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures we have considered reasonable and appropriate in thecircumstances nothing has come to their notice that has caused them to believe that therepresentations under sub-clause (i) and (ii) contain any material mis-statement. i) TheCompany has not declared or paid any dividend during the year hence requirement forcompliance with Section 123 of the Act is not applicable.
j) MCA Vide its notification dated 31.03.2022 has extended the requirement of.implementation of audit trail software to financial year commencing on or after 1st April.2023 accordingly reporting under Rule 11 (g) of Companies (Audit and Auditors).Amendment Rule 2021 is not applicable.
For J K V S & Co.
Firm Regn No. 318086E Place: New Delhi Date : May 212022 sd/-(SAJAL GOYAL) PartnerMembership No. 523903.
ANNEXURE - A TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 9 of the Independent Auditors' Report of even date to themembers of NATIONAL OXYGEN LIMITED on the financial Statements as of and for the yearended March 31 2022)
We report that: i) In respect of its Property Plant and Equipment and its IntangibleAssets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its property plant and equipment and for itsIntangible Assets.
b) The Property Plant and Equipment have been physically verified by the managementwherever possible at the close of the year as confirmed by the managementand no materialdiscrepancy were noticed on such verification. In our opinion the frequency ofverification of fixed assets is reasonable having regards to the size of the company andnature of its assets.
c) According to the information and explanations given to us and on the basis of ourexamination title deeds of the immovable property (other than properties where theCompany is the lessee and the lease agreements are duly executed in favour of the lessee)are held in the name of the Company.
d) The Company has not revalued its property plant and equipment (including right ofuse assets) and intangible assets during the year. Therefore the provisions of clause3(i)(d) of the Order are not applicable to the Company. e) According to information andexplanations given by the management no proceedings have been initiated or are pendingagainst the Company for holding any benami property under the Prohibition of BenamiProperty Transactions Act 1988 and rules made thereunder. Therefore provisions of clause3(1)
(e) of the Order are not applicable to the Company
ii. In respect of its Inventories:
a) As explained to us physical verification has been conducted by the managementwherever possible at all its locations at reasonable intervals during the year in respectof inventory of raw materials and finished goods. The discrepancies noticed on physicalverification of inventories as compared to book records were not material and the samehave been properly dealt with in the books of account.
b) Based on our examination of the books of accounts of the Company the Company hasbeen sanctioned working capital limits from banks or financial institutions during theyear. Quarterly return / statementhave been filed by the company and no materialdiscrepancies were noticed.
iii. According to the information and explanations given to us the Company has notmade investments in provided any guarantee or security or granted any loans or advancesin the nature of loans secured or unsecured to companies firms limited liabilitypartnership or any other parties during the year. Therefore the provisions of clause3(iii)(a) to (iii)(f) of the said Order are not applicable to the Company.
iv. As per the information and explanations provided to us the company has compliedwith the provisions of section 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and security provided by the company;
v. In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits or amount which are deemed to be deposits to whichthe directives of the Reserve Bank of India and the provisions of Section 73 to 76 or anyother relevant provisions of the Companies Act 2013 and the rules framed there underapply;
vi. We have broadly reviewed the books of accounts maintained by Company in respect ofproduct where pursuant to the rule made by the Central Government of India themaintenance of cost records has been prescribed under section 148 (1) of the Companies Act2013 and are of the opinion that prima faciethe prescribed records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determine whether they are accurate or complete.
vii. According to the information and explanations given to us and the records of theCompany examined by us: a) The Company has generally been regular in depositing amountsdeducted/accrued in the books of accounts in respect of undisputed statutory duesincluding Goods and Services Tax provident fund employees' state insurance income-taxsales-tax service tax duty of customs duty of excise value added tax cess and anyother material statutory dues as applicable. There was no undisputed outstandingstatutory dues as at the year end for a period of more than six months from the date theybecame payable. b) According to the information and explanations given to us and based onthe records of the company examined by us the amount of outstanding dues of Goods andServices Tax provident fund employees' state insurance income-tax sales-tax servicetax duty of customs duty of excise value added tax cess and any other materialstatutory dues which have not been deposited with the appropriate authorities on accountof any dispute are stated below:
|Name of the Statute ||Nature of Dues ||Amount Rs in Lacs ||Period to Forum where which the dispute amount relates pending |
|Central Excise Act 1944 ||Excise duty demanded on the facility charges being charged ||1.06 ||Sept'2000 to CESTAT Aug'2001 Southern Bench |
|Central Excise Act 1944 ||Departmental appeal against the partial favourable order passed by Commissioner (Appeals) for Excise duty demanded on the rental / facility charges being charged ||4.91 ||Sept'2000 to CESTAT Aug'2001 Southern Bench |
|Central Excise Act 1944 ||Departmental appeal against the favourable order passed by CESTAT in respect of 8% duty demanded on supply to ISRO under Nil rate of duty while availing Cenvat Credit ||5.71 ||2000-01 Madras High Court |
|Central Excise Act 1944 ||Excise duty demanded on the Cylinder Repair charges being charged ||0.20 ||Sept'2006 to CESTAT Mar'2007 Southern Bench |
|Central Excise Act 1944 ||Excise duty demanded on the Cylinder Holding / facility charges being charged ||1.67 ||May'2006 to CESTAT Aug'2006 Southern Bench |
|Service Tax ||Service Tax demanded on the Lease charge income received ||11.32 ||2002-03 & CESTAT 2003-04 Southern Bench |
|Service Tax ||Service Tax demanded on the Lease charge income received ||6.69 ||2004-05 & CESTAT 2005-06 Southern Bench |
|Customs Act 1961 ||Differential Customs Duty on Import of Second hand Plant (including Interest & Penalty) ||88.24 ||1994-95 CESTAT Southern Bench |
|Service Tax ||Service Tax on GTA claimed by the Deptt. which is contested by the company ||3.86 ||Apr'2012 to Madras High Mar'2013 Court |
|Income Tax Act 1961 ||Disallowance of expenses ||2.09 ||AY-2012-13 Dy. Commissioner of Income Tax |
|Income Tax Act 1961 || |
Disallowance made by the Assessing Officer which are not justified. Also brought forward Depreciation Loss not fully set off.
AY 2018-19 CIT (Appeals)
|Income Tax Act 1961 ||Set off LTCG against Brought forward losses not properly considered resulting in demand. ||110.85 ||AY 2019-20 Dy. Commissioner of Income Tax |
viii. According to the information and explanation given to us and as represented bythe management there were no transactions not recorded in the books of account whichhave been surrendered or disclosed as income in the tax assessments under the Income TaxAct 1961 (43 of 1961) during the year. Therefore provisions of clause 3(viii) of theOrder are not applicable to the Company.
ix. a) According to the information and explanations give to us and based on ourexamination of .the records of the Company the Company has not defaulted in repayment ofloans or .borrowings to any financial institutions banks or debenture holders. Furtherthe Company .has not taken any loan from the government.
b) Basis the information and explanation provided to us the Company has not beendeclared a wilful defaulter by any bank or financial institution or other lender.
c) According to the information and explanations given to us and based on ourexamination of the records of the Company the term loans availed/ amounts raised by issueof debt securities during the year have been utilized for the purpose for which it wasobtained.
d) Based on the information and explanation given to us and based on our examination ofthe records of the Company short term loans have not been utilized by the Company forlong term purposes.
e) Based on the information and explanation given to us and the books of accountexamined .by us the Company does not have any subsidiaries associates or joint ventures.Therefore .provisions of clause 3(ix)(e )and 3(ix)(f) of the Order are not applicable tothe Company
x. a) According to the information and explanation given to us by the management theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) during the year. Thus the provisions of clause 3(x) of theorder are not applicable to the Company.
b) During the year the Company has made preferential allotment of RedeemablePreference shares by way of alteration of terms of Compulsorily Convertible PreferenceShares which were issued during the previous year by converting the unsecured loan availedby the Company and has complied with the provisions of section 42 of the Companies Act2013. As per the information and explanations provided to us the amount raised at thetime of availing the said Loan was used for the purposes for which the funds were raised.
xi. a) Based upon the audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and according to the information andexplanations given to us we have neither come across any instance of fraud by the Companyor on the Company noticed or reported during the year nor have we been informed of anysuch case by the management.
b) We have not come across any instance of fraud therefore report under subsection 12of section 143 of the Companies Act2013 is not required to be filed by us in Form ADT-4as prescribed under rule 13 of the Companies (Audit and Auditors) Rules 2014 with the.Central Government. c) According to the information and explanations given to us thereare no whistle blower.complaints received by the company during the year.
xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly the provision of clause 3
(xii) of the Order are not applicable to the company.
xiii. According to the information and explanations provided to us and based on ourexamination of the records of the Company and as confirmed by the management thetransaction entered into with the related parties are in compliance with section 188 ofCompanies Act 2013 where applicable and the details have been disclosed in thefinancial statements in accordance with the applicable accounting standards. Section 177of the Act is not applicable to the company.
xiv. a) In our opinion and based on our examination the Company has an internal auditsystem commensurate with the size and nature of its business.
b) We have considered the internal audit reports of the Company issued till date forthe period under audit.
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 any non-cashtransactions with directors or persons connected with him. Accordingly the provisions ofthe clause 3(xv) of the Order are not applicable to the company.
xvi. a) The Company is not required to be registered under section 45-IA of the ReserveBank of .India Act 1934. Accordingly the provisions of the clause 3(xvi) of the Order arenot.applicable to the company.
b) In our opinion the Company has not conducted any Non-Banking Financial or HousingFinance activities during the year. Therefore the provisions of clause 3(xvi)(b) of theOrder are not applicable to the Company.
c) In our opinion the Company is not a Core Investment Company (CIC) as defined in theregulations made by the Reserve Bank of India. Therefore the provisions of clause3(xvi)(c) of the Order are not applicable to the Company.
d) According to the representations given by the management the Group does not haveany CIC as part of the Group. Therefore the provisions of clause 3(xvi)(d) of the Orderare not applicable to the Company
xvii.The Company has not incurred any cash loss in the current financial year as wellas in the immediately preceding financial year.
xviii.There has been no resignation of statutory auditors during the year. Thereforethe provisions of clause 3(xviii) of the Order are not applicable to the Company
xix. According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realization of financial assets and paymentof financial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit report thatthe Company is not capable of meeting its liabilities existing at the date of balancesheet as and when they fall due within a period of one year from the balance sheet date.We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.
xx. Based on the criteria prescribed for applicability under the Act the Company doesnot attract the provisions of Section 135 of the Act. Therefore the provisions of clause3(xx) (a) and (b) of the Order are not applicable to the Company.
| ||For J K V S & Co. |
| ||Chartered Accountants |
| ||Firm Regn No. 318086E |
| ||Sd/- |
| ||(SAJAL GOYAL) |
|Place: New Delhi ||Partner |
|Date : May 212022 ||Membership No. 523903. |
| ||UDIN: 22523903AJJNOR3447 |