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NBI Industrial Finance Company Ltd.

BSE: 538388 Sector: Financials
NSE: NBIFIN ISIN Code: INE365I01012
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NBI Industrial Finance Company Ltd. (NBIFIN) - Auditors Report

Company auditors report

To the Members of NBI Industrial Finance Company Limited Report on the FinancialStatements

We have audited the accompanying financial statements of NBI Industrial Finance CompanyLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss and the Cash F low statement for the yearthen ended and a summary of significant accounting policies and other explanatoryinformation.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for matters stated in Section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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.

Auditors' Responsibility

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 performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors' 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. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 and its profit and its cash flows for the year ended on that date.

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 Act we give in the "Annexure A" a statement on the matters specified inparagraphs 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 financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;

(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164 (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 does not have any pending litigations which would impact its financialposition;

ii. The Company did not have any long-term contracts including derivative contracts forwhich 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.

iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management - Refer Note 28.

For Lakhotia & Co.

Chartered Accountants

Firm's Registration Number: 313149E

Naresh Lakhotia

Partner

Membership Number: 51249 Kolkata

Dated: 30th May 2017

"Annexure A" to Independent Auditors' Report

Statement referred to in our Independent Auditors' report to the members of the Companyon the financial statements for the year ended 31 st March 2017.

i. (a) The Company has maintained proper records showing full particulars includingquantitative

details and situation of its fixed assets.

(b) The fixed assets have been physically verified by the management at reasonableintervals and no material discrepancies were noticed on such verification.

(c) The Company does not have any immovable property and as such Clause 3(i)(c) of theOrder is not applicable to the Company.

ii. The Company does not have any inventory and as such clause 3(ii) of the Order isnot applicable to the Company.

iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the register maintained underSection 189 of the Act and as such clauses 3(iii)(a)3(iii)(b) and 3(iii)(c) of the Orderare not applicable.

iv. According to the information and explanations given to us the company has notgiven any loan or guarantee or provided any security covered by the provisions of Section185 and in respect of loans investments guarantees and security the company hascomplied with provisions of Section 186 of the Act to the extent applicable.

v. The Company has not accepted deposits from the public.

vi. The Central Government has not prescribed for the maintenance of cost records underSection 148(1) of the Act.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company has generally been regular indepositing undisputed statutory dues including provident fund employees state insuranceincome-tax sales sax service tax duty of customs duty of excise value added tax cessand any other material statutory dues as applicable with the appropriate authorities.

(b) As at 31st March 2017 according to the records of the Company and theinformation and explanations given to us there were no dues of income tax sales taxservice tax duty of customs duty of excise and value added tax that have not beendeposited on account of any dispute.

viii. Based on the information and explanations given to us by the management theCompany has not defaulted in repayment of loan or borrowing from banks. There were noloans or borrowings from any financial institution Government or dues to debentureholders.

ix. The company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and any term loans during the year and as suchclause 3(ix) of the Order is not applicable to the Company.

x. During the course of our examination of the books of account carried out inaccordance with the generally accepted auditing practices in India we have neither comeacross any instance of fraud by the Company or on the Company by the officers oremployees either noticed or reported during the year nor have we been informed of suchcase by the management.

xi. Managerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. The company is not a Nidhi company and as such clause 3(xii) of the Order is notapplicable to the Company.

xiii. According to the information and explanations given to us and records of theCompany transactions with related parties are in compliance with sections 177 and 188 ofthe Act where applicable and details of such transactions have been disclosed in thefinancial statements as required by the applicable accounting standards.

xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review.

xv. According to the information and explanations given to us the company has notentered into any non-cash transactions with directors or persons connected with them.

xvi. The company is required to be registered under section 45-IA of the Reserve Bankof India Act 1934 and the registration has been obtained.

For Lakhotia & Co.

Chartered Accountants

Firm's Registration Number: 313149E

Naresh Lakhotia

Partner

Membership Number: 51249 Kolkata

Dated: 30th May 2017

"ANNEXURE B" TO THE INDEPENDENT AUDITORS' REPORT ON THE FINANCIAL STATEMENTSOF NBI INDUSTRIAL FINANCE COMPANY LIMITED Report on the Internal Financial Controls underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financial reporting of NBIIndustrial Finance Company Limited ("the Company") as of March 31 2017 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's 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 Controls Over Financial Reportingissued by the Institute of Chartered Accountants of lndia("ICAI"). 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 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 ICA1 and deemedto 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 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 auditors' judgement 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 detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition 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.

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 March 31 2017 based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".

For Lakhotia & Co.

Chartered Accountants

Firm's Registration Number. 313149E

Naresh Lakhotia

Partner

Membership Number: 51249 Kolkata

Dated: 30th May 2017