To the Board of Directors of NCL INDUSTRIES LIMITED
Report on the Audit of the Standalone Ind AS Financial Statements
We have audited the standalone Ind AS financial statements of NCLINDUSTRIES LIMITED ("the Company") which comprises the balance sheet as at 31stMarch 2021 and the statement of Profit and Loss (including other comprehensive income)statement of changes in equity and statement of cash flows for the year then endedaccountingstatements including a summary of significant policies and other explanatoryinformation (hereinafter referred to as " Ind AS financial statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 2021 its profit (including other comprehensive income) changes in equityand 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) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance 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 Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter
We draw attention to Note No. 46 of the standalone Financial Statementsregarding impact of COVID-19 pandemic. The situation continues to be uncertain and theCompany is evaluating the situation on an ongoing basis with respect to the challengesfaced.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements for thefinancial year ended March 31 2021. These matters were addressed in the context of ouraudit of the Standalone Financial Statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters.
|Key Audit Matters ||Auditor's response |
|Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard) Principal Audit Procedures We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: The application of the new revenue accounting standard involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date ||Principal Audit Procedures: |
| ||We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows: The application of the new revenue accounting standard involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings. We reviewed the collation of information and the logic of the report generated from the budgeting system used to prepare the disclosure relating to the periods Annual Report 20-21 over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. |
The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included inManagement Discussion and Analysis Board's Report including Annexure to Board'sReport Business Responsibility Report Corporate Governance and Shareholder'sInformation but does not include the financial statements and our auditor's reportthereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information; we are required to report that fact. We have nothing to report inthis regard.
Responsibilities of Management and Those Charged with Governance forthe Financial Statements
The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the 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 changes in equity and cash flowsof the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under section 133 of the Act.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting doubt on the Company's ability to continuerecordsrelevant to the preparation and presentation of the financial statements that give a trueand fair view and are free from material misstatement whether due to fraud or error.
In preparing the financial statements the Board of Directors isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative 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 deficiencies ininternal the Financial Statements
Our objectives are to obtain reasonable assurance about whether thefinancial 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection 143(3) (i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to standalonefinancial statements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast as significant agoing concern. If we conclude that a material uncertainty exists we are required to drawattention in our auditor's report to the related disclosures in the standalonefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant identifyanysignificant during our audit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial state -ments of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
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 of the Companies Act 2013 we give in the Annexure A a statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet the Statement of Profit and the Cash FlowStatement dealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid Standalone Financial Statements complywith the Accounting Standards specified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;
e) On the basis of the written representations received from thedirectors as on March 31 2021 taken on record by the
Board of Directors none of the directors is disqualified as on March31 2021 from being appointed as a director in terms of Section 164 (2) of the Act;
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B".
g) In our opinion the managerial remuneration for the year ended March31 2021 has been paid/provided by the Company to its directors in accordance with theprovisions of section 197 read with Schedule V to the Act;
h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:
i. The pending litigations of the company that might impact thefinancial position of the company are disclosed in the standalone financial statementsRefer note no. 33 to the financial statements;
ii. The company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
iii. The Company transferred an amount of Rs. 19.86 lakhs being theunpaid dividend to the Investor Education and Protection Fund on 12-10-2020 and26-11-2020.There has been no delay in transferring amounts to the Investor Education andProtection Fund by the Company during the year ended March 31 2021.
Annexure - A to the Auditors' Report
The Annexure A referred to in our Independent Auditor's Report tothe members of the Company on the Standalone financial statements for the year ended 31March 2021 we report that: i. In respect of its fixed assets:
(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of itsfixed assets by which fixed assets are verified during the year. In accordance with thisprogramme fixed assets were verified during the year and no material were noticed on suchverification. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its assets.
(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
ii. In respect of Inventories:
(a)The inventories have been physically verified by the managementduring the year. In our opinion the frequency of such verification is reasonable.
(b)The procedures of physical verification of inventories followed bythe management are reasonable and adequate in relation to the size of the Company and thenature of its business.
(c)The Company has maintained proper records of the said stocks. Asexplained to us there were no material discrepancies noticed on physical verification ofinventory as compared to the book records.
iii. The Company has not granted any loans secured or unsecured tocompanies firms or other parties covered in the register maintained under section 189 ofthe Companied Act 2013 (the Act'). Consequently clauses 3 (iii) (a) and 3(iii) (b) of the Order are not applicable to the Company.
iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct with respect to the loans investments guarantees and securities.
v. In our opinion and according to the information and explanationsgiven to us the Company has complied with the directives issued by the Reserve Bank ofIndia and the provisions of Section 73 to 76 or any other relevant provisions of
vi. the Act and the rules framed there under in respect of depositsaccepted. We are informed that no order was passed by the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any Court or Tribunal
vii. We have broadly reviewed the books of account relating tomaterials labour and other items of cost maintained by the Company pursuant to the Rulesmade by the Central Government for the maintenance of cost records under subsection(1) of Section 148 of the Act in respect of the activities carried on by the Companywherever applicable and we are of the opinion that prima facie the prescribed accounts andrecords have been made and maintained. However we have not made a detailed examination ofthe records. viii. In respect of statutory dues:
a) According to the information and explanations given to us and on thebasis of examination of the records of the Company amounts deducted/ accrued in the booksof account in respect of undisputed statutory dues including provident fundemployees' state insurance income-tax Goods and service tax duty of customs cessand other material statutory dues have been regularly deposited during the year by theCompany with the appropriate authorities. According to the information and explanationsgiven to us no undisputed amounts are payable in respect of income tax Goods andservices tax duty of customs cess and other material statutory dues were in arrears asat 31 March 2021 for a period of more than six months from the date they became payable.
b) According to the information and explanations given to us the duesof Sales tax Service tax Duty of Custom and Duty of Excise which have not been depositedon March 31 2021 on account of any dispute are as follows:
|Name of the statute ||Name of the dues ||Amount disputed (In Rs.) ||Period ||Forum where dispute is pending |
|Sales Tax and VAT Laws ||Sales Tax and VAT ||4.26 ||1996-1997 ||Sales Tax Appellate Tribunal |
|Sales Tax and VAT Laws ||Sales Tax and VAT ||16.88 ||1999-2000 ||Sales Tax Appellate Tribunal |
|Sales Tax and VAT Laws ||Sales Tax and VAT ||37.26 ||2013-2014 ||Sales Tax Appellate Tribunal |
|Central Excise Act 1944 ||Central Excise ||80.85 ||2009-2010 ||CESTAT |
|Central Excise Act 1944 ||Central Excise ||2.00 ||2016-17 ||CESTAT |
|Central Excise Act 1944 ||Central Excise ||1.00 ||2015-16 ||CESTAT |
|Finance Act 1994 ||Service Tax ||63.85 ||2015-16 ||Commissioner of Appeals |
|Central Excise Act 1944 ||Central Excise ||977.68 ||2013-2014 ||CESTAT |
|Finance Act 1994 ||Service Tax ||14.81 ||2013-2014 ||CESTAT |
|Finance Act 1994 ||Service Tax ||22.46 ||2013-2014 ||CESTAT |
|Finance Act 1994 ||Service Tax ||24.92 ||2014-2015 ||CESTAT |
|Local Areas Act 2001 ||Entry Tax ||0.58 ||2011-2012 ||Sales Tax Appellate Tribunal |
|Local Areas Act 2001 ||Entry Tax ||2.22 ||2012-13 ||Sales Tax Appellate Tribunal |
|Local Areas Act 2001 ||Entry Tax ||1.68 ||2013-14 ||Sales Tax Appellate Tribunal |
|Local Areas Act 2001 ||Entry Tax ||78.99 ||2014-15 ||Sales Tax Appellate Tribunal |
|Local Areas Act 2001 ||Entry Tax ||192.60 ||2015-16 ||Sales Tax Appellate Tribunal |
|Sales Tax and VAT Laws ||Sales Tax and VAT ||77.01 ||2010-2011 ||Sales Tax Appellate Tribunal |
|Local Areas Act 2001 ||Entry Tax ||333.29 ||2016-2017 ||Sales Tax Appellate Tribunal |
|Customs Act 1962 ||Customs Duty ||42.19 ||2013-2014 ||Appellate Commissioner of Cus- toms & Central Excise (Appeals) |
|Finance Act 1994 ||Service Tax ||18.09 ||2015-2016 ||CESTAT |
|Customs Act 1962 ||Customs Duty ||87.79 ||2013-14 ||CESTAT |
|Finance Act 1994 ||Service Tax ||221.69 ||2010-2013 ||CESTAT |
|Finance Act 1994 ||Service Tax ||1242.83 ||2006-07 to 2017-18 ||CESTAT |
ix. According to the information and explanations given to us and onthe basis of examination of the records the company has not defaulted in the repayment ofloans along with interest to the Banks.
x. The Company did not raise any money by way of initial public offeror further public offer (including debt instruments) and term loans during the year.Accordingly paragraph 3 (ix) of the Order is not applicable.
xi. According to the information and explanations given to us nomaterial fraud by the company or on the Company by its officers or employees has beennoticed or reported during the course of our audit.
xii. According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid/provided formanagerial remuneration is in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.
xiii. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.
xiv. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards;
xv. According to the information and explanations give to us and basedon our examination of the records of the Company the Company has not made privateplacement of Equity Shares during the Year.
xvi. According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or directors of its subsidiary Companies or personsconnected with them. Accordingly provisions of section 192 are not applicable.
xvii. The Company is not required to be registered under section 45-IAof Reserve Bank of India Act 1934.
Annexure - B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of M/s. NCL INDUSTRIES LIMITED ("the Company") as of 31 March 2021 inconjunction with our audit of Ind AS financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient adherence to company's policies the safeguardingof its 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.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial 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 deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial that the internal financial control over financial reporting may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
| ||FOR VENUGOPAL & CHENOY |
| ||CHARTERED ACCOUNTANTS |
| ||FRN: 004671S |
|Place : Hyderabad ||(P. V. SRI HARI) |
|Date : 25.06.2021 ||Partner |
| ||Membership No.021961 |
| ||UDIN: 21021961AAAAFQ3055 |