REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Nelcast Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2021 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and Cash Flow Statement for the year then ended and notes to thestandalone financial statements including a summary of significant accounting policiesand other explanatory information.
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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in Indiaincluding Indian Accounting Standards prescribed under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 as amended of the state ofaffairs of the Company as at 31st March 2021 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
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 Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India (ICAI) togetherwith the independent requirements that are relevant to our audit of the standalonefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion on the standalone financial statements.
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.
Information other than the Standalone Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statement that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
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 standalone financial statements.
As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
> Identify and assess the risks of material misstatement of the standalone 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
> Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
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
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein 'Annexure-A' a statement on the matters specified in paragraphs 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 including other comprehensiveincome Statement of 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 the IndAS 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 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 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 the requirements of Section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the 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 standalone financial statements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For K NAGARAJU & ASSOCIATES
Firm Regn. No. 002270S
K. NAGARAJU Partner
Membership No. 024344
Place : Hyderabad
Date : 31st May 2021
ANNEXURE A REFERRED TO IN OUR INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF THE COMPANYON THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH 2021 WEREPORT THAT:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant & Equipment;
(b) The Company has a policy of physically verifying its Property Plant &Equipment once in a year which in our opinion reasonable having regard to the size of theCompany and the nature of its business. During the year Property Plant & Equipmenthave been verified by the management at the year end and no discrepancies were noticed onsuch verification.
(c) The title deeds of immovable properties are held in the name of the Company.
ii. According to information and explanations given to us the management has conductedphysical verification of inventory at reasonable intervals and no material discrepancieswere noticed on physical verification during the year.
iii. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Act.
iv. According to information and explanations given to us the Company has compliedwith the provisions of Section 185 and 186 of the Act in respect of loans investmentsguarantees and security.
v. The Company has not accepted any deposits during the year and does not have anyunclaimed deposits as at 31st March 2021 and therefore the provisions of theclause 3 (v) of the Order is not applicable to the Company.
vi. We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules made by the Central Government under Section 148(1) of the Act and areopinion that prima facie the prescribed accounts and cost records have been made andmaintained.
vii. (a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company the Company is regular in depositing undisputedstatutory dues including provident fund employees' state insurance income-taxsales-tax service tax duty of customs duty of excise value added tax goods andservices tax cess and any other statutory dues as applicable with the appropriateauthorities and no dues were in arrears as at 31st March 2021 for a period ofmore than six months from the date they became payable.
(b) According to the records of the Company and on the basis of information andexplanations given to us there are no dues of income-tax sales-tax service tax duty ofcustoms goods and services tax and which have not been deposited on account of anydisputes. However according to information and explanations given to us the followingdues of value added tax have not been deposited by the Company on account of disputes:
|Name of Statute ||Nature of Dues ||Amount Involved (Rs. in Lakhs) ||Period to which the Amount Relates ||Forum where Dispute is pending |
|Central Sales Tax ||CST ||15.34 ||2009-10 ||Commissioner Appeals Vizag |
|Value Added Tax ||VAT ||1.77 ||2016-17 ||Commissioner (Appeals) (CT) |
viii. The Company has not defaulted in repayment of loans or borrowing to a financialinstitution bank government or dues to debenture holders.
ix. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) but the Company has availed a term loan from Bankduring the year. The moneys' raised by way of term loans were applied for the purpose forwhich those were raised.
x. We have not noticed or reported any fraud by the Company or any fraud on the Companyby its officers/ employees during the year.
xi. The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
xii. Clause 3 (xii) of the Order is not applicable as the Company is not a NidhiCompany.
xiii. According to information and explanations given to us all transactions with therelated parties are in compliance with the provisions of sections 177 and 188 of the Actwherever applicable and the details have been disclosed in the Standalone financialStatements etc. 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 accordingly theprovisions of clause 3 (xiv) of the Order is not applicable to the Company.
xv. According to information and explanations given to us the Company has not enteredin to any non-cash transactions with directors or persons connected with him accordinglythe provisions of clause 3 (xv) of the Order is not applicable to the Company.
xvi. Clause 3 (xvi) of the Order is not applicable as the Company is not required to beregistered under Section 45-IA of the Reserve Bank of India Act 1934.
For K NAGARAJU & ASSOCIATES
Firm Regn. No. 002270S
Membership No. 024344
Place : Hyderabad
Date : 31st May 2021
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF NELCAST LIMITED
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 NelcastLimited ("the Company") as of 31st March 2021 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting 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 Act.
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 the ICAI anddeemed to be prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls. Those standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
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 standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting 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 standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of management and directors of the Company; and
3. Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the standalone financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2021based 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 K NAGARAJU & ASSOCIATES
Firm Regn. No. 002270S
K. NAGARAJU Partner
Membership No. 024344
Place : Hyderabad
Date : 31st May 2021.