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Nicco Uco Alliance Credit Ltd.

BSE: 523209 Sector: Financials
NSE: N.A. ISIN Code: INE917B01023
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NSE 05:30 | 01 Jan Nicco Uco Alliance Credit Ltd
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OPEN 0.28
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VOLUME 26494
52-Week high 0.29
52-Week low 0.19
P/E
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
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Nicco Uco Alliance Credit Ltd. (NICCOUCOALL) - Auditors Report

Company auditors report

To the Members of NICCO UCO ALLIANCE CREDIT LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

QUALIFIED OPINION

We have audited the standalone financial statements of Nicco Uco Alliance CreditLimited ("the Company") which comprise the Balance Sheet as at March 312019 the Statement of Profit and Loss and the Statement of Cash Flows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid financial statements give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 loss and its cash flows for theyear ended on that date.

BASIS FOR QUALIFIED OPINION

a) Note No. 2.21 regarding cancellation of certificate of registration of the companyto carry out non-banking financial activities by Reserve Bank of India (RBI) vide itsorder dated 31st March 2005 against which the company has preferred an appeal before theAppellate Authority for Non-Banking Finance Company (NBFC) Joint Secretary Ministry ofFinance Govt. of India New Delhi which as stated is pending.

As the decision with regard to appeal against cancellation of license is pending forreasons as stated in the note above the accounts of the company have been prepared ongoing concern assumption on the basis of legal opinion obtained. In the event of adversedecision/ development the financial statements may require necessary adjustments in thevalue of its assets and liabilities.

b) Note No. 2.3.ii (b) regarding non-confirmation of balances by Banks and FinancialInstitutions (FI's) in whose Books the account of Company has turned Non Performing Assets(NPAs).

c) Note No. 2.3.vi regarding non compliance with order of Company Law Board (CLB) inrepayment of its Fixed Deposits liability and other accounting violation against whichlegal proceedings have been initiated by Serious Fraud Investigation Office. However asper available records fixed deposit liabilities had been settled as per a scheme approvedby Hon'ble High Court at Calcutta.

d) Note No. 2.23(a) regarding non-charging of interest on dues to banks and financialinstitution coming under the purview of consortium resulting in reduction of loss by Rs.426 crores.

We conducted our audit in accordance with Standards on Auditing (SAs) specified undersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accoutants of India together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Companies Act 2013 and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matters described in the Basis for Qualified Opinion section wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Sr. No. Key Audit Matters How our audit addressed the key audit matters
1. Litigations and claims – provisions and contingent liabilities Our key procedures included the following :
As disclosed in Notes detailing contingent liability and provision for contingencies the company is involved in direct indirect tax and other litigations (‘litigations') that are pending with different statutory authorities. • Assessed the appropriates of the company accounting policies including those relating to provision and contingent liability by comparing with the applicable accounting standards.
Whether a liability is recognized or disclosed as a contingent liability in the financial statements is inherently judgmental and dependent on a number of significant assumptions and assessments. • Assessed the company process for identification of the pending litigations and completeness for financial reporting and also for monitoring of significant developments in relation to such pending litigations;
The amounts involved are potentially significant and determining the amount if any to be recognized or disclosed in the Standalone financial statements is inherently subjective. • Engaged subject matter specialists to gain an understanding of the current status of litigations and monitored changes in the disputes if any through discussions with the management and by reading external advice received by the company where relevant to establish that the provisions had been appropriately recognized or disclosed as required;
• Assessed the company assumptions and estimates in respect of litigations including the liabilities or provisions recognized or contingent liabilities disclosed in the financial statements. This involved assessing the probability of an unfavorable outcome of a given proceeding and the reliability of estimates of related amounts;
• Performed substantive procedures on the underlying calculations supporting the provisions recorded;
• Assessed the management's conclusions through understanding precedents set in similar cases; and considering the appropriateness of the company's description of the disclosures related to litigations and whether these adequately presented in the Standalone financial statements.
2. The company has not provided interest on dues to Banks and financial institutions coming within the purview of consortium arrangement with effect from 01.04.2015 in anticipation of a favorable outcome of the ongoing negotiation for one time settlement of such dues. The un-provided interest amounts to Rs. 426 crores upto 31.03.2019. We have checked the details calculation of such un-provided interest.
3. Valuation of Investments :
Quoted Investments have been valued at lower of cost or market price. • Necessary papers including the final order of honourable Supreme Court have been verified by us in order to ensure the correctness of accounting of the said claim.
Un-quoted Investments have been valued on the basis of Net Worth of the respective investees. • We have checked the basis of valuation in detail and also the provision against such shortfall.

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 Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe 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 statement that givea 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.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the 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.

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

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

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

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

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

• Obtain sufficient appropriate audit evidence regarding the financial informationof the entities or business activities within the company to express an opinion on thefinancial statements. We are responsible for the direction supervision and theperformance of the audit of the financial statements of such entities included in thefinancial statements.

• We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

• We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of subsection (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure-2" statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that :

(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose 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 [and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus].

(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 [and with thereturns received from the branches not visited by us].

(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure-1".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us :

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 2.24 to the financial statements.

ii. The Company does not have any material foreseeable loss arising out derivativecontract.

iii. No money is required to be transferred by the Company to Investor Education andProtection Fund.

For G. BASU & CO.
Chartered Accountants
Firm Regn. No. 301174E
G. Guha
Place : Kolkata
Partner
Dated : May 27 2019 M. No. 054702

Annexure - 1

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 NICCOUCO ALLIANCE CREDIT LIMITED ("the Company") as of 31st March 2019 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 India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 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 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.

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.

Qualified Opinion

Attention is invited to the paragraph on qualified opinion in our audit report on thestandalone financial statements of even date.

In our opinion subject to the above qualification which have arisen out of materialdeficiency in financial control over the past years the company has maintained propercontrol over financial reporting during the year under review.

For G. BASU & CO.
Chartered Accountants
Firm Regn. No. 301174E
G. Guha
Place : Kolkata
Partner
Dated : May 27 2019 M. No. 054702

ANNEXURE TO THE AUDITORS' REPORT AS REFERRED TO IN PARA OF THE SAID REPORT OF EVEN DATE

1. (a) Original fixed asset records were destroyed by fire. Fresh records containingthe relevant details are now under updation. (b) The fixed assets will be physicallyverified only after updation of records.

(c) As per information and explanation given to us immovable properties held in thename of the company have been charged against loans from banks and financial institutions.

2. (a) There is no live agreement for lease and hire purchase stock as on date. Allsuch assets have turned Non-performing and necessary provision has been made for the same.Physical verification for the same has not been done during the year.

However as explained to us by the management there is little scope for doing the same.

(b) The company has no inventories.

3. According to the information and explanations given to us by the management thecompany has not given any loan secured or unsecured during the year to Companies firms orother parties covered in the Register maintained u/s 189 of the Companies Act 2013 exceptinterest free unsecured advances (net) given to its subsidiary company the maximum amountoutstanding at any time during the year and closing balance as on 31.03.2019 were Rs.1.24and Rs.1.24 Lacs respectively. As explained to us the above advance is repayable ondemand.

4. The company has not given any loan to its directors. The investment made by thecompany exceeds the limit stipulated U/S 186 of the Companies Act 2013. However theinvestments were acquired at a time when the company was registered as NBFC and henceexempted from the relevant provision.

5. The Company has not accepted any deposit during the year from the public as per thedirectives issued by the Reserve Bank of India and the provisions of Section 73 or anyother relevant provisions of the Companies Act 2013 and the rules made there under.

6. As per the information and explanations given to us the Company has given yearlymaintenance job of its Wind Mills to outside agencies on contract. As explained to usthere are no other costs for which cost records are to be maintained.

7. (a) According to the records of the company during the year the company hasgenerally been regular in depositing with the appropriate authorities undisputedstatutory dues including provident fund investor education and protection fund employeestate insurance income tax sales tax wealth tax service tax custom duty excise dutycess and any other statutory dues whichever applicable except for default in deposit ofbrought forward balances of Service Tax amounting to Rs.2932997/-. According to theinformation and explanation given to us no undisputed arrears of statutory dues wereoutstanding as on 31.03.2019 for a period a six months from the date they became payable.

(b) According to the records of the company the dues of sales tax custom duty wealthtax income tax excise duty service tax and cess which have not been deposited onaccount of any dispute and the forum where the disputes are pending are as under :

Name of the Statute Nature of Dues Amount (Rs. in lacs)* Forum where pending
Central and States Sales Tax Laws Central and State Sales Tax 27.50 W.B. Commercial Taxes Appellate and Revisional Board
Karnataka Sales Tax Act 1957 State Sales Tax 26.53 Karnataka High Court
Income Tax Act 1961 Income Tax 61.39 C.I.T. Appeal
23.12
M. S. Shoes The arbitration award has been been challenged in Delhi High Court 83.00 Delhi High Court
TOTAL 221.54

* The above figures are as per the information made available to us.

8. For details of default in repayment of loans to banks and financial institutionsreference may please be made to note no. 2.3 (VII) and 2.5 (VI).

9. The company has not raised any money by way of initial public offer or furtherpublic offer or term loan.

10. To the best of our knowledge and belief and according to the information andexplanations given to us no fraud on or by the company has been noticed or reportedduring the year.

11. Managerial remuneration has been paid in compliance with Section 197 read withSchedule V of Companies Act 2013 subject to obtaining approval from secured creditorsfor which necessary correspondence has been initiated.

12. The company is not a Nidhi Company.

13. Except for an unsecured advance to subsidiary company there was no othertransaction with related parties.

14. The company had not made any preferential allotment on private placement of sharesor fully on partly convertible debentures.

15. The company has not entered into any non cash transaction with directors or personsconnected with him.

16. The company was earlier registered U/S 45-1A of Reserve Bank of India Act 1934.Registration has since been cancelled by Reserve Bank of India. The company has preferredappeal before Appellate authority for NBFC Joint Secretary Ministry Finance Governmentof India New Delhi which is still pending.

For G. BASU & CO.
Chartered Accountants
Firm Regn. No. 301174E
G. Guha
Place : Kolkata
Partner
Dated : May 27 2019 M. No. 054702

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