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Nitco Ltd.

BSE: 532722 Sector: Consumer
NSE: NITCO ISIN Code: INE858F01012
BSE 14:17 | 16 Sep 31.20 -0.50
(-1.58%)
OPEN

32.00

HIGH

33.50

LOW

30.90

NSE 14:09 | 16 Sep 31.35 -0.45
(-1.42%)
OPEN

32.00

HIGH

33.40

LOW

30.75

OPEN 32.00
PREVIOUS CLOSE 31.70
VOLUME 38827
52-Week high 60.45
52-Week low 19.00
P/E
Mkt Cap.(Rs cr) 224
Buy Price 31.20
Buy Qty 562.00
Sell Price 31.50
Sell Qty 50.00
OPEN 32.00
CLOSE 31.70
VOLUME 38827
52-Week high 60.45
52-Week low 19.00
P/E
Mkt Cap.(Rs cr) 224
Buy Price 31.20
Buy Qty 562.00
Sell Price 31.50
Sell Qty 50.00

Nitco Ltd. (NITCO) - Auditors Report

Company auditors report

To The Members of NITCO LIMITED

Report on the Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of NITCOLimited ("the Company") which comprise the Balance Sheet as at 31 March 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended and summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "the standalone Ind AS financial statements").

Management's Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the stateof affairs financial performance (including Other Comprehensive Income) changes inequity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalone Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error. In preparing the financial statementsmanagement is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

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 of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sBoard of Directors as well as evaluating the overall presentation of the standalone IndAS financial statements our audit opinion on the standalone We believe that the auditevidence we have obtained is sufficient Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31 March 2018 its financial performance (including Other ComprehensiveIncome) its changes in equity and its cash flows for the year ended on that date.

Other Matter

We refer to Note 45A of the financial results which describe the debt restructuringscheme entered into by the Company with JM Financial

Assets Reconstruction Company Limited (JMFARC) and the resultant impact has beendisclosed as an exceptional item. Our opinion is not modified in respect of this matter.

The comparative financial information of the Company for the year ended 31 March 2017and the transition date opening Balance Sheet as at 1 April 2016 included in these Ind ASfinancial statements are based on the previously issued statutory financial the yearsended 31 March 2017 and 31 March 2016 prepared in accordance with the Companies(AccountingStandards) Rules 2006 (as amended)which were audited by the predecessor auditor reportsdated 30 May 2017 and May 30 2016 respectively. The adjustments to those financialstatements for the differences in accounting principles adopted by the Company ontransition to the Ind AS have been audited by us. Our opinion on the standalone Ind ASfinancial statements is not modified in respect of the above matter.

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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the

2. As required by Section 143(3) of the Act based on our audit we report to theextent applicable 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) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.

e) On the basis of the written representations received from the directors as on 31March 2018 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 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 with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate 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:

3. The Company has disclosed the impact of pending litigations financial position inits standalone Ind AS its financial statements - Refer Note 40(c) to the standalone Ind ASfinancial statements;

4. 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

5. There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company; and

6. The disclosures regarding details of specified bank notes are not applicable to theCompany for the year ended 31 March 2018.

For Nayak & Rane

Chartered Accountants

F.R.No:117249W

Kishore K. Rane

Partner

M No:100788

Place : Mumbai

Date : 29 May 2018

Annexure A to the Independent Auditor's Report

Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to in the Independent Auditor's Report tothe members of the Company on the standalone Ind AS financial statements for the yearended 31 March 2018 we report the following:

i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets ;

(b) The Company has a regular programme of physical verification of its fixed assetsby which all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified during the year and no material discrepancies were noticedon such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in fixed assets are held in the name of the Company except for one immoveableproperty which amounts to gross block of Rs 145.66 Lakh and net block of Rs 133.63 Lakhwhose title deed is not held in the name of the Company. In respect of immovableproperties been taken on lease and disclosed as property plant and equipment in thestandalone Ind AS financial statements.

ii. The inventory (excluding stock with third parties) has been physically verified bythe the frequency of such verification is reasonable. In respect with the inventory lyingwith third parties these have been substantially confirmed by them. The Company hasmaintained proper records of inventory. The discrepancies noticed on verification betweenthe physical stock and the book records were not material.

iii. According to the information and explanations given to us The Company has notgranted any loans secured or unsecured to companies firms Limited Liabilitypartnerships or other parties covered in the Register maintained under section 189 of theAct. Therefore the provisions of clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the saidorder are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act 2013in respect of grant of loans making investments and providing guarantees and securitiesas applicable.

v. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

vi. Pursuant to rules made by the Central Government of India the Company is requiredto maintain cost records as specified under Section 148(1) of the Act in respect of itsproducts. We have broadly reviewed the same and are of the opinion that prima facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the records with a view to determine whether they are accurateor complete

vii. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees' StateInsurance Income-tax Sales tax Service tax Goods and Services tax duty of Customsduty of Excise Value added tax Cess and other material statutory dues have generallybeen regularly deposited during the year by the Company with the appropriate authorities.

viii. According to the information and explanations given to us there are no dues ofIncome-tax or Sales tax or Service tax or Goods and Services tax or duty of Customs orduty of Excise or Value added taxes which have not been deposited by the Company onaccount of disputes except for the following:

Name of the Statute Nature of the Dues Amount ( Rs in Lakh) Period Forum where dispute is pending
The Income-tax Act 1961 Income Tax 30.64 From Assessment Year 1987 to Assessment Year 1997. High Court Mumbai
The Income-tax Act 1961 Income Tax 33.73 From Assessment Year 1987 to AssessmentYear 1997(Penalty) Commissioner of Income-tax

ix. According to the explanations and information given to us the Company hasdefaulted in repayment of dues to a financialinstitutions and bank the amount of defaultto LIC of India was Rs 1911.66 Lakh (period of default- 37 months) and DBS Bank was Rs244.60 Lakh (Period of default - 9 months).

With reference to the Debt Restructuring plan refer note 45A to the standalonefinancial statements wherein the Company's lenders (approx. 98%) assigned their debts toan asset reconstruction Company. Pursuant to the same the restructuring was implemented asper which loans have been converted into term loans debentures and preference shares.Post successful restructuring there would be write-offofpartoftheloans. Further theCompany is negotiating a similar settlement agreement with the other lender(s).

Pending negotiations no further adjustments have been made.

x. In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) and term loans during the year. Accordingly paragraph 3(ix)of the Order is not applicable to the Company.

xi. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement

xii. In our opinion and according to the information and explanations given to us andbased on examination of the records of the Company the Company has paid/providedmanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

xiii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it the provisions of Clause 3(xii) of the Order are not applicable to theCompany is a Private limited and accordingly the provisions of clause 3(xi) of the orderare not applicable.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company all transactions with the related parties arein compliance with Sections 177 and 188 of the Act where applicable and the details ofsuch related party transactions have been disclosed in the financial statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedunder Section 133 of the Act..

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has made preferential allotment orprivate placement of shares or fully or partly convertible debentures and shares duringthe year. The requirements of Section 42 of the Companies Act have been complied with andthe amount raised has been used for the purposes for which the funds were raised.

xvi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly provisions ofsection 192 of the Act are not applicable to the Company.

xvii. According to the information and explanation given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act.

For Nayak & Rane

Chartered Accountants

F.R.No:117249W

Kishore K. Rane

Partner

M No:100788

Place : Mumbai

Date : 29 May 2018

Annexure B to the Independent Auditor's Report

Referred to paragraph 2 (g) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date to in the Independent Auditor's Report tothe members of the Company on the standalone Ind AS financial statements for the yearended 31 March 2018 we report the following:

Report on the Internal Financial Controls Over Financial Reporting 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 NitcoLimited ("the Company") as of 31 March 2018 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on 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"). 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 the 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.

Auditor's 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 Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand issued by ICAI. 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 about the adequacy ofthe internal financial control 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 judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor 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 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 financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance 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 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 to future periods are subject to the risk that the internalfinancial evaluationofthe 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.

Opinion

In our opinion the Company has in all material respects financial reporting andsuch adequate internal controls system over effectively as at 31 March 2018 based on theinternal control over internal financial controls over financial financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the ICAI.

For Nayak & Rane

Chartered Accountants

F.R.No:117249W

Kishore K. Rane

Partner

M No:100788

Place : Mumbai

Date : 29 May 2018