To the Members of
NITIN CASTING LIMITED
(FORMERLY NITIN ALLOYS GLOBAL LIMITED)
Report on the Audit of the Financial Statements
We have audited the financial statements of NITIN CASTING LIMITED (FORMERLY NITINALLOYS
GLOBAL LIMITED) which comprise the Balance Sheet as at 31st March 2020and the Statement of Profit and Loss including Other Comprehensive Income Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (The Act) in the manner so required and give a true and fair viewinconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2020 and its profit total comprehensive incomechanges in equity and 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) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance 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 2013and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidences we haveobtained is sufficient and appropriate to provide a basis for our 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.There is no key audit matter to communicate in our report.
Emphasis of Matter
We draw your attention to Note 48 of the standalone financial results as regards themanagement's assessment of the financial impact due to the disruption caused by Covid-19pandemic situation. Our opinion is not modified in respect of this matter.
Information Other than the 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 financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon. In connection with our audit of thefinancial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact.
We have not received other formation before the date of auditors report so we cannotconclude if the other information is materially inconsistent with the financial statementsor our knowledge obtained in the audit or otherwise appears to be materially misstated.When we receive the other information and if we identify that there is materialmisstatement therein we will communicate the matter to those charged with governance.
Responsibilities of Management and those charged with Governance for the FinancialStatements
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 financial statements that give a true and fair view of the financial position andfinancial performance including other comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting standards (Ind AS) specified under section 133 of the Actread with relevant rules issued there under.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand 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 records relevant to the preparation and presentation ofthe financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
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.
The Board of Directors is 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 auditing 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 upto 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.
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 the mall relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
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 ofthe Companies Act 2013 we give in the Annexure "A" a statement on the mattersspecified 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) Wehavesoughtandobtainedalltheinformationandexplanationswhichtothebestofourknowledgeand belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with relevant rules issued thereunder.
(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in termsof Section 164 (2) of the Act.
(f) The Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial control over financialreporting were operating effectively as at 31st March 2020 based on theinternal control over financial reporting criteria established by the Company.
(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 to the best of our information and according to the explanations givento us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
With respect to the other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foresee able losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
ANNEXURE A TO INDEPENDENT AUDITORS' REPORT- 31 March 2020
With reference to the Annexure A referred to in the Independent Auditors' Report ofeven date to the members of NITIN CASTING LIMITED (FORMERLY NITIN ALLOYS GLOBAL LIMITED)on the Financial Statements for the year ended March 31 2020 we report the following
1) In respect of its property plant and equipment :
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipments.
b) Some of the property plant and equipment were physically verified during the yearby the Management in accordance with a programme of verification which in our opinionprovides for physical verification of all the property plant and equipment at reasonableintervals. According to the information and explanation given to us no materialdiscrepancies were noticed on such verification.
c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company- including registered title deeds we reportthat the title deeds comprising all the immovable properties of the Company are held inthe name of the Company.
2) As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on suchphysical verification.
3) According to information and explanations given to us and to the best of ourknowledge and belief the Company has granted unsecured loans to one concern covered inthe register maintained under Section 189 of the Act.
a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the Company's interest.
b) In respect of the aforesaid loans no schedule for repayment of principal andpayment of interest has been stipulated by the Company. Therefore in absence ofstipulation of repayment terms we do not make any comment on the regularity of repaymentof principal and payment of interest.
c) In respect of the aforesaid loans there is no amount which is overdue for more thanninety days
4) According to the information and explanations given to us the Company has compliedwith the provisions of Section 185 and 186 of the Companies Act 2013 in respect of theloans and investments made and guarantees and security provided by it.
5) According to the information and explanations given to us the Company has notaccepted any deposit from the public in accordance with the provisions of Sections 73 to76 or any other relevant provisions of the Act and the rules framed thereunder.Accordingly paragraph 3(v) of the Order is not applicable to the Company.
6) The Central Government of India has not specified the maintenance of cost recordsunder subsection (1) of Section 148 of the Act for any of the products of the Company.
7) According to the information and explanations given to us and according to the booksand records as produced and examined by us in our opinion :
a) The Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employee State Insurance Income Tax Custom Duty Goods andService Tax Cess and other material statutory dues as applicable to it with appropriateauthorities.
b) There were no undisputed amounts payable in respect Provident Fund Employee StateInsurance Income Tax Custom Duty Goods and Service Tax Cess and other materialstatutory dues in arrears as at 31st March 2020 for a period of more than sixmonths from the date they became payable..
c) As at 31st March 2020 the following are the particulars of dues onaccount of Income Tax Service Tax Sales Tax Custom Duty Excise Duty and VAT that havenot been deposited on account of any dispute :
Rs. in Lakhs
|Name of the Statute ||Nature of the dues ||Rs. in Lakhs ||Period to which the Amount Relates ||Forum where Dispute is Pending |
|Central Excise ||Excise Duty ||103.30 ||Apr 2007 to Oct 2011 ||CESTAT |
|Central Excise ||Excise Duty ||14.06 ||Nov 2011 to Sep 2012 ||CESTAT |
|Central Excise ||Excise Duty ||0.66 ||Jul 2000 to Jun 2001 ||CESTAT |
|Central Excise ||Excise Duty ||30.59 ||Oct 2012 to Jun 2015 ||CESTAT |
|Central Excise ||Excise Duty ||6.90 ||Jul 2015 to Apr 2016 ||CESTAT |
|Central Excise ||Excise Duty ||16.32 ||May 2016 to Jun 2017 ||CESTAT |
|Central Excise ||Excise Duty ||360.98 ||Mar 2010 to Jan 2014 ||CESTAT |
8) According to the records of the Company examined by us and as per the informationand explanations given to us the Company has not defaulted during the year in repaymentof dues to its financial institutions Bankers and government. The Company did not haveany outstanding debentures during the year.
9) In our opinion and according to the information and explanations given to us theterm loans have been applied for the purposes for which they were obtained.
10) 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.
11) According to the information and explanations given to us and based on ourexamination of records of the Company the Company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with schedule V to the Companies Act 2013.
12) The Company is not a Nidhi Company and the Nidhi rules 2014 are not applicable toit. Accordingly paragraph 3(xii) of the Order is not applicable to the Company.
13) According to the information and explanations given to us and based on ourexamination of the records of the Company all transaction with related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Financial Statements as required by the applicableIndian Accounting Standards.
14) 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 are not applicable to the Company.
15) 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 any non cashtransactions with its directors or persons connected with him. Accordingly the provisionsof Clause 3(xv) of the Order are not applicable to the Company.
16) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
ANNEXURE B' TO THE INDEPENDENT AUDITORS' REPORT- 31 MARCH 2020
Report on the Internal Financial Controls with reference to the aforesaid FinancialStatements under Clause (i) Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
(Referred to in paragraph (A)(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)
We have audited the internal financial controls with reference to Financial Statementsof Nitin Casting Limited (Formerly Nitin Alloys Global Limited) ("the Company")as of 31 March 2020 in conjunction with our audit of the Financial Statements of theCompany for the year ended on that date.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to Financial Statements and such internal financial controls wereoperating effectively as at 31 March 2020 based on the internal financial controls withreference to Financial Statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal controls with referenceto Financial Statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols with respect to Financial Statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to Financial Statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference toFinancial Statements were established and maintained and whether such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with respect to Financial Statements and theiroperating effectiveness. Our audit of internal financial controls with respect toFinancial Statements included obtaining an understanding of internal financial controlswith respect to Financial Statements assessing the risk that a material weakness existsand testing and evaluating the design and operating effectiveness of internal controlbased on the assessed risk. The procedures selected depend on the auditors' judgementincluding the assessment of the risks of material misstatement of the FinancialStatements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controlssystemwith reference to Financial Statements.
Meaning of Internal Financial Controls with reference to Financial Statements
A company's internal financial controls with reference to financial statements is aprocess 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 controlswith reference to financial statements include 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 with reference to FinancialStatements
Because of the inherent limitations of internal financial controls with reference toFinancial Statements 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 withreference to Financial Statements to future periods are subject to the risk that theinternal financial control with reference to Financial Statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.