THE MEMBERS OF
NITIN CASTING LIMITED
Report on the Audit of Financial Statements
We have audited the accompanying Financial Statements of Nitin Casting Limited (the Company) which comprise the Balance Sheet as at 31st March 2019 and the Statement of Profit and Loss (including Other Comprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and notes to the financial statements including a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us the aforesaid Financial Statements give the information required by the Companies Act 2013 ( the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended (IND AS) and other accounting principles generally accepted in India of the state of affairs of the Company as at 31st March 2019 its profit and total other comprehensive income changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act2013. Our responsibilities under those SAs are further described in the Auditor's responsibilities for the audit of the Financial Statements section of our report. We are independent of the Company in accordance with the code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Financial Statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. We have determined the matters described below to be the Key Audit Matters to be communicated in our report.
Description of Key Audit Matter
|The key audit matter||How the matter was addressed in our audit|
|Property Plant and Equipment|
The carrying amount of Property Plant and Equipment represents 39% of the total assets. The value in use of these Property Plant and Equipment have been determined based on certain assumptions and estimates of future performance.
The value in use so determined of each Cash Generating Unit (CGU) identified by the management have been used for the impairment evaluation of the Property Plant and Equipment. Due to the significance of the value of the PPE the inherent uncertainty and judgment involved in forecasting performance and the estimates involved in discounting future cash flows we have considered these estimates to be significant to our overall audit strategy and planning.
|In view of the significance of the matter our procedures|
in this area included the following :
Testing the design implementation and operating effectiveness of key controls over the impairment review process including the review and approval of forecasts and review of valuation models.
assessing the valuation methodology used by management and testing the mechanical accuracy of the impairment models
evaluating the past performances where relevant and assessing historical accuracy of the forecast produced by management;
Considering whether events or transactions that occurred after the balance sheet date but before the reporting date affect the conclusions reached on the carrying values of the assets and associated disclosures.
Performing sensitivity analysis of key assumptions including future revenue growth rates costs and the discount rates applied in the valuation models.
Evaluating the adequacy of the disclosures made in the standalone financial statements
|Impairment of Assets|
At the end of every reporting period the Company assesses whether there is any indication that an asset or cash generating unit (CGU) may be impaired. If any such indication exists the Company estimates the recoverable amount of the asset or CGU.
The determination of recoverable amount being the higher of fair value less costs to sell and value-in-use involves significant estimates assumptions and judgements of the long term financial projections.
Impairment of assets is a key audit matter considering the significance of the carrying value long term estimation and the significant judgements involved in the impairment assessment.
|Our audit procedures included considering the Company's|
accounting policies with respect to impairment in
accordance with Ind AS 36 Impairment of assets.
We performed test of controls over impairment process through inspection of evidence of performance of these controls.
We performed the following tests of details:
We obtained the management's impairment assessment.
We have obtained and evaluated the sensitivity analysis.
We assessed the disclosures in accordance with Ind AS 36 Impairment of assets.
Revenue Recognition of Rs. 100 Lakhs of
|We have performed the following procedures in relation to accuracy of revenue recognized and accrued.|
|Excise refund.|| Our audit procedures included considering the appropriateness of the company's revenue recognition accounting and assessing compliance with the policies in terms of the applicable Accounting Standards.|
| Statement and submissions at the time of Excise payment.|
| Understood the transaction.|
Verified the judgment from order of Commissioner CGST & Central Excise Daman for Appeal disposed off.
Information Other than the Ind AS Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the information in the Management Discussion and Analysis Board's Report including Annexures to the Board's Report and Corporate Governance but does not include the Ind AS financial statements and our auditor's report thereon.
Our opinion on the Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Financial Statements our responsibility is to read the other information and in doing so consider whether the other information is materially inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's Management and Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Financial Statements that give a true and fair view of state of affairs profit and other comprehensive income Changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records relevant to the preparation and presentation of the Financial Statements that give a true and fair view and are free from material misstatement whether due to fraud or error.
In preparing the Financial Statements management and Board of Directors are responsible for assessing the Company's ability to continue as a going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financial reporting process.
Auditors' Responsibilities for the Audit of the Financial Statements:
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements.
As part of an audit in accordance with SAs we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Financial Statements whether due to fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and based on the audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related disclosures in the 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's report. However future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the Financial Statements including the disclosures and whether the Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Financial Statements that individually or in aggregate makes it probable that the economic decisions of a reasonably knowledgeable user of the Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Financial Statements.
We communicate with those charged with governance regarding among other matters the planned scope and timing of the audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine those matters that were of most significance in the audit of the Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when in extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 (the Order) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act 2013 we give in the 'Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
A. 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 best of 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 the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including other comprehensive income the Cash Flows Statement and statement of changes in Equity dealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid Financial Statements comply with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on 31st March 2019 taken on record by the Board of Directors none of the directors is disqualified as on 31st March 2019 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls with respect to Financial Statements of the Company and the operating effectiveness of such controls refer to our separate Report in 'Annexure B. Our Report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.
g) With respect to other matters to included in the Auditor's Report in accordance 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 explanations given to us the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
B. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company during the year ended 31 March 2019.
For Sandeep Rflthi & Associates
Firm Registration No: 113728W
Membership Number: 047377
Mumbai 29th day of May 2019
ANNEXURE A TO INDEPENDENT AUDITORS' REPORT- 31 March 2019
With reference to the Annexure A referred to in the Independent Auditors' Report of even date to the members of NITIN CASTING LIMITED (FORMERLY NITIN ALLOYS GLOBAL LIMITED) on the Financial Statements for the year ended March 31 2019 we report the following
a) The Company has maintained proper records showing full particulars including quantitative details and situation of property plant and equipments.
b) Some of the property plant and equipment were physically verified during the year by the Management in accordance with a programme of verification which in our opinion provides for physical verification of all the property plant and equipment at reasonable intervals. According to the information and explanation given to us no material discrepancies were noticed on such verification.
c) According to the information and explanations given to us and on the basis of our examination of the records of the Company- including registered title deeds we report that the title deeds comprising all the immovable properties of the Company are held in the name of the Company.
2) As explained to us the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on such physical verification.
3) According to information and explanations given to us and to the best of our knowledge and belief the Company has granted unsecured loans to one concern covered in the register maintained under Section 189 of the Act.
a) In respect of the aforesaid loans the terms and conditions under which such loans were granted are not prejudicial to the Company's interest.
b) In respect of the aforesaid loans no schedule for repayment of principal and payment of interest has been stipulated by the Company. Therefore in absence of stipulation of repayment terms we do not make any comment on the regularity of repayment of principal and payment of interest.
c) In respect of the aforesaid loans there is no amount which is overdue for more than ninety days.
4) According to the information and explanations given to us the Company has complied with the provisions of Section 185 and 186 of the Companies Act 2013 in respect of the loans and investments made and guarantees and security provided by it.
5) According to the information and explanations given to us the Company has not accepted any deposit from the public in accordance with the provisions of Sections 73 to 76 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 records under sub-section (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 books and records as produced and examined by us in our opinion :
a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund Employee State Insurance Income Tax Custom Duty Goods and Service Tax Cess and other material statutory dues as applicable to it with appropriate authorities.
b) There were no undisputed amounts payable in respect Provident Fund Employee State Insurance Income Tax Custom Duty Goods and Service Tax Cess and other material statutory dues in arrears as at 31st March 2019 for a period of more than six months from the date they became payable.
c) As at 31st March 2019 the following are the particulars of dues on account of Income Tax Service Tax Sales Tax Custom Duty Excise Duty and VAT that have not 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 information and explanations given to us the Company has not defaulted during the year in repayment of dues to its financial institutions Bankers and government. The Company did not have any outstanding debentures during the year.
9) In our opinion and according to the information and explanations given to us the term 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 Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees noticed or reported during the year nor have we been informed of any such case by the Management.
11) According to the information and explanations given to us and based on our examination of records of the Company the Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 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 to it. 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 our examination of the records of the Company all transaction with related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Financial Statements as required by the applicable Indian Accounting Standards.
14) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly the provisions 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 our examination of the records of the Company the Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly the provisions of 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 Reserve Bank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For Sandeep Rathi & Associates
Firm Registration No: 113728W
Membership Number: 047377
Mumbai 29th day of May 2019
ANNEXURE 'B' TO THE INDEPENDENT AUDITORS' REPORT- 31st MARCH 2019
Report on the Internal Financial Controls with reference to the aforesaid Financial Statements 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 Regulatory Requirements' section of our report of even date)
We have audited the internal financial controls with reference to Financial Statements of Nitin Casting Limited (the Company) as of 31st March 2019 in conjunction with our audit of the Financial Statements of the Company for the year ended on that date.
In our opinion the Company has in all material respects adequate internal financial controls with reference to Financial Statements and such internal financial controls were operating effectively as at 31st March 2019 based on the internal financial controls with reference to Financial Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the Guidance Note).
Management's Responsibility for Internal Financial Controls
The Company's management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal controls with reference to Financial Statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business including adherence to company's policies the safeguarding of its assets the prevention and detection of frauds and errors the accuracy and completeness of the accounting records and the timely preparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financial controls with respect to Financial Statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under Section 143(10) of the Act to the extent applicable to an audit of internal financial controls with reference to Financial Statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to Financial Statements were established and maintained and whether such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with respect to Financial Statements and their operating effectiveness. Our audit of internal financial controls with respect to Financial Statements included obtaining an understanding of internal financial controls with respect to Financial Statements assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors' judgement including the assessment of the risks of material misstatement of the Financial Statements whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company's internal financial controls system with 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 a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial controls with reference to financial statements include those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition use or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to Financial Statements
Because of the inherent limitations of internal financial controls with reference to Financial Statements including the possibility of collusion or improper management override of controls material misstatements due to error or fraud may occur and not be detected. Also projections of any evaluation of the internal financial controls with reference to Financial Statements to future periods are subject to the risk that the internal financial control with reference to Financial Statements may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
For Sandeep Rathi & Associates
Firm Registration No: 113728W
Membership Number: 047377
Mumbai 29th day of May 2019