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Nitta Gelatin India Ltd.

BSE: 506532 Sector: Industrials
NSE: KERALACHEM ISIN Code: INE265B01019
BSE 00:00 | 20 Sep 109.80 3.55
(3.34%)
OPEN

106.50

HIGH

111.95

LOW

103.55

NSE 05:30 | 01 Jan Nitta Gelatin India Ltd
OPEN 106.50
PREVIOUS CLOSE 106.25
VOLUME 672
52-Week high 175.00
52-Week low 88.00
P/E 101.67
Mkt Cap.(Rs cr) 100
Buy Price 104.00
Buy Qty 4.00
Sell Price 109.80
Sell Qty 19.00
OPEN 106.50
CLOSE 106.25
VOLUME 672
52-Week high 175.00
52-Week low 88.00
P/E 101.67
Mkt Cap.(Rs cr) 100
Buy Price 104.00
Buy Qty 4.00
Sell Price 109.80
Sell Qty 19.00

Nitta Gelatin India Ltd. (KERALACHEM) - Auditors Report

Company auditors report

To the Members of Nitta Gelatin India Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Nitta GelatinIndia Limited (‘the Company') which comprise the Balance Sheet as at 31 March 2018the Statement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. 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 state ofaffairs (financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (‘Ind AS') specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. 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.

5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthese standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial controls relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on these standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Ind AS specified under Section133 of the Act of the state of affairs (financial position) of the Company as at 31 March2018 and its profit its cash flows and the changes in equity for the year ended on thatdate.

Emphasis of Matter

9. We draw attention to note 3.04 to the standalone financial statements regarding theCompany's remaining non-current equity investment in subsidiary and advances givenaggregating to Rs 13184571 and Rs 78917577 respectively as at 31 March 2018which are considered as fully recoverable by the management based on the projectedoperations and future expected cash flows of the subsidiary company which are dependenton certain assumptions and estimates considered by the management the appropriateness ofwhich is dependent upon the realisation of the related business plans. Our opinion is notmodified in respect of this matter.

Other Matter

10. The comparative financial information for the year ended 31 March 2017 and thetransition date opening balance sheet as at 1 April 2016 prepared in accordance with IndAS included in these standalone financial statements are based on the previously issuedstatutory financial statements for the year ended 31 March 2017 and 31 March 2016respectively prepared in accordance with Accounting Standards prescribed under Section 133of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 (as amended) whichwere audited by the predecessor auditor whosereportsdated9May2017and6May2016 respectivelyexpressed unmodified opinion on those standalone financial statements and have beenadjusted for the differences in the accounting principles adopted by the Company ontransition to Ind AS which have been audited by us. Our opinion is not modified inrespect of this matter.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditor's Report) Order 2016 (‘the Order')issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. Further to our comments in Annexure I as required by Section 143(3) of the Act wereport 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;

c) the standalone financial statements dealt with by this report are in agreement withthe books of account;

d) in our opinion the aforesaid standalone financial statements comply with Ind ASspecified under Section 133 of the Act;

e) on the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2018 from being appointed as a director in terms of Section 164(2) of the Act;

f) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31 March 2018 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 4 May 2018 as per Annexure II expressed unmodified opinion; and

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 (as amended) inour opinion and to the best of our information and according to the explanations given tous:

i. the Company as detailed in Note 3.31 to the standalone financial statements hasdisclosed the impact of pending litigations on its financial position;

ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

per Aasheesh Arjun Singh

Partner

Membership No. 210122

Kochi

4 May 2018

Annexure I to the Independent Auditor's Report of even date to the members of NittaGelatin India Limited on the standalone financial statements for the year ended 31 March2018

Annexure I

Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that: (i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies were noticed on such verification. In our opinion thefrequency of verification of the fixed assets is reasonable having regard to the size ofthe Company and the nature of its assets.

(c) The title deeds of all the immovable properties (which are included under the head‘Property plant and equipment') are held in the name of the Company.

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies between physicalinventory and book records were noticed on physical verification.

(iii) The Company has not granted any loan secured or unsecured to companies firmsLimited Liability Partnerships (LLPs) or other parties covered in the register maintainedunder Section 189 of the Act. Accordingly the provisions of clauses 3(iii)(a) 3(iii)(b)and 3(iii)(c) of the Order are not applicable.

(iv) In our opinion the Company has complied with the provisions of Sections 185 and186 of the Act in respect of investments and guarantees. Further in our opinion theCompany has not entered into any transaction covered under Section 185 and Section 186 ofthe Act in respect of loans and security.

(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) The Central Government has not specified maintenance of cost records undersubsection(1) of Section 148 of the Act in respect of Company's products. Accordinglythe provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income-tax sales-tax service tax duty ofcustoms duty of excise value added tax and other material statutory dues as applicableto the appropriate authorities. Undisputed amounts payable in respect of cess which wasoutstanding at the year-end for a period of more than six months from the date they becamepayable are as follows:

Statement of arrears of statutory dues outstanding for more than six months:

Name of the statute Nature of dues Amount ` Period to which the amount relates Remarks
The Water (Prevention and Control of Pollution) Cess Act 1977 Water cess 823805 July 2011 August 2011 April 2016 May 2016 and January 2017 to September 2017 Payment of dues is made based on the order of assessment received under the Water (Prevention and Control of Pollution) Cess Act 1977.

(b) The dues outstanding in respect of income-tax sales-tax service-tax duty ofcustoms duty of excise and value added tax on account of any dispute are as follows:Statement of Disputed Dues:

Name of the statute Nature of dues Amount (`) Amount paid under Protest (`) Period to which the amount relates Forum where dispute is pending
Income-tax Act 1961 Income tax 79942039 1161060 AY 2009-10 to 2013-14 Commissioner of Income Tax (Appeals)
Kerala Value Added Tax Act 2003 Value Added Tax 1237334 1237334 FY 2009-10 Deputy Commissioner of Sales Tax (Appeals)
Kerala Value Added Tax Act 2003 Value Added Tax 4856016 1431648 FY 2010-11 Deputy Commissioner of Sales Tax (Appeals)
Central Sales Tax Act 1956 Central Sales Tax 6879037 1522697 FY 2010-11 2011-12 and 2013-14 Deputy Commissioner of Sales Tax (Appeals)
Customs Act 1962 Custom duty 196835881 - FY 2010-11 Customs Excise and Service
to FY 2016-17 Tax Appellate Tribunal Bengaluru
Central Excise Act 1944 Central excise 35074543 - FY 2003-04 to 2014-15 Commissioner of Central Excise and Customes
Central Excise Act 1944 Central excise 720668 36252 FY 2010-11 to 2012-13 Customs Excise and Service Tax Appellate Tribunal Bengaluru
Central Excise Act 1944 Central excise 572606 28630 FY 2010-11 to 2012-13 Commissioner (Appeals)
Finance Act 1994 Service tax 3549668 139065 FY 2010-11 to 2012-13 Commissioner (Appeals) Customs Excise and Service Tax Appellate Tribunal Bengaluru
Finance Act 1994 Service tax 368058 18402 FY 2011-12
Finance Act 1994 Interest on service tax demands 2551897 - FY 2010-11 to 2012-13 Commissioner (Appeals)

(viii) The Company has not defaulted in repayment of loans or borrowings to any bankduring the year. The Company has no loans or borrowings payable to a financial institutionor government and no dues payable to debenture-holders during the year.

(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans were applied for thepurposes for which the loans were obtained.

(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.

(xi) Managerial remuneration has been paid and provided by the company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable. (xiii) In our opinion all transactions withthe related parties are in compliance with Sections 177 and 188 of Act where applicableand the requisite details have been disclosed in the financial statements etc. asrequired by the applicable Ind AS.

(xiv) During the year the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. (xv) In our opinion thecompany has not entered into any non-cash transactions with the directors or personsconnected with them covered under Section 192 of the Act.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

per Aasheesh Arjun Singh

Partner

Membership No. 210122

Kochi

4 May 2018

Annexure II to the Independent Auditor's Report of even date to the members of NittaGelatin India Limited on the standalone financial statements for the year ended 31 March2018

Annexure II

Independent Auditor's Report on the Internal Financial Controls under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 (‘the Act')

1. In conjunction with our audit of the standalone financial statements of NittaGelatin India Limited (‘the Company') as at and for the year ended 31 March 2018 wehave audited the internal financial controls over financial reporting (‘IFCoFR') ofthe Company as at that date. Management's Responsibility for Internal FinancialControls

2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the ‘Guidance Note') issued by the Institute of Chartered Accountants ofIndia (‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of the Company's business including adherenceto the Company's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor's Responsibility

3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (‘ICAI') and deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of IFCoFR and theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (‘theGuidance Note') issued by the ICAI. Those Standards and the

Guidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate IFCoFR were established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR includes obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR include 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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

7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that the IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such controls were operating effectivelyas at 31 March 2018 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by ICAI.

For Walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

per Aasheesh Arjun Singh

Partner

Membership No. 210122

Kochi

4 May 2018