Noble Explochem Ltd.
|BSE: 506991||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE875D01011|
|BSE 00:00 | 04 Mar||Noble Explochem Ltd|
|NSE 05:30 | 01 Jan||Noble Explochem Ltd|
|BSE: 506991||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE875D01011|
|BSE 00:00 | 04 Mar||Noble Explochem Ltd|
|NSE 05:30 | 01 Jan||Noble Explochem Ltd|
TO THE MEMBERS OF NOBLE EXPLOCHEM LIMITED
Report on the Audit of Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Noble ExplochemLimited (the Company') which comprise the Balance Sheet as at 31 March 2019 theStatement 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.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements do not give the informationrequired by the Companies Act 2013 (the Act') in the manner so required and do notgive a true and fair view in conformity with the accounting principles generally acceptedin India including Indian Accounting Standards (Ind AS') specified under Section 133of the Act of the state of affairs (financial position) of the Company as at 31 March2019 and its profit (financial performance including other comprehensive income) itscash flows and the changes in equity for the year ended on that date. We hereby give anadverse opinion.
Basis for Adverse Opinion
3. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI') togetherwith the ethical requirements that are relevant to our audit of the financial statementsunder the provisions of the Act and the rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion. The following are the basis for us to form an adverse opinion;
a. The company is under insolvency proceedings from 14.05.2018. The status ofinsolvency proceedings as on the date of audit is that RP has put a newspaperadvertisement on 18.05.2019 in local & national newspapers inviting EOI for resolutionplan. The last date for receipt of such EOI is 17.06.2019. As per Regulation 35 of theInsolvency and Bankruptcy Board of India (Insolvency Resolution Process for CorporatePersons) Regulations 2016 the fixed assets can't be reported at fair value as thecompany is under insolvency proceedings. Hence the fixed assets are considered at carriedforward book value only.
The Company's operations have been suspended since December 2006. The Company hasincurred losses during the current year and past several years and the company's net worthhas been completely eroded. The Company Current Liabilities exceeds its Current assets ason the Balance Sheet Date.
In view of all this we are of the opinion that the company cannot be considered as a"Going Concern" and we are unable to comment on whether its assets would beadequate to meet its liabilities.
b. The Company has been declared as Sick Unit by the erstwhile Board for Industrial andFinancial Reconstructions(BIFR) via their order dated 22nd July 2011 and the Company hasnot received Draft Rehabilitation Scheme from IDBI Bank (i.e. Operating Agency erstwhileBIFR) However vide Notification No. S.O. 3569(E) issued by the Ministry of FinanceCentral Government doted November 25 2016 Sick Industrial Companies (Special Provisions)Act1985 (SICA) stand repealed with effect from 1stDecember. 2016. TheAdditional Liability if any on account of such repeal of SICA Act not ascertainable
c. As explained in Note No. 20 of Notes to Accounts the expenses aggregating Rs. 4.61lacs for the Year 2018-19 have not been provided due to which current year loss is underslated by Rs 4.61 lacs.
d. Calls in arrears are unreconciled to the extent of Rs 2.25 lacs.
e. No provision has been made for loans and advances amounting to Rs. 110.51 lacswhich are prima facie doubtful of recovery and in our opinion current year's loss andaccumulated losses of the company are under stated by provision of such doubtful advances.
f. Depreciation on tangible and intangible assets (as per Schedule 11 of Companies Act2013) has not been provided due to discontinuing operation of the company since December2006 as the relevant assets are not in use.
g. Deferred Tax Assets (Net) as per IND AS - 12 (previously as per Accounting Standard22 regarding "Accounting for Taxes on Income) has not been recognized in view ofconsistent losses in the past and of uncertainty regarding estimation of future profitwith reasonable certainty.
h. As explained in Note No 21 the liability on account of non-fulfillment of exportobligation has not been considered since the same has remained ascertained andunaccounted for.
i. The Company is not regular in depositing statutory dues with appropriate authoritiesand substantial amount of statutory dues has become overdue and remain unpaid. Totalstatutory dues outstanding are Rs. 96.86 Lacs.
j. As explained company's production activity is closed most of the provisions ofapplicable laws like Gratuity Act Labor laws Environment Lows Specific Industry relatedlaws etc. are not complied with.
k. Internal auditor for the financial year under review has not been appointed by thecompany as required under section 138 of the Companies Act 2013 and also the company hasnot appointed Key Managerial Person (KMP) in form of Company Secretary in whole time inemployment and Chief Financial Officer. However as explained to us by the' managementthat company production activity has been fully stopped from the year 2006-2007. There isno sale or purchase activity since then. Only Administrative activity is continued atRegistered Office of the company. The Present size of the working is limited only up toadministrative work and necessary staff is maintained by the Company.
l. Attention is also invited in respect of the share application money received of Rs.622.50 Lacs by the Company which is pending for allotment in terms of Section 73 readwith Companies (Acceptance of Deposits) Amendment Rules 2015.
m. In absence of documents/ details are not made available to us we are unable tocomment whether any sums require to be transfer to the Investor Education and ProtectionFund or not and period of delay thereon.
n. The balance of other current assets trade payables unsecured loans and othercurrent liabilities includes balance remaining outstanding for a substantial period. Thebalances are subject to confirmation and reconciliation. The reported financials mighthave consequential impact which remains unascertained.
o. As informed to us by the Board of Director Company has neither provided nor paidany interest on outstanding dues to MSME Creditors in the past years and current yearRefer Note No. 13 Trade payables - disclosure in accordance with section 22 of MicroSmall and Medium Enterprises Development Act 2006.
p. Rental expense for the office premises is not provided as per the rent agreement.There is shortage in booking of rent by Rs. 55352.
Key Audit Matters
4. 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.
5. Except for the matter described in the Basis for Adverse Opinion' section wehave determined that there are no other Key Audit Matters to communicate in our report.
Information other than the Financial Statements and Auditor's Report thereon
6. 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 the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information; weare required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charge with Governance for the StandaloneFinancial Statements
7. 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 of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income Cash Flow and changes inequity of the Company in accordance with the Indian Accounting Standards (INDAS)prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules2015 as amended and other accounting principles generally accepted inIndia.
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 raids and other irregularities selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
8. 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.
9. Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
10. 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 withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
11. As part of an audit in accordance with Standards on Auditing we exerciseprofessional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for explaining our opinion on whether the Companyhas adequate internal financial controls system in place and the operating effectivenessof such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
12. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
15. As required by the Companies (Auditor's Report) Order2016 (the Order')issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.
16. Further to our comments in Annexure A as required by Section 143(3) of the Act wereport that: a) we have sought and obtained all the information and explanations which tothe best of our knowledge and belief were necessary for the purpose of our audit; exceptfor those mentioned in the Basis for Adverse Opinion Section
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; except for thosementioned in the Basis for Adverse Opinion Section
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 133of the Act; Except for the following accounting standards:
IND AS 16 - Property Plant and Equipment
IND AS 12 - Income Taxes
IND AS 19 - Employees Benefits
lND AS 36 - Impairment of Assets.
IND AS 37 - Provisions Contingent Liabilities and Contingent Assets
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 March2019 from being appointed as a director in terms of Section164(2) of the Act; companyunder IBC board dissolved.
f) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as on 31March 2019 in conjunction with our audit of the financialstatements of the Company for the year ended on that date and our report as per Annexure Bexpressed an qualified opinion;
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 has not disclosed the impact of pending litigations on its financialposition in the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts; assuch the question of commenting on any material foreseeable losses thereon does not arise;
iii. there has been delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year ended 31 March 2019;can't be commented upon due to non-availability of required data.
iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to30 December 2016 whichare not relevant to these financial statements. Hence reporting under this clause is notapplicable.
FOR D P Sarda & Co
Date; 20th June 2019
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
(Annexure "A" Referred to in Paragraph 1 under the heading "Report onother legal and regulatory requirements "of Our Report of Even Date.)
Reports under The Companies (Auditor's Report) Order 2016 (CARO 2016) for the yearended on 31st March 2019
On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we state that;
1 In Respect of Fixed Assets
(a) The Company has not maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Fixed Assets of the Company have not been physically verified by the Managementduring the year therefore we are unable to comment on discrepancies in absence of suchphysical verification.
(c) As informed to us title deed of immovable properties are held in name of CompanyHowever there are equitable mortgage on the existing freehold land and charge on otherfixed assets
(d) The fair value of assets are not disclosed as mentioned in para 3(a) of the mainaudit report. Hence the assets are disclosed at carry forward values.
2 In Respect of Inventories
According to the information and explanations given to us the company's productionactivity has been fully stopped from the year 2006-2007. There is no sale or purchaseactivity since then. Only administrative activity is continued at Registered Office of thecompany therefore the company does not have any inventories on hand as on the reportingdate.
3 Loans to Parties given to Parties Covered under section 189
According to the information and explanations given to us the Company has not grantedany loan secured or unsecured to companies firms or other parties covered under section189 of the Act. Accordingly paragraph (iii) of the said Order is not applicable.
4 Compliance of Provision of Section 185 and 186 of the Companies Act 2013 in respectof Loans Guarantees and securities.
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 Act with respectto the loans and investments made.
5 Acceptance of Deposits
According to the information and explanations given to us the Company has not acceptedany deposits from the public. Only an old outstanding of Share Application Money which ispending for allotment of Rs. 25 Lacs covered under section 73 to 76 of the Companies Act2013 and rules framed there under.
6 Maintenance of Cost Record
According to the information and explanations given to us the company's productionactivity has been fully stopped from the year 2006-07. There is no sale or purchaseactivity since then. Only administrative activity is continued at Registered Office of thecompany and as explained to us Central Government has not prescribed the maintenance ofcost records under sub-section (1) of section 148 of (he Act for the products of theCompany Therefore the provisions of Clause 3(vi) of the Order is not applicable to theCompany.
7 Undisputed & Disputed Statutory Dues
(a) According to the information and explanations given to us and the records of theCompany examined by us In our opinion the Company is not regular in depositing theundisputed statutory dues including provident fund investor education and protection fundemployees' state insurance income tax sales tax wealth lax service tax customs dutyexcise duty value added tax cess and any other statutory dues as applicable with theappropriate authorities .
The additional interest and penalty (if any)in above statutory dues as may be levied bythe concerned authorities has not been quantified and provided for. In addition to abovethere are demands raised from Central Processing Centre (CPC) TDS aggregating to Rs.176990/- for various financial years. As informed to us the company is in the process ofidentifying the nature of such demands and whether any rectification/disputes are requiredto be taken before jurisdictional authorities .
(b) As informed to us the dues outstanding of Income- Tax Sales-tax Wealth taxService Tax Custom duty Excise duty and cess on account of any dispute are as follows:
8 Loan From Banks/ Financial Institution/ Government/ Debenture
As 'explained to us Company has not defaulted in repayment of dues to a financialinstitution or banks. However there are outstanding dues of 1432718/- standing in theBooks of Account relating to The Employees Bank Loan for which confirmation is notavailable with the company.
9 Proceeds of Public Issue (Including debt instruments) /Term Loan
According to the records of the company examined by us and as per the information andexplanations given to us Company has not raised any money from any public issue/ followon offer. However the Company has received Share Application Money which is pending forallotment.
10 Frauds on or by the Company
During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India and accordingto the information and explanations given to us by the management we have neither comeacross any instance of fraud on or by the Company. Noticed or reported during the yearnor have we been informed of such case by the Management of Company.
11 Managerial Remuneration
According to the records of the company examined by us and as per the information andexplanations given to us the managerial remuneration has been paid or provided inaccordance with the provisions of sec lion 197 read with schedule V of the Companies Act.
12 Nidhi Companies
In our opinion the Company is not a chit fund or a Nidhi/mutual benefit fund/societyTherefore the provision of clause 3 (xii) of the Order is not applicable to the Company.
13 Related Party Transactions
As per the information and explanations given during the course of our verification. inour opinion all transactions with the related parties made by the company were incompliance with section 177 and 188 of the Act to the extent applicable to the companyduring the year the relevant details in respect of which have been appropriatelydisclosed in the financial statements.
14 Preferential Issue of Shares or Debentures
According to the information and explanations given to us The company has not made anypreferential allotment or private placement of shares or partly convertible debenturesduring the year However the Company "as received Share Application Money which ispending for allotment.
15 Non-Cash Transactions with Director's etc.
According to the information and explanations given to us we report that the companyhas not entered into any non-cash transaction with directors or persons connected withhim.
16 Provision or Section 45-1A of the Reserve Bank of India Act 1934
According to the information and explanations given to us during the year the Companyis not required to be registered under section 45- lA of the Reserve Bank of IndiaAct1934.
FOR D P Sarda & Co
Date; 20th June 2019
Independent Audit Report to the Members of Noble Explochem Limited.
Annexure "B" to the Auditors Report
Report on Internal Financial Controls under Clause (I) of Sub-section 3 of Section 143of the Companies Act2013 ("the Act")
1. In conjunction with our audit of the standalone financial statements of NobleExplochem Limited (the"Company") as at and for the year ended 31 March 2019 wehave audited the internal financial controls over financial reporting (IFCoFR)of theCompany as of that date.
Management's Responsibility for Internal Financial Controls
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 Accountantsof India (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
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 theICAI and deemed to be prescribed under Section143(10) of the Act to the extent applicableto an audit of IFCoFR and the Guidance Note issued by the ICAI. Those Standards and theGuidance 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 included 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 judgment 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. Annexure B to theIndependent Auditor's Report of even date to the members of Noble Explochem Limited onthe standalone financial statements for the year ended 31 March 2019 Meaning of InternalFinancial 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 includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management over ride of controls material misstatements due toerror or fraud may occur and not be detected. Also projections of any evaluation of theIFCoFR to future periods are subject to the risk that IFCoFR may become inadequate becauseof changes in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
8. According to the information and explanations given to us and based on our auditthe following material weaknesses have been identified as at 31.03.2019;
The company did not have an appropriate internal control system: a) For recoverableincluding loans and advances and creditors outstanding balances obtaining theirconfirmations and reconciliation of their outstanding balances with the books of accounts.This could potentially affect the balance in the other recoverable trade payable incomeand expenses account balances. b) For payment of statutory dues which could potentiallygive rise to liabilities
A material weakness' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.
9. In our opinion except for the possible effects of the material weakness describedabove on the achievement of the objectives of the control criteria the company hasmaintained in all material respects adequate internal financial controls over financialreporting and such internal control over financial reporting criteria established by thecompany considering the essential components of the internal control stated in theGuidance Note issued by the ICAI.
We have considered the material weakness identified and reported above in determiningthe nature timing and extend of audit test applied in our audit of the stand alonefinancial statements of the company for the year ended 31.03.2019 and these materialweakness do not affect our opinion on the standalone financial statements of the Companyother than qualification reported by us in our independent audit report.
FOR D P Sarda & Co
Date; 20th June 2019