The Members of Noble Explochem Limited.
Report on the Financial Statements
We have audited the accompanying standalone financial statements of Noble ExplochemLimited("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Standalone Financial Statements
The management and Board of Directors of the Company are responsible for the mattersstated in Section134(5) of the Companies Act 2013 (the act') with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with rule 7 of Companies (Accounts) Rules2014. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; 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.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control 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 accounting policies used and the reasonableness of the accountingestimates made by the Company's management and Board of Directors as well as evaluatingthe overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
Matter of Emphasis
The Company's operations have been suspended since December 2006. The Company hasincurred losses during past several years and the company's net worth has been completelyeroded. In view of all this we are unable to comment whether the company can beconsidered as a "Going Concern" and whether its assets would be adequate to meetits liabilities.
We draw your attention that by Notification No. S.O. 3569(E) issued by the Ministry ofFinance Central Government dated November 25 2016 Sick Industrial Companies (SpecialProvisions) Act 1985 (SICA) stand repealed with effect from 1st December 2016. As aconsequence the proceedings of the Company on reference under SICA before Board forIndustrial and Financial Reconstruction (BIFR) abated and came to an end.
As explained in Note No.16of Notes to Accounts the expenses/liabilities aggregating Rs.201.58 lacs for the Year 2016-2017 have not been provided due to which current year lossand accumulated losses are under stated by Rs 201.58 lacs
NECL 35 AGM
As explained in Note No. 24 of Notes to Accounts calls in arrears is unreconciled tothe extent of Rs 2.25 lacs As explained in Note No. 21 of Notes to Accounts no provisionhas been made for loans and advances amounting to Rs. 110.51lacs which are prima faciedoubtful of recovery and in our opinion current year's loss and accumulated losses of thecompany are under stated by provision of such doubtful advances As explained in Note No.22 of Notes to Accounts Depreciation on tangible and intangible assets (as per ScheduleII of Companies Act 2013) has not been provided.
As explained in Note No. 25 the liability on account of non-fulfillment of exportobligation has not been considered since the same is not ascertainable
Attention is also invited in respect of the share application money received by theCompany which is pending for allotment in terms of Section 73 read with Companies (Acceptance of Deposits) Amendment Rules 2015.
In our opinion and to the best of our information and according to the explanationsgiven to us and subject to what is stated above its consequential impacts the financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with accounting principles is generally accepted inIndia of the state of affairs of the company as at 31st March 2017 its Lossand its Cash Flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section143 ofthe Act we give in the Annexure-A' a statement on the matters Specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act we further report 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 appears from our examination of those books;
c. The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are
in agreement with the books of account;
d. In our opinion the aforesaid financial statements comply with the applicableAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. Except the following accounting standards:
Accounting Standard - 6 Depreciation Accounting Accounting Standard -15 EmployeesBenefits.
Accounting Standard - 28 Impairment of Assets
Accounting Standard - 29 Contingent Liabilities Assets and Provisions.
e. On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the director is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164(2) of theAct.
f. With respect to the adequacy of the Internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in - Annexure - "B"
g. In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:
i. The Company does not have any pending litigations which would impact its financialposition except as stated otherwise.
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. Since there has been no occasion during the year under report to transfer anysums to the Investor Education and Protection Fund. The question of delay in transferringsuch sums does not arise.
iv. The company has provided requisite disclosures in its financial statements as toholdings as well as dealing in specified Bank Notes during the period from 8 November 2016to 30th December 2016 and these are in accordance with the books of accountsmaintained by the Company. Refer Note.
FOR AMAR BAFNA& ASSOCIATES
Firm Registration No: 114854W
Membership No: 048639
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT.
Annexure-A' Statement on the matters Specified in paragraphs 3 and 4 of theOrder to the extent applicable. The Annexure referred to in our report of even date tothe MEMBERS OF NOBLE EXPLOCHEM LIMITED. For the year 31st March 2017. Wereport that:
|Cla use ||Sub Clause ||Particulars |
|(i) ||(a) ||The Company has not maintained proper records showing full particulars including quantitative details and situation of fixed assets. |
| ||(b) ||The fixed assets of the company have not been physically verified by the management during the year therefore we are unable to comment on discrepancies in absence of such physical verification. |
| ||(c) ||As per information and explanation provided to us the title deed of immovable properties are held in the name of the company. |
|(ii) || ||As inform to us the company does not have any inventories on hand as on the reporting date. |
|(iii) || ||As informed during the year The Company has not granted Loans to parties covered in the register maintained under section 189 of the Companies Act 2013 ("the Act"). Therefore the provisions of paragraph 3(iii) of the said order are not applicable to the Company. |
|(iv) || ||In our opinion and according to the information and explanations given to us the Company has complied with the provisions of section 185 and 186 of the Act in respect of loans investments guarantees and security to the extent applicable to it. |
|(v) || ||According to the information and explanations given to us the Company has not accepted any deposits from the public except share application money which is pending for allotment covered under section 73 to 76 of the Companies Act 2013. And rules framed there under. |
|(vi) || ||To the best of our knowledge and as explained Central Government has not prescribed the maintenance of cost records under sub-section (1) of Section 148 of the Act for the products of the Company. Therefore the provision of clause 3(vi) of the Order is not applicable to the Company. |
|(vii) ||(a) ||According to the information and explanations given to us and the records of the Company examined by us in our opinion the Company is not regular in depositing the undisputed statutory dues including provident fund investor education and protection fund employees' state insurance income tax sales tax wealth tax service tax customs duty excise duty value added tax cess and any other statutory dues as applicable with the appropriate authorities. |
| || ||According to the information and explanations given to us and the records of the Company examined by us undisputed dues in respect of provident fund investor education and protection fund employees' state insurance income-tax wealth-tax service tax sales-tax customs duty excise duty cess and other statutory dues which were outstanding as at Balance Sheet date for a period of more than six months from the date they became payable are as follows: |
|Name of the Statute ||Nature of the dues ||Amount |
|Income Tax Act ||Income Tax& TDS ||16.16 |
|Income Tax Act ||Income Tax (as informed to us that the same will be provided in the books of account in the year of the payment) ||2.11 |
|BST/CST and VAT ||BST/CST and VAT ||57.11 |
|Professional Tax Act ||Professional Tax Act ||10.77 |
|Service Tax ||Service Tax ||1.35 |
|Employees Provident Fund Act ||Provident Fund ||14.21 |
|ESIC Act ||ESIC ||27.46 |
|Central Excise Act ||Excise Duty ||7.75 |
| ||Investor Education and Protection Fund (Unpaid Dividend) ||1.43 |
|According to the records of the Company the dues outstanding of Income-Tax Sales-tax Wealth tax Service Tax Custom duty Excise duty and cess on account of any dispute are as follows: (Rs. in Lacs) ||Fringe Benefit ||13.36 |
|Name of the Statute Nature of Dues || || |
|Central Excise Tariff Act. Excise Duty || || |
|Wealth Tax Act ||Wealth Tax ||1.43 |
|Non Agriculture & Gram Panchayat Tax ||Non Agriculture & Gram Panchayat Tax ||25.22 |
(b) According to the records of the Company the dues outstanding of Income-Tax
Sales-tax Wealth tax Service Tax Custom duty Excise duty and cess on account of anydispute are as follows:
(Rs. in Lacs)
|Name of the Statute ||Nature of Dues ||Amount |
|Period to which amount relates ||Forum where dispute is pending. |
|Central ||Excise Duty ||15.90 ||Various ||CESTAT |
|Excise || || ||Years ||Mumbai. |
|Tariff || || || || |
|Act. || || || || |
(viii) Based on our audit procedures and as per the information and explanations givenby the management we are of the opinion that during the year Company has not defaulted inrepayment of dues to a financial institution or banks.
(ix) According to the records of the company examined by us and as per the informationand explanations given to us the Company has not raised any money from any publicissue/follow on offer. However the Company has received share application money which ispending for allotment.
(x) According to the information and explanations given by the management we reportthat no fraud on or by the company was noticed or reported during the year.
(xi) According to the records of the company examined by us and as per the informationand explanations given to us the managerial remuneration has been paid or provided inaccordance with the provisions of section 197 read with schedule V of the Companies Act.
(xii) In our opinion the Company is not a chit fund or a nidhi/mutual benefitfund/society. Therefore the provision of clause 3(xii) of the Order is not applicable tothe Company.
(xiii) In our opinion all the transactions with the related parties are in compliancewith section 177 and 188 of the Act where applicable and the details have been disclosedin the financial statements as required by applicable accounting standard. (Refer Note No.34.)
(xiv) According to the records of the Company examined by us and as per the informationand explanations given to us the Company has not made any preferential allotment orprivate placement of shares or partly or fully convertible debentures during the yearhowever the company has received share application money which is pending for allotment.
(xv) According to the information and explanations given to us we report that theCompany has not entered into any non-cash transaction with directors or persons connectedwith him
(xvi) In our opinion the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
FOR AMAR BAFNA & ASSOCIATES
Firm Registration No: 114854W
Membership No: 048639
Annexure -"B" to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
In conjunction with our audit of the standalone financial statements of the Company asof and for the year ended 31 March 2017 we have audited the internal financial controlsover financial reporting of Noble Explochem Limited.("the Company").
Management's Responsibility for Internal Financial Controls
The Respective Board of Directors of the Company are responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of 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 its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") issued by ICAI and the Standards on Auditing issued byICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both issued by the Instituteof Chartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements 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 controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance 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
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
According to the information and explanations given to us and based on our audit thefollowing mat erial weaknesses have been identified as at March 312017:
The Company did not have an appropriate internal control system:
a. For recoverable including loans and advances and creditors outstanding balancesobtaining their confirmations and reconciliation of their outstanding balances with thebooks of accounts. This could not potentially affect the balance in the trade receivabletrade payable income and expenses account balances.
b. For payment of statutory dues which could potentially give rise to liabilities.
A material weakness is a deficiency or a combination of deficiencies in internalcontrol in our financial reporting. Such that there is a reasonable possibility that amaterial misstatement of the Company's annual or interim financial statements will notprevented or detected on a timely basis.
In our opinion except for the possible effects of the material weaknesses 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 on Audit of internal financial control over financial reporting issued bythe Institute of Chartered Accountants of India.
We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the Company for theyear ended on 31st march 2017 and these material weakness do not affect ouropinion on the standalone financial statements of the Company other than qualificationreported by us in our independent Audit Report.
FOR: AMAR BAFNA& ASSOCIATES
Firm Registration No: 114854W
Amar Bafna Partner
Membership No: 048639