The Members of
NTC Industries Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of NTC IndustriesLimited ("the Company") which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").
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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance 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 financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Sl. No. ||Key Audit Matter ||Auditor's Response |
|1 ||Litigations and claims - provisions and contingent liabilities ||Our key procedures included but not limited to the following: |
| ||Refer note 37 to 39 to the standalone financial statements. The Company is involved in indirect tax and other litigations (JitigationsQ that are pending with different statutory authorities. ||a) Assessed the appropriateness of the Company accounting policies relating to provisions and contingent liability by comparing with the applicable accounting stand ards; |
| ||The level of management judgement associated with determining the need for and the quantum of provisions for any liabilities arising from these litigations is considered to be high. ||b) Assessed the Company process and the underlying controls for identification of the pending litigations and completeness for financial reporting and also for monitoring of significant developments in relation to such pending litigatio ns; |
| ||This judgement is dependent on a number of significant assumptions and assessments which involves interpreting the various applicable rules regulations practices and considering precedents in the various jurisdictions. ||c) Assessed the Company assumptions and estimates in respect of litigations including the liabilities or provisions recognized or contingent liabilities disclosed in the standalone financial statements. This involved assessing the probability of an unfavourable outcome of a given proceeding and the reliability of estimates of related amounts; |
| ||This matter is considered as a key audit matter in view of the uncertainty regarding the outcome of these litigations the significance of the amounts involved and the subjectivity involved in management judgement as to whether the amount should be recognized as a provision or only disclosed as contingent liabil ity in the standalone financial statements. ||d) Performed substantive procedures on the underlying calculations supporting the provisions recorded; |
| || ||e) Assessed the management conclusions through understanding relevant judicial precedents in similar cases and the applicable rules and regulations; |
| ||The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. ||f) Engaged subject matter specialists to gain an understanding of the current status of litigations and monitored changes in the disputes if any through discussions with the management and by reading external advice received by the Company where relevant to validate managements conclusions; and |
| || ||g) Assessed the appropriateness of the Company s description of the accounting policy disclosures related to litigations and whether these are adequately presented in the standalone financial statements. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other ^irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified Mmisstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or 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
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
2. As required by Section 143(3) of the Act based on our audit we 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 purposes of our audit.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
e) On the basis of the written representations received from the directors as on March312019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
h) 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 disclosed the impact of pending litigations on its financialposition in its standalone financial statements.
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For VKR & Associates.
ICAI Firm Registration No.: 320323E
Santosh Kumar Agrawal FCA
Membership No.: 067092
Kolkata 28th day of May 2019
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)
i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As informed to us the fixed assets of the company have been physically verified bythe Management at the year end and in our opinion the frequency of verification isreasonable having regard to the size of the Company and the nature of its asset. Nodiscrepancies were noticed on such physical verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company we report that except as stated in Note No 35regarding non registration of property at Silliguri of ' 655372/- in the name of thecompany all other title deeds of the immovable properties are held in the name of theCompany as at the balance sheet date.
ii) As explained to us the inventories other than material lying with third parties(which have substantially been confirmed) were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on suchphysical verification.
iii) The company has granted unsecured loans to the parties covered in the registermaintained under Section 189 of the Act; and with respect to the same:
a) The terms and conditions of the grant of such loans are not prejudicial to thecompany's interest.
b) The loans granted to the parties covered in the register maintained under section189 of the Act has no stipulated schedule of repayment of principal and payment ofinterest and are repayable on demand.
c) According to the information and explanations given to us since the loans grantedhas no stipulated schedule of repayment of principal and payment of interest thequestion of overdue amounts does not arise.
iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities.
v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.
vi) The rules regarding maintenance of cost records which have been specified by thecentral government under section 148(1) of Companies Act 2013 are not applicable.Accordingly the provisions of clause 3(vi) of the Order are not applicable.
vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amount deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees' StateInsurance Income Tax Sales Tax Service Tax Duty of Customs Duty of Excise ValueAdded Tax Cess and Other Statutory Dues applicable to it have been generally regularlydeposited during the year with the appropriate authorities. According to the informationand explanations given to us no undisputed amounts payable in respect to above were inarrears as at March 312019 for a period of more than six months from the date on whichthey become payable except as stated below:
Nature of due Amount (र in lacs)
Period Entry Tax 0.422017-18
|Nature of due ||Amount (र in lacs) ||Period |
|Entry Tax ||0.42 ||2017-18 |
b) As at 31st March 2019 there is no amounts payable in respect of disputed incometax sales tax service tax duty of customs duty of excise and value added tax except asstated below: Nature of Statute Nature of Dues Amount (र in lacs) Period Forum wherependingCentral Excise Act 1944 Excise Duty 3131.82 October 1994 to October 1996 CustomsExcise & Service Tax Appellate Tribunal Central Excise Act 1944 Penalty135.81September 28 1996 to October 311996 Customs Excise & Service Tax AppellateTribunal.
|Nature of Statute ||Nature of Dues ||Amount (र in lacs) ||Period ||Forum where pending |
|Central Excise Act 1944 ||Excise Duty ||3131.82 ||October 1994 to October 1996 ||Customs Excise & Service Tax Appellate Tribunal |
|Central Excise Act 1944 ||Penalty ||135.81 ||September 28 1996 to October 311996 ||Customs Excise & Service Tax Appellate Tribunal |
viii) In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to banks. The companyhas not taken any loans or borrowings from any financial institution and government or hasnot issued any debentures..
ix) The company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Term loan has been applied forthe purpose for which they were obtained.
x) According to the information and explanations given to us no fraud by the Companyor on the Company by its offcers/employees has been noticed or reported during the periodcovered by our audit.
xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii) The company is not a Nidhi Company. Accordingly the provisions of clause 3(xii)of the Order are not applicable.
xiii) Based on our examination of the records and the information and explanationsgiven to us all transactions with the related parties were in compliance with sections177 and 188 of Companies Act 2013 and the details have been disclosed in the StandaloneInd AS Financial Statements etc as required by the applicable accounting standards.
xiv) Based on our examination of the records and the information and explanations givento us the Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Therefore the provisions ofclause 3(xiv) of the Order are not applicable to the Company.
xv) Based on our examination of the records and the information and explanations givento us the Company has not entered into any non-cash transactions with the directors orpersons connected with him. Therefore the provisions of clause 3(xv) of the Order are notapplicable to the Company.
xvi) Based on our examination of the records and the information and explanations givento us the company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For VKR & Associates. |
| ||Chartered Accountants |
| ||ICAI Firm Registration No.: 320323E |
| ||Santosh Kumar Agrawal FCA |
| ||(Partner) |
| ||Membership No.: 067092 |
|Kolkata 28th day of May 2019 || |
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of NTCIndustries Limited ("the Company") as of March 312019 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date. y I
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 and the Standards on Auditingprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.
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 judgement 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 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
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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For VKR & Associates |
| ||Chartered Accountants |
| ||Firm Regn. No. - 320323E |
| ||SANTOSH KUMAR AGRAWAL FCA |
|Place : Kolkata ||Membership No.: 067092 |
|Date: 28th day of May 2019 || |