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Auditor Report of Nicco Uco Alliance Credit Ltd.
Mar 31, 2025
We have audited the standalone financial statements of Nicco Uco Alliance Credit Limited ("the
Companyâ), which comprise the balance sheet as at March 31, 2025, the statement of Profit and
Loss and the statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us,
except for the effects of the matter described in the Basis for Qualified Opinion section of our report,
the aforesaid financial statements give a true and fair view in conformity with the accounting
principles generally accepted in India, of the state of affairs of the Company as at Mai ch 31st, 2025
the loss, and its cash flows for the year ended on that date.
Basis for Qualified Opinion
a) Note No. 27.1 regarding cancellation of certificate of registration of the company to carry
out non-banking financial activities by Reserve Bank of India (RBI) vide its order dated 31st
March 2005, against which the company has preferred an appeal before the Appellate
Authority for Non-Banking Finance Company (NBFC), Joint Secretary, Ministry of Finance,
Govt, of India, New Delhi, which, as stated, is pending. Notwithstanding this read with
negative net worth of the company, accounts have been compiled under going concern
concept.
Considering cancellation of license has been contested in appeal still pending, the accounts
of the company have been claimed to have been prepared on going concern assumption on
the basis of legal opinion obtained by company in earlier years. In the event of adverse
decision/development predicament the financial statements may require necessary
adjustments in the value of its assets and liabilities, the quantum of which is not readily
ascertainable.
b) Note No. 13(d) regarding non-confirmation of balances by Banks and Financial Institutions
(FI''s) in whose Books the account of Company has turned Non Performing Assets (NPAs).
Statutory Audit Report for the year ended 31st March, 2025 of Nicco Uco, Alliance Credit Limited
Page 1 of 1G iff
c) Note No.27.3(a) regarding non-charging of interest on dues to banks and financial
institution coming under the purview of consortium resulting in reduction of loss by
Rs.2044 crores.
d) Actuarial valuation not done in this financial year as per IND-AS-19.
In absence of adequate details necessary adjustment could not be made as per relevant
provision of 1ND-AS.
We conducted our audit in accordance with Standards on Auditing (SAs) specified under
section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are
further described in the Auditor''s Responsibilities for the Audit of the Financial Statements
section of our report. We are independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India together with the ethical
requirements that are relevant to our audit of the financial statements under the provisions
of the Companies Act, 2013 and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the ICAl''s Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our qualified
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. In addition to the matter desciibed in the
Basis for Qualified Opinion section we have determined the matters described below to be the key
audit matters to be communicated in our report.
|
Sr. No. |
Key Audit Matter |
How our audit addressed the key audit matters |
|
1. |
Litigations and claims -provisions and |
Our key procedures included the following: |
|
As disclosed in Notes detailing contingent |
⢠Assessed the appropriates of the company |
|
|
Whether a liability is recognized or The amounts involved are potentially |
® Assessed the company process for ⢠Engaged subject matter specialists to gain an |
|
|
inherently subjective. |
⢠Assessed the company assumptions and |
|
|
⢠Performed substantive procedures on the ⢠Assessed the management''s conclusions |
|
2. |
The company has not provided interest |
We have checked the details calculation of such un¬ | |
|
3. |
Valuation of Investments: Quoted Investments have been valued at Un-quoted Investments have been valued |
⢠Necessary papers have been verified by us. ⢠We have checked the basis of valuation in detail. |
Managementâs Responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters staled in section 134(5) of the
Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Financial
statements that give a true and fair view of the financial position, financial pei foi mance, changes in
equity and cash flows of the Company in accordance with the accounting principles generally
accepted in India, including the accounting Standards specified under section 133 of the Act. This
responsibility also includes maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of appiopriate accounting
policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statement that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Companyâs
ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management cither intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting
process.
Auditorâs Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably he expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
. identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(i] of the
Companies Act, 2013, we are also responsible for expressing our opinion on whether the
company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
« Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Companyâs ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor''s report to the related disclosuies in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor''s report. However, future events or
conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
⢠Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the company to express an opinion on the financial
statements. We are responsible for the direction, supervision and the performance of the
audit of the financial statements of such entit ies included in the financial statements.
⢠We communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
⢠We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
⢠From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditorâs
report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the
Central Government of India in terms of Section 143(ii) of the Act, we give in the Annexure-2 a
statement on the matters specified in paragraphs 3 and 4 of the order.
2. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best
of our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books but financial
statement lias not been presented as per Division-Ill, Schedule-111 of Companies Act,
2013 meant for NBFC.
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account.
(cl) In our opinion, the aforesaid standalone Financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
(e) Considering our comment in para (c) of "basis of qualified opinion" above we are
unable to comment whether the directors of the company are disqualifiable as on
31.03.2021 within the meaning of Sec.l64(2) of Companies Act, 2013.
(f) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to
our separate Report in "Annexure 1â.
(g) With respect to the other matters to be included in Auditorâs Report in accordance
with the requirements of Section-197(16) of the Act, as amended, in our opinion and
to the best of our information and according to the explanation given to us the
entire remuneration of the Managing Director pertaining to the period 01.05.2017
to 30.04.2020 has not been approved by the lender''s as required under Schedule-V
ofCompanies Act, 2013.
[h] With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our
opinion and to the best of our information and according to the explanations given
to us:
i. The Company has disclosed the impact of pending litigations on its financial
position in its financial statements - Refer Note 28.1 to the financial
statements.
/''/. The Company does not have any material foreseeable loss arising out of
derivative contract
Hi. No money is required to be transferred by the company to Investors
Education and Protection Fund.
Iv (a) Management has represented that to the best of its knowledge
and belief no funds other than those disclosed in accounts has been
advanced or loaned or invested by the Company to or in any other person
or entity including foreign entity with the understanding that the
intermediary shall directly or indirectly lend or invest in other persons or
entity identified in any manner whatsoever by or on behalf of Company or
providing any guarantee, security or the like on behalf of the ultimate
beneficiary.
(b) The management has represented that to the best of its knowledge and
belief no funds other than those disclosed in the notes has been
received from any person or entity including foreign entity with the
understanding that the Company shall directly or indirectly lend or
invest in other persons or entity identified in any manner whatsoever
by or on behalf of funding party or provide any guarantee, security or
the like on behalf of funding party.
(c) During application of Audit procedure as being considered reasonable
and appropriate in the circumstances, nothing has come to our notice
that has caused us to believe that the representations under (a) and
(b) above contain any material mis-statement.
(d) No dividend declared or paid during the year by the company.
(e) Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014
The company has used an accounting software for maintaining its books of account
that does not have the feature of recording the audit trail. We are also unable to rely
on automated controls related to financial reporting in the accounting software.
Consequently, we are unable to comment on compliance of audit trail requirements
by the said software as envisaged under Rule 11(g)-
UDIN : 25051800BMIWTD1658
Place : Kolkata ForEASUCHAHCHANl&DEB
CHARTERED ACCOUNTANTS
Date : n r.no,304049E
U 8 MAY 202F
Partnef
(!,!. tto.-051t00)
Mar 31, 2014
We have audited the accompanying financial statements of Nicco Uco
Alliance Credit Limited ("the Company"), which comprise the Balance
Sheet as at March 31,2014, and the Statement of Profit and Loss and
Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") read with General Circular
15/2013 dated 15th September, 2013 of the Ministry of Corporate Affairs
in respect of Section 133 of the Companies Act, 2013. This
responsibility includes the design, implementation and maintenance of
internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditors'' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
a) Note No. 2.21 regarding cancellation of certificate of registration
of the company to carry out non-banking financial activities by Reserve
Bank of India (RBI) vide its order dated 31stMarch 2005, against which
the company has preferred an appeal before the Appellate Authority for
Non-Banking Finance Company (NBFC), Joint Secretary, Ministry of
Finance, Govt. of India, New Delhi, which, as stated, is pending.
As the decision with regard to appeal against cancellation of license
is pending for reasons as stated in the note above, the accounts of the
company have been prepared on going concern assumption on the basis of
legal opinion obtained. In the event of adverse decision/ development
the financial statements may require necessary adjustments in the value
of its assets and liabilities.
b) Note No. 2.3.x regarding default made by the Company in repayment of
its Fixed Deposits liability as per order of Company Law Board (CLB)
against which legal proceedings have been initiated by Serious Fraud
Investigation Office. Please refer Clause 6(c) of annexure to the
Auditors Reports.
c) Note No. 2.3.ix regarding non-confirmation of balances by Banks and
Financial Institutions (FI''s) in whose Books the account of Company
has turned Non Performing Assets (NPAs).
d) Non ascertainment of impairment of assets as required by Accounting
Standard (AS)-28 issued by The Companies (Accounting Standards) Rules,
2006. Refer Note No. 2.24.
The impact of above paragraphs on the "Loss After Tax" and
"Shareholder''s Funds" of the company is unascertainable.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India :
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31,2014;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of matter
Attention is invited to the following points :
(i) Note no. 2.3 and 2.5 regarding application filed by different banks
forming the consortium of bankers with Debt Recovery Tribunal for and
by International Finance Corporation, Washington with hon''ble
Calcutta High Court for recovery of their dues.
(ii) Note no. 2.11 regarding Serious Fraud Investigation against the
company on recommendation of Registrars of Companies.
(iii) Note No. 2.36 regarding writ petition pending before Hon''ble
High Court at Calcutta challenging the decision of Ministry of
Corporate Affairs in regard to extension of term of appointment of Mr.
L. N. Kaul, Managing director.
All the above notes are self-explanatory.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
subsection (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of
the said Order.
2. As required by section 227(3) of the Act, we report that :
a. we have obtained all the information and explanations, subject to
our observations made in the above Para which to the best of our
knowledge and belief were necessary for the purpose of our audit;
b. in our opinion, subject to our observations made in the above Para,
proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Reportare in agreement with the books of
account;
d. Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet,
Statement of Profit and Loss, and Cash Flow Statement comply with the
Accounting Standards referred to in subsection (3C) of section 211 of
the Companies Act, 1956 read with General Circular 15/2013 dated 15th
September, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013.
e. In view of default in repayment of fixed deposits and interest
thereon, all the directors of the company are disqualified as on 31st
March, 2014 from being appointed as directors in other public companies
in terms of clause (g) of subsection (1) of section 274 of The
Companies Act, 1956.
Annexure to the Auditors'' Report
The Annexure referred to in paragraph 1 of Our Report of even date to
the members of Nicco Uco Alliance Credit Limited on the financial
statements of the company for the year ended 31st March, 2014.
1. (a) Consequent upon the destruction of relevant records due to a
fire at office premises the company is not yet been able to
update it records in regard to its fixed assets. However we have been
given to understand that the necessary action is in process.
(b) No part of fixed assets has been disposed off during the year.
2. (a) There is no live agreement for lease and hire purchase stock as
on date. All such assets have turned Non-performing and
necessary provision has been made for the same. Physical verification
for the same has not been done during the year. However as explained
to us by the management, there is little scope for doing the same.
(b) Since the company has not conducted the physical verification of
its inventories the question of following proper procedure does not
arise.
3. (a) According to the information and explanations given to us by the
management, the company has not given any loan secured
or unsecured during the year to Companies, firms or other parties
covered in the Register maintained u/s 301 of the Companies Act, 1956
except interest free unsecured advances (net) given to its subsidiary
company, the maximum amount outstanding at any time during the year and
closing balance as on 31.03.2014 were Rs. 0.40 Lacs and Rs. 0.40 Lacs
respectively. As explained to us the above advance is repayable on
demand. Accordingly clauses 4(III) (b) to (d) of the order are not
applicable.
(e) According to the information and explanations given to us by the
management, the company has not taken any loan secured or unsecured
during the year from Companies, firms or other parties covered in the
Register maintained u/s 301 of the Companies Act, 1956. Accordingly
clause 4(NI)(f) and (g) of the order are not applicable.
4. In our opinion and according to the information and explanations
given to us, considering the financial position, size and the nature of
the business of the company, we observed certain areas which requires
improvement in internal control.
5. According to the information and explanations provided by the
management, there are no contracts or arrangements the particulars of
which need to be entered into the register maintained u/s 301 of the
Companies Act 1956. Accordingly, clause 4(v)(b) of the order is not
applicable.
6. The Company has not accepted any deposit during the year from the
public as per the directives issued by the Reserve Bank of India and
the provisions of Section 58A and 58AA or any other relevant provisions
of the Companies Act, 1956 and the rules made there under. However the
balance of the deposits as on 31st of March, 2014 exceeded the ceiling
limit fixed by Reserve Bank of India by Rs. 1510.08 Lacs (refer note
no. 2.3.vii) excluding interest payable on that. According to the
information and explanations given to us, no order has been passed by
National Company Law Tribunal or any court or any other Tribunal on the
company except the following orders passed by Reserve Bank of India and
Company Law Board :
a) Consequent upon failure of the company to repay its dues to the
depositors in terms of CLB orders legal proceedings have been initiated
by SFIO against the company for violation of Sec 58(a) of Companies
Act, 1956. The total dues including interest as on 31.03.2014 is Rs.
1510.08 lacs.
b) The Company has submitted a scheme for reduction of share capital
and issue of shares to the deposit holders in lieu of the principal
held by them as on 01.04.2007. The scheme was approved by the deposit
holders and shareholders and now pending before Hon''ble High Court at
Calcutta for approval. Refer Note No. 2.3.v.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. As per the information and explanations given to us, the Company has
given yearly maintenance job of its Wind Mills to outside agencies on
contract. As explained to us, there are no other costs for which cost
records are to be maintained.
9. (a) According to the records of the company, during the year the
company has generally been regular in depositing with the
appropriate authorities, undisputed statutory dues including provident
fund, investor education and protection fund, employee state insurance,
income tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess and any other statutory dues whichever applicable, except
for default in deposit of brought forward balances of Service Tax
amounting to Rs. 1,06,306/-, Profession tax amounting to Rs. 8,020/-,
Tax Deducted at Source (TDS) amounting to Rs. 24,071/-. Regarding
unclaimed Fixed Deposits refer Note No. 2.7 (a) & (b) and Para No. (d)
of our main audit report.
(b) According to the records of the company, the dues of sales tax,
custom duty, wealth tax, income tax, excise duty, service tax and cess
which have not been deposited on account of any dispute and the forum
where the disputes are pending are as under :
Name of the Statute Nature of Dues Amount Forum where pending
(Rs. in lacs)*
Central and States Sales Central and 27.50 W.B.Commercial
Tax Laws State Sales Tax Taxes Appellate
and Revisional Board
Karnataka Sales Tax Act, State Sales Tax 26.53 Karnataka High
1957 Court
Finance Act, 1994 Service Tax 29.33 Supreme Court
Total 83.36
* The above figures are as per the information made available to us.
10. The accumulated losses of the company are more than its net worth.
The company has incurred cash losses during the current financial year
covered by our audit and also in the immediately preceding financial
year.
11. Consequent upon withdrawal of the petition filed u/s 391(1) and
391(6) of the Companies Act, 1956 interest on working capital and term
loans aggregating to Rs. 37,608.26 Lacs provided for the period
January, 2004 to March, 2014 remain unpaid. Working capital loan, term
Loan to the tune of Rs. 12,312.86 Lacs and securitization installment
payable to the extent of Rs. 992.95 Lacs also remain unpaid.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a Nidhi/ Mutual Benefit fund /
Society.
14. The company has maintained records of transactions and contracts in
respect of shares, securities, debentures and other investments. We
also report that the company has held shares, securities, debentures
and other investments in its own name.
15. The company has not given any guarantee for loans taken by others
from banks or Financial Institutions.
16. Based on the information and explanations given to us by the
management, no term loan was obtained by the company during the year.
17. On the basis of our overall examination of the balance Sheet, the
company raised no fund on short-term basis during the year. However
the loss incurred by the company which is technically long term outflow
of fund is observed to have been predominantly financed by erosion of
short/long term resources.
18. The company has not made any preferential allotment of shares
during the year to parties and companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. The company has not issued any Debentures during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
has been noticed or reported during the year.
For G. BASU & CO.
Chartered Accountants
Firm Regn. No. 301174E
3, Chowringhee Approach G. Guha
Kolkata - 700 072 Partner
Dated, The 30th day of May, 2014 Membership No. 054702
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of Nicco Uco
Alliance Credit Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2013, and the Statement of Profit and Loss and
Cash Row Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management''s Responsibility tor the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditors''Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
weH as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for QualMlsd Opinion
a) Note No. 2.21 regarding cancellation of certificate of registration
of the company to carry out non-banking financial activities by Reserve
Bank of India (RBI) vide its order dated 31stMarch 2005, against which
the company has preferred an appeal before the Appellate Authority for
Non-Banking Finance Company (NBFC), Joint Secretary, Ministry of
Finance, Govt, of India, New Delhi, which, as stated, is pending.
As the decision with regard to appeal against cancellation of license
is pending for reasons as stated in the note above, the accounts of the
company have been prepared on going concern assumption on the basis of
legal opinion obtained.
In the event of adverse decision/ development the financial statements
may require necessary adjustments in the value of its assets and
liabilities.
b) Note No. 2.3.x regarding default made by the Company in repayment ot
its Fixed Deposits liability as per order of Company Law Board (CLB).
c) Note No.2.3.ix regarding non-confirmation of balances by Banks and
Financial Institutions (Fl''s) in whose Books the account of Company has
turned Non Performing Assets (NPAs). Non-confirmation is in respect of
loan accounts, interest payable on such loan accounts. Due to such
nofHionfirmation we are unable to comment on the amount of loans &
interest payable on such loan accounts.
d) Note No. 2.7 (a) & (b) regarding the reasons for Non transferring of
amounts in respect of ''Unclaimed Fixed Deposits (including interest
accrued thereon till the maturity date)" to "Investors Education and
Protection Fund", even after the expiry of more than seven years, as
required by Sec 205(c) of the Companies Act 1956.
e) Non ascertainment of impairment of assets as required by Accounting
Standard (AS)-28 issued by The Companies (Accounting Standards) Rules,
2006. Refer Note No. 2.24.
The impact of above paragraphs on the toss After Tax" and
"Shareholder''s Funds" of the company is unascertainable.
QusHflod Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of matter
i) Note No. 2.5(1), UCO bank, the leader of the consortium of bankers
moved an application in the Debt Recovery Tribunal (DRT) on 29.11.2005
to recover the outstanding dues against the company, which the company
has contested. The learned DRT has passed an order on 01.12.2005
appointing two receivers for making an inventory and taking a symbolic
possession of secured properties of the company but at the same time
directing that till disposal of the prayer for interim relief, the
company will not deal with or transfer or dispose of any of fts secured
properties. However, the company shall carry on its business as usual.
(if) Note No. 2.3.iv.a to 2.3.iv.d regarding applications filed by
various banks and financial institutions to DRT and DRT 1 to recover
their dues.
(Hi) Note No. 2.3.iv.e regarding suit initiated by International
Finance Corporation, Washington in Hon''ble High Court at Calcutta.
(iv) Note number 2.3.iv.f regarding measures taken by UCO bank u/s
13(4) of theSARFESI act against the company.
(v) Note No. 2.11(d) regarding Serious Fraud Investigation against the
company on recommendation of Registrar of Companies (ROC).
(vi) As per the information and explanations given to us, the land and
building held by the company in excess of its own use amounting to Rs
292.85 Lacs and investments in unquoted shares of companies (other than
subsidiary and company in the same group) amounting to Rs 6.80 Lacs is
In violation of Para 19 of Non-Banking Financial (Deposit accepting or
holding) Companies, Prudential Norms, (Reserve Bank) directions, 2007
in regards to "Restrictions on investments in land and building and
unquoted shares".
Moreover as per requirement such land and buildings or unquoted shares
acquired in satisfaction of debts are to be disposed off within a
period of 3 years from the date of acquisition. In absence of the
information regarding acquisition of such land & building and unquoted
shares in satisfaction of debts and the period of holding of such
assets, we are unable to comment on the same.
However we have been given to understand that most of such assets are
charged with Banks and Financial Institutions and cannot be liquidated
to bring the same within limits of prudential norms as mentioned above
(Refer note no. 2.35).
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of sub-
section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
2. As required by section 227(3) of the Act, we report that:
a. we have obtained all the information and explanations, subject to
our observations made in the above Para which to the best of our
knowledge and belief were necessary for the purpose of our audit;
b. in our opinion, subject to our observations made In the above Para,
proper books of account as required by law have been kept by the
Company so far as appears from our examination of those books;
c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. Except for the effects of the matter described in the Basis for
Qualified Opinion paragraph, in our opinion, the Balance Sheet,
Statement of Profit and Loss, and Cash Flow Statement comply with the
Accounting Standards referred to in subsection (3C) of section 211 of
the Companies Act, 1956.
e. In view of default in repayment of fixed deposits and interest
thereon, all the directors of the company are disqualified as on 31st
March, 2013 from being appointed as directors in other public companies
in terms of clause (g) of subsection (1) of section 274 of The
Companies Act, 1956.
Annexure to the Auditors''Report
The Annexure referred to in paragraph 1 of Our Report of even date to
the members of Nicco Uco Alliance Credit Limited on the financial
statements of the company for the year ended 31 st March, 2013.
1. (a) The Companyhas notmaintainedproper records
showingfullparticulars.includingquantitative details and situation of
ils fixed Assets. Due to fire which took place in Eastern Divisional
Office (EDO) in an earlier year, fixed asset register was destroyed;
however the same is yet to be prepared. Refer note no. 2.33.
Further, in the absence of Fixed Asset register, the Company is unable
to identify the assets lost due to fire in 2009/sold during the year.
Accordingly the same has not been accounted for.
(b) According to the information and explanations given to us, physical
verification of Fixed Assets has not been carried out during the year;
hence shortage, excesses, if any, has not been ascertained.
Consequently we are unable to comment on the discrepancies if any.
(c) Substantial part of Fixed Assets has not been disposed off during
the year so as to affect the going concern assumption.
2. (a) There is no live agreement for lease and hire purchase stock as
on date. All such assets have turned Non-performing and necessary
provision has been made for the same. Physical verification for the
same has not been done during the year. However as explained to us by
the management, there is little scope for doing the same.
(b) Since the company has not conducted the physical verification of
its inventories the question of following proper procedure does not
arise.
(c) All Assets under Hire Purchase have turned Non Performing Assets in
the books of the company and necessary provision has been made for the
same. List of such inventories submitted to us was not complete. We are
unaware of any record available with the company in this regard in the
light of the fire which took place in the office as mentioned in Para
1(a) above.
3. (a) According to the information and explanations given to us by
the management, the company has not given any loan secured or unsecured
during the year to Companies, firms or other parties covered in the
Register maintained u/s 301 of the Companies Act, 1956 except interest
free unsecured advances (net) given to its subsidiary company, the
maximum amount outstanding at any time during the year and closing
balance as on 31.03.2013 were Rs.0.40 Lacs and Rs.0.40 Lacs
respectively. As explained to us the above advance is repayable on
demand. Accordingly clauses 4(111) (b) to (d) of the order are not
applicable.
(e) According to the information and explanations given to us by the
management, the company has not taken any loan secured or unsecured
during the year from Companies, firms or other parties covered in the
Register maintained u/s 301 of the Companies Act, 1956. Accordingly
clause 4(lll)(f) and (g) of the order are not applicable.
4. In our opinion and according to the information and explanations
given to us, considering the financial position, size and the nature of
the business of the company, we observed weakness in the system of
internal control in respect of non-furnishing of details/non
reconciliation of certain accounts, repayment of fixed deposits, etc.,
which needs improvement. Refer Para 1, 2, 9 and 14 in this regard.
Also, refer Note No. 2.5 vi(a), 2.9(a),(c) & (d).
5. According to the information and explanations provided by the
management, there are no contracts or arrangements the particulars of
which need to be entered into the register maintained u/s 301 of the
Companies Act 1956. Accordingly, clause 4(v)(b) of the order is not
applicable.
6. The Company has not accepted any deposit during the year from the
public as per the directives issued by the Reserve Bank of India and
the provisions of Section S8A and S8AA or any other relevant provisions
of the Companies Act, 1956 and the rules made there under. However the
balance of the deposits as on 31st of March 2013 exceeded the ceiling
limit fixed by Reserve Bank of India by Rs.943.38 Lacs (refer note no
2.3.vii) excluding interest payable on that. According to the
information and explanations given to us, no order has been passed by
National Company Law Tribunal or any court or any other Tribunal on the
company except the following orders passed by Reserve Bank of India and
Company Law Board :
a) Not to accept fixed deposits w.e.f. 14.06.04 and do renewal of fixed
deposits from 01.07.04 which, as stated, the company has duly complied
with.
b) Reserve Bank of India (RBI) vide order dated 31.03.05 has cancelled
the Certificate of Registration of the company to cany on the business
of a Non-banking Finance Company(NBFC) against which the company has
preferred an appeal before Appellate Authority for NBFC, Joint
Secretary Ministry of Finance, Government of India, New Delhi, which,
as stated, is pending. Refer Note No.2.21.
c) Honorable Company Law Board Eastern Region Bench has passed an order
vide order dated 22nd March, 2005 against Company''s Petition No. 641
(58AA)/ERB/2004 for rescheduling the repayment of Company''s Fixed
Deposit liability including interest accrued thereon u/s 45QA of the
RBI Act 1934. As at 31.03.2013 there was default of Rs.943.38 Lacs in
repayment of fixed deposit dues vis-a-vis the amount supposed to be
paid as per Company Law Board (CLB) schedule. Refer Note No. 2.3.x &
xi.
d) The Company has submitted a scheme for reduction of share capital
and issue of shares to the deposit holders in lieu of the principal
held by them as on 01.04.2007. The scheme was approved by the deposit
holders and shareholders and now pending before Hon''ble High Court at
Calcutta for approval. Refer Note No. 2.3.V.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. As per the information and explanations given to us, the Company
has given yearly maintenance job of its Wind Mills to outside agencies
on contract. As explained to us, there are no other costs for which
cost records are to be maintained.
9. (a) According to the records of the company, during the year the
company has generally been regular in depositing with the appropriate
authorities, undisputed statutory dues including provident fund,
investor education and protection fund, employee state insurance,
income tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess and any other statutory dues whichever applicable, except
for default in deposit of brought forward balances of Service Tax
amounting to Rs. 1,06,306/-, Profession tax amounting to Rs.8,020/-,
Tax Deducted at Source (TDS) amounting to Rs.24,071/-. Regarding
unclaimed Fixed Deposits refer Note No. 2.7 (a) & (b) and Para No. (d)
of our main audit report.
(b) According to the records of the company, the dues of sales tax,
custom duty, wealth tax, income tax, excise duty, service tax and cess
which have not been deposited on account of any dispute and the forum
where the disputes are pending are as. under:
* The above figures are as per the information made available to us.
10. The accumulated losses of the company are more than its net worth.
The company has incurred cash losses during the current financial year
covered by our audit and also in the immediately preceding financial
year.
11. Consequent upon Withdrawal of the petition filed u/s 391(1) and
391(6) of the Companies Act, 1956 interest on working capital and term
loans aggregating to Rs. 30,969.92 Lacs provided for the period
January, 2004 to March, 2013 remain unpaid. Working capital loan, term
Loan to the tune of Rs. 12,194.43 Lacs and securitisation installment
payable to the extent of Rs.992.95 Lacs also remain unpaid.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a Nidhi/ Mutual Benefit fund/
Society.
14. According to the information and explanations given to us, the
company is not dealing or trading in shares, securities, and other
investments. The company has maintained records of transactions and
contracts in respect of shares, securities, debentures and other
investments however the same is not updated. We also report that the
company has held shares, securities, debentures and other investments
in its own name. During the year there has been increase/change in no.
of certain shares, the value of which could not be ascertained and
accounted for. Refer Note No. 2.9(a). 2.9(c) & (d).
15. The company has not given any guarantee for loans taken by others
from banks or Financial Institutions.
16. Based on the information and explanations given to us by the
management, no term loan was obtained by the company during the year.
17. On the basis of our overall examination of the balance Sheet, the
company raised no fund on short-term basis during the year. However
the loss incurred by the company which is technically long term outflow
of fund is observed to have been predominantly financed by erosion of
short/long term resources.
18. The company has not made any preferential allotment of shares
during the year to parties and companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. The company has not issued any Debentures during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
has been noticed or reported during the year.
FOR SINGHI & CO.
Chartered Accountants
Firm Regn. No. 302049E
1B, Old Post Office Street ML. Shukla
Kolkata - 700 001 Partner
Dated, The 28th day of May, 2013 Membership No. 051505
Mar 31, 2011
We have audited the attached Balance Sheet of NICCO UCO ALLIANCE CREDIT
LIMITED as at 31st March, 2011, the Profit & Loss Account and the Cash
Flow Statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditor's Report) Order, 2003 as amended
by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by
the Central Government of India in terms of sub-section (4A) of section
227 of the Companies Act, 1956, we enclose in the Annexure, a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that:
1. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
2. In our opinion, subject to our observations made in para 6 below
proper books of account as required by law have been kept by the
company so far as appears from our examination of those books;
3. The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
4. In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 except for AS-28 relating to the "Impairment of
Assets" prescribed by The Institute of Chartered Accountants of India,
refer note no. 9 of schedule 15B and subject to our observation
mentioned in para 6 below.
5. In view of default in repayment of fixed deposits and interest
thereon, all the directors of the company are disqualified as on 31st
March, 2011 from being appointed as directors in other public companies
in terms of clause (g) of subsection (1) of section 274 of The
Companies Act, 1956.
6. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts subject to,
a) (i) Note No. 10 in Schedule 15B regarding cancellation of
certificate of registration of the company to carry out non-banking
financial activities by Reserve Bank of India (RBI) vide its order
dated 31st March 2005, against which the company has preferred an
appeal before the Appellate Authority for Non-Banking Finance Company
(NBFC), Joint Secretary, Ministry of Finance, Govt. of India, New Delhi
which is pending.
As the decision with regard to appeal against cancellation of license
is pending for reasons as stated in the note above, the accounts of the
company have been prepared on going concern assumption on the basis of
legal opinion obtained.
In the event of adverse decision/ development the financial statements
may require necessary adjustments in the value of its assets and
liabilities.
(ii) Note No. 11 (a) in schedule 15B, UCO bank, the leader of the
consortium of bankers moved an application in the Debt Recovery
Tribunal (DRT) on 29.11.2005 to recover the outstanding dues against
the company, which the company has contested. The learned DRT has
passed an order on 01.12.2005 appointing two receivers for making an
inventory and taking a symbolic possession of secured properties of the
company but at the same time directing that till disposal of the prayer
for interim relief, the company will not deal with or transfer or
dispose of any of its secured properties. However, the company shall
carry on its business as usual.
(iii) Note No. 11(b) to 11 (e) regarding applications filed by various
banks and financial institutions to DRT and DRT 1 to recover their
dues.
(iv) Note No. 11(f) regarding suit initiated by International Finance
Corporation in High Court at Calcutta.
(v) Note number 11(g) in Schedule 15 B regarding measures taken by UCO
bank u/s 13(4) of the SARFESI act against the company.
b) Note No. 14 of schedule 15B regarding default made by the Company In
repayment of Its Fixed Deposits liability as per order of Company Law
Board (CLB).
c) Note No. 12(a) of schedule 15B regarding non-confirmation of
balances by Banks and Financial Institutions (Fl's) in whose Books the
account of Company has turned Non Performing Assets. (NPA)
Non-confirmation is in respect of loan accounts,
Interest payable on such loan accounts.
Current account balances with consortium and other banks include an
amount of Rs. 209.25 Lacs, realisability of which appears to be
negligible. No provision for the same has been made In the accounts. We
are therefore unable to ascertain the actual position of these accounts
with such Banks. Refer Note No. 12(b) & (c) of Schedule 1SB.
d) Note No. 21 regarding Serious Fraud Investigation against the
company on recommendation of Registrar of Companies (ROC).
e) Non transferring of Rs. 16.48 Lacs regarding unclaimed Fixed
Deposits (including interest accrued thereon till the maturity date) to
"Investors Education and Protection Fund", even after the expiry of
more than seven years, as required by Sec 205(c) of the Companies Act
1956. Refer Note No. 15 (b) of Schedule 15B.
f) Non ascertainment of impairment of assets as required by AS-28.
and read with other notes and in particular note no 3(b) and 11(h) in
Schedule 15(b) give the information required under the Companies Act,
1956 in the manner so required and give a true and fair view in
conformity with the accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
(b) In the case of the Profit and Loss Account, of the Loss for the
year ended on that date; and
(c) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
Annexure to the Auditors' Report
(Referred to In Paragraph 3 of our report of even date)
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets in respect of its Southern Divisional Office (SDO). Due to fire
taken place in Eastern Divisional Office (EDO), fixed asset register
was damaged; however the same is yet to be prepared.
Further, in the absence of Fixed Asset register, the Company is unable
to identify the assets lost due to fire in 2009/sold during the year.
Accordingly the same has not been accounted for.
(b) According to the information and explanations given to us, physical
verification of Fixed Assets has not been carried out during the year;
hence shortage, excesses if any has not been ascertained. Consequently
we are unable to comment on the discrepancies if any.
(c) Substantial part of Fixed Assets has not been disposed off during
the year so as to affect the going concern.
2. (a) There is no live agreement for lease and hire purchase stock as
on date. All such assets have turned Non-performing and necessary
provision has been made for the same. Physical verification for the
same has not been done during the year. However as explained to us,
there is little scope for doing the same.
(b) Since the company has not conducted the physical verification of
its inventories the question of following proper procedure does not
arise.
(c) All Assets under Hire Purchase have turned Non Performing Assets in
the books of the company and necessary provision has been made for the
same. List of such inventories submitted to us was not complete. We are
unaware of any record available with the company in this regard in the
light of the fire which took place in the office as mentioned in Para
1(a) above.
3. (a) According to the information and explanations given to us by
the management, the company has not given any loan secured or unsecured
during the year to Companies, firms or other parties covered in the
Register maintained u/s 301 of the Companies Act, 1956 except unsecured
advances given to its subsidiary company, the maximum amount of which
outstanding at any time during the year and closing balance as on
31.03.2011 was Rs. 5.12 Lacs and Rs. 0.35 Lacs respectively. As
explained to us the above advance is repayable on demand. Accordingly
clause 4(lll) (b) to (d) of the order are not applicable.
(b) According to the information and explanations given to us by the
management, the company has not taken any loan secured or unsecured
during the year from Companies, firms or other parties covered in the
Register maintained u/s 301 of the Companies Act, 1956. Accordingly
clause 4(lll)(f) and (g) of the order are not applicable.
4. In our opinion and according to the information and explanations
given to us, considering the financial position, size and the nature of
the business of the company, we observed weakness in the system of
internal control in respect of non-reconciliation of certain accounts,
repayment of Fixed deposits, etc, which needs improvement. Refer para
1, 2, 9 and 14 in this regard.
5. According to the information and explanations provided by the
management, there are no contracts or arrangements the particulars of
which need to be entered into the register maintained u/s 301 of the
Companies Act 1956. Accordingly, clause 4(vXb) of the order is not
applicable.
6. The Company has not accepted any deposit during the year from the
public as per the directives issued by the Reserve Bank of India and
the provisions of Section 58A and 58AA or any other relevant provisions
of the Companies Act, 1956 and the rules made thereunder. However the
balance of the deposits as on 31st of March 2011 exceeded the ceiling
limit fixed by Reserve Bank of India by Rs. 1982.04 Lacs (refer note no
15(a) of Schedule 15B) excluding interest payable on that. According to
the information and explanations given to us, no order has been passed
by National Company Law tribunal or any court or any other Tribunal on
the company except the following orders passed by Reserve Bank of India
and Company Law Board:
a) Not to accept fixed deposits w.e.f. 14.06.04 and do renewal of fixed
deposits from 01.07.04 which, as stated, the company has duly complied
with.
b) Reserve Bank of India (RBI) vide order dated 31.03.05 has cancelled
the Certificate of Registration of the company to carry on the business
of a Non-banking Finance Company (NBFC) against which the company has
preferred an appeal before Appellate Authority for NBFC, Joint
Secretary Ministry of Finance, Government of India, New Delhi, which is
pending. Refer Note No. 10 of Schedule 15B.
c) Honourable Company Law Board Eastern Region Bench has passed an
order vide order dated 22nd March, 2005 against Company's Petition No.
641(58AA)/ERB/2004 for rescheduling the repayment of Company's Fixed
Deposit liability including interest accrued thereon u/s 45QA of the
RBI Act 1934. As at 31.03.2011 there was default of Rs. 1982.04 Lacs in
repayment of fixed deposit dues vis-a-vis the amount supposed to be
paid as per Company Law Board (CLB) schedule. Refer Note No. 14 (a) &
(d) of Schedule 15B.
d) The Company has submitted a scheme for reduction of share capital
and issue of shares to the deposit holders in lieu of the principal
held by them as on 01.04.2007. The scheme was approved by the deposit
holders and shareholders and now pending before Hon'ble High Court at
Calcutta for approval. Refer Note No. 14(b) of Schedule 15B.
e) The Company has not complied with prescribed liquidity requirement
of Reserve Bank of India.
8. The Company has given yearly maintenance job of its Wind Mills to
outside agencies on contract. As explained to us, there are no other
costs for which cost records are to be maintained.
9. (a) According to the records of the (company, during the year the
company has generally been regular in depositing with the appropriate
authorities, undisputed statutory dues including provident fund,
investor education and protection fund, employee state insurance,
income tax, sales tax, wealth tax, service tax, custom duty, excise
duty, cess and any other statutory dues whichever applicable, except
for default in deposit of Service Tax amounting to Rs. 1,06,306/-,
Profession tax amounting to Rs. 8,020/-, Tax Deducted at Source (TDS)
amounting to Rs. 26,311/- and unclaimed Fixed Deposits OS referred to
in Para no. 6 (e) of our audit report in this regard.
(b) According to the records of the company, the dues of sales tax,
custom duty, wealth tax, income tax, excise duty, service tax, and cess
which have not been deposited on account of any dispute and the forum
where the disputes are pending are as under:
Name of the Statute Nature of Dues Amount Forum where pending
(Rs. in
lacs)*
Central and
States Sales Central and
State Sales Tax 27.50 W.B. Commercial Taxes
Tax Laws Appellate and
Revisional Board.
Karnataka
Sales Tax Act, State Sales Tax 26.53 Karnataka High Court.
1957
Total 54.03
* The above figures are as per the information made available to us.
10. The accumulated losses of the company are more than its net worth.
The company has incurred cash losses during the current financial year
covered by our audit and also in the immediately preceding financial
year.
11. Consequent upon withdrawal of the petition filed u/s 391(1) and
391(6) of the Companies Act, 1956 interest on working capital and term
loans aggregating to Rs. 20518.53 Lacs provided for the period
February, 2004 to March, 2011 remain unpaid. Working capital, term Loan
to the tune of Rs. 12013.68 Lacs and securitisation installment payable
to the extent of Rs. 992.95 Lacs also remain unpaid.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a Nidhi/ Mutual Benefit fund/
Society.
14. According to the information and explanations given to us, the
company is not dealing or trading in shares, securities, and other
investments. The company has maintained records of transactions and
contracts in respect of shares, securities, debentures and other
investments however the same is not updated. We also report that the
company has held shares, securities, debentures and other investments
in its own name except in a few cases where transfer is pending in the
name of the company.
15. The company has not given any guarantee for loans taken by others
from banks or Financial Institutions.
16. Based on the information and explanations given to us by the
management, no term loan was obtained by the company during the year.
17. On the basis of our overall examination of the balance Sheet, the
company raised no fund on short-term basis during the year. However
the loss incurred by the company which is technically long term outflow
of fund is observed to have been predominantly financed by erosion of
short/long term resources.
18. The company has not made any preferential allotment of shares
during the year to parties and companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. The company has not issued any Debentures during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the company
has been noticed or reported during the year.
FOR SINGHI & CO.
Chartered Accountants
Firm Regn. No. 302049E
L. N. Dey
Partner
M.No.- 3569
1B, Old Post Office Street
Kolkata - 700 001
The 27th day of May, 2011
Mar 31, 2010
We have audited the attached Balance Sheet of NICCO UCO ALLIANCE CREDIT
LIMITED as at 31st March, 2010, and also the Profit & Loss Account and
the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys Management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors Report) Order, 2003 as amended
by the Companies (Auditors Report) (Amendment) Order, 2004 issued by
the Central Government of India in terms of sub-section (4A) of section
227 of the Companies Act, 1956, we enclose in the Annexure, a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
Further to our comments in the Annexure referred to above, we report
that:
1. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
2. In our opinion, subject to our observations made in para 6 below
proper books of account as required by law have been kept by the
company so far as appears from our examination of those books;
3. The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956 except for AS-28 relating to the "Impairment of
Assets" prescribed by The Institute of Chartered Accountants of India,
refer note no. 9 of schedule 15B and subject to our observation
mentioned in para 6 below.
5. In view of default in repayment of fixed deposits and interest
thereon, all the directors of the company are disqualified as on 31st
March, 2010 from being appointed as directors in other public companies
in terms of clause (g) subsection (1) of section 274 of The Companies
Act, 1956.
6. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts subject to,
a) (i) Note No. 10 in Schedule 15B regarding cancellation of
certificate of registration of the company to carry out non-banking
financial activities by Reserve Bank of India (RBI) vide its order
dated 31st March 2005, against which the company has preferred an
appeal before the Appellate Authority for Non-Banking Finance Company
(NBFC), Joint Secretary, Ministry of Finance, Govt, of India, New Delhi
which is pending.
(ii) Note No. 11 (a) in schedule 15B, UCO bank, the leader of the
consortium of bankers moved an application in the Debt Recovery
Tribunal (DRT) on 29.11.2005 to recover the outstanding dues against
the company, which the company has contested. The learned DRT has
passed an order on 01.12.2005 appointing two receivers for making an
inventory and taking a symbolic possession of secured properties of the
company but at the same time directing that till disposal of the prayer
for interim relief, the company will not deal with or transfer or
dispose of any of its secured properties. However, the company shall
carry on its business as usual.
(iii) Note number 11(g) in Schedule 15 B regarding measures taken by
UCO bank u/s 13(4) of the SARFESI act against the company.
As the decision with regard to appeal against cancellation of license
is pending for reasons as stated in the note above, the accounts of the
company have been prepared on going concern assumption on the basis of
legal opinion obtained.
In the event of adverse decision/ development,the financial statements
may require necessary adjustments in the value of its assets and
liabilities.
b) Note No. 14 of schedule 15B regarding default made by the Company in
repayment of its Fixed Deposits liability as per order of Company Law
Board (CLB).
c) Note No. 3 (b) of schedule 1.5B regarding managing directors excess
remuneration awaiting approval from Central Government for the
financial year 2007-08. Further, for FY 2008-09 & 2009-10 company has
received approval from Central Government tor paying Rs. 8.26 lakhs
per annum; however, actual payment crossed the above limit in the above
mentioned years by Rs.0.47 Lacs and Rs. 0.29 Lacs respectively.
d) Note No. 12 of schedule 15B regarding non-confirmation of balances
by Banks and Financial Institutions (Fls) in whose Books the account
of Company has turned Non Performing Assets (NPA). Non-confirmation is
in respect of loan accounts, interest payable on such loan accounts;
fixed deposit accounts & Current accounts held by the company with
them. Fixed deposits and current account balances with lender Banks
include an amount of Rs. 192.78 lacs, realisability of which appears to
be negligible. No provision for the same has been made in the
accounts. We are therefore unable to ascertain the actual position of
these accounts with such Banks and Fls.
e) Note No. 19 of Schedule 15B regarding non ascertainment and
accounting of losses arising out of fire on fixed assets etc. at the
registered office of the company.
f) Note No. 21 regarding Serious Fraud Investigation against the
company on recommendation of Registrar of Companies (ROC).
g) Non transferring of Rs. 10.57 lacs regarding unclaimed Bonds
(including interest accrued thereon till the maturity date) and Rs.
3.13 lacs regarding unclaimed Fixed Deposits (including interest
accrued thereon till the maturity date) to "Investors Education and
Protection Fund", even after the expiry of more than seven years, as
required by Sec 205(c) of the Companies Act 1956.
and read with other notes in Schedule 15 give the information required
under the Companies Act, 1956 in the manner so required and give a true
and fair view in conformity with the accounting principles generally
accepted in India :
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010;
(b) In the case of the Profit and Loss Account, of the Loss for the
year ended on that date; and
(c) In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
Annexure to the Auditors Report (Referred to in Paragraph 3 of our report
of even date)
1. (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets in respect of its Southern Divisional Office (SDO). Due to fire
taken place in Eastern Divisional Office (EDO), substantial part of
fixed asset register was damaged; however the same is being recreated
now.
(b) According to the information and explanations given to us, physical
verification of Fixed Assets has not been carried out by the
management/ other agencies during the year; hence we are unable to
comment on the discrepancies if any.
(c) Substantial part of Fixed Assets has not been disposed off during
the year so as to affect the going concern.
2. (a) There is no live agreement for lease and hire purchase stock as
on date. All such assets have turned Non-performing and necessary
provision has been made for the same. As such there is little scope for
physical verification and accordingly the same has not been done during
the year.
(b) Since the company has not conducted the physical verification of
its inventories the question of following proper procedure does not
arise.
(c) The company is maintaining proper records of the stocks on hire
under Hire Purchase Contracts.
3. (a) According to the information and explanation given to us by the
management, the company has not given any loan secured or unsecured
during the year to Companies, firms or other parties covered in the
Register maintained u/s 301 of the Companies Act, 1956 except
expenditure incurred on behalf of its subsidiary company, the maximum
amount of which outstanding at any time during the year and closing
balance as on 31.03.2010 was Rs. 0.06 lacs. As explained to us the
above advance is repayable on demand. Accordingly clauses 4(lll)(b) to
(d) of the order are not applicable.
(b) According to the information and explanation given to us by the
management, the company has not taken any loan secured or unsecured
during the year from Companies, firms or other parties covered in the
Register maintained u/s 301 of the Companies Act, 1956. Accordingly
clauses 4(lll)(f) and (g) of the order are not applicable.
4. In our opinion and according to the information and explanations
given to us, there is an internal control system which is commensurate
with the size of the Company and nature of its business for the
purchase of inventory and fixed assets and for the sale of goods and
services. During the year some weaknesses were noticed in the system as
mentioned below:
(i) in respect of reconciliation of subsidiary ledger of interest
payable on fixed deposits with such figure as appearing in the control
ledger.
(ii) regarding repayment of fixed deposits.
However, the company is taking necessary steps to remove the weaknesses
noticed in the system for repayment of fixed deposits.
5. As per the information and explanations given to us, the
particulars of contracts and arrangements, which need to be entered
into the register of contracts, maintained u/s 301 of the Companies
Act.1956 have been so entered. As the amount of such transactions is
not more than Rs. 5 lacs, Para 5(b) of the order is not applicable.
6. The Company has not accepted any deposit during the year from the
public as per the directives issued by the Reserve Bank of India and
the provisions of Section 58A and 58AA or any other relevant provisions
of the Companies Act, 1956 and the rules made thereunder. However the
balance of the deposits as on 31st of March 2010 exceeded the ceiling
limit fixed by Reserve Bank of India by Rs. 2363.60 lakhs excluding
interest payable on that. According to the information and explanations
given to us, no order has been passed by National Company Law Tribunal
or any court or any other Tribunal on the company except the following
orders passed by RBI and Company Law Board:
a) Not to accept fixed deposits w.e.f. 14.06.04 and do renewal of fixed
deposits from 01.07.04 which the company has duly complied with.
b) Reserve Bank of India (RBI) vide order dated 31.03.05 has cancelled
the Certificate of Registration of the company to carry on the business
of a Non-banking Finance Company(NBFC) against which the company has
preferred an appeal before Appellate Authority for NBFC, Joint
Secretary Ministry of Finance, Government of India, New Delhi, which is
pending.
c) Honorable Company Law Board Eastern Region Bench has passed an order
vide order dated 22nd March, 2005 against Companys Petition No. 641
(58AA)/ERB/2004 for rescheduling the repayment of Companys Fixed
Deposit liability including interest accrued thereon u/s 45QA of the
RBI Act 1934. As at 31.03.2010 there was default of Rs, 2015.85 lacs in
repayment of fixed deposit dues vis-a-vis the amount supposed to be
paid as per Company Law Board (CLB) schedule.
The Company has submitted a scheme for reduction of share capital and
issue of shares to the deposit holders in lieu of the principal held by
them as on 01.04.2007. The scheme was approved by the deposit holders
and shareholders and now pending before Honble High Court at Calcutta
for approval.
d) The Company has not complied with prescribed liquidity requirement
of Reserve Bank of India.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. The Company has given yearly maintenance job of its Wind Mills to
outside agencies on contract. There are no other costs for which cost
records are to be maintained.
9. (a) According to the records, of the company, the company has
generally been regular in depositing with the appropriate authorities,
undisputed statutory dues including provident fund, investor education
and protection fund, employee state insurance, income tax, sales tax,
wealth tax, service tax, custom duty, excise duty, cess and any other
statutory dues whichever applicable, during the year except for default
in deposit of Service Tax (of SDO) amounting to Rs. 1,06,306/- ,
Profession tax (of SDO) amounting to Rs. 5,077/- and regarding deposit
of unclaimed Bonds amounting to Rs. 10,57,756/- and regarding unclaimed
Fixed Deposits amounting to Rs. 3,12,628/- which were due for more than
six months as on 31st March 2010. Also refer para no 6 (g) of audit
report in this regard.
(b) According to the records of the company, the dues of sales tax,
custom duty, wealth tax, income tax, excise duty, service tax and cess
which have not been deposited on account of dispute and the forum where
the disputes are pending are as under;
Nature of Contingent
liability Status of case As at
31.03.2010 As at
31.03.2009
(Rs. in
lacs) (Rs. in
lacs)
Contingent liability
w.r.t Central The disputed
demand is pending 27.50 27.50
and States Sales Tax before W.B.
Commercial Taxes
(A.Y. 1995-1996 to
2002-2003) Appellate and
Revisional Board
Karnataka Sales Tax
Act, 1957, Matter is pending
with 26.53 26.53
Karnataka High Court karnataka High
Court.
Contingent Liability
w.r.t. Income Disputed demand
is pending - 114.01
Tax Act, 1961
(A.Y. 2000-01, before C.I.T.
(Appeals) - VI
2001-02 & 2003-04)
Service Tax applic-
able on Lease & Disputed demand
is pending 29.33 -
Hire Purchase
Transactions at SDO before Supreme
Court
Total 83.36 168.04
10. The accumulated losses of the company are more than its net worth.
The company has incurred cash losses during the current financial year
covered by our audit and also in the immediately preceding financial
year.
11. Consequent upon withdrawal of the petition filed u/s 391(1) and
391(6) of the Companies Act, 1956 interest on working capital and term
loans aggregating to Rs. 16,289.22 lakhs provided for the period
February, 2004 to March, 2010 remain unpaid. Term Loan to the tune of
Rs. 1,348.97 lakhs and securitisation instalment payable to the extent
of Rs. 992.95 lakhs also remain unpaid.
12. According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
13. The Company is not a chit fund or a Nidhi/Mutual Benefit fund/
Society.
14. According to the information and explanations given to us, the
company is not dealing or trading in shares, securities and other
investments. The company has maintained proper records of transactions
and contracts in respect of shares, securities, debentures and other
investments and timely entries have been made therein. We also report
that the company has held shares, securities, debentures and other
investments in its own name except in a few cases where transfer is
pending in the name of the company.
15. The company has not given any guarantee for loans taken by other
companies from banks or Financial Institutions.
16. Based on the information and explanations given to us by the
management, no term loan was obtained by the company during the year.
17. On the basis of our overall examination of the balance Sheet, the
company raised no fund on short-term basis during the year. However
the loss incurred by the company which is technically long term outflow
of fund is observed to have been predominantly financed by erosion of
short/long term resources.
18. The company has not made any preferential allotment of shares
during the year to parties and companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
19. The company has not issued any Debentures during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. We have been informed by the management regarding the fraud
perpetrated on the company by a few employees of the company in the F.Y
2008-09 and there after which has been stated in Note No. 20 in
Schedule 15B. As investigation is in progress so exact amount can be
quantified only on completion of investigation.
FOR SINGHI & CO.
Chartered Accountants
Firm Regn. No. 302049E
L. N. Dey
M.No.- 3569
Partner
1B, Old Post Office Street
Kolkata - 700 001
The 31st day of May, 2010
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